Section 31 Indian Contract Act 1872 - Contingent Contract Defined

Section 31 of the Indian Contract Act, 1872 defines a contingent contract. Such a contract makes performance dependent on the happening or non-happening of an uncertain event that is collateral to the contract.

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Section 31 - Contingent contract defined

Section 31: 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 definition has two important features. First, the contractual obligation depends on an uncertain future event happening or not happening. Second, that event must be collateral to the contract, meaning that it is not itself the promised performance that constitutes the principal obligation.

Essential elements of a contingent contract

  • There must be a valid contract: The arrangement must otherwise satisfy the requirements of an enforceable contract under the Indian Contract Act, 1872.
  • Performance is conditional: The obligation to do or not to do something depends upon an event.
  • The event is uncertain: At the relevant time, it is uncertain whether the specified event will happen or will not happen.
  • The event is collateral: The event is incidental or collateral to the contract rather than the very performance promised by a party.

Illustration under Section 31

Illustration: A contracts to pay B Rs. 10,000 if B's house is burnt. This is a contingent contract.

The payment obligation in this illustration depends upon the occurrence of the collateral event, namely the burning of B's house. Section 31 supplies the definition; the rules governing when contingent contracts can be enforced or become void are principally contained in Sections 32 to 36.

Contingent contract and wager are not the same

A contingent contract should not automatically be treated as a wagering agreement. Section 31 defines contracts whose performance depends upon a collateral event, whereas Section 30 separately deals with agreements by way of wager. The legal character of an arrangement therefore depends on its terms and substance, not merely on the presence of an uncertain event.

Official source for the Indian Contract Act, 1872

For the current statutory text, amendments, and official publication of the Act, refer to India Code, maintained by the Government of India.

Legal note: This page provides general legal information about Section 31. Application of the provision depends on the wording of the particular contract and the surrounding facts.