Contingent Contracts
Section 31. Contingent contract defined.
A contingent contract is a contract that depends on a future event, which may or may not happen.
The contract involves doing or not doing something only if that event occurs.
The event is collateral, meaning it is separate from the contract itself but affects whether the contract is enforceable.
Illustration:
(a).
A agrees to pay B ₹10,000 if B’s house burns down.
The obligation to pay arises only if the house actually burns.
Until that event happens, the contract cannot be enforced.
Section 32. Enforcement of contracts contingent on an event happening.
A contingent contract is a contract that depends on a future event.
Such contracts cannot be enforced by law until the event actually happens.
If the event never happens or becomes impossible, the contract becomes void.
Illustrations:
(a).
A agrees to buy B’s horse if A survives C.
The contract can only be enforced if C dies while A is alive.
Until that happens, A is not legally bound to buy the horse.
(b).
A agrees to sell a horse to B if C refuses to buy it.
The contract is enforceable only when C actually refuses.
(c).
A agrees to pay B money when B marries C.
If C dies before marrying B, the condition cannot happen, so the contract becomes void.
Section 33. Enforcement of contracts contingent on an event not happening.
Some contingent contracts depend on a future event not happening.
Such contracts cannot be enforced until it is clear that the event will not happen.
In other words, the contract becomes enforceable only when it becomes impossible for the event to occur.
Illustration:
(a).
A agrees to pay B a sum of money if a certain ship does not return.
If the ship sinks, it is now impossible for the ship to return.
Only at this point can B enforce the contract and claim the money.
Section 34. When event on which contract is contingent to be deemed impossible, if it is the future conduct of a living person.
Some contingent contracts depend on how a living person will act in the future.
A contract is considered impossible if a person does something that makes the agreed event unable to happen.
This can be because it cannot occur within a definite time or requires additional conditions that prevent it from happening
Illustration:
(a).
A agrees to pay B money if B marries C.
C marries D before marrying B.
Now, B marrying C is impossible at present, so the contract can be considered impossible, even though theoretically, C could marry B later if D dies.
Section 35. When contracts become void which are contingent on happening of specified event within fixed time. When contracts may be enforced, which are contingent on specified event not happening within fixed time.
Contingent contracts can also specify that an event must happen or not happen within a fixed time.
The law treats these differently depending on whether the contract depends on occurrence or non-occurrence of the event.
1. Contracts contingent on an event happening within a fixed time:
The contract becomes void if the event does not happen by the end of the fixed time.
It also becomes void if the event becomes impossible before the fixed time.
2. Contracts contingent on an event not happening within a fixed time:
The contract can be enforced when the time expires and the event has not happened.
If, before the fixed time expires, it becomes certain that the event will not happen, the contract can also be enforced.
Illustrations:
(a).
A promises to pay B money if a certain ship returns within a year.
If the ship returns within the year, the contract can be enforced.
If the ship is burnt or lost within the year, making its return impossible, the contract becomes void.
(b).
A promises to pay B money if a certain ship does not return within a year.
If the ship does not return within the year, the contract can be enforced.
If the ship is burnt within the year, the contract can also be enforced because the event of the ship returning cannot happen.
Section 36. Agreement contingent on impossible events void.
If a contract or agreement depends on an event that is impossible, it is automatically void.
It doesn’t matter whether the parties knew it was impossible when they made the agreement , the law treats such contracts as invalid from the start.
Illustrations:
(a).
A agrees to pay B ₹1,000 if two straight lines enclose a space.
This is mathematically impossible, so the agreement is void.
(b).
A agrees to pay B ₹1,000 if B marries A’s daughter C, but C was already dead when the agreement was made.
Since the marriage can never happen, the contract is void.
