Business Laws and Ethics · Indian Contracts Act, 1872

Contingent and Quasi Contracts for CMA Intermediate

Updated 10 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 (Section 31). A quasi contract is not a real contract. The law imposes the duty to pay, as under Section 70, so that nobody keeps a benefit unfairly. Identify the event or the benefit first, then apply the rule.

Understand Contingent and Quasi Contracts

A contingent contract depends on an event outside the contract itself. Section 31 calls it a contract to do or not to do something, if some event, collateral to such contract, does or does not happen. The official illustration: A contracts to pay B ₹10,000 if B's house is burnt. The fire is the collateral event. It is not the main promise.

The event must be uncertain and collateral. A contract does not become contingent merely because it is conditional on the parties' own promises. An insurance contract and a contract of indemnity are standard examples of contingent contracts. A contingent contract is a valid contract if it meets all the other essentials. This is what separates it from a wagering agreement, which is void (Section 30). In a wager, each side wins or loses only on the uncertain event, and neither has any other interest in it. In a contingent contract, the event is only a condition. The parties may have a real interest, such as insurable interest.

Timing of enforcement matters. A contract contingent on an uncertain future event happening cannot be enforced until that event happens (Section 32). If the event becomes impossible, the contract becomes void. For a contract contingent on an event not happening, Section 33 says it can be enforced when the happening of that event becomes impossible, and not before. Illustration: A agrees to pay B a sum if a certain ship does not return. The ship is sunk. The contract can be enforced when the ship sinks.

A quasi contract is different. There is no agreement between the parties. The law creates the obligation, and the heading used in the Act is relations resembling those of contract. The idea is fairness: a person should not enjoy another's benefit free if the other did not mean it as a gift. Sections 68 to 72 cover the main cases: supply of necessaries to a person incapable of contracting, payment of another's dues by an interested person, the non-gratuitous act (Section 70), the finder of goods, and money paid by mistake or under coercion.

Section 70 is the one examiners favour. It applies where a person lawfully does anything for another, or delivers anything to him, not intending to do so gratuitously, and the other person enjoys the benefit. The latter must compensate or restore the thing. Section 73 adds that when an obligation resembling those created by contract has been incurred and not discharged, the injured person gets the same compensation as if the other had contracted to discharge it and had broken the contract.

Key rules to remember

Contingent contract (Section 31): Contingent contract = promise to do or not do something + if a collateral event does or does not happen; Illustration: A pays B ₹10,000 if B's house is burnt. The event is collateral to the contract.
Enforcement when the event must happen: Cannot be enforced until the uncertain future event happens; void if it becomes impossible; This is the rule in Section 32. It is stated here in plain words.
Enforcement when the event must not happen (Section 33): Enforceable when the happening of the event becomes impossible, and not before; Official illustration: payment if a ship does not return is enforceable once the ship sinks.
Section 70 conditions: Lawful act or delivery + no intention to act gratuitously + other person enjoys the benefit ⇒ pay compensation or restore; All three conditions must be present. Check each one in the answer.
Obligation resembling contract (Section 73, second paragraph): Injured person gets the same compensation as if the other had contracted and broken the contract; Remedy follows the contract-breach measure of compensation. Remote and indirect loss is not recoverable.
Contingent contract versus wager: Contingent: valid if other essentials are met. Wagering agreement: void (Section 30); Look for a real interest in the event and a promise that is not just a bet.

How to solve Contingent and Quasi Contracts questions

Use this order for any problem or theory question on this topic. It keeps your answer short and mark-worthy.

1Read the facts and ask: is there an agreement? If one party promises something conditional on an outside event, think contingent contract. If there is no agreement but one person gains from another's act, think quasi contract.
2For a contingent contract, name the collateral event and say whether it is uncertain. Quote Section 31 in your own words.
3Decide when the contract can be enforced: after the event happens, or, for a not-happening event, once its happening becomes impossible (Section 33).
4Check whether the arrangement is really a wager (Section 30). Ask whether both parties merely bet on the event with no other interest.
5For a quasi contract, apply Section 70 in three tests: was the act lawful, was it not meant to be gratuitous, and did the other person enjoy the benefit?
6Look for facts that defeat the claim, such as intention to act gratuitously, or no benefit actually enjoyed or accepted.
7State the remedy: compensation for, or restoration of, the thing done or delivered. Mention the Section 73 principle if the question is about unpaid obligations.
8Write a one-line conclusion naming the parties and the amount, if given.

Quickest way: Three-question filter

When to use it: Use this for 2-mark MCQs and for the first two lines of a descriptive answer.

Is there a promise conditional on an outside event? If yes, it is contingent. Is it only a bet on that event? If yes, it is a wager, which is void.
Is there no agreement, yet someone received a benefit? If yes, it is a quasi contract. Go to Section 70.
Check the three conditions of Section 70 and the gratuitous intention. Pick the option that matches the result.

Common mistakes in Contingent and Quasi Contracts

Treating every conditional promise as contingent.
Students see the word 'if' and stop thinking.
Fix: Check that the event is collateral to the contract and is not part of the main performance or the parties' own promises.
Calling a contingent contract a wagering agreement, or the reverse.
Both depend on an uncertain event.
Fix: Remember that a wager is void (Section 30) and rests only on the bet. A contingent contract is valid if it meets the other essentials, and the parties often have a real interest, as in insurance.
Saying a contingent contract can be enforced at once.
Students forget the timing rule.
Fix: State that enforcement waits for the event. For an event-not-happening contract, Section 33 allows enforcement only once its happening becomes impossible.
Calling a quasi contract a contract by agreement.
The name contains the word contract.
Fix: Write that the law imposes the obligation and that there is no agreement. It is a relation resembling contract.
Awarding payment under Section 70 even when the act was meant to be free.
Students focus on the benefit and skip the intention test.
Fix: Quote the official illustration: A saves B's property from fire and gets nothing if the circumstances show A intended to act gratuitously.
Applying Section 70 when the other person had no choice and did not enjoy the benefit.
Students forget enjoyment of the benefit is a condition.
Fix: Show in the answer that the other person actually enjoyed the benefit, for example used the goods as his own.

Worked examples

Example 1

Meera agrees to pay Kavita ₹2,00,000 if the cargo ship 'Sagar' does not return to Kochi. The ship sinks at sea. Kavita demands the money. Can she enforce the promise, and when?

Show the solution

The promise to pay depends on the ship not returning. That event is collateral to the promise and is uncertain. So this is a contingent contract under Section 31.
The contract is contingent on an event not happening. Under Section 33, it can be enforced when the happening of that event becomes impossible, and not before.
The ship has sunk. Its return has become impossible.
So the contract becomes enforceable at the time the ship sinks. It could not have been enforced while the ship might still have returned.

Answer: Yes. It is a contingent contract, and Kavita can enforce the ₹2,00,000 promise from the moment the ship sinks.

Example 2

Sharma Textiles, Surat, by mistake delivers cloth worth ₹40,000 to Verma's shop in Indore. Verma does not return it and sells the cloth as his own stock. Can Sharma Textiles recover anything? Name the principle.

Show the solution

There is no agreement between the parties, so this is not a contract. It is a relation resembling contract, a quasi contract.
Apply Section 70. First, the delivery was lawful. Second, Sharma Textiles did not intend the delivery to be a gift, since it was a mistake in an ordinary trade. Third, Verma enjoyed the benefit by treating the goods as his own.
All conditions are met. Verma must pay compensation for the goods or restore them. The official illustration (a) is almost identical: goods left at B's house by mistake, and B treats them as his own, so B must pay.
The amount is the value of the cloth, ₹40,000, as the goods are sold and cannot be restored.

Answer: Yes. Under Section 70, Verma must pay ₹40,000, because the delivery was lawful, non-gratuitous and he enjoyed the benefit.

Exam tips

Define a contingent contract in the Section 31 words, then quote the ₹10,000 house-burnt illustration. This earns the definition mark quickly.
For 'distinguish between' questions, give four or five points: nature of the event, validity, interest of the parties, enforceability, and example. Compare contingent contracts with wagering agreements this way.
For Section 70 problems, list its three conditions as separate lines and tick each against the facts. Examiners award step marks for each.
In MCQs, watch for words such as 'gratuitously', 'by mistake' and 'enjoys the benefit'. These decide the answer.
Remember that a quasi contract is created by law and not by agreement. A one-line statement of this is often the key to a correct option.

Practice questions from Indian Contracts Act, 1872

Contingent and Quasi Contracts in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Contingent and Quasi Contracts: frequently asked questions

What is a contingent contract with an example?

It is a contract to do or not to do something if some event, collateral to the contract, does or does not happen. For example, A promises to pay B ₹10,000 if B's house is burnt. The fire is the collateral event.

What is the difference between a contingent contract and a wagering agreement?

A contingent contract is valid if it meets the other essentials of a contract, and the event is only a condition. A wagering agreement is void under Section 30 because it is a bet on an uncertain event with no other interest. Insurance is the usual example of a valid contingent contract.

What is a quasi contract?

It is an obligation imposed by law, though there is no agreement between the parties. The aim is to stop one person unfairly keeping another's benefit. Examples include the non-gratuitous act in Section 70 and money paid by mistake.

When can a person claim compensation under Section 70?

The person must have lawfully done something for, or delivered something to, another, without intending it as a gift. The other must have enjoyed the benefit. Then the other has to pay compensation or restore the thing.

Is a quasi contract a real contract?

No. A real contract needs an agreement. A quasi contract has none and is a relation resembling a contract. The law gives the injured person a remedy as if there were a contract.