Contingent Contract

Contingent Contract

Contingent Contract

Basing on the presence or absence of Condition’s, Contracts can be classified into two groups namely; Absolute Contracts and Contingent Contracts. In the case where there is no condition, it is called Absolute Contract. As there is no condition, an absolute contract is to be performed under all circumstances.

So, 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. It is an absolute contract is one where the promisor performs the contract without any condition.

In the case where there is a condition, then such a contract is called a Contingent Contract. Therefore Contingent Contract means Conditional Contract. When imposed and a condition is fulfilled, the Contingent Contract becomes valid and the parties have to perform their obligations. If imposed and Condition is not fulfilled, the Contingent Contract becomes Void and then it need not be performed. So Contingent Contract is to be performed under some circumstances only.


  • A contingent contract cannot be enforced unless the specified event takes place.
  • If the event on which the contract is based becomes impossible, then the contract becomes void.
  • A contract based upon the non-happening of an event becomes enforceable only when the event becomes impossible.

Example: There is a Contract between A and B according to which A has to sell his goods which are in the voyage, to B if the ship reaches the harbor safely. Here condition can be seen and it is Contingent Contract. All indemnity contracts, guaranteed contracts, and insurance contracts are Contingent Contracts. According to Sec. 31 of Indian Contracts Act, a Contract performance of which depends upon happening or non-happening of an uncertain event is called Contingent Contract.