Section 35 of Indian Contract Act 1872: Contingent Contracts Within a Fixed Time

Section 35 of the Indian Contract Act, 1872 deals with contingent contracts in which the specified uncertain event must happen, or must not happen, within a fixed period. It explains when such a contract becomes void and when it becomes enforceable.

In brief: If a contract depends on an uncertain event happening within a fixed time, it becomes void when that time expires without the event happening, or earlier if the event becomes impossible. If the contract depends on the event not happening within the fixed time, it may be enforced when the time expires without the event, or earlier when it becomes certain that the event will not happen.

What is a contingent contract?

A contingent contract is defined by Section 31 of the Indian Contract Act, 1872. It is a contract to do or not to do something if an event, collateral to the contract, does or does not happen. Section 35 applies where the parties have also fixed a time within which the uncertain event is required to happen or not happen.

Section 35: When contingent contracts become void or enforceable

Event required to happen within fixed time: A contingent contract to do or not to do anything if a specified uncertain event happens within a fixed time becomes void if the fixed time expires without the event happening. It also becomes void before expiry of that time if the event becomes impossible.

Event required not to happen within fixed time: A contingent contract based on a specified uncertain event not happening within a fixed time may be enforced when the fixed time expires and the event has not happened. It may also be enforced earlier if it becomes certain that the event will not happen.

How Section 35 operates

  • A fixed time is essential: Section 35 specifically addresses contingencies tied to a defined period.
  • Happening of an event: Where performance depends on the event happening within the period, failure of the event by the deadline makes the contract void.
  • Impossibility before the deadline: There is no need to wait for the fixed period to expire if the specified event has already become impossible.
  • Non-happening of an event: Where performance depends on the event not happening, the contract becomes enforceable after the fixed period expires without the event.
  • Certainty of non-happening: Enforcement may arise before the deadline if it becomes certain that the specified event cannot occur.

Illustrations under Section 35

Illustration (a): Ship required to return within one year

A promises to pay B if a particular ship returns within one year. The promise can be enforced if the ship returns within that year. If the ship is destroyed during the year, the specified event has become impossible and the contingent contract becomes void without waiting for the year to end.

Illustration (b): Ship required not to return within one year

A promises to pay B if a particular ship does not return within one year. The promise becomes enforceable if the year ends without the ship returning. It can also become enforceable earlier if the ship is destroyed, because it is then certain that the ship will not return.

Difference between Sections 32, 33, 35 and 36

Section 32 deals generally with enforcement where an uncertain future event must happen. Section 33 deals with contracts contingent on an uncertain future event not happening. Section 35 applies the same basic ideas where a fixed time is specified. Section 36 separately provides for agreements contingent on impossible events.

Practical example

Suppose X agrees to pay Y if a regulatory approval is obtained within 90 days. If the approval is not obtained by the end of the 90-day period, the contingent obligation governed by the agreed condition cannot be enforced merely on the basis that approval might be obtained later. If, during those 90 days, the approval becomes legally impossible to obtain for that transaction, the contingency fails at that earlier point. The exact result in a real agreement will depend on its wording and the applicable law.

Official text of the Indian Contract Act, 1872

The official text of the Act, including Section 35, can be checked on the Government of India's India Code portal.

Official Indian Contract Act, 1872 - India Code

Legal note: Section 35 should be read with the terms of the particular contract and the other provisions governing contingent contracts. The legal effect of a clause may depend on its drafting, the nature of the contingency and the facts of the transaction.