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CMA Intermediate · Business Laws and Ethics · Indian Contracts Act, 1872

Under the Indian Contract Act, 1872, a "contingent contract" is a contract to do or not to do something if:

A contingent contract is one to do or not to do something if an event collateral to the contract does or does not happen. The event must be outside the contract's own performance, as when payment is promised if a house is burnt.

  1. Asome event, collateral to such contract, does or does not happenCorrect
  2. Bthe promisor alone decides whether to perform it
  3. Cone party receives consideration only after performance is complete
  4. Dthe contract is made orally and not in writing

Explanation

Section 31 defines a contingent contract as one to do or not to do something if some event, collateral to the contract, does or does not happen. The other options describe features that have nothing to do with the definition. A promise dependent on the promisor's own will is not a collateral uncertain event.

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