Assignment 2
- 1. BUSINESS LAW NAME : R.Malini CLASS : II- B.Com “B” ROLL NO : 18URO7
- 2. CONTINGENT CONTRACT Definition : A ‘contingent contract’ is a contract to do or not to do something if some event, collateral to such contract does or does not happen.
- 3. FROM THE DEFINITION IT IS CLEAR THAT : The performance of a contingent contract depends upon the happening or non- happening of some future event. The event must be uncertain. The event must be collateral (not primary) to the contract.
- 4. RULES IN RESPECT OF CONTINGENT CONTRACTS : The rules regarding contingent contracts are contained in section 32 to 36. These are: 1. A contract, contingent upon the happening of an uncertain future event, cannot be enforced unless and until that event has happened. If the happening of the event becomes impossible, such a contract becomes void. Example : X contract to pay Y a certain sum of money when Y marries Z. Z dies without being married to Y. The contract cannot be enforced.
- 5. 2. A contract, contingent upon the non- happening of an uncertain future event, can be enforced when the non- happening of that event becomes impossible. Example : M agrees to lend Rs.5,000 to N, if P, whom N has approached earlier for the money, does not give. P dies. The contract can be enforced upon P’s death.
- 6. 3. If a contract is contingent upon how a person will act at an unspecified time, the event shall be considered to become impossible when such person does anything that renders it impossible. Example : A agrees to pay B a certain sum of if B marries C. C marries D. The marriage of B to C must, now be considered impossible, although it is possible that D may die and that C may afterwards marry B.
- 7. 4. A contract, contingent upon the happening of on uncertain future event within a specified time, become void, if such event does not happen or its happening becomes impossible before the expiry of that time. Example : L promise to pay M a certain sum if a particular ship does not return within a year. The contract can be enforced if the ship does not return within a year.
- 8. 5. Contingent agreements to do or not to do anything, if an impossible event happens, are void, whether the impossibility of the event is known or not to the parties to the agreement at the time when it is made. Example : X agrees to pay Rs.2,000 if two straight lines should enclose a space. The agreement is void.