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Contingent Contract

According to the Indian Contract Act, a contract may be absolute or contingent. An absolute contract would be the one, the performance of which is certain or absolute in itself and is not dependent on happening or non happening of any probable event. In this type of contract, the promisor binds himself to perform under any event. Whereas a contingent contract is a contract, wherein the performance of the contract depends upon some uncertain event which may or may not occur.
As per Sec. 31 of Indian Contract Act 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. The performance of a contingent contract becomes due only upon the happening or non happening of some future uncertain event. In simple terms, it is a conditional contract.



On 1st January, Ashwin agrees with Ramesh that if he gets a new car by 13th January, he will sell his old car to him for ₹ 40,000. It is a contingent contract as the performance of Ashwin’s promise depends upon his getting a new car. If he gets the car, he shall perform the contract, otherwise not.

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