THE LEGAL WATCH
Trusted Contract Advisory
TLW - Contract Awareness Initiative
TLW - Legal Awareness Initiative
When the contract depends on happening or not happening of some future event, then it is called contingent contract.
For example: A agrees to pay B a sum of money if a certain ship does not return. That is the contract is depended on a future event. If ship returns than B can ask for the money promised by A acc to contract.
A contingent contract is a contract to do or not to do something, if some event collateral to such contract does or does not happen’.
In simple words, contingent contracts, are the ones where the promisor perform his obligation only when certain conditions are met. The contracts of insurance, indemnity, and guarantee are some examples of contingent contracts.
Illustration:- A contracts to pay to B Rs. 20,000 if B’s house is burnt. This is a contingent.