The term contingent means anything which is dependent on something else.
According to Section 31 of the Indian Contract Act, a contract to do or not to do something , if some event collateral to such contract , does or does not happen, is termed as a contingent contract.
Contracts of Insurance, Indemnity and Guarantee are some examples of contingent contracts.
In a contingent contract, there should be some event collateral to the contract. If the event consists in performance of the contract itself by one party, it is not a contingent contract. For example, X announces a reward of Rs.1000 to be paid to anybody who finds his lost dog. Y finds the dog and his act of finding the dog is the acceptance of the offer as well as the performance of the contract. Thus this contract is not a contingent contract.
A contingent contract is therefore a kind of conditional contract and the condition must be uncertain in nature.
It must be mentioned here that a contingent contract to do or not to do anything if an uncertain future event happens cannot be enforced by law unless and until that event has actually happened. If, in case, the event becomes impossible, such a contract will become void.
Similarly, a contingent contract 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 it.
