CMA Foundation · Fundamentals of Business Laws and Business Communication · Contingent Contracts
Under Section 32 of the Indian Contract Act, 1872, a contingent contract to do something if an uncertain future event happens can be enforced by law when:
A contract contingent on an uncertain event happening becomes enforceable only when that event has actually happened. Until then it cannot be enforced by law, and signing, expectation or preparation by a party does not change this, as Section 32 provides.
- Athe contract is signed by both parties
- Bthe uncertain event has happenedCorrect
- Cthe parties believe the event is likely to happen
- Done party has made preparations to perform
Explanation
Section 32 says such contracts cannot be enforced unless and until the event has happened. Signing, belief or preparation does not make the contract enforceable, because the event is collateral and must actually occur.
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