Distinction between a Contingent Contract and a Wagering Agreement

Although wager is a contingent agreement, yet there are certain points of difference between the two:

Contingent Contract

1. A contingent contract has been defined as a contract to do or not to do something, if some event collateral to such contract does or does not happen. A contingent contract is wider in scope.

2. A contingent contract thus includes a wager. In other words a wagering agreement is a contingent agreement (contract).

3. In a contingent contract mutual promises are not necessary.

4. Example. A promises B to pay Rs. 1,000 if a ship does not return. Here A is making a promise to pay but B is not making a similar promise to pay A. thus there is no mutuality of promises in a contingent contract.

5. In a contingent contract there is an independent interest. Example. A gets his house insured. It is a contingent contract as A has independent interest in this case.

6. In a contingent contract determi­nation of an uncertain event is not the sole condition.

7. A contingent contract is valid.

Wagering Agreement

1. A wager is a promise to pay money or money’s worth on the happening or non-happening of an uncertain event.

2. A contingent contract need not necessarily be a wager. Thus we can say that all wagering agreements are contingent but all contingent contracts are not wager.

3. In case of a wagering agreement promise must be mutual.

4. Example. In wagering agreement A agrees to pay B 20 rupees if it rains on Monday and if it does not rain B will pay 20 rupees to A. In the above example there is mutuality of agree­ment but this mutuality of promises is not necessary in case of a contingent contract.

5. In a wagering agreement there is no independent interest apart from the money to be won or lost.

6. Example. A promises to pay Rs. 100 to B if it rains on Monday. It is a wagering agreement as A has no independent interest.

7. In a wagering agreement determination of an uncertain event is the main condition of the contract.

A wagering agreement is void/ illega