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Thread: What is contingent contract? Is it enforceable by law? If so under what circumstances

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    Moodle What is contingent contract? Is it enforceable by law? If so under what circumstances

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    Contingent contract
    Q. What is contingent contract? Is it enforceable by law? If so under what circumstances. Discuss fully. (2001)
    1. Introduction:
    If any contract performance depends upon the happening of certain event of future is called contingent contract. An ordinary contract can become contingent contract. If its performance is made dependent upon the happening or non happening of an uncertain event, collateral to such contract. Contingent contract is also called conditional contract.
    Example:
    A contracts to pay B Rs. 2000 if B marries to C. This is contingent contract.
    Collateral event:
    The collateral event means connected event.
    2. Definition of contingent contract:
    A “contingent contract” is a contract to do or not to do something if some event, collateral to such contract, does not happen.
    3. Essentials:
    Following are the essentials of the conditional contract.
    (i) The performance of such contract depends upon the happening or non happening of some future uncertain event.
    (ii) The event must be uncertain,
    (iii) The happening or non happening of the events must be collateral.
    4. Rules of the performance of contingent contract:
    Rules of the performance of contingent contract are following.
    (I) Happening of uncertain event:
    According to Sec. 32
    “Contingent contracts to do or not to do anything if an uncertain future event happens cannot be enforced by law, unless and until that event happened. If the event becomes impossible, such contract becomes void.
    Example:
    A contracts to pay B a sum of 100,000/- when B marries C. C dies without being married, to B. The contract becomes void.
    (II) Un happening of uncertain event:
    According to Sec 33.
    “Contingent to do or not to do anything if an uncertain future event does not happen can be enforced when the happening of that event becomes impossible but not before.
    Example:
    “A agrees to pay B a sum of money if a certain ship does not return. The ship is sunk the contract can be enforced when the ship sinks.
    (III) Time not specified:
    According to Sec. 34
    “If the future event which the contract is contingent is the way which the person will act at an unspecified time, the event shall be considered to become impossible when such person does anything which renders it will be void contract.
    Example:
    “A agree to pay B a sum of money if B marries to C. But C marries to D. The marriage of B to C must now be considered impossible. Although it is possible that D. may die and C may afterwards marry B.
    (IV) Time specified:
    According to Sec. 35 (1)
    Contingent contracts to do or not do anything if a specified uncertain events happens with in a specified time become void. If at the expiration of the fixed time such event has not happens or before the time fixed.
    Example:
    A promises to pay B a sum of money if train returns to Karachi within 24 hours. The contract is enforceable if train returns with in specified time. But if train destroyed during the fixed time the contract will be void.
    (V) Fixed time expired:
    Sec 35 (2)
    “Contingent contracts to do or not to do anything if a specified uncertain event does not happened with in a fixed time may be enforced by law when time has expired and such event has not happened or before the time fixed has expired it becomes certain that such event will happen.”
    Example:
    A promises B to pay a some of money if certain trains does not turn within day. The contract may be enforced if train does not return.
    (VI) Impossible events:
    According to sec 36.
    “Contingent agreement to do or not to do anything impossible event happens are void whether the impossibility of the event is known or not to the parties to the agreement a time when it is made.
    Example:
    A agree to pay B a sum of money if B will marry A’s daughter’s C. C was dead at the time of agreement. It is void.
    5. Conclusion:
    To conclusion it can be said that, contingent contract is also known as conditional contract. It is valid contract. The parties have real interest in the occurrence or non occurrence of the event. Contracts of guarantee, indemnity and insurance are its example.

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