Contingent Contract:

A contract which is dependent on the happening or non-happening of a future uncertain event is called a contingent contract. The term 'contingent' means something that may or may not happen in the future. Thus, a contingent contract is a contract which is conditional, and the parties to the contract agree to be bound by the contract only if the uncertain event occurs or does not occur.

Example: A agrees to pay B Rs. 10,000 if it rains tomorrow.

In this example, the contract is contingent upon the happening of a future uncertain event, which is rain. If it rains tomorrow, A will have to pay B Rs. 10,000, and if it does not rain, the contract becomes void.

Types of Contingent Contracts:

Contingent contracts can be classified into two types:

1. Contingent contracts based on the happening of an uncertain event: In such contracts, the performance of the contract is contingent upon the occurrence of an uncertain event. For example, A agrees to pay B Rs. 10,000 if B's house is destroyed in a fire.

2. Contingent contracts based on the non-happening of an uncertain event: In such contracts, the performance of the contract is contingent upon the non-occurrence of an uncertain event. For example, A agrees to pay B Rs. 10,000 if B's house does not get destroyed in a fire.

Legal Validity:

Contingent contracts are legally valid if they fulfill the following conditions:

1. The uncertain event must be future and cannot be a past event.

2. The uncertain event must be beyond the control of both parties. It should not depend on the will of either party.

3. The uncertain event must not be illegal or against public policy.

4. The contract must be enforceable only if the uncertain event happens or does not happen.

Conclusion:

Thus, a contingent contract is a contract that is dependent on the happening or non-happening of a future uncertain event. Such contracts are legally valid if they fulfill certain conditions. Contingent contracts are widely used in business transactions, insurance, and other areas where performance is dependent on uncertain events.