What is mean by contingent contract?

Contingent Contract is a Contract which has to do or not to do something.

for example Krishna Contracts with Ram that he will give 1 crore rupees if rains fall on 31st december... held it is based on future whether it happens or may not happen.




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. Insurance contract provide the best example of contingent contracts.

Example:

• 
  A contracts to pay B Rs. 10,000 if B's house is burnt. This is a contingent contract.
• 
  A promises to B Rs. 1 crore if a certain ship does not return within a year.

Essential features of a contingent contract

1. 
   Dependence on a future event: The performance of a contingent contract depends upon the happening or non-happening of some future event.
2. 
   Collateral Event: The event must be collateral to the contract.
3. 
   Uncertain Event: The event must be uncertain.

Note:
The performance of a contingent contract must depend upon the happening or non-happening of an event and not on the mere will of the promisor.
Rule about contingent contract
When the contract, based upon happening of future event:
For example : A promises to pay B Rs. 10,000 if A's ship coming from London reaches at Mumbai-port on or before 31^stMay,2011.
Case 1:When the ship reaches at Mumbai-port on or before 31^stMay,2011
Valid contract(Enforceable law)
Case 2: When the ship reaches at Mumbai port after the specified period i.e. 31^stMay,2011
Void/ Unenforceable
Case 3: When the ship sinks
Void/Unenforceable
When the contract, based upon non-happening of future event:
For example : A promises to pay B Rs. 10,000 if A's ship coming from London doesn't reaches at Mumbai-port on or before 31^stMay,2011.
Case 1:When the ship reaches at Mumbai-port on or before 31^stMay,2011 i.e., specified period
Void
Case 2: When the ship reaches at Mumbai port after the specified period i.e. 31^stMay,2011
Valid
Case 3: When the ship sinks
Valid