What is the meaning of contingent contract?

What is the meaning of contingent contract?

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. Illustration. A contracts to pay B Taka 10,000 if B’s house is burnt. This is a contingent contract. Enforcement of contracts contingent on an event happening.

What are the types of contingent contract?

Types of contingent contracts

• Contract depends upon the occurrence of an uncertain event.
• Contract depends upon the non-happening of an uncertain event.
• On the conduct of a living person.
• Contract depends upon the occurrence of an uncertain event within a specified time.

What is contingent contract state the rules regarding contingent contract?

This is a contingent contract. Under Section 31 of the Indian Contract Act, 1872, contingent contracts are defined as follows: “If two or more parties enter into a contract to do or not do something, if an event which is collateral to the contract does or does not happen, then it is a contingent contract.”

What is the example of contingent contract?

Insurance contracts, indemnity contracts, and guarantee contracts are some examples of contingent contracts. Contingent Contract Example: A promises to pay B a sum of 20 thousand rupees if there is damage to his house from fire. The payment of the amount is contingent on the house being destroyed by fire.

Why contingent contract is important?

A contingent contract eliminates the need to come to an agreement. By allowing parties to bet on their predictions, a contingent contract enables parties to “live with” their differences. A contingent contract makes commitments self-enforcing by eliminating the need to reconvene or renegotiate when a surprise crops up.

What is contingent contract conclusion?

Section 35 of The Indian Contract Act, 1872 states that: Contingent contracts to do or not to do anything is a specified uncertain event happens within a fixed time becomes void if, at the expiration of the time fixed, such event has not happened, or if, before the time fixed, such event becomes impossible.

Why contingent contract is valid?

A contingent contract will be valid only if it is a contract to do or not to do something. For instance, if a person A contracts to pay B, another person, a sum of 10,000 if B’s house is burnt, it is a valid contingent contract.