Contingent Contracts

The word contingent is used in this Act

to mean ‘conditional’. Thus a
contingent contract is a conditional
contract.
Sec.31- ‘ A contingent contract is a
contract to do or not to do something, if
some event, collateral to such contract,
does or does not happen.’
The performance of a contingent
contract is dependent on a future
uncertain event, and such event should
be collateral to the contract. The
performance becomes due on
 Event collateral to a
contract
The collateral event on which the
performance of a contract is
dependant must be independent or
ancillary to the contract.
‘ A collateral event is an event which
is neither a performance directly
promised as a part of contract, nor the
whole of the consideration for the
promise.’ Pollock & Mulla.
 Rules
Act of party- the word event include
‘act of the party.’ The act may be of
the party to the contract or a third
party.
Happening of an event- Sec 32. ‘
contingent contracts to do or not to
do anything if an uncertain future
event happens cannot be enforced
by law unless and until that event
has happened.’ thus it can be
enforced only when ‘that’ event
 ..Rules
Non happening of an event. Sec
33 ‘Contingent contracts to do or
not to do anything if an uncertain
future event does not happen can
be enforced when the happening of
the event becomes impossible, and
not before’.
Thus a contract contingent up on
non happening of an event can be
enforced only when such event
becomes impossible.
..Rules
Happening of an event within a
fixed time- Sec.35. “Contingent
contracts to do or not to do
anything if a specified uncertain
event happens within a fixed
time, become void if, at the
expiration of the time fixed, such
event has not happened, or if,
before the time fixed, such event
becomes impossible.”
…Rules
Non-happening of an event
within a fixed time- Sec.35.
‘contingent contracts to do or not
to do anything if an uncertain
future event does not happen
within a fixed time may be
enforced by law when the time
fixed has expired and such event
has not happened, or before the
time fixed has expired, if it
becomes certain that such event
…Rules
Happenning of an impossible
event- Sec.36. ‘‘Contingent
agreements to do or not to do
anything if an impossible event
happens, are void, whether the
impossibility of the event is
known or not to the parties to the
agreement at the time when it is
made.’
Effect of contingent
contracts
Contingent contracts are
perfectly valid contracts, though
their enforceability by law
depends up on the happening or
non happening of a future
uncertain event.
When the event has occurred,
the contract rests on the same
footing as if it had been made
positively and without reference
of any contingency.