Question

Sections 31 to 35 of Chapter III of the Indian Contract Act, 1872 deals with contingent contracts and Section 36 deals with contingent agreements. A contingent contract is one where the liability to perform the promise depends upon some collateral event which may or may not happen. A contract of insurance is an example of a contingent contract, where the liability of the insurer depends upon the occurrence of the event, viz. damage or destruction arising out of fire. Life insurance in a broader sense comprises any contract in which one party agrees to pay a given sum upon happening of a particular event contingent upon duration of human life, in consideration of the immediate payment of a smaller sum or certain equivalent periodical payments by another. The event may be certain but it’s happening in a specific manner or within a particular time would be uncertain. A contract of indemnity to make good the loss arising out of the conduct of the promisor is a contract contingent upon the act of a party. Such condition may be express or may also be implied into a contract. A contract for storage of potatoes in a cold storage cooling system was held subject to an implied condition that it could be performed only when there was continuous electric supply. But where there is a document embodying the terms of a contract, it is not permissible to imply therein a condition if that will be inconsistent with its express terms.