Comprehension
Sections 31 to 35 of Chapter III of the Indian Contract Act, 1872 deals with contingent contracts and Section 36 deals with contingent agreements. A contingent contract is one where the liability to perform the promise depends upon some collateral event which may or may not happen. A contract of insurance is an example of a contingent contract, where the liability of the insurer depends upon the occurrence of the event, viz. damage or destruction arising out of fire. Life insurance in a broader sense comprises any contract in which one party agrees to pay a given sum upon happening of a particular event contingent upon duration of human life, in consideration of the immediate payment of a smaller sum or certain equivalent periodical payments by another. The event may be certain but it’s happening in a specific manner or within a particular time would be uncertain. A contract of indemnity to make good the loss arising out of the conduct of the promisor is a contract contingent upon the act of a party. Such condition may be express or may also be implied into a contract. A contract for storage of potatoes in a cold storage cooling system was held subject to an implied condition that it could be performed only when there was continuous electric supply. But where there is a document embodying the terms of a contract, it is not permissible to imply therein a condition if that will be inconsistent with its express terms.
Question: 1
Which of the following is not correct about the nature of contingent contract?
Which of the following is not correct about the nature of contingent contract?
Updated On: Jul 19, 2024
- A contract contingent upon the happening of an event can be enforced after that event occurs.
- A contract contingent upon the happening of an event can be enforced even before that event occurs.
- If the event becomes impossible, the contract becomes void.
- The parties are under no obligation till the happening of that event unless there is a term requiring the parties to make effort to make that event happen.
Hide Solution
Verified By Collegedunia
The Correct Option is B
Solution and Explanation
The Correct Answe is option (B): A contract contingent upon the happening of an event can be enforced even before that event occurs.
Was this answer helpful?
0
0
Question: 2
‘A’ agrees to pay ‘B’ a sum of money if a certain cruise does not return. The cruise is sunk. Based on the given facts, which of the following statement is correct?
‘A’ agrees to pay ‘B’ a sum of money if a certain cruise does not return. The cruise is sunk. Based on the given facts, which of the following statement is correct?
Updated On: Jul 19, 2024
- The contract can be enforced when the cruise sinks.
- Sinking of cruise has no relevance for validity of contract.
- The contract cannot be enforced when the cruise sinks.
- The condition is impossible.
Hide Solution
Verified By Collegedunia
The Correct Option is A
Solution and Explanation
The Correct Answe is option (A): The contract can be enforced when the cruise sinks.
Was this answer helpful?
0
0
Question: 3
Which of the following is correct regarding a contingent contract?
Which of the following is correct regarding a contingent contract?
Updated On: Jul 11, 2024
- No contract comes into existence until the contingency occurs.
- One party cannot assume an immediate unilateral obligation subject to a condition.
- The parties cannot enter into an immediately binding contract; and either the operation of the contract is made to depend upon the happening of the specified event.
- All contingent contracts are void.
Hide Solution
Verified By Collegedunia
The Correct Option is A
Solution and Explanation
The Correct Answe is option (A): No contract comes into existence until the contingency occurs.
Was this answer helpful?
0
0
Question: 4
‘X’ promises to pay ‘Y’ a sum of money if a certain ship returns within a year. Based on the given facts, which of the following statement is not correct?
‘X’ promises to pay ‘Y’ a sum of money if a certain ship returns within a year. Based on the given facts, which of the following statement is not correct?
Updated On: Jul 11, 2024
- The contract becomes void if the ship is burnt within the year.
- The contract depends upon returning or non-returning of the ship.
- The contract may be enforced if the ship returns within the year.
- The contract cannot be enforced if the ship returns within the year.
Hide Solution
Verified By Collegedunia
The Correct Option is D
Solution and Explanation
The Correct Answe is option (D): The contract cannot be enforced if the ship returns within the year.
Was this answer helpful?
0
0
Question: 5
‘A’ agrees to pay ‘Z’ an amount of Rs 2 lakhs if ‘Z’ marries ‘B’. ‘B’ was dead at the time of the said agreement between ‘A’ and ‘Z’. Based on the given facts, which of the following statement is correct?
‘A’ agrees to pay ‘Z’ an amount of Rs 2 lakhs if ‘Z’ marries ‘B’. ‘B’ was dead at the time of the said agreement between ‘A’ and ‘Z’. Based on the given facts, which of the following statement is correct?
Updated On: Aug 23, 2024
- The agreement is valid.
- The enforceability of agreement does not depend on the existence of ‘B’
- The agreement is void.
- The event is possible in its nature.
Hide Solution
Verified By Collegedunia
The Correct Option is C
Solution and Explanation
The Correct Answe is option (C): The agreement is void
Was this answer helpful?
0
0
Question: 6
Which of the following statement correctly describes the difference between wagering agreements and contingent contracts?
Which of the following statement correctly describes the difference between wagering agreements and contingent contracts?
Updated On: Jul 11, 2024
- Wagering agreements are void and contingent contracts are valid.
- Wagering agreements are valid and contingent contracts are void.
- Wagering agreements and contingent contracts are valid.
- Wagering agreements and contingent contracts are void.
Hide Solution
Verified By Collegedunia
The Correct Option is A
Solution and Explanation
The Correct Answe is option (A): Wagering agreements are void and contingent contracts are valid.
Was this answer helpful?
0
0
Top Questions on Laws of Contract
- Inference about the existence of the contract can be made from the letters, emails, and other correspondence between the parties. Pick the correct options:
- AILET LLM - 2025
- Legal Studies
- Laws of Contract
- Generally, time is not of the essence in contracts unless specified. Pick the correct option:
- AILET LLM - 2025
- Legal Studies
- Laws of Contract
- Pick the incorrect statement:
- AILET LLM - 2025
- Legal Studies
- Laws of Contract
- The following is not true about novation of contracts:
- AILET LLM - 2025
- Legal Studies
- Laws of Contract
- For an agreement without consideration to be valid under S. 25(3) of the Indian Contract Act, 1872 it is necessary that
- AILET LLM - 2025
- Legal Studies
- Laws of Contract
View More Questions
Questions Asked in CLAT PG exam
- The Hon’ble Supreme Court in the case of ‘Nil Ratan Kundu and another v. Abhijit Kundu’ 2008(3) Apex Court Judgements 232 (SC), while granting the custody to the maternal grandparents observed: In our judgement, the law relating to custody of a child is fairly well settled and it is this. In deciding a difficult and complex question as to custody of minor, a Court of law should keep in mind relevant statutes and the rights flowing therefrom. But such cases cannot be decided solely by interpreting legal provisions. It is a humane problem in live in relationship and is required to be solved with human touch. A Court while dealing with custody cases, is neither bound by statutes nor by strict rules of evidence or procedure nor by precedents. In selecting proper guardian of a minor, the paramount consideration should be the welfare and well-being of the child. In selecting a guardian, the Court is exercising parens patriae jurisdiction and is expected, may bound, to give due weight to a child’s ordinary comfort, contentment, health, education, intellectual development and favorable surroundings. But over and above physical comforts, moral and ethical values cannot be ignored. They are equally, or we may say, even more important, essential and indispensable consideration. If the minor is old enough to form an intelligent preference or judgement, the Court must consider such preference as well, though the final decision should rest with the Court as to what is conducive to the welfare of the minor.
The Hon’ble Supreme Court in the case of ‘Gaurav Nagpal v. Semedha Nagpal’-(2009)1 SCC 42, while giving paramount importance to the welfare of the child, which should include moral and ethical values, besides ethical well-being, observed as under:
When the court is confronted with conflicting demands made by the parents, each time it has to justify the demands. The Court has not only to look at the issue on legalistic basis, in such matters human angles are relevant for deciding those issues. The Court then does not give emphasis on what the parties say, it has to exercise a jurisdiction which is aimed at the welfare of the minor. As observed recently in Mausami Moitra Ganguli case, the Court has to give due weightage to the child’s ordinary contentment, health, education, intellectual development and favorable surroundings, but over and above physical comforts, the moral and ethical values have also to be noted. They are equal if not more important than the others.
(Extracts from Jaswinder Singh and Another vs Surjit Singh, AIR 2010 (NOC) 425 (P. & H.))- CLAT PG - 2025
- Family Laws
- The Companies Act, 2013 does not deal with insolvency and bankruptcy when the companies are unable to pay their debts or the aspects relating to the revival and rehabilitation of the companies and their winding up if revival and rehabilitation is not possible. In principle, it cannot be doubted that the cases of revival or winding up of the company on the ground of insolvency and inability to pay debts are different from cases where companies are wound up under Section 271 of the Companies Act, 2013. The two situations are not identical. Under Section 271 of the Companies Act, 2013, even a running and financially sound company can also be wound up for the reasons in clauses (a) to (e). The reasons and grounds for winding up under Section 271 of the Companies Act, 2013 are vastly different from the reasons and grounds for the revival and rehabilitation scheme as envisaged under the IBC. The two enactments deal with two distinct situations and in our opinion, they cannot be equated when we examine whether there is discrimination or violation of Article 14 of the Constitution of India. For the revival and rehabilitation of the companies, certain sacrifices are required from all quarters, including the workmen. In case of insolvent companies, for the sake of survival and regeneration, everyone, including the secured creditors and the Central and State Government, are required to make sacrifices. The workmen also have a stake and benefit from the revival of the company, and therefore unless it is found that the sacrifices envisaged for the workmen, which certainly form a separate class, are onerous and burdensome so as to be manifestly unjust and arbitrary, we will not set aside the legislation,solely on the ground that some or marginal sacrifice is to be made by the workers. We would also reject the argument that to find out whether there was a violation of Article 14 of the Constitution of India or whether the right to life under Article 21 Constitution of India was infringed, we must word by word examine the waterfall mechanism envisaged under the Companies Act, 2013, where the company is wound up in terms of grounds (a) to (e) of Section 271 of the Companies Act, 2013; and the rights of the workmen when the insolvent company is sought to be revived, rehabilitated or wound up under the Code. The grounds and situations in the context of the objective and purpose of the two enactments are entirely different.
(Extracted, with edits and revision, from the judgement in Moser Baer Karamchari Union Thr. President Mahesh Chand Sharma v. Union of India and Ors, 2023 SCC Online SC 547)- CLAT PG - 2025
- Company Law
- Ahmadi, J. (as he then was) speaking for himself and Punchhi, J., endorsed the recommendations in the following words-The time is ripe for taking stock of the working of the various Tribunals set up in the country after the insertion of Articles 323-A and 323-B in the Constitution. After the incorporation of these two articles, Acts have been enacted where-under tribunals have been constituted for dispensation of justice. Sufficient time has passed, and experience gained in these last few years for taking stock of the situation with a view to finding out if they have served the purpose and objectives for which they were constituted. Complaints have been heard in regard to the functioning of other tribunals as well and it is time that a body like the Law Commission of India has a comprehensive look-in with a view to suggesting measures for their improved functioning. That body can also suggest changes in the different statutes and evolve a model on the basis whereof tribunals may be constituted or reconstituted with a view to ensuring greater independence. An intensive and extensive study needs to be undertaken by the Law Commission in regard to the Constitution of tribunals under various statutes with a view to ensuring their independence so that the public confidence in such tribunals may increase and the quality of their performance may improve.
Before parting with the case, it is necessary to express our anguish over the ineffectiveness of the alternative mechanism devised for judicial review. The judicial review and remedy are the fundamental rights of the citizens. The dispensation of justice by the tribunal is much to be desired.
(Extracted with Edits from R.K. Jain v. Union of India, 1993 (4) SCC 119)- CLAT PG - 2025
- Constitutional Laws
- The elements of tort of negligence consist in – (a) duty of care; (b) duty is owed to the plaintiff; (c) the duty has been carelessly breached. Negligence does not entail liability unless the exacts a duty in the given circumstances to observe care. Duty is an obligation recognised by law to avoid conduct fraught with unreasonable risk of damage to others. The question whether duty exists in a particular situation involves determination of law. Hence, three ingredients are necessary for the existence of a duty of care: (i) foreseeability of the damage, (ii) proximity of relationship between the parties; and (iii) whether it is “just, fair and reasonable” that the law should impose a duty of care. In Caparo Industries Plc. v. Dickman, 1990 2AC 605, the court held that breach of duty is concerned with the standard of care that ought to have been adopted in the circumstances and whether the defendant’s conduct fell below that standard i.e., whether he was careless.
The court while quoting Rajkot Municipal Corporation v. Manjulben Jayantilal Nakum, 1997 stated that as a tort, negligence consists of legal duty to take care and breach of that duty. Duty determines whether the type of loss suffered by the plaintiff in the particular way in which to occurred can ever be actionable. The division of negligence into duty, breach and consequent damage is convenient for the purpose of exposition but it can be confusing because the issues will often overlap. The process of determining a breach of duty involves three steps: First, it is necessary to ascertain the qualities of the reasonable person, given the qualities attributed to him, would have taken in the circumstances. The factors that are permissible to take into account in this regard are prescribed by law, but the amount of care that the reasonable person would have taken is a question of fact. Thirdly, it must be determined whether the defendant took less care than the reasonable person would have taken.
(Extracts from Managing Director, Kerala Tourism Development Corporation Limited v. Deepti Singh and Ors., 2019 SC)- CLAT PG - 2025
- Law of Torts
- Article 14 of the Constitution stipulates that the State shall not deny to any person equality before the law or the equal protection of laws within the territory of India. Article 15(1) states that the State should not discriminate against any citizen on grounds only of religion, race, caste, sex, place of birth or any of them. Article 15(4) stipulates that nothing in Article 15 shall prevent the State from making any special provision for the advancement of any socially and educationally backward classes of citizens or for the Scheduled Castes and the Scheduled Tribes. Article 16 deals with equality of opportunity in matters of public employment. Clause (1) of Article 16 guarantees equality of opportunity for all citizens in matters relating to employment or appointment to any office under the State. Clause (2) stipulates that no citizen shall be discriminated in or be ineligible for any employment or office under the State on the grounds only of religion, race, caste, sex, descent, place of birth, residence or any of them. Clause (4) of the provision states that nothing in Article 16 shall prevent the State from making any provision for the reservation of appointments or posts in favour of any backward class of citizens, which in the opinion of the State, is not adequately represented in the services under the State. The purpose of the equal opportunity principle in Article 16(1) and the reservation provision in Article 16(4) has emerged as a focal point of the jurisprudence on reservations in this Court. A discussion of the journey of the competing models of equality that the Court has espoused and their evolution over the course of the years is necessary to understand the constitutional vision on equality.
The impugned constitutional amendments by which Article 16 (4-A) and 16 (4-B) have been inserted, flow from Article 16 (4). They do not alter the structure of Article 16 (4). They retain the controlling factors or the compelling reasons which enables the State to provide for reservation keeping in mind the overall efficiency of the state administration under article 335. Sub-categorization within a class is a constitutional requirement to secure substantive equality in the event that there is a distinction between two sections of a class; Sub-classification must not lead to the exclusion of one of the categories in the class. A model that provides sufficient opportunities to all categories of the class must be adopted; and Sub-classification among a class must be on a reasonable basis.
Justice Bela Trivedi opined, in dissent, that presidential list of scheduled castes notified under Article 341 cannot be altered by the States. Any change to this list can only be made by a law enacted by Parliament. Sub-classification, according to her would amount to tampering with the Presidential List and undermine the object Article 341, which aims to eliminate political influence in the SC-ST List. Further, she emphasised the importance of adhering to the rule of plain and literal interpretation. She mentions that any preferential treatment for a sub-class within the presidential list would deprive other classes within the same category of their benefits. In the absence of executive or legislative power, state lack the competence to sub-classify castes and the benefit reserved for all SCs. Allowing states to do so would constitute a colourable exercise of power, which is impermissible under law. Justice Trivedi concluded by affirming that affirmative action by States must remain within constitutional boundaries and held that the law laid down in E.V. Chinnaiah case was correct and should be upheld.
(Extract from The State of Punjab & Ors. v. Davinder Singh & Ors. 2024 SC)- CLAT PG - 2025
- Constitutional Laws
View More Questions