Contingent Contracts

A contingent contract is a promise

- to do or not to do something
- on the happening or not happening of
- a future uncertain event
- which is collateral to the contract.
In other words:
- the promise must depend on a
contingency, and
- the contingency must be
collateral to the contract.


Contingent Contracts - 2
Collateral means
- something that is connected to the contract
- but, it is not the principal promise in the
contract.
Collateral event must be something that is not
the consideration for the promisors promise.
Example: A promises to pay money to B, if
Bs stocks in the go-down are destroyed by
fire. Here, the event destruction by fire is a
chance by accident. It is
- not the consideration given by B
- nor the performance expected by A.
Hence this is an example of a contingent contract.

Contingent Contracts - 3
A promise that depends upon a contingent
event in a contract can be enforced
- after the future uncertain event
- has happened or
- has not happened or
- has become impossible to happen
depending upon the circumstances of each
situation and case.
[Sections 32 to 36 deal with such situations]
Let us assume some of such situations and decide.
Some contingent contracts
1. Happening of an event [Sec32]:
A agrees to buy a property from B, after
B inherits such property from his father.
B survives his father
B dies before his father.
2. Non-happening of an event [Sec33]:
A promises to pay money to B, if Bs
ship does not return from voyage.
the ship returns from the sea
the ship sinks at sea

Some contingent contracts-2

3. Promise depends on the act of a third Party
[Sec-34]
S sell goods to B and B promises to pay the
price after C has fixed it.
- C fixes the price
- C refuses to fix the price
- C dies before fixing the price.
4. Promise depends on the
- happening or
- non-happening of an event
within a stated period of time [Sec-35]

Some contingent contracts-3
Happening within a stated period of time:
B promises to buy the whole of the
consignment of rice on board & pay money
to A, if As ship returns from voyage by
31
st
Dec.

- As ship returns on 30
th
of Dec
- As ship returns on 10
th
Jan
- As ship sinks at sea on 20
th
Dec.

Some contingent contracts-4
Non-happening within a stated period of time:
P promises to pay A, if As ship does not return
from voyage by 31
st
Dec.
- As ship returns on 30
th
Dec.
- As ship returns on 10
th
Jan.
- As ship sinks at sea on 20
th
Dec.

5. Promise depends on an impossible event:
A promises to pay money to B, when living
beings from Mars come and settle on earth.
It is impossible event, hence Void.
Quasi-Contracts
Even when there is no contract between
persons, a court may find a quasi-contract
to compensate a plaintiff who can show that:

He gave some benefit to the defendant.

He reasonably expected to be paid for
the benefit and the defendant knew this;
and

The defendant would be unjustly enriched
if he/she did not pay.

Quasi Contracts - 2
Some instances where we can notice certain
relations resembling those created by contract.
Necessaries supplied to a person incapable of
contracting [Sec-68]
Reimbursement of money to the person who
paid dues of other, because in payment of which
he is interested [Sec-69]
Obligation of person enjoying benefit of non-
gratuitous act. [Sec-70]
Responsibility of finder of goods. [Sec-71]


Quasi Contracts - 3
Liability of person to whom
- money is paid or goods delivered
- by mistake or under coercion. [Sec-72]
The distinction between quasi-contracts
and unilateral contracts is that
In unilateral contract, one party makes a
promise and the other party can accept
only by doing something.
In quasi-contracts, law attributes
contractual relations between parties,
though no promise and no acceptance.
Quantum meruit
Quantum meruit: is the
Name given to an action distinct from that
arising out of the original contract.
It is based upon a new contract originating
in the conduct of the parties.
It means that the complainant gets
as much as he deserved.
This phrase is used when part performance
relates to services of an individual; whereas
Quantum valebent: is used in cases where
there is part delivery of goods.