Contingent contracts

1. Definition: section 31

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. Illustration: A contracts to pay B Rs 10,000 if B's house is burnt. This is a contingent contract.

Essentials:

• A valid contract, with every element of section 10.
• Performance depends on an uncertain future event happening or not happening. If the event is certain to happen, the contract is not contingent, only performable at a future date.
• The event is collateral: it is not part of the consideration or the promise itself. If A promises to pay B when B delivers goods, delivery is B's reciprocal promise, not a collateral event.
• The event is not at the mere will of the promisor. “I will pay if I choose” is no contract. The event may, however, involve the will of a third party or of the promisee.

Contracts of insurance, indemnity and guarantee are the commonest contingent contracts.

2. Rules of enforcement

Rule 1: contingent on an event happening (section 32)

Such a contract cannot be enforced by law unless and until the event has happened. If the event becomes impossible, the contract becomes void. Illustrations: (a) A makes a contract with B to buy B's horse if A survives C. This cannot be enforced unless and until C dies in A's lifetime. (c) A contracts to pay B a sum of money when B marries C. C dies without being married to B. The contract becomes void.

Rule 2: contingent on an event not happening (section 33)

Such a contract can be enforced when the happening of the event becomes impossible, and not before. Illustration: 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.

Rule 3: event depending on the future conduct of a living person (section 34)

If the future event on which a contract is contingent is the way in which a person will act at an unspecified time, the event is considered to become impossible when that person does anything which renders it impossible that he should so act within any definite time, or otherwise than under further contingencies. Illustration: A agrees to pay B a sum of money if B marries C. C marries D. The marriage of B to C must now be considered impossible, although it is possible that D may die and that C may afterwards marry B.

Rule 4: event to happen within a fixed time (section 35, first paragraph)

The contract becomes void if, at the expiration of the time fixed, the event has not happened, or if before that time it becomes impossible. Illustration (a): A promises to pay B a sum 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.

Rule 5: event not to happen within a fixed time (section 35, second paragraph)

The contract may be enforced if the event has not happened within the fixed time, or if before the expiry of that time it becomes certain that it will not happen. Illustration (b): A promises to pay B a sum 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.

Rule 6: impossible events (section 36)

Contingent agreements to do or not to do anything if an impossible event happens are void, whether or not the impossibility is known to the parties at the time. Illustrations: A agrees to pay B Rs 1,000 if two straight lines should enclose a space; A agrees to pay B Rs 1,000 if B will marry A's daughter C, and C was dead at the time. Both agreements are void.

3. Contingent contract and wager distinguished

• Validity. A contingent contract is valid; a wager is void under section 30.
• Reciprocity. A wager consists of reciprocal promises with mutual chances of gain and loss: one party must win and the other lose. A contingent contract need not be reciprocal in that sense.
• Interest. In a wager the parties have no interest in the event beyond the stake. In a contingent contract (insurance, for example) the promisee has a real interest in the event, such as the house that may burn.
• Nature of the event. In a wager the uncertain event is the core of the agreement. In a contingent contract it is collateral.
• Every wager is contingent, but not every contingent contract is a wager.

Gherulal Parakh v. Mahadeodas Maiya, 1959 INSC 24, AIR 1959 SC 781, explains the essentials of a wager and holds that it is void but not illegal.

4. Problem

Narendra promised to marry Leelavathi after the death of his father. While his father was still alive, Narendra married Shubha. Leelavathi sues Narendra for breach of promise. Narendra says that nothing was due until his father died, and his father is still alive. Decide.

Issue. Whether a contract to marry contingent on the father's death can be sued on while the father is alive, once the promisor has by his own act made the marriage impossible.

Law. Section 32: a contract contingent on an event happening cannot be enforced until the event happens, and becomes void if the event becomes impossible. Section 34: where the contingency is the way a living person will act at an unspecified time, it is deemed impossible when that person does anything which renders it impossible that he should so act within a definite time, or otherwise than under further contingencies (illustration: A agrees to pay B if B marries C; C marries D; the marriage of B and C is deemed impossible though D may die). Section 39: when a party has refused to perform, or disabled himself from performing, his promise in its entirety, the promisee may put an end to the contract. This is the English rule of anticipatory breach in Frost v. Knight (1872), where the defendant promised to marry the plaintiff on his father's death, broke off the engagement while the father lived, and was held liable at once.

Application. The performance Leelavathi bargained for is Narendra's marriage to her. Under section 5(i) of the Hindu Marriage Act, 1955, a second marriage while a spouse is living is void, and bigamy is an offence (section 82 of the Bharatiya Nyaya Sanhita, 2023). By marrying Shubha, Narendra has done an act which makes it impossible for him to marry Leelavathi when his father dies, or at all, except under a further contingency (Shubha's death or a divorce). On the reasoning of section 34 and its illustration, the contingency must now be treated as having become impossible. Narendra cannot rely on that impossibility to escape liability, because he brought it about himself; he has disabled himself from performing within section 39. Leelavathi need not wait for the father's death.

Conclusion. Leelavathi may treat the contract as broken now and sue for damages under section 73. Specific performance is not available: a promise to marry is a contract so dependent on personal qualifications that the court will not order it (section 14(c) of the Specific Relief Act, 1963, as substituted in 2018). Narendra's defence fails.

How this is examined

“What is a contingent contract? State the rules regarding its enforcement” was set in January 2026, and the Narendra and Leelavathi problem in the same paper. For the essay, give section 31 with its essentials, then the six rules with one illustration each, and end with the distinction from a wager. For the problem, use sections 32, 34 and 39 as above. A short note on “contingent contract and wager” is also common.