Indian Contract Act 1872 – Wager and Contingent Contract
Wager and Contingent Contract. Concept of Wager, Contingent Contract and their subtle differences.
i. Reciprocal promises : A wagering agreement consists of reciprocal promises whereas a contingent contract may not contain reciprocal promises.
ii. Nature : A wagering agreement is essentially of a contingent nature whereas a contingent contract may not be of a wagering nature.
iii. Legal Status : A wagering agreement is void, whereas a contingent contract is valid.
iv. Interest : In a wagering agreement, the parties have no other interest in the subject matter of the agreement ,except the winning or losing of the amount of the wager. Thus, a wagering agreement is a game of chance, but a contingent contract is not so.
v. Future Event : In a wagering agreement, the future event is the sole determining factor while in a contingent contract the future event is only collateral.
vi. Performance : A wagering agreement is a promise to pay money or money’s worth on the happening of some uncertain event in consideration of the other party’s promise to pay if the event does not happen.
Whereas, a contingent contract is a contract to do (or abstain from doing something), if some event, collateral to such contract, does or does not happen.
Example:
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