Contingent Contract:-Contingent contract is defined in sec. 31 of Indian Contract 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. Contracts of Insurance, Indemnity and Guarantee are some examples of contingent contracts.An ordinary contract can become contingent contract. If its performance is depend upon the happening or non happening of an uncertain event.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. A collateral event is defined as one which is neither a performance directly promised as part of the contract, nor the whole of the consideration for a promise. The event, therefore independent of the contract and does not form part of consideration to it.

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.For Example:- A contract to pay B Rs. 10,000 if Bs house is burnt. This is a contingent contract. A promise to B Rs. 1 crore if a certain ship does not return within a year.. There are different types of contingencies:-

1. Inspection Contingency-the most common type of contingency allows you to investigate the desirability and condition of the property to your satisfaction. For example, you might get a professional inspection, hire a structural engineer, obtain estimates on any repairs or upgrades you'd like to do during this period. You can decide to back out of the agreement if the condition of the home requires extensive repairs that you are not willing to accept during this period.

2. Sale Contingency-People relocating or moving up to a larger home often want a sale contingency which makes the purchase of their new home contingent on the sale of their previous home.

3. Financing Contingency- which of course is not your case since you are offering cash. This allows you time to obtain a commitment from a lender to finance your home purchase.

A Contingency Contract may be used when you currently own a home and need or want to sell it in order to purchase your next home. Such a contract is conditioned on the sale and closing of your present home. If your home does not sell and close by the date specified in the contract, you are off the hook -- the contract is dissolved and you are entitled to a full refund of your earnest money.Contingency contracts usually contain a "kick out" clause. This means that if someone else makes an acceptable offer on the same home you have chosen, then you have a short time, generally 24 to 48 hours, to make a decision. That decision may be to allow your contingency contract to be "kicked out" or, in the alternative, you may enter into a contract amendment agreeing to remove the contingency language and agree to come to closing on the date in the contract, irrespective of whether your home has sold.

Essential features of a contingent contract:-1. Dependence on a future event: The performance of a contingent contract depends upon the happening or non-happening of some future event.2. Collateral Event: The event must be collateral to the contract.3. Uncertain Event: The event must be uncertain.

Rules of performance of Contingent Contracts:1) Enforcements of contracts contingent on happening of a future uncertain event: (Sec32):-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.Illustrations:(a) A makes a contract with B to buy Bs houses if A survives C. This contract cannot be enforced by law unless and until C dies in As life time.(b) A makes a contract with B to sell a house to B at a specified price, if C to whom the house has been offered refuses to buy. The contract cannot be enforced by law unless and until C refuses to buy the house.(c) A contract to pay B a sum of money when B marries C. C dies without being married to B. The contact becomes void.Contracts so contingent become void when the event becomes impossible. Performance of such contract becomes impossible as the event on which the contract was contingent becomes impossible for example, imposition of government restrictions.2) Enforcement of contracts on the non-happening of a future uncertain event: (Sec 33)Contingent contracts to do or not to do anything if an uncertain future event does not happen can be enforced when the happening of the event becomes impossible and not before.Illustration:A agrees to pay B a sum of money if a certain ship does not return. The ship is sunk. The contract can be enforced when the ship sinks.3) Contracts contingent on future conduct of a living person: (Sec 34)If future event which a contract is contingent is the way in which a person will act at an unspecified time, the event shall be considered to become impossible when such person does anything which renders it impossible that he should so act within any definite time, or otherwise than under future contingencies.Illustration:A agrees to pay B a sum of money if B marries C, C marries D. The marriage of B to C must now be considered impossible although it is possible that D may die and that C may afterwards marry B.4) Contracts contingent on a specified event happening within a fixed time: (Sec 33(1))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 happened or if before the time fixed, such event becomes impossible.Illustrations:A promise to pay B a sum of money if a certain ship returns within a year. The contracts may be enforced if the ship returns within the year, and becomes void if the ship is burnt within the year.

CONCLUSION:Contingent contract is also known as conditional contract. It is valid contact. The parties have real interest in the occurrence or non occurrence of the event.Contractsof guarantee, indemnity and insurance are its example.