Contingent Contract

Contingent Contract

A contingent contract is a contract to do or not to do something. This is a valid contract. In this contract either party or both party may have an interest is the subject matter of the contract. For example, A agrees to pay Taka 20 lac to B, if B’s house is burnt. This is a contingent contract.

Essential elements or features of contract. The basic elements of a valid contract are described below:

Offer and acceptance: There must be a lawful offer by one party and a lawful acceptance of the offer by other party or parties.

Intention to create legal relationship: There must be an intention among the parties that the agreement shall create legal relations.

Lawful consideration: An agreement comes into existence when one or more persons promise to another or other persons to do or not to do something. Every promise forming the consideration for each other leads to contract. Only those considerations are valid which are lawful.

Capacity of parties: The parties to an agreement must be legally capable of entering into an agreement otherwise it cannot be enforceable by law. The parties must not suffer from minority, lunacy, idiocy, drunkenness and other similar factory.

Free consent: In order to be enforceable by law, an agreement must by based on the free consent of all the parties. The consent is not free if the agreement is induced by coercion, undue influences, mistake, misrepresentation and fraud.

Certainty: The agreement must not be vague. The meaning of the agreement must be certain otherwise it cannot be enforceable by law.

Writing: An oral contract is sometimes difficult to prove. Therefore important agreements should be made in writing.