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 to B Rs. 10,000 if B's house is burnt. This is a contingent contract.
Differences between Contingent Contracts and Wagering Contracts?
Factors Contingent Contracts
Meaning It is a contract to do or not to do something
with reference to a collateral event
happening or not happening.
It may not contain reciprocal promises
Reciprocal promises Example. A promises B to pay Rs. 1,000 if
a ship does not return. Here A is making a
promise to pay but B is not making a
similar promise to pay A. thus there is no
mutuality of promises in a contingent
contract.
Uncertain event The event is collateral.
Nature of contract Contingent contract may not be wagering
in nature.
Contracting parties has interest in the
subject matter in a contingent contract.
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Wagering Contract
It is a promise to give money or
money’s worth with reference to an
uncertain event happening or not
happening.
It consists of reciprocal promises.
 Example. In wagering agreement A
agrees to pay B 20 rupees if it rains on
Monday and if it does not rain B will
pay 20 rupees to A. In the above
example there is mutuality of agree-
ment but this mutuality of promises is
not necessary in case of a contingent
contract.
The uncertain event is the core factor
A wagering agreement is essentially
contingent in nature.
The contracting parties have no
interest in the subject matter.
Interest of parties  Example. A gets his house insured. It is a Example. A promises to pay Rs. 100
contingent contract as A has independent to B if it rains on Monday. It is a
interest in this case. wagering agreement as A has no
independent interest.

Mutuality of loss and Contingent contract is not based on the A wagering contract is a game, losing
gain doctrine of mutuality of loss and gain. and gaining alone matters.

Effect of contract Contingent contract is valid. A wagering agreement is void.

Similarities between wagering and contingent contract:

 The contract must be conditional on the happening or not happening of the event.
 The event must be uncertain.
 All wagers are contingent but all contingent contracts are not wagers.

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