Section 121

A contingent contract is a contract to do or not to do something if some event, collateral to the contract, does or does not happen. This section defines what constitutes a contingent contract under the Indian Contract Act, 1872. According to Section 31 of the Act, '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'. The event must be collateral, meaning it should not be a direct part of the contract but rather something that may or may not occur, affecting the contract's performance. For instance, a contract to pay a certain sum if a ship arrives safely is a contingent contract because the arrival of the ship is an event collateral to the contract. The Indian courts have interpreted this section to mean that for a contract to be considered contingent, the event must be uncertain at the time of the contract's formation and must have a direct bearing on the contract's performance.