Vested and contingent interests, and conditional transfers - Property Law

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1. Vested interest: section 19
2. Contingent interest: section 21
3. Condition precedent and void conditions: sections 25 and 26
4. The rule of acceleration: section 27
5. Condition subsequent: sections 28 to 32
6. Conditions requiring an act: sections 33 and 34
7. Problem
How this is examined

Cases checked to exist. Read the judgment before quoting a holding.

Every case cited here has been checked to exist — the citation resolves and names the right parties. The propositions attributed to each case have not been verified line by line against the judgment. Case names link through to the full judgment: read it before quoting a holding in an examination answer, and never carry a proposition from notes into court on trust.

How to organise this topic. Sections 19 to 34 look like a long list, but they turn on two questions. First, has the interest vested, or is it waiting on an uncertain event? Second, if the transfer carries a condition, is it a condition that must be met before the interest arises, or one that ends an interest already given? Each section answers one of those questions for a particular case.

1. Vested interest: section 19

An interest is vested where it is created in favour of a person without specifying the time when it is to take effect, or in terms specifying that it is to take effect forthwith or on the happening of an event which must happen, unless a contrary intention appears. A vested interest is not defeated by the death of the transferee before he obtains possession.

The Explanation lists four things from which an intention that the interest shall not be vested is not to be inferred: a provision postponing enjoyment, a prior interest given to another person, a direction to accumulate income, and a provision that if a particular event happens the interest shall pass to another. A to B for life and then to C: C's interest is vested at once, though he enjoys it only after B's death. If C dies first, his heirs take.

2. Contingent interest: section 21

An interest is contingent where it is created to take effect only on the happening of a specified uncertain event, or if a specified uncertain event does not happen. It becomes vested when the event happens or becomes impossible. A to B “if he marries C”: B has a contingent interest until he marries C.

The Exception: where a person becomes entitled on attaining a particular age, and the transferor also gives him absolutely the income to arise in the meantime, or directs the income to be applied for his benefit, the interest is not contingent. Giving the income now shows that the transferor meant the interest to vest now.

Distinctions to tabulate in an answer

Nature. Vested: present right, future enjoyment. Contingent: no right until the condition is met; only a possibility of a right.
Dependence on an event. Vested: none, or an event that is certain (a death). Contingent: an uncertain event.
Death before possession. Vested: passes to heirs. Contingent: fails if the transferee dies before the condition is fulfilled.
Transferability. Both are transferable, but the transferee of a contingent interest takes it subject to the contingency.

Sections 22 to 24 apply the distinction: an interest given to members of a class on attaining a particular age vests only in those who reach it (section 22); where no time is fixed for an uncertain event, the interest fails unless the event happens before or when the prior interest ends (section 23); and a transfer to those of a group who survive, with no time fixed, goes to those alive when the prior interest ends (section 24).

3. Condition precedent and void conditions: sections 25 and 26

A condition precedent must be fulfilled before the interest arises. Section 25 provides that an interest created on a condition precedent fails if the condition is impossible, forbidden by law, of such a nature that if permitted it would defeat the provisions of any law, fraudulent, involves or implies injury to the person or property of another, or is regarded by the court as immoral or opposed to public policy.

The illustrations: a farm let to B on condition that he walk a hundred miles in an hour (lease void); money to B on condition he marries A's daughter C, who was dead at the date of the transfer (void); money to B on condition he murders C (void); money to A's niece if she deserts her husband (void).

Section 26: a condition precedent is deemed fulfilled if it has been substantially complied with. Money to B on condition that he marries with the consent of C, D and E; E dies and B marries with the consent of C and D. The condition is fulfilled.

4. The rule of acceleration: section 27

Section 27 provides that where, on a transfer of property, an interest is created in favour of one person, and by the same transaction an ulterior disposition of the same interest is made in favour of another, if the prior disposition fails, the ulterior disposition takes effect upon the failure of the prior disposition, although the failure may not have occurred in the manner contemplated by the transferor. But where the intention is that the ulterior disposition shall take effect only in the event of the prior disposition failing in a particular manner, it does not take effect unless the prior disposition fails in that manner.

The ulterior interest is “accelerated”: it moves forward to fill the gap left by the failed prior interest, instead of the property reverting to the transferor.

Illustration (a). A transfers Rs. 500 to B on condition that he shall execute a certain lease within three months after A's death, and if he should neglect to do so, to C. B dies in A's lifetime. The disposition in favour of C takes effect, though B's interest failed by death and not by neglect.
Illustration (b). A transfers property to his wife, but in case she should die in his lifetime, to B. A and his wife perish together, and it cannot be proved that she died before him. The disposition in favour of B does not take effect, because A intended B to take only on one particular kind of failure, which has not been proved.

5. Condition subsequent: sections 28 to 32

A condition subsequent operates on an interest already created and ends it if a specified event happens or does not happen. Section 31 permits such a condition, subject to section 12. Illustration: A transfers a farm to B for life, with a proviso that if B cuts down a certain wood the transfer shall cease to have effect. B cuts the wood and loses his life interest.

Section 28. An ulterior transfer conditional on the happening or not happening of a specified event is subject to the rules in sections 10, 12, 21 to 25 and 27.
Section 29. An ulterior disposition of that kind cannot take effect unless the condition is strictly fulfilled. Money to B on his reaching majority or marrying, with a proviso that if B dies a minor or marries without C's consent it shall go to D. B marries at seventeen without C's consent: the transfer to D takes effect.
Section 30. If the ulterior disposition is invalid, the prior disposition is not affected. A farm to B for life, and if she does not desert her husband, to C: B takes for life as if no condition had been inserted.
Section 32. A condition subsequent is valid only if the event is one that could legally be a condition for creating an interest. A void condition subsequent is simply disregarded, and the interest already given stands.

Trap: two different standards of fulfilment. A condition precedent needs only substantial compliance (section 26). A condition subsequent, which takes away an interest already given, must be strictly fulfilled before the divesting takes effect (section 29). And an invalid condition precedent makes the transfer fail (section 25), while an invalid condition subsequent leaves it standing (sections 30 and 32).

6. Conditions requiring an act: sections 33 and 34

Where an interest is subject to a condition that the person taking it shall perform an act and no time is specified, the condition is broken when he renders the performance impossible, permanently or for an indefinite period (section 33). Where a time is specified, the act must be performed within it; but if performance is prevented by the fraud of a person who would benefit directly from non-fulfilment, further time equal to the delay caused by the fraud is allowed (section 34).

7. Problem

A transfers his house to B on condition that B completes his medical degree within five years of A's death, and if B fails to do so, to C. B dies two years before A. Who takes the house?

Issue. Whether C's ulterior interest takes effect when B's interest fails by death rather than by failure to complete the degree.

Law. Section 27: if the prior disposition fails, the ulterior disposition takes effect even though the failure did not occur in the manner contemplated, unless the transferor intended it to take effect only on failure in a particular manner (illustrations (a) and (b)).

Application. The gift to C was to operate if B's interest did not come into effect. B's death means it never can. Nothing in the deed shows that A wanted C to take only if B lived and failed his examinations. The case is the same as illustration (a).

Conclusion. C takes the house under the rule of acceleration; it does not revert to A's estate.

How this is examined

“Rule of acceleration” was a short note in January 2026: give the text of section 27, the meaning of acceleration and both illustrations. “Distinguish between vested and contingent interest” and “Condition precedent and condition subsequent” are standing short notes and 10-mark questions; set out the distinctions point by point and use the illustrations to sections 25, 26, 29 and 31.