Contingent and Quasi Contracts

Contingent Contracts and Quasi Contracts- Meaning, Essentials, Types and Rules

Objective

After going through this lesson, you shall be able to understand the following concepts:

• Essentials of Contingent Contract

• Difference Between Contingent and Wagering Contracts

• Meaning of Quasi Contracts

Before going through this lesson, let us read the meaning of difficult words that we will come across in this lesson.

Introduction

We have already learnt about various types of contracts as classified under the Indian Contract Act, 1872. However, besides those covered under chapter one, there are two more types of contracts that have not been discussed so far, namely, contingent contracts and quasi contracts.

What is a contingent contract?

Consider the following diagram:

What can you infer from this?

We can clearly make out that A promises to pay B Rs 500 in case the train doesn't arrives at its scheduled time. This means that the payment of the promised amount is dependent upon the arrival of train, that is, whether it turns up at the scheduled time or not?

Also, it can be said that the performance of contract between A and B is dependent upon arrival of train, or the contract between A and B is a conditional contract. This is called a contingent contract.

Before proceeding further, let us check what the Indian Contract Act, 1872, states about the same.



The performance of contingent contracts is made dependent upon a contingency.This is the reason they are sometimes called ‘conditional contracts’. However, sometimes an absolute contract may appear to be conditional whereas in reality, it is not so. Such contracts are not contingent contracts. This can be understood with help of an example. Suppose a person who wants to purchase a 300 × 500 square yards of plot in the outskirts of city agrees to pay Rs 2,00,000 to a broker who if manages to make available the required plot to him. This contract is an absolute contract and not a contingent contract because the uncertain event in the contract is the consideration for the contract itself and is not a collateral event. For a contract to be contingent, the uncertain event should be collateral to such contracts and not the consideration.

Essentials of a contingent contract
The definition of contingent contracts as provided by Section 31 of the Indian Contract Act, 1872, points certain essentials for a contract to be called contingent contract.

• Wheth…