VOID AGREEMENTS

AND
CONTINGENT CONTRACTS

Joynab Binta Marium Kali

Lecturer
Department of law
Noakhali science and Technology University
 Topics will be
covered
⮚ What is a Contingent Contract?
⮚ How is Contingent Contract
Defined?
⮚ What are the Essential of
Contingent Contract?
⮚ What are the Rules Relating to a
Contingent Contract?
⮚ Difference between Contingent
Contract and Wagering agreement
 What is a Contingent Contract?

A contingent contract is a contract where

performance depends upon some event
which may or may not happen.
The performance of a contingent contract
becomes due only upon the happening or
non happening of some future uncertain
event which may or may not happen.
Example :
X contracts to pay y BDT. 10,000 if Y‟s house is
burnt. This is a contingent contract as its
performance is dependent upon an uncertain
event i.e. Burning of Y‟s house which may or
 How is Contingent Contract Defined?

According to Section 31 of the Contract Act

1872:
“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.”
The event on which the performance depends upon
may be either an event which is certain to happen
(though no one knows when it may happen) or it may
be an event which is uncertain.
In other words the said event may or may not happen.
Contracts of insurance, indemnity and guarantee, etc;
are contingent contract. Contingent contracts are
called conditional contracts under English Law.
 Essential of Contingent Contract?

1. There should be a contract to do or not to do

something.
2. The happening of the event should be
uncertain.
3. The performance of the contract must depend
upon the happening or non-happening of some
event.
4. The event on which the performance is to
depend must be collateral or incidental to the
contract.
5. The event must not be the mere will of the
promisor.
 Rules regarding Contingent
Contract
1. Contingent contract 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.
Conversely, contingent contract dependent on the
happening of a certain event, can be enforced
only on the happening of that event.
If the event becomes impossible, such contracts
becomes void as provided under section 32.
 Rules regarding Contingent
Contract
Examples:
1. X entered into a contract with Y that, if he
lives even after the death of Z he will buy
the house of Z. The contract will enforceable
only if Z dies during the life time of X.

(2) X contracts with Y to give him a new car

when he marries P. P dies without being
married to Y. The contract becomes void
 Rules regarding Contingent
Contract
2. Contingent contracts to do or not to do
anything, if an uncertain event does not
happen can be enforced when the happening of
that event becomes impossible and not before
as per sec. 33.

Examples:
X contracts to pay Y a certain sum of money if a
certain ship does not return. The ship is
destroyed in a fire. The contract can be
enforced when the ship is destroyed.
 Rules regarding Contingent
Contract

3. Under section 34 of the Contract Act

1872:
if a contract is contingent upon how a
person will act at an unspecified time,
the event shall be considered to have
become impossible when such person
does anything which renders it
impossible that he should so act within
any definite time or other wise than
under further contingencies.
 Rules regarding Contingent
Contract
Example :
X agrees to pay Y a sum of money if Y
marries Z. Y maries A.
Now marriage of Y to Z seems to be
impossible though it is possible that Y
may marry Z after divorcing A.
The contract will, however, be
performed.
 Rules regarding Contingent
Contract
4. According to Section 35 of the
Contract Act 1872:
1. When contracts become void which
are contingent on happening of
specified event within fixed time
2. When contracts may be enforced
which are contingent on specified
event not happening within fixed
time
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.
 Rules regarding Contingent
Contract
5. According to Section 36 of the Contract Act
1872:
All contingent agreements to do or not to do anything
if an impossible event happens are void. It is essential,
whether the impossibility of the event is known or not
known to the parties to the agreement at the time
when it is made.
Examples:
X promises Y to pay him a certain sum of money, if
he marries X‟s niece. X‟s niece had died at the time
if agreement.
The agreement is void.
Difference between Contingent
Contract and Wagering agreement

POINTS OF CONTINGENT WAGERING AGREEMENT

DIFFERENCE CONTRACT
Type of A contingent contract A wager is an agreement that can be
document is enforceable by the enforceable or non-enforceable by
Law. law.

Mentioned A contingent contract A wagering agreement is mentioned

under is mentioned in in Section 30 of the I Contract Act
Section 31 of the 1872. According to this Section,
Contract Act 1872, wagering agreements are
and is legally valid. considered void.
Definition Section 31 of the The Contract Act does not define
Contract Act states the term wagering agreement.
that a contingent However, a wager means to either
contract is a contract profit or incur a loss by betting on
to do or not to do something depending on the
something depending outcome of a future uncertain
on the outcome of a event.
future uncertain event,
which is collateral to
this contract.
Interest In a contingent In a wagering agreement, the only
contract, there is an interest is in whether I have gained
interest in the contract, profit or incurred loss, depending
as an act will be done upon the outcome of an event.
depending on the
uncertain future event.
Uncertain An uncertain future An uncertain
Future event is secondary future event is the
event or collateral to the only factor that
contract. It does not determines who
determine the has won the
outcome of the wager.
contract

Reciprocal In a contingent In a wagering

Promise contract, there may agreement,
or not be reciprocal reciprocal
promises. promises are
involved.
Thank You………..