CHAPTER III --- OF CONTINGENT CONTRACTS (31-36) 31. "CONTINGENT CONTRACT" DEFINED.—
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 Rs. 10,000 if B’s house is burnt. This is a contingent contract.
NOTE
Ingredients of contingent contract.—These are as follows :
1. Contract to do or not to do something.
2. Contract is based on if some event does or does not happen.
3. The event must be collateral to such contract.
All contracts of insurance except life insurance are contingent contract. AIR 1967 SC 816.
32. ENFORCE MENT OF CONTRACTS CONTINGENT ON AN EVENT HAPPENING.—
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. if the event becomes impossible, such contracts become void.
ILLUSTRATION
a. A makes a contract with B to buy B’s horse if A survives C. This contract cannot be enforced by law unless and untilC dies in A’s lifetime.
b. A makes a contract with B to sell a horse to B at a specified price, if C, to whom the horse has been offered, refusesto buy him. The contract cannot be enforced by law unless and until C refuses to buy the horse.
c. A contracts to pay B a sum of money when B marries C. C dies without being married to B. The contract becomesvoid.
33. ENFORCEMENT OF CONTRACTS CONTINGENT ON AN EVENT NOT HAPPENING. —
Contingent contracts to do or not to do anything if an uncertain future event does not happen, can be enforcedwhen the happening of that event becomes impossible, and not before. ILLUSTRATIONA agrees to pay B a sum of money if a certain ship does not return. The ship is sunk. The contract can be enforced when the ship sinks.
34. WHEN EVENT OF WHICH CONTRACT TO BE DEEMED IMPOSSIBLE, IF IT IS THE FUTURE CONDUCT OF A LIVINGPERSON. —
If the future event on which a contract is 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.
ILLUSTRATION
A agrees to pay B a sum of money if B marries C. C marries D. The marriage of B to C must now be considered impossible, although it is possible that D may die, and that C may afterwards marry B.
35. WHEN CONTRACTS BECOME VOID, WHICH ARE CONTTIGENT ON HAPPENING OF SPECIFIED EVENT WITHINFIXED 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.
WHEN CONTRACT MAY ENFORCED, WHICH ARE CONTIGENT ON SPEICIFIED EVENT NOT HAPPENING WITHIN FIXEDTIME. —
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,
ILLUSTRATIONS
(a) A promises to pay B a sum of money if a certain ship returns within a year. The contract may be enforced if the ship returns within the year; and becomes void if the ship is burnt within the year.
(b) A promises to pay B a sum of money if a certain ship does not return within a year. The contract may be enforced if the ship does not return within the year, or is burnt within the year.
36.AGREEMENTS CONTIGENT ON IMPOSSIBLE EVENT, VOID. .—
Contingent agreements 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.
ILLUSTRATIONS
(a) A agrees to pay B 1,000 rupees if two straight lines should enclose a space. The agreement is void.
(b) A agrees to pay B 1,000 rupees if B will marry A’s daughter C. C was dead at the time of the agreement. The agreement is void.
