Meaning & Rules Related To Contingent Contract

According to sec (31) of ICA, 1872, a contingent contract is a contract to do or not to do something, if the event, collateral to such contract, does or does not happen. Thus it is a contract, the performance of which is dependent upon the happening or non-happening of an uncertain future event, collateral to such events.

1. Its performance depends upon the happening or non-happening in the future of some event.

2. The event must be uncertain

3. The event must be collateral

The following are the rules regarding the performance of a contingent contract:

1. Contingent contract upon the happening of a future uncertain event:-

When the happening of such event has possible it becomes enforced and if the happening of such event becomes impossible it becomes void.

2. Contingent contract upon the non-happening of a future uncertain event:

When the happening of such event becomes impossible it becomes enforced and when such event has possible it becomes void.

3. Contingent contract upon happening of an event within a specified time:

When such an event has happened within the specified time it can be enforced and if the happening of such event becomes impossible within the specified time it becomes void.

4. Contingent contract upon non-happening of an event within a specified time:

When the happening of such event becomes impossible within the specified time it can be enforced and if the happening of such event has happened within the specified time it becomes void.

5. Contingent contract upon impossible events:

Such an agreement cannot be enforced since it is void. Whether the impossibility of the event was known to the parties or not is immaterial

6. Contingent contract upon future conduct of a living person:

When such a person acts in the manner as desired in the contract it can be enforced and if such person does not act in the manner as desired in the contract it becomes void.