CMA Foundation · Fundamentals of Business Laws and Business Communication · Contingent Contracts
Which of the following best captures the meaning of a contingent contract under Section 31 of the Indian Contract Act, 1872?
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 dependence on a collateral event is the defining feature under Section 31.
- AA contract to do or not to do something, if some event collateral to such contract does or does not happenCorrect
- BA contract whose performance depends only on the wishes of one of the contracting parties
- CA contract that is enforceable only if it is made in writing and registered
- DA contract to do something that becomes impossible after it is made
Explanation
Section 31 defines a contingent contract as a contract to do or not to do something if some event, collateral to the contract, does or does not happen. The event must be outside the contract's own promises. The option about one party's wishes describes no part of the definition, and the one about impossibility after formation describes a different situation.
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