Chapter 5 Contingent contracts

Question 1

Define contingent contract? Example.

Answer 1

A contingent contract is a contract to do (not to do) something if some event, collateral to such contract, does happen or does not happen.
Examples: Contracts of insurance and Contracts of guarantee.

Question 2

Discuss essentials of contingent contracts?

Answer 2

The essentials features of contingent contracts are discuss below:
1. Dependence on a future event:
The performance of contingent contracts depend upon the happening or non- happening of some future event.
2. Collateral event:
The event must be collateral/incidental(related or connected) to the contract.
Uncertain event:
The event must be uncertain(unknown).

Question 3

Discuss difference b/w wagering agreement and contingent agreement?

Answer 3

Validity:
Wagering agreement is void and illegal.
Contingent contract is valid (unless it is illegal or impossible)
Future event:
Future event is sole determining factor of agreement(only one event in the contract).
Future event is only collateral(two event in the contract).
Interest of parties:
Its parties have no other interest except winning or losing the wagering amount.
Its parties have real interest in happening or non-happening of event.
Reciprocal promises:
It may or may not consist of reciprocal event.
It consist of reciprocal promises.

Question 4

Discuss rule regarding performance of contingent contract upon happening of an event?

Answer 4

If time is fixed:
Contract can be enforced only when event happen within time specified.
Contract cannot be enforced if event become impossible or time passes.
If time is not fixed:
Contract can be enforced only when event happen.
Contract cannot be enforced if event become impossible.

Question 5

Discuss rule regarding performance of contingent contract upon non-happening of an event?

Answer 5

If time is fixed:
Contract can be enforced only when event become impossible or does not happen within time specified.
Event cannot be enforced if event happens within time specified.
If time not fixed:
Contracts can be enforced only when it become impossible.
Contracts cannot enforce if event happens.

Question 6

Discuss validity of contingent contract about impossible event and future conduct of a person?

Answer 6

Impossible contingent contract are void ab-initio.
Such event become impossible if that person does anything by which it becomes impossible to perform the contract within nay definite time.