Question

Which of the following is not correct about the nature of contingent contract?

• A. A contract contingent upon the happening of an event can be enforced after that event occurs.
• B. A contract contingent upon the happening of an event can be enforced even before that event occurs.
• C. If the event becomes impossible, the contract becomes void.
• D. 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.
• A. The contract can be enforced when the cruise sinks.
• B. Sinking of cruise has no relevance for validity of contract.
• C. The contract cannot be enforced when the cruise sinks.
• D. The condition is impossible.
• A. No contract comes into existence until the contingency occurs.
• B. One party cannot assume an immediate unilateral obligation subject to a condition.
• C. 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.
• D. All contingent contracts are void.
• A. The contract becomes void if the ship is burnt within the year.
• B. The contract depends upon returning or non-returning of the ship.
• C. The contract may be enforced if the ship returns within the year.
• D. The contract cannot be enforced if the ship returns within the year.
• A. The agreement is valid.
• B. The enforceability of agreement does not depend on the existence of ‘B’
• C. The agreement is void.
• D. The event is possible in its nature.
• A. Wagering agreements are void and contingent contracts are valid.
• B. Wagering agreements are valid and contingent contracts are void.
• C. Wagering agreements and contingent contracts are valid.
• D. Wagering agreements and contingent contracts are void.

Answer 1

The Correct Option is B

A contingent contract is a type of contract where the fulfillment is dependent on the occurrence or non-occurrence of an uncertain future event. According to the Indian Contract Act, 1872, contingent contracts are governed by Sections 31 to 35. Let's analyze the options provided:

• A contract contingent upon the happening of an event can be enforced after that event occurs: This is correct. The very nature of contingent contracts implies that they become enforceable only after the specified uncertain event happens.
• A contract contingent upon the happening of an event can be enforced even before that event occurs: This is incorrect. By definition, the enforcement of a contingent contract is conditional on the occurrence of the event.
• If the event becomes impossible, the contract becomes void: This is correct. If the uncertain event on which the contract is contingent becomes impossible, the contract cannot be enforced and is therefore 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: This is correct. The obligations under a contingent contract only arise upon the occurrence of the event, unless explicitly mentioned otherwise.

Based on the analysis, the statement "A contract contingent upon the happening of an event can be enforced even before that event occurs." is not correct about the nature of contingent contracts.

Answer 2

The provided scenario asks whether a contract between 'A' and 'B' can be enforced if a particular cruise does not return, with the cruise having sunk. This falls under the category of contingent contracts as per the Indian Contract Act, 1872, specifically Sections 31 to 35, which deal with liabilities dependent on uncertain future events. A contingent contract is valid when the event upon which it is contingent happens or does not happen. In this case, the contract stipulates payment upon the cruise's non-return. The sinking of the cruise constitutes non-return. Therefore, the condition stipulated in the contract has been met, satisfying the requirement for enforceability of the obligation. Thus, the correct conclusion is: The contract can be enforced when the cruise sinks.

Answer 3

In the context of the Indian Contract Act, 1872, specifically dealing with contingent contracts, a contingent contract is one where the enforceability of the contract depends upon the occurrence or non-occurrence of an event that is uncertain. The primary conditions for a contingent contract are:

• The event must be collateral to the contract, meaning it is not a part of the main contract but is an external factor affecting its execution.
• The obligation to perform the contract depends on the happening of that event.

Here is an explanation of why the correct answer is "No contract comes into existence until the contingency occurs":

• This aligns with the definition of a contingent contract because the performance of such a contract is conditional on the occurrence of the specified event. If the event does not occur, the contract remains unenforceable and thus never comes into existence as a binding agreement.
• Sections 31 to 35 of the Indian Contract Act address this, ensuring that no legal obligation is recognized until the contingency takes place. This is consistent with the nature of contingent agreements where the event's occurrence dictates the formation of the contract.
• Additionally, the option "All contingent contracts are void" is incorrect because contingent contracts are valid, enforceable agreements subject to the fulfillment of certain conditions.

Therefore, given the options, the statement "No contract comes into existence until the contingency occurs" correctly describes a contingent contract under the specified legal framework.

Answer 4

In the context of contingent contracts, as defined by the Indian Contract Act, 1872, we can analyze the given problem to determine the correct statement. A contingent contract's enforceability depends on the occurrence of an uncertain event. Here's how we approach the problem:

1. Statement "The contract becomes void if the ship is burnt within the year." implies that the contract is based on the condition that the ship returns. If the ship is burnt and cannot return, the performance of the contract becomes impossible, making the contract void under Section 32 of the Indian Contract Act, 1872.

2. Statement "The contract depends upon returning or non-returning of the ship." correctly identifies the nature of a contingent contract. The contract's performance depends on the ship's return, a future uncertain event, making this statement true.

3. Statement "The contract may be enforced if the ship returns within the year." accurately reflects the enforceable nature of contingent contracts upon fulfillment of the specified condition, i.e., the ship's return.

4. Statement "The contract cannot be enforced if the ship returns within the year." contradicts the principles of contingent contracts. If the condition is met (ship returns within the year), the contract is enforceable. Therefore, this statement is incorrect.

Based on the analysis, the statement that is not correct is:

The contract cannot be enforced if the ship returns within the year.

Answer 5

The problem involves an agreement, which is contingent upon the marriage of ‘Z’ to ‘B’. However, ‘B’ was already deceased at the time the agreement was made. According to Section 36 of the Indian Contract Act, 1872, contingent agreements are void if the event on which they depend is impossible from the outset.

In this case, the event in question is impossible because ‘B’ is deceased, making it impossible for ‘Z’ to marry ‘B’. Consequently, the agreement is void under the Indian Contract Act as it relies on an impossible condition.

Thus, among the options provided, the statement that accurately describes the situation is:

The agreement is void.

Answer 6

In legal studies, it is important to differentiate between wagering agreements and contingent contracts, particularly under Indian law. According to the Indian Contract Act of 1872, these two concepts have distinct legal standings.

Wagering Agreements: These are agreements where two parties make reciprocal promises that depend on the occurrence of an uncertain event. The primary objective of these agreements is gambling or betting. Wagering agreements are declared void under Section 30 of the Indian Contract Act, meaning they have no legal backing and cannot be enforced in a court of law.

Contingent Contracts: These are valid contracts whose performance depends on the occurrence or non-occurrence of an uncertain future event. Sections 31 to 35 of the Indian Contract Act, 1872, cover contingent contracts. Insurance contracts are common examples, where an insurer's obligation to pay exists only if a certain event (like damage or death) takes place. Unlike wagering agreements, contingent contracts are enforceable by law if all other conditions of a valid contract are satisfied.

To summarize, the correct statement distinguishing these two legal concepts is: "Wagering agreements are void and contingent contracts are valid."