Contingent contracts (ss. 31-36): definition, essentials, rules of enforcement, contingent v wagering and absolute contracts

LUG-103 Law of Contract including Specific Relief Act & Sale of Goods Act, Unit III: Contingent contracts (ss. 31–36). · LLB · 60 min

Chapter III of the Contract Act (ss. 31-36) deals with contracts whose performance depends on an uncertain collateral event: insurance, indemnity, guarantee and every sale 'subject to' something. This lecture reads s. 31 word by word, works through the five enforcement rules of ss. 32-36 with the Act's own illustrations, separates a contingent contract from a wager (s. 30) and from an absolute contract with a term about performance, and studies Bashir Ahmed, Chandulal Harjivandas and Nandkishore Lalbhai Mehta. The topic is asked in almost every paper, usually for 5 or 7 marks, often paired with the wagering agreement.

Objectives

Explain the definition of a contingent contract in s. 31 and each of its essentials.
Apply the rules of enforcement in ss. 32-36 to a problem, using the Act's illustrations.
Distinguish a contingent contract from a wagering agreement and from an absolute contract.
Explain why insurance, indemnity and guarantee are contingent contracts, with Chandulal Harjivandas.
Use Bashir Ahmed and Nandkishore Lalbhai Mehta to decide whether a clause is a contingency or a term of performance.

Slides

Where contingent contracts sit in the Act
What s. 31 says: the definition and its illustration
Essentials of a contingent contract
Section 32: contracts contingent on an event happening
Sections 33 and 34: non-happening, and the conduct of a living person
Sections 35 and 36: fixed time, and impossible events
Contingent contract v wagering agreement (s. 30)
Contingent v absolute; insurance, indemnity and guarantee
Bashir Ahmed and Nandkishore Lalbhai Mehta: contingency or term?
Frost v. Knight: the contingent promise before the event
Indian v English law, and some further points
How the examiner asks it

Loading the lecture…