CSEET · Business Laws and Management · Elements of Law of Contracts
Under the Indian Contract Act, 1872, a contingent contract is one to do or not to do something if some event does or does not happen. What kind of event must this be?
The event must be collateral to the contract. Section 31 defines a contingent contract as a promise to do or not to do something if some event, collateral to the contract, does or does not happen, so the event is not the main performance promised.
- AAn event collateral to the contractCorrect
- BAn event forming the main promise of the contract
- CAn event within the sole control of the promisor
- DAn event that has already happened before the contract
Explanation
Section 31 defines a contingent contract as one to do or not to do something if some event, collateral to such contract, does or does not happen. The event is therefore not part of the main promise itself. An event forming the main promise is the wrong idea, because then it would not be collateral.
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