What is  Contingent Contract ? Indian Contract Act 1872 | CA Foundation
Channel: Learning With Nirmal
Date: 2023-03-01

This video talks about the following topics
Section 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”.
An event which is neither a performance directly promised as 
part of the contract, nor the whole of the consideration for a 
promise.
Features of Contingent Contract 
1. There should be a contract to do or not to do something, if 
some event, does or does not happen.
2. Event should be collateral to such contract.
3. The Contingent event should not be the mere will of the 
promisor
Rules Regarding Performance of Contingent Contract 
u/s 32 
1. The happening of a future uncertain event 
If the contract is dependent upon happening of future 
uncertain event and if the event becomes impossible the 
contract can not be enforced and becomes void.
2. Non-happening of an event 
If the contract is dependent upon non happening of a future 
uncertain event and if the event happens the contract cannot 
be enforced and becomes void.
How is it different from wagering 
agreement?
1. A wagering agreement is absolutely void (S.30) while on the other hand 
contingent contract is a valid contract.
2. In a contingent contract, the future uncertain event is merely collateral 
whereas in a wagering agreement the uncertain event is a sole 
determining factor of the agreement.
3. In a wager, the parties are not interested in the occurrence of the event 
except for winning or losing the best amount while in a contingent 
contract the parties have a real interest in occurrence or nonoccurrence of the event.
4. All wager contracts are contingent contracts, but all contingent 
contracts are not by way of the wager.
Essential elements of the contingent 
contract
After examining the definition of the contingent contract given under section 
31 of the Act, the essentials of the term contingent contract are as follows:
There must be a valid contract to do or 
abstain from doing something
Section 32 and 33 of the Act talks about enforcement of the contingent contract 
on the happening or not happening of the events respectively. The contract will 
be valid only if it is about performing or not performing an obligation.
Illustration 1: X makes a contract with Y to buy Y’s dog if X survives Z. This 
contract cannot be enforced by law unless and until Z dies in X’s lifetime.
Illustration 2: X agrees to pay Y a sum of money if a certain ship does not return. 
The ship is sunk. The contract can be enforced when the ship sinks

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