Understanding Contingent Contracts
A contingent contract is a type of agreement that relies on the occurrence of a specific event to become enforceable. The characteristics and implications of contingent contracts are crucial for understanding their validity in legal terms.
Definition of a Contingent Contract
- A contingent contract is defined under Section 31 of the Indian Contract Act, 1872. It is an agreement that will only be enforceable when a certain condition is met.
- For example, "I will pay you $100 if it rains tomorrow." Here, the payment is contingent upon the specific event of rain.
Validity of Contingent Contracts
- Contingent contracts are considered valid as long as the conditions are lawful and possible to perform.
- If the event on which the contract is contingent becomes impossible or unlawful, then the contract may become void.
Comparison with Other Types of Contracts
- Void Contracts: These are contracts that cannot be enforced by law from the beginning.
- Voidable Contracts: These are initially valid but can be annulled at the option of one party.
- Illegal Contracts: These involve unlawful objectives and are not enforceable by law.
Conclusion
- Since contingent contracts are valid agreements based on future events, they are classified as valid under the law.
- Thus, the correct answer to the question is option 'C' – Valid. This classification supports the enforceability of the contract as long as its conditions are lawful.