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Contingent Contracts 31 To 36

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108 views2 pages

Contingent Contracts 31 To 36

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chahalharry849
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Indian Contract Act 1872

Notes By Adv Ravneet Singh Joshi


9914200017

Chitkara University Business School


Subject Code : Legal Environment of Business
The Indian Contract Act, 1872
Contingent Contracts (Sections 31 to 36 of the Indian Contract Act,
1872)
Contingent contracts are agreements where the performance depends on the
occurrence of a specific event. If the event happens, the contract must be
performed; if it does not, the contract is not enforceable. Let’s break down
these sections with simple explanations and examples.

1. Section 31: Definition of Contingent Contracts


• Provision: A contingent contract is a contract that is dependent on the
happening or non-happening of a specific event, which may or may
not happen.
• Example:
A agrees to pay B ₹10,000 if it rains on a particular day. Here, B will
only receive the money if it rains; if it does not rain, the contract does
not need to be fulfilled.

2. Section 32: Contracts to be Performed on the Happening of a Specified


Event
• Provision: A contingent contract must be performed when the
specified event occurs. If the event is impossible, the contract becomes
void.
• Example:
A agrees to sell B his car if B wins a race. If B wins the race, A must
sell the car to B. If B does not win, A is not obligated to sell the car.
• Illustration:
Suppose A promises to pay B ₹20,000 if B's son gets a scholarship. If
the son gets the scholarship, A must pay. If he does not get the
scholarship, A has no obligation.

3. Section 33: Contracts to be Performed on the Non-Happening of a


Specified Event
• Provision: If a contract is contingent on the non-happening of an
event, and the event does not happen, the contract must be performed.
• Example:
A agrees to pay B ₹5,000 if B’s company does not get a new contract
by the end of the month. If the company does not get the new contract,
A must pay B.
Indian Contract Act 1872
Notes By Adv Ravneet Singh Joshi
9914200017

4. Section 34: Contracts in Which a Person is Bound to Perform Whether


the Event Happens or Not
• Provision: In certain cases, the performance of the contract is required
irrespective of the event’s occurrence.
• Example:
A agrees to sell B a painting for ₹50,000. If the painting is destroyed
in an accident, A must still refund B's money if B had paid it in
advance.

5. Section 35: Contracts Void if the Event Becomes Impossible


• Provision: If the event on which the contingent contract is based
becomes impossible, the contract is void.
• Example:
A and B enter into a contract where A will pay B ₹30,000 if B’s factory
is destroyed by fire. If the factory is not destroyed, the contract does
not have to be performed. If the factory was already destroyed before
the contract was made, the contract is void.

6. Section 36: Contracts Void if the Event is Not Performance Due to a


Party’s Own Fault
• Provision: If a contingent contract becomes impossible due to the
fault of the party who should have performed it, the contract is void.
• Example:
A promises to sell B a plot of land if A receives a certain legal
clearance. If A deliberately does not apply for the clearance and thus
makes it impossible to get it, the contract is void.

Summary
1. Contingent contracts depend on a specific event happening or not
happening.
2. Performance is required if the event occurs; if it does not, the contract
may not need to be performed.
3. Impossible events make the contract void, while faults of the party
can also render it void.

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