Business Laws · The Indian Contract Act, 1872

Contingent and Quasi Contracts: CA Foundation Business Laws

Updated 4 October 2026 · Fact-checked

A contingent contract is a promise to do or not do something if a collateral event does or does not happen. A quasi contract is not a real contract. The law imposes an obligation to pay or return something to prevent unjust gain. Identify the type, apply the matching rule, then state the conclusion.

Understand Contingent and Quasi Contracts

A contingent contract is a contract to do or not to do something, if some event, collateral to the contract, does or does not happen. The event is collateral: it is not part of the promise itself. Example: A contracts to pay B ₹10,000 if B's house is burnt. The payment depends on the fire. This is the logic of an insurance contract.

The key rules are simple. A contract contingent on an event happening cannot be enforced until that event has happened (s. 32). If the event becomes impossible, the contract becomes void (s. 32). A contract contingent on an event not happening can be enforced when the happening of that event becomes impossible, and not before (s. 33). Related rules cover events that depend on how a living person acts, and events fixed to happen within a stated time (s. 35 deals with contracts contingent on an event happening within a fixed time or not happening within a fixed time). Ss. 32 and 35 are not in the official text supplied for this page, so check their exact wording in your study material.

A wagering agreement looks similar but is different. In a wager, two parties promise money on an uncertain event, and one wins and the other loses. Neither has any interest in the event except the stake. In a contingent contract, the event is collateral and the parties usually have a real interest (for example, an insured person). A wager is void. A contingent contract can be valid.

A quasi contract (an obligation resembling those created by contract) has no agreement at all. The law creates the duty so that nobody gains unjustly at another's cost. Sections 68 to 72 deal with certain relations resembling those created by contract. They include supply of necessaries to a person incapable of contracting (s. 68), payment by a person who is interested in the matter, enjoyment of a non-gratuitous act, and money paid or goods delivered by mistake or under coercion. The responsibility of a finder of goods is in s. 71, which says the finder is subject to the same responsibility as a bailee. The finder's rights, including the right to retain goods and the right to sell, are in ss. 168 and 169. These sit outside the 68-72 range, in the part on bailment.

For non-payment of such an obligation, the injured person gets the same compensation as if there had been a contract and it had been broken (this is in the compensation section for breach of contract).

Key rules to remember

Contingent contract (s. 31): Promise to do / not do something IF a collateral event does / does not happen; The event must be collateral to the contract, not the promise itself. Example: pay ₹10,000 if B's house is burnt.
Event happening (s. 32): Enforceable only after the event happens; void if the event becomes impossible; This section is not in the supplied official text, so confirm the exact wording in your study material. Section 35 covers events happening or not happening within a fixed time.
Event not happening (s. 33): Enforceable when the happening of the event becomes impossible, and not before; Illustration: A pays B if a ship does not return. The ship sinks. Enforceable when the ship sinks.
Necessaries to incapable person (s. 68): Supplier is reimbursed from the property of the incapable person; Applies to the incapable person or anyone he is legally bound to support. The supplies must be suited to his condition in life. Only his property is liable, not the person.
Finder of goods (s. 71): Finder who takes goods into custody has the same responsibility as a bailee; He must take reasonable care and cannot use the goods for himself.
Finder's right (s. 168): No suit for compensation for trouble and expense; may retain goods until paid; may sue for a specific reward offered; The right to retain goods covers the compensation. If a specific reward is offered, the finder can sue for it and retain the goods until he receives it.
Finder's right to sell (s. 169): Thing commonly on sale + owner not found or refuses lawful charges + (danger of perishing or losing greater part of value, OR charges reach two-thirds of value); All conditions must be met before the finder may sell.

How to solve Contingent and Quasi Contracts questions

Use this order for any problem question on this topic. It keeps your answer in the provision, facts, conclusion format.

1Read the facts and decide: is there a promise that depends on an uncertain event, or is there no agreement at all but one person has received a benefit or goods?
2If it depends on an event, check that the event is collateral and uncertain. If both parties merely bet on the outcome with no other interest, treat it as a wagering agreement, which is void.
3For a contingent contract, ask whether the event is to happen or not to happen. Then apply the matching rule on when it can be enforced.
4If there is no agreement, name the quasi contract head: necessaries, payment by an interested person, non-gratuitous act, finder of goods, or money paid by mistake or coercion.
5State the rule in plain words. Quote the section number only if you are sure of it. For s. 31, s. 32, s. 33, s. 68, s. 71, s. 168 and s. 169 you can safely do so.
6Apply the rule to the facts, using the names and figures in the question.
7Write a one-line conclusion that answers exactly what was asked, such as who can recover and how much.

Quickest way: Provision-Facts-Conclusion in four lines

When to use it: Use it for a short problem question worth a few marks when time is tight.

Line 1: Label the issue, such as 'This is a contingent contract' or 'This is a quasi contract of finder of goods'.
Line 2: State the rule in one sentence, with the section number if you are sure of it.
Line 3: Apply it to the facts, using names and figures from the question.
Line 4: Conclude clearly, such as 'So B can recover ₹X from A's property' or 'So the finder can retain the goods but cannot sue for expenses'.
Memory aid for quasi contract heads: necessaries, interested payment, non-gratuitous act, finder, mistake or coercion.

Common mistakes in Contingent and Quasi Contracts

Treating every 'if' promise as a contingent contract.
Students spot the word 'if' and stop thinking.
Fix: Check that the event is collateral and that the parties are not just betting. A mutual bet on an uncertain event is a wager and is void.
Saying a quasi contract needs an agreement or consent.
The word 'contract' suggests a normal agreement.
Fix: Write that a quasi contract is created by law, not by agreement. Its purpose is to prevent unjust enrichment.
Holding the incapable person (for example a minor or lunatic) personally liable under s. 68.
Students mix up personal liability with liability of property.
Fix: Say the supplier is reimbursed from the property of the incapable person. The person is not personally liable.
Saying the finder can sue the owner for his expenses.
It feels fair that the finder should be paid.
Fix: Under s. 168 the finder cannot sue for compensation for trouble and expense voluntarily incurred. He can retain the goods until paid. He can sue only for a specific reward that the owner has offered.
Allowing the finder to sell any lost thing after some time.
Students forget the conditions in s. 169.
Fix: List the conditions: the thing is commonly on sale, the owner cannot be found or refuses to pay lawful charges, and either the thing is in danger of perishing or losing most of its value, or the charges reach two-thirds of its value.
Enforcing a contract contingent on an event not happening before it becomes impossible.
Students reverse the two rules.
Fix: For 'if the event does not happen', enforcement comes when the event becomes impossible, and not before. In the ship example, that is when the ship sinks.

Worked examples

Example 1

A agrees to pay B ₹1,00,000 if a certain ship does not return. The ship is sunk at sea. Is the contract enforceable? When?

Show the solution

Issue: A's promise depends on an uncertain future event, the non-return of the ship. The event is collateral, so this is a contingent contract (s. 31).
Rule: contingent contracts to do or not to do anything if an uncertain future event does not happen can be enforced when the happening of that event becomes impossible, and not before (s. 33).
Application: once the ship is sunk, it can no longer return. The happening of the event (the ship's return) has become impossible.
Conclusion: the contract can be enforced from the time the ship sinks.

Answer: The contract is a contingent contract. B can enforce A's promise of ₹1,00,000 when the ship sinks, because its return has become impossible. B could not enforce it earlier.

Example 2

Meera finds a gold chain on a road and takes it into her custody. She spends ₹2,000 on newspaper notices to find the owner. Raman, the owner, claims the chain. Meera asks for ₹2,000. Raman refuses. (a) Can Meera sue Raman for ₹2,000? (b) Can she keep the chain? (c) Would your answer change if Raman had offered a reward of ₹5,000 for its return?

Show the solution

Issue: Meera is a finder of goods. This is a quasi contract, since there is no agreement between her and Raman.
Rule: a finder who takes goods into custody has the same responsibility as a bailee (s. 71). Under s. 168 the finder cannot sue the owner for compensation for trouble and expense voluntarily incurred. But he may retain the goods until he receives that compensation.
Application to (a) and (b): Meera cannot sue Raman for the ₹2,000. She may retain the chain until she is paid.
Application to (c): if the owner offered a specific reward for the return of lost goods, the finder may sue for the reward and retain the goods until she receives it.
Meera must still take reasonable care of the chain while it is with her.

Answer: (a) No, Meera cannot sue for the ₹2,000. (b) Yes, she may retain the chain until she receives the compensation. (c) If Raman had offered a specific reward of ₹5,000, Meera could sue for the ₹5,000 and retain the chain until she receives it.

Exam tips

Short answers often ask for the difference between a contingent contract and a wagering agreement. Write two or three points: the nature of the event, the parties' interest, and the validity of the agreement.
For problem questions, always name the type (contingent or quasi) first. This earns marks even if your final calculation is off.
Write the section number only where you are sure of it. A wrong section number costs more than leaving it out.
For s. 68, always mention that reimbursement comes from the property of the incapable person, and that the supplies must suit his condition in life.
Use the illustrations you remember (house burnt, ship not returning, lunatic supplied with necessaries) as your examples. They are easy to apply and examiners expect them.

Practice questions from The Indian Contract Act, 1872

Contingent and Quasi Contracts: frequently asked questions

What is a contingent contract in simple words?

It is a contract to do or not to do something if some other event, collateral to the contract, does or does not happen. Paying ₹10,000 if B's house is burnt is a standard example. Insurance is the usual real-life case.

How is a contingent contract different from a wagering agreement?

In a contingent contract the event is collateral and the parties generally have a real interest in it. In a wager, each side wins or loses only on the uncertain event, with no other interest. A wagering agreement is void, while a contingent contract can be valid.

What is a quasi contract?

It is an obligation that the law imposes even though the parties made no agreement. The aim is to stop one person from gaining unjustly at another's cost. Sections 68 to 72 deal with certain relations resembling those created by contract, while the finder's rights and right to sell are in ss. 168 and 169.

Can a finder of lost goods keep them?

He has the responsibility of a bailee, so he must take care of the goods and try to return them. He can retain the goods against the owner until he receives compensation for his trouble and expense. He can sell them only under the strict conditions in s. 169.

Can a minor be sued for necessaries supplied to him?

The minor is not personally liable. Under s. 68, the supplier can be reimbursed from the property of the person incapable of contracting. The supplies must be necessaries suited to his condition in life.