A contract may be absolute i.e. in which the promise has to be performed independent of any condition or contingency.
Contingent contract-Section 31
A contingent contract is a contract to do or not to do some thing, if some event, collateral to such contract, does or does not happen.
Example (a): A contracts to pay B Rs. 10,000 if B’s house is burnt. This is a contingent contract.
(b): A agrees to sell a specified plot of land to B, if he succeeds in litigation concerning such plot of land.
Essentials of contingent contract
1. Performance of a contingent contract is made dependent upon the happening or non-happening in future of some event.
2. The event must be uncertain i.e. it should not be bound to happen.
3. The event must be collateral to the contract.
Rules regarding contingent contracts
The rules regarding contingent contracts as contained in sections 32 to 36 are summarised below:
1. Happening of uncertain future event-Section 32: Contingent contracts dependent on the happening of uncertain future event cannot be enforced until such event has happened. If that event becomes impossible such contract becomes void.
Example (a): A makes a contract to buy B’s horse if A survives C. The contract cannot be enforced by law unless and until C dies in A’s lifetime.
(b): A agrees to pay B a sum of money when B marries C. C dies without being married to B. The contract is void.
2. Non-happening of uncertain future event-Section 33: Contracts contingent upon the non-happening of an uncertain future event, can be enforced when the happening of that event becomes impossible.
Examples (a): A agrees to pay B a sum of money if a certain ship does not return. The ship is sunk. The contract can be enforced when the ship sinks.
3. Action at unspecified time-Section 34: Contract contingent upon how a person wilt act at an unspecified time, shall becotti6 void if the person does anything which renders the event impossible so that it becomes impossible for him to so act within definite time or under further contingencies.
Examples: A agrees to pay B Rs. 1,000 if B marries C. C marries D. The marriage of B to C now is impossible, although it is possible that D may die and that C may afterwards marry B.
4. Event happening within fixed time-Section 35: Contract contingent on the happening of an event within a fixed time becomes void if, at the expiration of time, such event has not happened or if, before the time fixed, such event becomes impossible.
Example: A promises to pay B Rs. 1,000 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.
5. Non-happening of event within fixed time-Section 35: Contract contingent upon non-happening of an event within a fixed time may be enforced by law when the time fixed has expired and such event has not happened, or before the expiry of such time, it has become certain that such event shall not happen.
Example: A promises to pay B Rs. 1,000 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 year.
6. Happening of impossible event-Section 36: Contingent agreement to do or not to do anything, if an impossible event happens, are void, whether or not this fact is known to the parties.
Examples (a): A agrees to pay B Rs. 1,000 if two straight lines should enclose a circle. The agreement is void.
(b): A agrees to pay B Rs. 1,000 if B marries A’s daughter C. C was dead at the time of the agreement. The agreement is void.