Question

______ is/are example(s) of a contingent contract.

• A. Insurance contract
• B. Guarantee contract
• C. Indemnity contract
• D. All the three

Answer 1

The correct option is D All the three

A contingent contract is one that is contingent as it depends on something else happening. Under Section 31 of the Indian Contract Act, 1872, contingent contracts are defined as follows: “If two or more parties enter into a contract to do or not do something, if an event which is collateral to the contract does or does not happen, then it is a contingent contract.

The constituent elements of a Contingent contract are:

• It is a contract
  
• It may be positive or negative, i.e to do or not to do something.
  
• It is dependent on the future event and this event is a future uncertain event, which may or may not happen.

Therefore, all indemnity contracts, guarantee contracts as well as insurance contracts are contingent contracts as they are dependent on a future event.