CONTINGENT CONTRACT

Definition

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. (Sec. 31)

Collateral Event

The collateral event means a connected event. The collateral event is not

The part of the consideration but in fact, a part of the contract.

EXAMPLES

a. A contracts to pay Rs. 1000 to B, if B marries C. It is a contingent contract.

b. A promises to give a loan of Rs. 1000 to B, if he is elected the president of a

particular association. It is a contingent contract.

Performance of Contingent Contracts

The rules of performance of contingent contracts are as under:

Happening of Event

Contingent contracts to do or not to do anything if an uncertain future

Event happens, cannot be enforced by law unless and until that event has

Happened. (Sec 32)

In other words, a contingent contract dependent on the happening of a

Future event cannot be enforced by law until that event has happened. If the

Event becomes impossible, the contract becomes void.

EXAMPLES

A contracts to pay a sum of money to B, B marries C. C dies before getting

Married to B. The contract becomes vold.

B A makes a contract to sell a horse to B I C refuses to buy it. The contract

Cannot be enforced by law unless Crefuses to buy the horse.

Non Happening of Event

Contingent contracts to do or not to do anything if an uncertain future

Event does not happen, can be enforced when the happening of that event
Becomes impossible, and not before (Seo 33)

The enforceability depends upon the impossibility of the contingent event

Unt the event becomes impossible, the contract cannot be enforced.

EXAMPLE

A agrees to pay a sum of money to B, if a certain ship does not retum.

The ship is sunk. The contract becomes enforceable when the ship is sunk.

Depending on Future Conduct

I the future event on which a contract is contingent is the way in won a

Person will act at an unspecified time, the event shall be considered to become

Impossible when such person does anything which rendere it impossible that he

Should so act within any definite time, or otherwise than under further

Contingencies. (Sec 34)

Thus, the future conduct of any person is considered impossible if it

Becomes impossible to perform it in the given circumstances.

EXAMPLE

A agrees to pay a sum of money to B, if Barries C. Later, C marries D.

The marriage of B to C will be considered impossible although it is possible that

D may die and C may marry B afterwards.

Happening of Event within Fixed Time

Contingent contracts to do or not to do anything if a specified uncertain

Event happens within a fixed time become void if, at the expiration of the time

Fixed, such event has not happened, or if, before the time fixed, such event

Becomes impossible. (Sec 35(1))

It means that a contract contingent on the happening of an event within a

Fixed time becomes void if the time fixed expires and the event does not happen

Or the event becomes impossible before the time expires.

EXAMPLE

A promises to pay a sum of money to B, if a certain ship returns within a

Year. The contract becomes enforceable if the ship retums within a year and

Becomes void if the ship sinks within a year

Non-Happening of Event within Fixed Time

Contingent contracts to do or not to do anything, if a specified uncertain

Event does not happen within a fixed time may be enforced by law when the

Time fixed has expired and such event has not happened, or before the time fixed

Has expired it it becomes contain that such event will not happen (Sec 35(2))

If performance of a contract depends on the non happening of an event

Within a specified time, its performance cannot be demanded if the event does

Not happen or its happenmg becomas impossible belore the expiry of that time.

EXAMPLE

A agrees to pay a sum of money to B, if a certain ship does not retum.

The ship is sunk. The contract becomes enforceable when the ship is sunk.

3. Depending on Future Conduct

I the future event on which a contract is contingent is the way in won a

Person will act at an unspecified time, the event shall be considered to become

Impossible when such person does anything which rendere it impossible that he

Should so act within any definite time, or otherwise than under further

Contingencies. (Sec 34)

Thus, the future conduct of any person is considered impossible if it

Becomes impossible to perform it in the given circumstances.

EXAMPLE

A agrees to pay a sum of money to B, if Barries C. Later, C marries D.

The marriage of B to C will be considered impossible although it is possible that

D may die and C may marry B afterwards.

4. Happening of Event within Fixed Time

Contingent contracts to do or not to do anything if a specified uncertain

Event happens within a fixed time become void if, at the expiration of the time
Fixed, such event has not happened, or if, before the time fixed, such event

Becomes impossible. (Sec 35(1))

It means that a contract contingent on the happening of an event within a

Fixed time becomes void if the time fixed expires and the event does not happen

Or the event becomes impossible before the time expires.

EXAMPLE

A promises to pay a sum of money to B, if a certain ship returns within a

Year. The contract becomes enforceable if the ship retums within a year and

Becomes void if the ship sinks within a year

Non-Happening of Event within Fixed Time

Contingent contracts to do or not to do anything, if a specified uncertain

Event does not happen within a fixed time may be enforced by law when the

Time fixed has expired and such event has not happened, or before the time fixed

Has expired it it becomes contain that such event will not happen (Sec 35(2))

If performance of a contract depends on the non happening of an event

Within a specified time, its performance cannot be demanded if the event does

Not happen or its happenmg becomas impossible belore the expiry of that time.

Contiger snd Quas Contracts

EXAMPLE

A promises to pay a sum of money to B, a certain ahip does not retum

Within a year. The contract may be enforced If the ship does not return within a

Year or sinks within a year.

Happening of Impossible Event

Contingent agreements to do or not to do anything if an impossible event

Happens, are vold, whether the impossibility of the event is known or not to the

Parties to the agreement at the time of foration (Sec. 36)

In means that if the performance of contract is made dependent on an

Event which is already impossible, the contract becomes void whether or not the

Fact is known to the parties.

EXAMPLES

A agrees to pay Rs: 1000 to B, if he can run at 500 kilometers per hour. The

Agreement is vold

A agrees to pay Rs. 1000 to B, B marries A’s daughter C. C was dead at

The time of the agreement. The agreement is vold.

DIFFERENCE BETWEEN CONTINGENT AND WAGERING AGREEMENT

The main points of distinction between the two are as under:

Contingent

Wagering

Validity

It is a valid contract.

It is absolutely void.

2. Interest

The parties have real interest in the The parties are not interested in the

Occurrence or non-occurrence of the occurrence of the event except for the

Event

Winning or losing the bet amount

3 Uncertain Event

The future uncertain-event is merely The uncertain event is the sole

Collateral

Determining factor

QUASI CONTRACT

Meaning

Quas contract arises under some special circumstances. Ils ant

Obligation imposed by law upon a person for the benefit of another even in the

Absence of a contract it is based on the principle of equity ang justice. It states

That nobody shall be allowed to become nch at the cost of anot. Sometimes,

Regues that a particular personal performem obligations such

Obligations are calld quasi contracts. They are also called constructive Contract.
Kinds of Quasl Contracts

The following are different kinds of contracts:

Supply of Necessaries

Il a person, incapable of entering into a contract or afryone whom he is

Legally bound to support, is supplied by another person with necessaries suited to

His condition in life, the person who has furnished such supplies is entitled to

Reimbursed from the property of such incapable person. The following points

Must be noted: (Sec 68)

The person to whom the necessaries are supplied is incapable of entering

Into a contract, Le minor, person of unsound mind.

The other person has supplied him or anyone whom ho is legally bound to

Support with necessaries suited to his condition of life:

C. The things supplied must be necessaries and not luxuries.

d. Incompetent person’s property is liable in pay only a reasonable price and not

the contract price

e. The price of the goods or services supplied can be recovered out of property

of incompetent person if he has any. He is not porsonally liable.

1 The incompetent person must not have such necessaries

EXAMPLES

A supplies B, aminor with necessario suitable to his conditionne. Als

Entitled to recover from B’s property

A supplies necessaries of de to the wife and chiden olan insane person 8

Als entitled to recover from property

Payment by interested Person

A person who is interested in the payment of money which another is

Bound by law to pay, and who therefore pays L is entitled to be reimbursed by

The other. The following points must be noted (Se 69

A person should be interested in payment to protect hown intarest

A person himself should not be legally bound to pay

Another person should be legally bound to pay

A person should make the payment

Or poton

EXAMPLES

A pays aroors of colocavoddste een is landlord A

Cannover from Britannien

6. Ho can sue for recovery of damages if anyone deprives him of the

Possession of the goods.

7. He can sell the goods in the following situations:

a. When goods are perishable.

b. When lawful charges of the finder amounts to 2/3rd of its value.

C. When the owner is found but refuses to pay lawful charges.

d. When the owner cannot be found out with reasonable diligence.

EXAMPLE

X, a guest found a diamond ring at the birth party of Y. X told Y and other

Guests about it. X could not find the owner X can retain the ring.

5. Mistake or Under Coercion

A person to whom money has been paid or anything delivered by

Mistake or under coercion must ropay or turn it to the person who paid it by

Mistake or under coercion (Sec. 72)

If one party by mistake or under coercion pays money to another party

Which is not duo by contract or otherwise that money must be repaid.

EXAMPLES

A and B jointly borrow Rs. 1090 from C A alone pays the amount to CB, not

Knowing that A has paid the amount, also pays Rs. 1000 to CC must repay

The amount to B
A paid some money to 8 by mistake which was due to CA can recover his

Money from B

SHORT ANSWER QUESTIONS

What is a contingent contract?

What are the characteristics of a contingent contract

Name the quasi contracts

TEST QUESTIONS

1.

2.

Define the term contingent contract. Discuss the rules relating to the

Performance of contingent contracts

Distinguish between a contingent contract and a wagering agreement. What

Are the rules relating to contingent contracts?

What are quasi-contracts? Explains the quasi-contracts.

3.

Cortigen und Quas Contracte

77

Write a short note on Quasi-contracts

5. State the quasi-contracts recognized under the Contract Act 1872

B There are certain relations resembling those created by a contract. Explain

Giving examples

2 Discuss the rights and duties of a linder of goods