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Of the section in general.---This short chapter of the Act appears to be the original work of the Legislative Department. There are some clauses on the subject in the draft prepared in England, but their language is quite different. We do not know why the word "contingent", familiar to English lawyers only in the law of real properly, was preferred to "conditional". A promise is said to be absolute or unconditional when the promisor binds himself to performance in any event, conditional when performance is due only on the happening of some uncertain event, in the future, or if some state of facts not within the promisor's knowledge now exists. Some learned authors extend the name of conditional to promises to be performed only after a lapse of time, but this, with great respect seems not correct, for the lapse of time cannot be regarded as uncertain or contingent. Some deny it to contracts dependent on the present existence of unknown facts, but this also seems untenable; an unknown present fact is as uncertain for the contracting parties as any future event.

In the text of the Act the words "some event collateral to such contract" are not very clear. They seem on the whole to mean that the event is neither a performance directly promised as part of the contract, nor the whole of the consideration for a promise. Thus, if I offer a reward for the recovery of lost goods, there is not a contingent contract; there is no contract at all unless and until some one, acting on the offer, finds the goods and brings them to me. So, if I tell B, I will pay him Rs. 1,000 if he marries C, this is not a contingent contract but merely an offer which will become a contract if, without any revocation of it in the meantime, B does marry C ; and therefore illustration (c) to s. 32, and the illustration to S. 34 below, must be read as implying that the agreement is made for some present and independent consideration. Again, a contract to pay a man for a piece of work is very commonly made on the terms that he is to have no pay till the work is all done; but the completion of the work, being the very thing contracted for, is not collateral to the contract, and the contract is not properly said to be contingent, though the performance of the work may be, and often is, a condition precedent to the payment of the wages.

The illustration to the section is the ordinary one of a contract of fire insurance. All contracts of insurance and indemnity are obviously contingent. So are many other kinds of contracts in both great and small matters. A wager is a contingent agreement, but S. 30 prevents it from being a contract. A contract between A and Z that if A succeeds in his suit with regard to certain land in the possession of Z he shall purchase the land from Z. for Rs. 300 is contingent. This, however, is not the common type of contract. A contract to supply a man, in return for a fixed payment, with extracts of newspaper articles or paragraphs relating to a given subject which may appear during a given time in contingent; for the duty arises only if and when such matter is published in one of the journals contemplated by the parties. Here the contingent events do not in any necessary or probable way depend on the promiser's will; but in many cases---as, for example, a sale on approval, the contingency may depend on an act of discretion to be exercised by him. A, whose property has been attached, agrees to sell it to B, upon the following terms inter alia: (i) that A should apply to the Court for its approval to the sale of the property to B; (ii) that part of the sale price should be paid to the attaching creditors; (iii) that the balance of the price should be paid in the presence of the Sub-Registrar. A, duly applied to the Court for its approval, but the application was rejected. Thereupon A sold the property to C, who had notice of the contract with B. B sued A and C for specific performance, but it was held that the contract with B was a contingent contract, and the contingency having failed, there was no contract which could be enforced.

Contingency dependent on act of party.---The distinction just now mentioned requires some further explanation. Words (if promise amount to no promise at all if their operation is expressed to be dependent, in terms of effect, on the mere will and pleasure of the promiser, as if a man says that for a certain service he will pay whatever he himself thinks right or reasonable. But the operation of a promise may well be dependent on a voluntary act other than a mere declaration of the promiser's will to be bound. The act may be that of a third person; thus a promise to pay what A shall determine is perfectly good. The act may also be that of the promiser himself, so long as it is not an act of more arbitrary choice whether he will be bound or not, as in the common case of goods being sold on approval, where the sale is not completed until the buyer has either approved the goods or kept them beyond the time allowed for trial.

On the same principle, if a clause in a contract provides that a party’s disability to perform his promise shall be a cause for annulling the contract but shall give no remedy in damages, this does not apply to a disability brought about by the promiser's own conduct. A builder's right to recover for his work is often made conditional on the architect certifying that the work has in fact been done and properly done, and such a condition is good.

Conversely the operation of penal clauses in a contract may be made to depend not only on some default of one party, but on the decision of a person appointed by the other party that a default contemplated by the contract has taken place.

In some kinds of contracts, especially for the sale or letting of immovable property, clauses are commonly inserted expressly giving one or both of the parties an option to rescind the contract in specified events. In such cases, and in other cases where there is a complete anti active obligation from the first, though subject to be defeated by matter subsequent, it does not seem that the contract can properly be called contingent. A purchased B's land, and leased the same to him for a period of six years, there being a forfeiture clause on failure to pay rent on the due dates. It was also agreed that if B paid rent regularly, A would reconvey the land to B at the end of the six years. B failed to pay the rent regularly, and A., while waiving the right of re-entry, gave notice cancelling the agreement to recovery. In a suit lay B, for reconveyance, it was held that waiver of the right of re-entry, did not affect the contract of reconveyance, and that B, not having performed the condition precedent to his right to reconveyance, was not entitled to specific performance.

Requisites of contingent contract explained. Enforcement of contingent contract---Contended that contingent contracts cannot be enforced unless contingent event happens and that since appellants did not agree to execute a sale deed, contract of sale which was contingent upon such execution, could not be enforced---Contention repelled as being without any force---Held, agreement also provided that respondent shall have a right to obtain a sale deed through specific performance of contract and as such suit for specific performance did lie.

32. Enforcement of contracts contingent on an event happening. Contingent contracts to do or not to do anything if an uncertain future event happens cannot be enforced by law unless and until that event has happened.

If the event becomes impossible such contracts become void.

There are some cases which may be dealt with either under this section or S. 56, for it may be equally true to say that performance of a material part of the contract has become impossible and that the contract was made on the contingency of an event which has become impossible; or it may be hard at first sight, at any rate to say which section is the more applicable.

Whether a contract is of the kind specified in this section may be a question of fact or construction. In one case where this section was relied upon, the Privy Council held, on the construction of the document, that it operated as an unconditional undertaking on the defendant's part to procure a loan and out of the loan to repay the money due to the plaintiff.

33. Enforcement of contracts contingent on an event happening.---Contingent contracts to do or not to do anything if an uncertain future event does not happen can be enforced when the happening of that event becomes impossible, and not before.

Sections 32 and 33 cannot be made plainer by any commentary. S. 34 is in accordance with any authority. The illustration to the section, in which it must be assumed that A's agreement is made for some distinct consideration, as otherwise it would be merely a proposal, may therefore be taken as declaring the Common Law. The application of the present section, or any section in the group, must obviously depend on the special facts and the construction of the contract.

Contract Act (IX of 1872), S. 202---Reference to arbitrator---Contract of agency---Dispute arising between parties covered by arbitration clause of agreement---Dispute referred to sole arbitrator under agreement for adjudication and proceedings of suit stayed.

35. When contracts become void which are contingent on happening of specified event within fixed time.---Contingent contracts to do or not to do anything if a specified uncertain event happens within a fixed time become void if, at the expiration of the time fixed, such event has not happended, or if, before the time fixed, such event becomes impossible.

When contracts may be enforced which are contingent on specified event not happening within fixed time.---Contingent contracts to do or not to do anything if a specified uncertain .event does not happen within a fixed time may be enforced by law when the time fixed has expired and such event has not happened or, before the time fixed has expired, if it becomes certain that such event will not happen.

(a) A promises to pay B, a sum of money if a certain ship returns within a year. The contract may be enforced if the ship returns within the year, and becomes void if the ship is burnt within the year.

(b) A promises to pay B a sum of money if a certain ship does not return within a year. The contract may be enforced if the ship does not return within the year, or is burnt within the year.

Contingent contract---When should be performed. One term of the contract was "this offer is subject to our getting necessary Licence and permission from the Government of Pakistan for which we do not anticipate any difficulty."

The defendants contended that this offer is subject to our getting necessary Licence and permission from the Government of Pakistan.

Held; the contention raised on behalf of the defendants is not of such substance. Under the contract Act conditional contract are also permissible and the contract in question is one of those contracts. There is nothing on the record to suggest that the condition is of such a nature which shows that the agreement between the parties had not been finally concluded. The moment the proposals were accepted it became a complete contract but it was contingent and could be enforced unless rendered impossible.

36. Agreements contingent on impossible events void.---Contingent agreements to do or not to do anything, if an impossible event happens, are void, whether the impossibility of the event is known or not to the parties to the agreement at the time when it is made.

(a) A agrees to pay B 1,000 rupees if two straight lines should enclose a space. The agreement is void.
(b) A agrees to pay B 1,000 rupees if B will marry A's daughter C. C was dead at the time of the agreement. The agreement is void.

The two last foregoing sections explain themselves. Before leaving this chapter we may note that somewhat similar provisions as to transfers of property made subject to conditions occur in the Transfer of Property Act, 1882, see especially Ss. 25-34. A conditional transfer of property, though it may be, and often is, made in pursuance of a contract, is not, of course, itself a contract. It was therefore necessary to lay down distinct and independent, though more or less analogous, rules for such transactions.

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