CMA Foundation · Fundamentals of Business Laws and Business Communication · Contingent Contracts
Which of the following best describes a contingent contract under 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 event must lie outside the contract itself, which is why dependence on a party's own wish or on formalities does not make a contract contingent.
- 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 wish of one of the parties
- CA contract that is enforceable only if it is made in writing and registered
- DA contract to do something if the promisor's own act is completed
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 dependence is on a collateral event, not on the mere will of a party. Hence the first option alone matches the definition.
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