HERITAGE LAW COLLEGE

ROLL NO :- A) 23001
B) 23002
NAME :- A) MUSKAN AGARWAL
B) AISHI NASKAR
SUBJECT :- GENERAL PRINCIPLES OF CONTRACT
SECTION :- “A”
TOPIC :- WRITE A SHOTE NOTE ON CONTINGENT CONTRACT
FACULTY NAME :-
 Introduction
The indian contract act 1872 defines the term “contracts” under section 2(h) as an agreement
between two or more parties that engenders liability that is enforceable by law and for every
contract, there should be an agreement that is made by the free consent of parties competent to
contract, for a lawful consideration and with a lawful object.
The agreement should not be declared void hereby to form a contract. Thus for the formation of
a contract, there must be an agreement and something in addition to that an agreement and its
enforceability at law.
The word contingent ordinarily means ‘subject to chance’. In the indian contract act, 1872 this
word has been used to mean conditional, just the way we use it generally. Uncertainty is the
hallmark of the future. Estimating the chances of an uncertainty becoming certain, calculating
the results if the event doesn’t happen and then measuring the potential to deal with its
consequences are all about contingent contracts. Parties may stipulate that performance of
obligations under a contract is dependent on a contingency, even though the contract is validly
formed. The parties agreeing to the conditions agree that the rights will be enforced, and the
obligations will be due on the happening of the contingency on the contracting of a valid contract
Contingent contracts
The word “contingency” means something that is related to a future event and is uncertain So,
the term contingent contract means an agreement That is based on the occurrence or the non-
occurrence of a future event that is likely or not likely to happen
Chapter III of the Indian contract act, 1872 incorporating section 31 to 36 lays down the
provisions that deal with the contingent contracts
Section 31
According to the Indian contract act, 1872 (bare act) section 31 carry the definition of the term
“contingent contract” which says
“a ‘contingent contract’ is a contract to do or not do something, if some event, collateral to
such contract, does or does not happen “
The term “collateral” here stipulates the event when the contract becomes valid depending upon
the eventuality of the conditions specified in the contract in question. if A and B enter into a
contract for the delivery of goods in the near future and A gives consideration of a certain
amount to B for the delivery of goods, then it does not amount to a contingent contract since A’s
obligation arises out of the event which is not collateral, but a part of the contract.
Illustration / example
‘A’ and ‘B’ enters a contract, where ‘A’ states that he would transfer the ownership and the
possession of the disputed house to ‘B’ if he Wins the case. Here the transfer is conditional upon
A winning the litigation. Hence, it is a contingent contract where the execution of the contractual
obligations depended on a specific event.
Every contingent contract is thus a contract primarily, like any other contract. An absolute and
unconditional one, without any reservations or conditions, which is to be performed under any
event
[CASE LAW]
“Chandulal Vs. Commissioner of income tax “

In 1959, Harjivandas Kotecha purchased a Children's Deferred Endowment Assurance policy for
his minor son, with premiums paid from his own taxable income. The policy offered life insurance
and a lump sum payout on maturity, but the son's ownership was contingent on him adopting
the contract upon reaching adulthood. The Income-tax Officer and Appellate Assistant
Commissioner denied Kotecha's claim for insurance premium rebate under section 15(1) due to
the son's minority. However, the High Court ruled The High Court, accordingly observed that the
real contracting parties were the father of the assesse and the Life Insurance Corporation and it
was only under certain contingency on the happening of which the contract was to become the
contract of the assesse.
legal term "contingent" to highlight the uncertain nature of the son's ownership
SECTION 32
According to the Indian contract act, 1872 (bare act) section 32
“enforcement of contracts contingent on an event happening”
`- contingent contract to do or not to do anything if an uncertain future events happens,
cannot be enforced by law unless and until that event has happened. If the event becomes
impossible, such contracts become void
concerns the implementation of contracts contingent on the happening of an uncertain event.
Unless and until the event occurs, the contract cannot be enforced and It specifies to perform
any obligation under the contract that becomes certain on a happening of uncertain future
matter. These contracts are enforceable until a specific event occurs.
Illustration
A and B entered into a contract which stated that A would pay B Rupees One Lakh if he married
C. But, in the meanwhile C died without marrying B So, the contract becomes void.
“DOCTRINE OF FRUSTRSTION “
Under this doctrine a promisor is relieved of any liability under a contract in the event of the
breach of contract and contract will be deemed to be void. Doctrine of frustration on the other
hand makes the contract void when the said act is impossible or incapable of being performed for
reasons outside the control of parties.
[CASE LAW]
Satyabrata Ghose vs Mugneeram Bangur & Co., And ... on 16 November, 1953
In the given case, the court held that performance of the contract by any of the parties has not
become unfeasible, the court said that the land taken by the government was of temporary
native the government did not take the land for a permanent purpose. It was only for a limited
time period. Also, Mugneeram Bngur and the company did not initiate their work when the land
was taken by the government. So therefore there is no case of interruption in work.
Court also noted that there was no time limit specified in the contract for the completion of
construction of the roads and drains because it was understood that the work will be completed
in a reasonable time period. Therefore, the work was to be completed within a reasonable time,
and also since, the war conditions prevalent were known to both the parties while entering into
the contract, that reasonable time was to be modified.

SECTION 33
According to the Indian contract act, 1872 (bare act) section 33
“enforcement of the contract contingent on an event not happening”
- Contingent contract. To do. Or. Not to do anything. If an uncertain future event. Does not
happen. Can be enforced. When the happening of the event became impossible and not
before.
In such cases, the promisor is liable to do or not do something if the event does not happen.
However, the contract cannot be enforced by law unless happening of the event becomes
impossible. If the event takes place, then the contingent contract is void
Illustration: Peter promises to pay John Rs 50,000 if the ship named Titanic which leaves on a
dangerous mission does not return. This is a contingent contract. This contract is enforceable by
law if the ship sinks making its return impossible. On the other hand, if the ship returns, then the
contract is void.
SCETION 34
According to the Indian contract act, 1872 (bare act) section 34
" When event on which contract is contingent to be deemed impossible, if it is the future
conduct of a living person”
- If the future event. On which a contract is contingent. Is the way in which. A person. We'll
ask at. An unspecified Time., The event shall be considered. To become impossible when such
person does. Anything which renders it Impossible. That he should. So act. Within any Definite
time, or otherwise than under further contingencies
deals with contracts contingent on the future conduct of a living person. If the future event on
which a contract is a contingent is the way a person will act at an unspecifie time, the event shall
be consider to become impossible when such person does anything which renders impossible
that he should so act within any definite time, or otherwise than under further contingencies.
Illustration
Peter promises to pay John Rs 5,000 if he marries Julia. However, Julia marries Oliver. Julia’s act
thus renders the event of John marrying her impossible. (A divorce is still possible though but the
happening of the event is considered impossible.)
SECTION 35
According to the Indian contract act, 1872 (bare act) section 35
" When contracts become void, which are contingent on happening specified event within
fixed time”
- Contingent contracts to do or not to do anything, if a specified uncertain event happen
within a fixed time, become viod if, at the expiration of the time fixed, such event has not
happened, or if, before the time fixed, such event become impossible
“when contracts may be enforced, which are contingent on specified event not happening
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, if it becomes
certain that such event will not happen

regarding contracts contingent on the happening of specified events within a fixed time. If the
event does not happen within the specified time, then the contract becomes void. In such cases,
the promisor is liable to do or not do something if the event does not happen within the said
time. The contract can be enforced by law if the fixed time has expired and the event has not
happened before the expiry of the time. Also, if it becomes certain that the event will not happen
before the time has expired, then it can be enforced by law.
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. If a man promises to pay another man
some money if a ship does not return within a year, the contract becomes void if the ship is
burnt or sinks within that year
Illustration: A agrees to pay B a certain amount of money if the ship returns within a year. If the
ship returns within the specified time, then the contract is enforceable, if not it becomes void.
SECTION 36
According to the Indian contract act, 1872 (bare act) section 36
“agreement contingent on impossible event void”
- Contingent agreement to do or not to do anything, if an impossible event happens, 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
If a contingent contract is based on the happening or non-happening of an impossible event, then
such a contract is void. This is regardless of the fact if the parties to the contract are aware of the
impossibility or not.
Illustration: Peter promises to pay John Rs 5,000 if the ship named Titanic which leaves on a
dangerous mission does not return before June 01, 2019. This contract is enforceable by law if
the ship does not return within the fixed time. Also, if the ship sinks or is burnt, the contract is
enforced by law since the return is not possible.

Essential elements
1) There Must Be A Valid Contract To Do Or Not To Do Something
2) The Performance Of The Contract Must Be Conditional
3) The Said Event Must Be Collateral To Such Contract
4) The Event Should Not Be At The Discretion Of The Promisor
5) Contingent Contract And Agreements Subject To Contract
Conditions when a contingent contract can be enforced
1) On The Happening Of An Event
- The contingent contracts to do or abstain from doing something if an uncertain future
event happens. However, the contract cannot be enforced by law unless the event takes
place. If the event becomes impossible, such contracts become void
2) On The Event Not Happening
- The contingent contracts to do or abstain from doing something if an uncertain future
event does not happen can be enforced when the happening of that event becomes
impossible. If the event takes place, then the contingent contract is void
3) On The Event on happening and Not Happening Within A Specified Time
- Contingent contracts to do or not to do anything if a future uncertain event happens
within a fixed time. Such a contract is void if the event does not happen and the time
lapses. It is also Contingent contract to do or not to do anything if an uncertain event does
not happen within a fixed time may be enforced by law when the fixed time has expired,
and such event has not happened, or before the time fixed has expired, if it becomes
certain that such event will not happen. void if before the time fixed, the happening of the
event becomes impossible.
-
4) On the future conduct of a living person
- If a contract contingent upon how a person will act at a future time, the event shall be
considered impossible when such person does anything which makes it impossible for the
event to happen
Situations when a contingent becomes void
 1) The Event Being Impossible
- If an agreement to do or not to do is based on the impossible event, then such agreement
is void, whether the impossibility of the event is known or not to the parties to the
agreement at the time when it is made
2) Non-Happening Of Event Within Fixed Time
- contingent contract to do or not to do something, if 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 impossibl
3) Agreements Contingent On Impossible Events
- contingent agreement to do or not to do anything, if an impossible event happens, are
void, whether the impossibility of the event is known or not to the parties to the
agreement at the time when it is
4) Conduct Of A Living Person
- if the future event on which a contract is a contingent is the way in which a person will act
at an unspecified time, the event shall be considered to become impossible when such
person does anything which renders it impossible that he should so act within any definite
time, or otherwise than under further contingencies.

Conclusion
A contract is an agreement enforceable by law. For every contract, there should be an agreement
which is made by the free consent of parties competent to contract, for a lawful consideration and
with a lawful object. The agreement should not be declared void hereby to form a contract. Every
contingent contract is a contract primarily. Like any other contract, it is also a contract to do or not
to do something. It is not, however, an absolute and unconditional one, without any reservations
or conditions, which is to be performed under any event. Its performance is dependent on some
event’s happening or not happening- the contingency.
For a contract to be a contingent contract, certain essential elements have to be there. These
elements form a contingent contract and without them, a contract will not be contingent. There
must be a valid contract to do or not to do something. The performance of the contract must be
conditional. The said event must be collateral to such contracts and the event should not be at the
discretion of the promisor. These are some rules that have to be followed for a contingent contract
to be enforceable. For instance, on the happening of an event, on the event not happening and on
the event not happening within a specified time. There are some situations when a contingent
contract becomes void. Some of them are: the event being impossible, not happening of event
within fixed time, agreements contingent on impossible events and on the conduct of a living
person.