Contingent contract
What is a Contingent Contract?
The term ‘Contingent Contract’ is defined in Section 31 of the Contract Act. It provides the following.
“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.” For example, A contract to pay C Rs 23,000 if C’s house is burnt. This is a contingent contract. As pointed out by Leake, “A contingent, or as it is called in English Law, a condition promise is distinguished from an absolute promise to fact that the performance of the contract becomes due on happening of a condition or contingency and so it is not due immediately on the making of the contract”.
Essential elements of a contingent contract.
The mentioned below are the essential elements of a contingent contract:
As mentioned in words, “Some event collateral to such contract”, it has been an appropriate remark that they are not very clear. They seem the whole to mean that the event is neither a performance directly promised as part of the contract nor the whole of the consideration for the promise. Thus, if one offers a reward for recovering the lost goods, there is no contingent contract. Reference in this context is Northern India Iron and Steel Co. Ltd. v. The State of Haryana and another, wherein the Punjab and Haryana High Court observed: “Section 31 of the Contract Act defines the contingent contract as a contract to do or not to do something if agreement if an agreement to pay ‘Minimum demand charges’ there is no collateral event which to happen. The consumer is liable to pay the minimum demand charges. These chargers, in certain circumstances, can be reduced.
When can a contingent contract be enforced?
Section 32 provides that the 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 occurred. Further, if the event becomes impossible, such contracts become void.
Contingent contracts to do anything if an uncertain future event does or does not happen can enforced when the happening of that event becomes impossible, and not before
Contingent contracts to do anything if a specified uncertain event does not occur within a set time may be enforced by law when the time set has expired. Such an event has not happened, or before the time set has passed, it will not occur if it becomes inevitable.
When a contingent contract becomes void?
Section 32 of the Contract Act provides that :
If the event becomes impossible, contingent contract to do or not to do anything if an uncertain future event happens become void.
Contingent contracts to do or not to do anything if a specified uncertain event occurs within a set time becomes void if at the expiration of the time set, such event has not happened, or if, before the time specified, such event becomes impossible.
Section 36 provides that contingent agreements to do or not to do anything if an impossible event happens are void, whether the impossibility of the event is known to the parties to the contract at the time when it is made.
This Article Does Not Intend To Hurt The Sentiments Of Any Individual Community, Sect, Or Religion Etcetera. This Article Is Based Purely On The Authors Personal Views And Opinions In The Exercise Of The Fundamental Right Guaranteed Under Article 19(1)(A) And Other Related Laws Being Force In India, For The Time Being. Further, despite all efforts made to ensure the accuracy and correctness of the information published, White Code Legal and Tax shall not be responsible for any errors caused due to human error or otherwise.
