CONTINGENT CONTRACT

Question 1

A contingent contract is a contract to do or not to do something if:
(a) A future event happens
(b) A past event happened
(c) The parties agree
(d) There is a breach of contract

Answer 1

(a) A future event happens

Question 2

Which of the following contracts can be considered as contingent contracts?
(a) Lease agreements
(b) Employment contracts
(c) Insurance contracts
(d) Purchase agreements

Answer 2

(c) Insurance contracts

Question 3

What is the essential characteristic of a contingent contract?
(a) It depends on a past event
(b) It depends on a certain event
(c) It depends on a collateral event
(d) It depends on the consent of both parties

Answer 3

(c) It depends on a collateral event

Question 4

The performance of a contingent contract depends on the happening or non-happening of:
(a) A past event
(b) A certain event
(c) A future event
(d) A present event

Answer 4

(c) A future event

Question 5

Which of the following statements is true about a contingent contract?
(a) It is always void and illegal
(b) It is valid only if the event is certain
(c) It consists of reciprocal promises
(d) It has no interest of the parties involved

Answer 5

(c) It consists of reciprocal promises

Question 6

A contingent contract depends on a future event. (True/False)

Answer 6

True

Question 7

A contingent contract is a contract to do or not to do something if some ___________ event happens.

Answer 7

collateral

Question 8

The performance of a contingent contract depends on the happening or non-happening of a ___________ event.

Answer 8

future

Question 9

A contingent contract consists of ___________ promises.

Answer 9

reciprocal

Question 10

The interest of the parties involved in a contingent contract is based on the happening or non-happening of the ___________ event.

Answer 10

contingent

Question 11

Contingent Contract (a) Depends on a future event
Collateral Event (b) Uncertain event
Reciprocal Promises (c) Related to the contract
Future Event (d) Consists of mutual commitments
Uncertain Event (e) Contract based on certain conditions

Answer 11

Contingent Contract (a) Depends on a future event
Collateral Event (c) Related to the contract
Reciprocal Promises (d) Consists of mutual commitments
Future Event (a) Depends on a future event
Uncertain Event (b) Uncertain event

Question 12

What is a contingent contract?

Answer 12

Answer: A contingent contract is a contract to do or not to do something based on the happening or non-happening of some collateral event.

Question 13

Give an example of a contingent contract.

Answer 13

Answer: Insurance Contracts and Indemnity and Guarantee Contracts.

Question 14

What are the essential features or characteristics of a contingent contract? Discuss each feature.

Answer 14

Answer: The essential features of a contingent contract are as follows:

The performance of the contract depends on
1)the happening or non-happening of a future event.
2) The event must be collateral or incidental to the contract.
3)The event must be uncertain.

Question 15

Define a contingent contract and provide examples of such contracts.

Answer 15

Answer: A contingent contract is a contract that depends on the happening or non-happening of some future event, collateral to the contract.
Examples of contingent contracts include insurance contracts and indemnity and guarantee contracts.

Question 16

Explain the basis of the difference between a Wagering Agreement and a contingent contract.

Answer 16

Answer: The basis of the difference between a Wagering Agreement and a contingent contract is as follows:

1) Validity: The Wagering Agreement is void and illegal, while a contingent contract is valid unless dependent on an impossible event.
2) Future/Uncertain Event: In a Wagering Agreement, the future event is the sole determining factor of the agreement, while in a contingent contract, the future event is only collateral.
3) The Interest of Parties: In a wagering Agreement, the parties have no other interest in the happening or non-happening of the event except winning or losing a certain amount, whereas, in a contingent contract, the parties have a real interest in the happening or non-happening of the event.
4) Reciprocal Promises: A wagering Agreement may or may not consist of reciprocal promises, whereas a contingent contract consists of reciprocal promises.

Question 17

Explain the concept of a contingent event in a contract.

Answer 17

Answer: A contingent event in a contract refers to an event that is collateral or incidental to the contract. It is a future event that is uncertain and upon the happening or non-happening of which the performance of the contract depends. The contingent event is related to the subject matter of the contract and has a direct impact on the contractual obligations of the parties involved.

Question 18

Discuss the significance of the uncertainty of an event in a contingent contract.

Answer 18

Answer: The uncertainty of an event is a crucial aspect of a contingent contract. It means that the occurrence or non-occurrence of the event is unknown or not determined at the time of contract formation. The uncertainty adds a level of risk to the contract, as the parties obligations are contingent upon the happening or non-happening of the event. It allows for the possibility of different outcomes, making the contract’s performance dependent on the uncertain event.

Question 19

Explain the enforcement rules for contingent contracts based on the happening of an uncertain future event.

Answer 19

Answer: Contingent contracts based on the happening of an uncertain future event are enforceable if the event happens within the specified time. If the event becomes impossible, the contract becomes void and unenforceable.

Question 20

Discuss the enforcement rules for contingent contracts based on the non-happening of an uncertain future event.

Answer 20

Answer: Contingent contracts based on the non-happening of an uncertain future event are enforceable if the event becomes impossible. If the event happens, the contract becomes void and unenforceable.

Question 21

When is a contingent contract enforceable if it is based on a time-fixed event?

Answer 21

Answer: A contingent contract based on a time-fixed event is enforceable if the event happens within the specified time. If the time expires or the event becomes impossible before the time expires, the contract becomes void.

Question 22

Explain the enforcement rules for contingent contracts based on the happening of an impossible event.

Answer 22

Answer: Contingent contracts based on the happening of an impossible event are void, regardless of whether the impossibility of the event is known or not to the parties at the time of making the agreement.

Question 23

When is an event based on future conduct deemed impossible in a contingent contract?