Contingent contract

October 11, 2024

48600

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This article is written by Abhay Pandey and further updated by Upasana
Sarkar. This article deals with contingent contracts under Indian Contract
Act, 1872. It deals with the various components and conditions of contingent
contracts. It also gives a detailed list of the advantages and disadvantages of
using contingent contracts. It also gives a precise definition of wagering and
conditional contracts and how they are different from contingent contracts.

Table of Contents

 Introduction
 Meaning and concept of contingent contract under Indian Contract Act
 Main components of a contingent contract
o A valid contract must exist for either doing something or abstaining from doing something
o Performance of the contract must be conditional
o Condition must be collateral on a future uncertain event
o Future events should not be at the discretion or under the control of the promisor
 Key features of a contingent contract
 Enforcement of contingent contract
o Enforcement of contract contingent on the happening of an event
o Enforcement of contract contingent on an event not happening
o When a contract is contingent on the future conduct of a living person
o Contracts contingent on an event happening within the fixed time
o Contracts contingent on an event not happening within the fixed time
o Contract contingent on an impossible event
 Situations when a contingent contract becomes void
 When are contingent contracts used
 How is a contingent contract different from a wagering agreement
 How is a conditional contract different from a contingent contract
 Advantages of using contingent contracts
 Disadvantages of contingent contracts
 Important judicial pronouncements
o Frost vs. Knight (1872)
o Harbaksh Singh Gill And Ors. vs. Ram Rattan And Anr. (1988)
o Nemi Chand and Ors. vs. Harak Chand and Ors. (1965)
o Nandkishore Lalbhai vs. New Era Fabrics Pvt.Ltd.& Ors. (2015)
 Conclusion
 Frequently Asked Questions (FAQs)
o What are the universal constraints present in contingent contracts?
o What are the essential components of a contingent contract?
o Whether insurance contracts are contingent contracts or not?
 References

Introduction
Contracts can be of various types, as laid down in the Indian Contract Act,
1872. It also states which contracts are enforceable in the court of law and
which are not. While reading this Act, we will get to know about different
types of contracts, which can be distinguished based on various factors. Two
of them are absolute contracts and contingent contracts. A contract is
considered contingent only when there is some specified uncertain event that
may or may not happen in the future. A contingent contract is dependent on
the occurrence or non-occurrence of that event. The condition mentioned in
the contract should be collateral to the contract. It must not be part of the
consideration specified in it.

The performance of contingent contracts solely depends upon the completion

of such conditions, after which the task is performed by the promisor. But it
is not so in the case of an absolute contract. In these contracts, there is no
necessity for the presence of any condition for its performance like those of
contingent contracts. So, in other words, we can say that a contingent
contract acts as a security against future mishaps, as in these types of
contracts, the promisor is compelled to do his duty only when the collateral
conditions are fulfilled as mentioned in the contract that has been previously
consented by the parties.

Meaning and concept of contingent

contract under Indian Contract Act
Section 31 of the Indian Contract Act, 1872, defines the term ‘Contingent
Contract’. This section expressly states that it is a contract to perform
something or not to do something as stated in the contract only when the
collateral conditions as mentioned in such contract are fulfilled. In this kind of
contract, two important points must be noted. One is that the conditional
nature of the contract must be collateral to it. Another one is that it must not
form a part of the consideration.

Illustration:- In case a contract is made between A and B, where A

contracts to pay B a certain sum of money if B’s house is burnt. It is a
condition. The payment of the amount to B by A is contingent on the house
being destroyed by fire. If B’s house is not burnt by fire, then no liability
occurs on the part of A to pay that amount to B. Since the destruction of B’s
house by fire is the collateral condition of the contract, the non-occurrence of
such an event prevents B from claiming the amount from A.

Main components of a contingent contract

The main components of a contingent contract are laid down in the Indian
Contract Act under Section 31, which are as follows-

A valid contract must exist for either doing something

or abstaining from doing something
A contract entered into between the parties is considered valid if they have
made the contract by following the provisions of Section 32 and Section 33 of
the Indian Contract Act. Section 32 mainly deals with contingent contracts
where a future uncertain event needs to occur, and unless and until that
event has happened, it will not be enforceable in a court of law. Section 33,
on the other hand, says the complete opposite. It mainly deals with such
incidents where such an event must not occur, and only when that future
event becomes impossible it will be enforceable in the court of law, and not
before. Contingent contracts are usually made where parties agree to take
risks.

Illustration: If a contract is made between P and Q, where P promises to

pay Q a certain sum of money if a certain ship does not return. In case the
ship sinks due to a thunderstorm or any other natural calamity, this
contingent contract can be enforced.

Performance of the contract must be conditional

The performance of a contract which is conditional in nature must be
performed by the promisor as soon as the condition that needs to take place
has happened. That condition must be uncertain in nature. If that condition is
fulfilled in the future, then the promisor must fulfil the terms of the contract,
which are contingent upon the occurrence or non-occurrence of the event.

Illustration: X promises Y to take him on a holiday trip if Y passes the exam

with 80% marks. Therefore, X will be liable to take Y on a trip only when Y
gets 80% or above in his exam.

Condition must be collateral on a future uncertain

event
The condition must be collateral in nature. In other words, the happening or
non-happening of the event should be collateral to the contract, that is, it
should exist independently, otherwise, it cannot be enforced.

Illustration: X promises Y to deliver him 20 copies upon payment of Rs.

2000. This contract is not a contingent contract since there is no uncertain
condition present in that contract. The payment of Rs. 2000 acts as a
consideration in this contract. Here, the delivery of the copies depends on
the event, which is a consideration and not a collateral condition.

Future events should not be at the discretion or under

the control of the promisor
The future event should not depend upon the mere will of the promisor. The
event must not be under his control or wish. The contingency should not at
all be dependent on the promisor. It should be a totally futuristic and
uncertain event. In case such a condition is under the control or will of the
promisor, it will not be considered as a contingent contract.

Illustration 1: M promises to pay N an amount of Rs. 10 lakhs if N goes

abroad to study on 1st January, 2025. This is a contingent contract. Going
abroad to study is totally a futuristic and uncertain event and is not merely
M’s will.

Illustration 2: X and Y enter into a contract where X promises Y that he will

give him Rs. 50,000 in case X does not marry A. In his case, the future event
is at the discretion of the promisor. Hence it will not be considered as a
contingent contract.

Key features of a contingent contract

Some of the important key features of contingent contracts that one needs to
know while studying about contingent contracts are as follows-

 Obligations of the contracting parties: It is the duty of the parties

to the contract to fulfil it. There must be two parties present, of whom
one is the promisor, and another is the promisee. While making the
contingent contract, both parties must understand the terms and
conditions in the same way, and their objectives must align with each
other like other contracts.
 Enforcement of the contract: Before the enforcement of a
contingent contract, it must be seen that all the legal requirements are
present in it that a valid contract requires. In the absence of those
elements of contracts, it will not be possible to frame a contingent
contract. Therefore, it is important to understand that the performance
of a contingent contract depends on a certain specified event. So the
presence of all the elements in the contract is important for enforcing a
contingent contract.
 Effect of the contract: As stated above, all contingent contracts are
dependent on the occurrence or non-occurrence of some particular
event which must be mentioned in the clauses of the contract and must
have been agreed to by both parties. Accordingly, the parties will be
liable to either fulfil the contract or not to perform it. So in case a
specific act or event does not happen or has happened, which is not in
accordance with the provisions of the contract, then the parties are not
obligated to perform their respective duties.
 Specified event: The event specified in the contract must not be
something more important than the contract itself. Its occurrence must
be independent in nature and should not depend on anyone’s will or
desire.
 Possibility of performance: This is also an important feature of a
contingent contract. The agreement made between the parties will
 cease to be valid in case a particular event is impractical, illegal, or so
uncertain that it is impossible to predict its outcome.
 Legality of the contract: Depending on the particular terms and
conditions framed, contingent contracts may have different legal
consequences. Like those of any other contract, in a contingent
contract also, it is the duty of the parties to see that both of them must
accept the conditions made between them in the same sense and that
they are competent enough to understand those terms as stated in it.

Enforcement of contingent contract

The provisions that deal with the enforcement of contingent contracts are
stated under Sections 32, Section 33, Section 34, Section 35 and Section 36,
which are as follows-

Enforcement of contract contingent on the happening

of an event
The first condition of the contingent contract is mentioned under Section 32
of the Indian Contract Act, 1872, which deals with the enforcement of
contingent contracts based on the happening of a future uncertain event. The
enforcement of this contract is dependent on the occurrence of that incident.
If it does not take place in accordance with the condition mentioned in the
contract or it becomes impossible to occur for some reason, there is no
obligation on either of the parties to carry out the contract.

Illustration: X promises to pay Y Rs. 100,000 if he marries Z, who is the

most beautiful girl in their locality. This is a contingent contract. But Z dies in
an unfortunate car accident a few days after this contract was made. Since
the event is no longer possible, the contract becomes void.

Enforcement of contract contingent on an event not

happening
The second condition of the contingent contract is mentioned under Section
33 of the Indian Contract Act, 1872, which deals with the enforcement of
contingent contracts based on the non-occurrence of a future uncertain
event. In this case, since the contingent contract needs to be executed on
not happening of some particular event, the promisor is liable to perform his
part only when the future event does not take place. If the contrary happens,
the promisor cannot be made liable for performing his promise.
Illustration: X promises Y to pay him Rs. 20000 if his farm does not
produce 100 kg apples. But the rain was insufficient that year which
prevented the production of 100 kg apples. Therefore, X will have to pay as a
part of the contingent contract.

When a contract is contingent on the future conduct

of a living person
The third condition of the contingent contract is mentioned under Section 34
of the Indian Contract Act, 1872, which deals with the conduct of a living
person. This section expressly states that the occurrence of an event that is
dependent or under the control of any person’s action would be deemed to
have become impossible if such person does any act which makes the
performance of such condition postponed for an indefinitely long period of
time.

Illustration: X promises Y to gift him a brand new car on the condition that
he has to marry Z. In the meantime, Z runs away with A and marries him.
So the marriage between Y and A becomes impossible, as Z is now already
married to A. Although it is possible that A may die and that Z afterwards
marries Y but since the event is postponed for an indefinitely long period of
time, it will be deemed as impossible.

Contracts contingent on an event happening within

the fixed time
Section 35 (para 1) of the Indian Contract Act, 1872, discusses the
enforcement of a contingent contract on the happening of an event within a
fixed time. In this kind of contingent contract, the promisor promises to
perform his obligations if a future uncertain event takes place within a
particular period of time.

Illustration: M promises N to supply certain materials that will come via

certain ships before 1st August, 2025. If the promise is fulfilled, N promises
to pay M the money. In this case, the contract becomes void if the ship sinks
or does not come back within the fixed time.

Contracts contingent on an event not happening

within the fixed time
Section 35 (para 2) of the Indian Contract Act, 1872, discusses the
enforcement of contingent contracts on the non-happening of an event within
a fixed time. In this kind of contingent contract, the promisor promises to
perform his obligations if a future uncertain event does not take place within
a particular period of time or it becomes impossible.

Illustration: A contract was made between M and N. As per the contract, M

promised N to pay a certain amount of money if a certain ship does not
return before 1st August, 2025. In case the ship burns before the given time,
which also will make it impossible to return, the contract in such a situation
can be enforced by law since the return is impossible.

Contract contingent on an impossible event

Section 36 of the Indian Contract Act, 1872, deals with the sixth condition of
the contingent contract. It talks about contingent contracts of impossible
events. If two parties enter into a contingent contract where the happening
of such a future event is impossible, then such agreement will be considered
void, notwithstanding whether they had knowledge about it or not at the
time when they entered into the contract.

Situations when a contingent contract

becomes void
There are certain situations under which a contingent contract becomes void,
which are as follows-

 Firstly, as per Section 32, in case the event on which the contingent
contract is dependent becomes impossible to perform, the contract
would automatically become void.

 Secondly, as per Section 34, in case the event on which the contingent
contract is dependent becomes impossible due to certain actions of a
person. It is because the action of the person prevented the occurrence
of the event. Therefore, the contract will be considered void in such
cases.
 Thirdly, as per Section 35, in case the event on which the contingent
contract is dependent does not occur within a specific time, or in case
the uncertain event that ought not to have occurred before the fixed
time period takes place, the contract will become impossible, and it will
be considered void.
Illustration: A contract is made between two parties, where Subh is the
promisor, and Rony is the promisee. Here, Subh promises to sponsor a trip
for Rony, if he can make a talk show with his favourite actor within a year.
So the time duration is within that year. The contract becomes void when his
favourite actor dies within the year.
  Fourthly, as per Section 36, in case an agreement is made contingent
on the happening of an impossible event, then such agreement is void,
whether the impossibility of the event is known or not to the parties at
the time when the agreement was made.
Illustration: Rohini enters into a contract with Payel, where Rohini promises
Payel to pay Rs. 5000 if the Sun rises in the west instead of the east. This
agreement entered into by them is a void one because such an incident can
never take place.

When are contingent contracts used

Contingent contracts are mostly helpful for people who are involved in
businesses. The provisions of contingent contracts help them to manage risks
and uncertainties present in the course of business operations. It is also
useful in those situations where negotiation between parties results in a
deadlock. In those situations, they enter into a contingent contract which will
be beneficial for both of the parties and protect them from future
happenings. Certain situations when a contingent contract is used as it
seems beneficial are as follows-

 Insurance: Insurance agreements are one of the most important

contingent contracts as they cover various incidents that occur in the
day-to-day lives of the people. Insurance is a way by which a party
tries to secure its assets in case of some unknown mishap. If any
uncertain future event occurs, liability will be taken by the insurer. It is
the duty of the insurer to compensate the other party who has entered
into the agreement for monetary security and protection during some
specific mishap like a car accident, property damage, and others.
Insurance that is mostly helpful for people includes Health Insurance,
car insurance, property insurance, and others.
 Contracts of employment: Contracts made between the employer
and employee for the purpose of employment are known as
employment contracts. There might be some contingent clauses in that
agreement relating to the performance of an employee. It includes
giving incentives like bonuses or stock options contingent upon
completing a specific target set previously by the employer or for
staying with the company for a specified period of time.
 Real estate transactions: Real estate transactions mean agreements
made for the purchase of real estate. A Purchase and Sale Agreement
(PSA) is very beneficial for a business for establishing the terms and
conditions of a transaction that will take place between the buyer and
seller. It may contain certain contingent provisions relating to
financing, successful inspection, and upon the fulfilment of which the
contingent contract will be executed.
 Mergers and acquisitions: In the case of mergers and acquisitions
also, the parties normally try to enter into contingent contracts, where
payment is made on the basis of particular targets or benchmarks as
has been previously set by the parties as per the clauses of the
contract. As soon as the target is achieved, it is the duty of both buyer
and seller to come in contact with one another to clear all the
payments.
 Contracts of construction: Contingent contracts are also used for
construction purposes, where payment depends on the completion of a
particular project, construction of certain buildings, or certain other
conditions. Generally, the wages of the workers are paid upon the
completion of certain construction as specified in the contract.
 Event planning and partnership agreements: In the case of event
planning, there are certain contingency clauses like the inclusion of a
specific number of guests must be present, the venue must be selected
from their catalogue, and many others. Similarly, a contingent
agreement is also made between the partners of a firm or a company
to share the assets and profits after the end of a financial year.
 Contracts dealing with research and development: The research
and development sector uses various types of contingent clauses in its
agreements for tying payments for project goals. Thus, contingent
contracts are useful in this area also.
 Contracts of indemnity, warranty and guarantee: These contracts
also use contingency clauses. Contracts of warranty and guarantee are
mostly used when a supplier does not have a relationship with a
counterparty. In the case of Chandulal Harjivandas vs. CIT (1966), it
was held by the Supreme Court that all contracts of insurance and
indemnity are contingent contracts.
How is a contingent contract different from
a wagering agreement
A wagering agreement is such an agreement where one party promises to
pay a fixed amount of money to another party on the happening of an
uncertain future event, and the other party will pay the same to the first
party in case the event does not happen. In such circumstances, no party
knows the actual outcome of the agreement. Either of the parties can win,
and the other party will lose the game. These agreements are those
agreements that are not enforceable in a court of law as they have been
declared void.

A wagering agreement is absolutely void under Section 30 of the Indian

Contract Act, 1872, unlike contingent contracts, which are considered to be
valid by law. For instance, in a cricket match, if a challenge takes place
between two parties, where X, one party, challenges Y, another party, that
he is sure that team A will win the match. On hearing that if Y accepts this
challenge and states that if team A wins the cricket match, he will pay X an
amount of Rs. 1000, and if not, X will pay him Rs. 1000. If X accepts Y’s
proposal, then such agreement will be termed as wagering agreement.

The differences between contingent contracts and wagering agreements are

as follows-

Factors Contingent contracts Wagering agreements

Though Section 30 deals with

A proper definition of a contingent contract is wagering contracts, no proper
Definition
given in Section 31. definition of wager is present under
that Section.

All contingent contracts are not always

All the wagering agreements are
Nature wagering in nature. It may or may not be
considered to be contingent in nature.
wagering agreements.

Wagering agreements are those

Reciprocal Contingent contracts entered into may or may
agreements where there are always
promise not have reciprocal promises.
reciprocal promises.

Unlike wagering agreements, contingent Wagering agreements are considered

Validity of an
contracts are enforceable in a court of law, and to be void agreements under the
agreement
so they are valid contracts. Indian Contract Act.

Key element of The condition that a future uncertain event For wagering agreements, future
the agreement will occur is collateral to the main purpose of events are not collateral but an
the contract. essential factor or key element of an
agreement.

Interest of the parties in the subject matter of The real interest of the parties is on
Interest of the the contract is an important factor. The real winning or losing the bet amount and
parties interest of the parties is on the happening or not on the happening or non-
non-happening of an event. happening of an event.

Game of a The contingent contracts are not a game of The wagering agreements, on the
chance chance. other hand, are a game of chance.

In a wagering agreement, either of the

When the parties enter into a contingent
Mutuality of parties can gain, and the other will
contract, it is made on the basis of the doctrine
loss and gain lose. So it is a game of losing and
of mutuality of loss and gain.
gaining.

How is a conditional contract different from

a contingent contract
Contingent contracts and conditional contracts, though, seem similar, but
they have slightly different characteristics. Conditional contracts are those
contracts whose performance is conditional upon the fulfilment of a specific
event. Conditional contracts may include following types of conditions-

 Precedent condition: There are various contracts where there is a

certain condition present that either or both parties have to fulfil before
further proceeding with the contract. That condition is known as a
precedent condition.
 Subsequent condition: There are various contracts where the
contract terminates automatically due to the occurrence or non-
occurrence of certain events as mentioned in the contract. Such a type
of condition is known as the subsequent condition.
 Concurrent condition: Concurrent condition means that in the
contract, there is a certain condition present that both parties have to
fulfil simultaneously with the performance of the contract, as it is
binding on them.
In the case of conditional contracts, conditions that need to be fulfilled are
certain, i.e., bound to happen, which is not the case with contingent
contracts, as such conditions may or may not happen. The mere addition of
certain conditions in the contract does not make it a contingent contract, the
condition stipulated must fulfil the essentials of a contingent contract. Hence,
it can be said that all contingent contracts are conditional contracts, but not
vice versa.

Advantages of using contingent contracts

The advantages of using a contingent contract are as follows-

 Balancing the interest of all the parties: Opinions of different

parties to a contract might vary later. So at that time, it might cause
problems in the contractual relationships between the parties. Hence
contingent contracts help parties to align their interests.
 Minimising the risk: It also acts as an important advantage of
contingent contracts. Therefore, contingent contracts help them to
minimise their risk.
 Flexibility: Contingent contracts also provide flexibility to the parties
entering into a contract. Since it helps avoid the termination of
contracts or disputes resulting from unanticipated events, it is
considered more flexible than other kinds of contracts.
 Scope of negotiation: In the case of absolute contracts, there is no
scope for renegotiation. But if the parties enter into a contingent
contract stating certain conditions, it often helps them to revise by
making necessary adjustments or sub-agreements.
 Avoiding litigation: The occurrence of uncertain events often leads to
various disputes among the parties that ultimately lead to litigation.
Contingent contracts reduce the probability of conflicts by describing
precisely what needs to be done in case of such uncertain events.
 Cost-effectiveness: These contingent contracts are also useful for
organising or arranging a business as they involve less upfront
investment than conventional contracts. So it is a cost-effective
method.

Disadvantages of contingent contracts

The disadvantages of using a contingent contract are as follows-

 Complex in nature: One of the disadvantages of contingent contract

is that it is complicated in nature.
 Risk of non-performance: There is also a risk of non-performance in
a contingent contract as there is an uncertainty in the occurrence or
non-occurrence of an event. Therefore, there are chances of breach of
a contract.
  Lack of information: It is essential for both parties to have the same
information, otherwise, one party will be in an advantageous position
than the other. So the party having valuable information has a greater
chance of winning. This lack of information about other parties might
lead to an imbalance of power and can cause loss to those parties.
 Poor measurement criteria: Poor measurement criteria of
occurrence or non-occurrence can create a problem in the completion
of a contingent contract.

Important judicial pronouncements

Frost vs. Knight (1872)

In this case, the defendant promised to marry the plaintiff on the death of his
father. While the father of the plaintiff was still alive, he married another
woman. Therefore, by marrying another woman, the defendant clearly
portrayed his intention not to fulfil his promise. It was held by the English
Court that it had become impossible that he should marry the plaintiff and so
she was entitled to sue him for the breach of contract.

Harbaksh Singh Gill And Ors. vs. Ram Rattan And

Anr. (1988)
In this case, respondent no. 2 agreed to sell his half of the property to
respondent no.1 and also pay an amount at a rate of 3% per year if the
litigation suit for the division of property is not settled in 1 year. The
execution of the sale deed took place a month after the partition of the
property and the separation of the vendor’s share in it. Respondent No. 2
consented to sign the agreement of sale along with respondent no. 1. But
when the application of the plaintiff for partition was dismissed, respondent
no. 2 refused to finalise the deal and demanded his earnest money back. The
appellants refuted the plaintiff’s claim and argued that specific performance
against them could not be required because they bought the property.

The Punjab and Haryana High Court observed that it was not the vendor’s
fault as he tried to seperate the share but failed to do it. The court refused to
consider it a contingent contract stating that when the performance of the
contract is not dependent on the happening of some collateral event, it is an
absolute contract. So it must be performed unconditionally. It was held by
the court that the vendee could only file an injunction suit restricting the sale
of that vendor’s property to somebody else in future.
Nemi Chand and Ors. vs. Harak Chand and Ors.
(1965)
In the case of Nemi Chand and Ors. vs. Harak Chand and Ors. (1965), it was
observed by the Rajasthan High Court that Section 32 of the Indian Contract
Act, 1872 (ICA) states that a contingent contract to do or not do anything
depends on the happening of an uncertain future event, and till then, the
contract cannot be enforced.

The Rajasthan High Court heard the contention of both parties and observed
that it is the responsibility of the party to try the matter and file a plea, not
only on the question of law but also on the question of fact. They cannot say
that it is the court’s responsibility to try such a case suo moto.

It was also declared that the impugned contract was a contingent contract by
the High Court of Rajasthan. It was stated by the court that a contingent
contract to do or not do something is dependent on the occurrence of an
undetermined future event. The court also stated that if the party does not
want to try the matter, then it is not the responsibility of the courts to
consider the case suo moto.

Nandkishore Lalbhai vs. New Era Fabrics Pvt.Ltd.&

Ors. (2015)
In this case, a contract for the sale of land was executed. The contract was
made for selling that land to a factory on the condition that it would be done
only if the labour unions agreed to the sale and the change of land use was
approved by the competent authority. Both parties consented to the
contingent agreement that was made between them to sell the land
afterwards.

The Supreme Court, while dealing with this case, found that later when they
decided to sell it, none of the conditions were satisfied that were mentioned
in the contract. It was because neither the labour union nor the competent
authority gave their assent to the sale of the land. Thus, the contract was not
enforceable against the seller.

Conclusion
Contingent contracts are used mainly where risks are involved or with some
future goals. It is not like absolute contracts. Contingent contracts require
the fulfilment of conditions before their performance. Its performance also
depends on the occurrence or non-occurrence of a future event. So most of
the time, these contracts are unable to be performed as occurrence or non-
occurrence of an event does not happen within the estimated time frame as
thought by the parties. However, contingent contracts are very helpful for
various business agreements and legal contexts. Contingent contracts are
useful in insurance contracts, contracts of indemnity or guarantee, or for
negotiations. Generally, contingent contracts are not used while making
normal contracts.

Frequently Asked Questions (FAQs)

What are the universal constraints present in

contingent contracts?
Some of the universal constraints present in the contingent contracts are as
follows-

 It must be mutually consented to by the competent parties in good

faith on reasonable grounds.
 There must be proper clarity and specificity in a contingent contract.
 The condition must be something that must have the possibility to
occur or else the contract will lose its validity.

What are the essential components of a contingent

contract?
The various essential components of a contingent contract are as follows-

 The performance of the contract is based on conditions.

 The conditions must be collateral in nature.
 Based on the occurrence or non-occurrence of an event.
 The occurrence or non-occurrence of the future event should not be
dependent on the desire of the promisor.

Whether insurance contracts are contingent contracts

or not?
Insurance contracts are also contingent contracts as the individuals who have
taken subscription under their insurance policy will have to compensate them
only when the subject matter, whatever they have insured, is either lost or
damaged.
References
 https://www.scconline.com/blog/post/2019/04/08/bom-hc-not-
unlawful-for-an-advocate-to-enter-into-a-contingent-contract-while-
appearing-in-capacity-of-a-counsel-in-arbitration-proceedings/
 http://student.manupatra.com/Academic/Abk/Law-of-Contract-and-
Specific-Relief/Chapter8B.htm

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