Contingent Contract- the Indian Contract Act, 1872

According to the section 31 of the India Contract Act, 1872 
A contract to do or not to do something, if some event, collateral to such contract, does or does not happen. 
Contracts of insurance, indemnity and guarantee fall under this category. 
Essentials of a Contingent Contract are:
1. The performance of a Contingent Contract depends upon the happening or non-happening of some future event.
2. The event must be collateral to the contract and not part of the contract.
3. The event happening must be uncertain.
4. The contingent event must not be a mere 'will' of the promisor.

Rules Relating to Enforcement:
1. Enforcement only on happening of an        event: Such contract can be enforceable by law only when the collateral event has taken place. If the event becomes impossible, such contracts become void. 

2. Contracts contingent upon the non-happening of n event: Such contracts can be enforced when the happening of that event becomes impossible.

3. Agreements contingent upon impossible events: Such agreements 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. 

4. Contracts contingent upon happening of specified event in fixed time: Such contracts are enforceable when a specified uncertain event will happen in a fixed period of time, and becomes void upon the expiration of the time fixed. 

5. Contacts contingent upon the non-happening of specified event within a fixed time: Such contracts can be enforced by law if before the expiry of fixed time Such event does not happen or it becomes certain that such event will not happen. 

So, here above we discussed about the Contingent contact of the Indian contact act, 1872. For other topics of business law please click the links below, 

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