“A Comparative study of agreement by wager and contingent contract’’

A PROJECT REPORT
Submitted in partial fulfilment of the
requirement for the award of the degree
of
LLB
By
Arti kumari
(2420030020)

(Department of Law)

MANIPAL UNIVERSITY JAIPUR JAIPUR-303007

RAJASTHAN, INDIA

November,2024
DEPARTMENT OF LAW
MANIPAL UNIVERSITY JAIPUR, JAIPUR – 303 007(RAJASTHAN), INDIA
 23 -11-2024
CERTIFICATE
This is to certify that the project titled “A Comparative study of
agreement by wager and contingent contract” is a record of the
Bonafide work done by arti kumari ,2420030020 submitted in partial
fulfilment of the requirements for the award of the LLB in School of
Law of Manipal University Jaipur, during the academic year 2024-25.

Dr. Arti sharma,

Assistant Professor
Faculty of Law
Manipal University Jaipur

DR. SONU AGGARWAL,

Associate Professor
Faculty of Law
Manipal University Jaipur
23 -11-2024
CERTIFICATE

This is to certify that the project entitled” A Comparative study of

agreement by wager and contingent contract” was carried out by
Arti kumari ,2420030020 at Manipal University, Jaipur under my
guidance during, September 2024 to November 2024

Dr. Arti sharma

 ACKNOWLEDGMENT
I express my sincere gratitude to the Dean of department of law Manipal
University Jaipur, Dr Bharti, for Providing me with the opportunity and
resources to undertake this project on “A Comparative study of agreement by
wager and contingent contract”. Their encouragement and support have been
instrumental in the successful completion of this work.
I am deeply indebted to Head of Department (HOD), Dr Sonu Agarwal, for their
invaluable guidance and motivation throughout this endeavour. Their insights
and constructive feedback have enriched my understanding and significantly
contributed to the quality of this project.
I extend my heartfelt thanks to my Department Guide, assistant professor Arti
sharma, for their constant support, mentorship, and patience during the course
of this work. Their expertise and advice have been a guiding light, helping me
to refine my research and analysis.
Lastly, I am grateful to my peers, family, and friends for their encouragement
and moral support, which have been a source of strength throughout this
journey.
Thank you all for making this learning experience both meaningful and
fulfilling.
 Abstract
The Indian Contract Act, 1872, provides a detailed framework for the regulation and
enforcement of agreements and contracts, including the provisions governing wagering
agreements and contingent contracts. While both involve the element of uncertainty and
depend on the occurrence or non-occurrence of a future event, their legal status and
enforceability differ significantly, reflecting distinct legislative intent and societal
considerations. This study offers a comprehensive comparative analysis of these two forms
of agreements, emphasizing their treatment under the Act and their implications in practice.
Wagering agreements, specifically addressed in Section 30 of the Act, are declared void and
unenforceable. They are characterized by their speculative nature, where the outcome is
entirely based on chance or an uncertain event, and neither party has a genuine interest in
the event except for the prospect of a monetary gain or loss. The prohibition on wagering
agreements reflects a public policy stance against promoting gambling and speculative
transactions that may harm societal interests.
In contrast, contingent contracts, defined in Sections 31 to 36 of the Act, are valid and
enforceable agreements that depend on the occurrence or non-occurrence of a future
uncertain event. These contracts are widely recognized as lawful and practical, as they often
serve legitimate purposes such as facilitating insurance, indemnity, and guarantees.
Contingent contracts must satisfy all the essential elements of a valid contract under the Act,
including lawful consideration and object, distinguishing them from wagering agreements.
This study delves into the legal distinctions between these concepts by analysing their
definitions, legislative intent, judicial interpretations, and real-world applications.
The research draws on relevant case law, statutory provisions, and academic commentary to
illustrate the nuances of these agreements. It also examines the broader implications of
their legal treatment, such as their impact on economic activities, contractual freedom, and
the regulation of speculative transactions. By providing a detailed comparative analysis, this
study aims to enhance the understanding of wagering agreements and contingent contracts
under Indian law and offer insights for legal practitioners, scholars, and policymakers in
addressing ambiguities and ensuring equitable outcomes in contractual disputes.

4o

 Keyword: Indian contract Act,1872, Wagering agreement, Sections 31 to 36, Legal

Status, Public Policy, Speculative Transactions, Enforceability, Judicial Interpretations,
Insurance and Indemnity Contracts, Gambling and Speculation, Contractual Freedom,
Legal Distinctions, Case Law Analysis, Legislative Intent, Uncertainty in Contracts,
Valid and Void Agreements, Economic Implications, Contractual Ambiguities
Content
1. Introduction
2. Definitions
3. Characteristics
4. Legal validity
5. Case law
6.Conclusion
7. Reference’s
 1.INTRODUCTION
Contracts form the backbone of legal and economic relationships in India, as codified under the
Indian Contract Act, 1872. This legislation provides a comprehensive framework for the formulation,
execution, and enforcement of agreements, ensuring certainty and fairness in transactions. Within
this framework, agreements by wager and contingent contracts occupy a distinctive space due to
their reliance on future uncertain events. Despite their apparent similarity, these two types of
agreements differ significantly in their legal validity, enforceability, and underlying purposes. This
study seeks to explore and compare these agreements as outlined in the Indian Contract Act, 1872,
and analyze their implications in the Indian legal and socio-economic context.

An agreement by wager, as defined in Section 30 of the Indian Contract Act, 1872, is an agreement
wherein two or more parties promise to pay money or money’s worth depending on the outcome of
an uncertain event. Such agreements are inherently speculative and are declared void under the Act.
The rationale behind this provision lies in discouraging gambling and speculative ventures that may
lead to financial instability and moral concerns. However, there are exceptions to this rule, such as
certain transactions in lotteries or horse races, provided they are conducted under the framework of
state-regulated laws.

On the other hand, a contingent contract, governed by Sections 31 to 36 of the Act, is a lawful
contract that is conditional upon the happening or non-happening of a specific future event. Unlike
agreements by wager, contingent contracts are enforceable by law, provided they meet the essential
elements of a valid contract under Section 10 of the Act. Such contracts are widely used in insurance,
indemnity, and other risk-related transactions, offering a legitimate means to safeguard interests
against uncertainties.
The fundamental distinction between these two agreements lies in their enforceability and purpose.
Agreements by wager are speculative and primarily designed to profit from the uncertainty of an
event without any substantive interest in the outcome. In contrast, contingent contracts are
structured to fulfil legitimate needs and are underpinned by lawful objectives. For example, an
insurance contract is a contingent contract that protects the insured party from potential loss,
demonstrating the practical utility of such agreements.

This comparative study aims to analyze these agreements within the purview of the Indian Contract
Act, 1872, and explore their significance in Indian society. By examining key legal provisions, judicial
interpretations, and case studies, the study highlights the conceptual and practical differences
between these agreements. Additionally, it considers the evolving role of these concepts in
contemporary Indian legal and economic landscapes, addressing issues such as the impact of
technological advancements on wagering agreements and the expanding scope of contingent
contracts.

Through this analysis, the study provides valuable insights into the Indian Contract Act, 1872,
emphasizing the need to align legal frameworks with public policy objectives and societal welfare. By
contrasting agreements by wager with contingent contracts, this exploration underscores the Act's
commitment to promoting lawful, fair, and economically sound agreements while discouraging
speculative and unethical practices.
 2.DEFINTIONS
2.1 Wager agreement

a. According to Indian contract act 1872

 Section 30 of the Indian Contract Act, 1872 deals with wagering agreements and it states
that “Agreements by way of wager are void and no suit shall be brought for recovering
anything alleged to be won on any wager, or entrusted to any person to abide the result of
any game or other uncertain event on which any wager is made”.

 The term wager means a Bet.

 Sir William Anson’s define “Wager” as a “promise to give money or money’s worth upon the
determination or ascertainment of an uncertain event”

b. Essentials of a Wager
 It must be dependent upon the determination of an uncertain event: this implies that for
an agreement to be a wagering agreement, it is necessary that the subject matter of the
agreement must be dependent on an uncertain event.
 There must be mutual chances of gain or loss: the second essential feature is that upon the
determination of the contemplated event, each party should stand to win or lose. If there
are no such mutual chance of gain or loss, there is no wager
 Neither party to have control over the event: if one of the parties has the event in his own
hands, the transaction lacks an essential ingredient of a wager
 No other interest in the event: the parties must not have any interest in the happening of
the event other than the sum or stake he will win or lose.

c. Illustrations
 A boxing match is scheduled between ‘A’ and ‘B’. If A wins the match, ‘C’ agrees to pay ‘D’
Rs. 1000, whereas if B wins the match, D agrees to pay Rs. 1000 to C. This is a wagering
agreement since both the parties have a chance to win or lose.
 A and B enter into an agreement that if A resigns from her job, B will pay Rs. 10000 to A and
A will pay Rs.10000 to B if she does not resign from her job. Here A has control over her
resignation and therefore will not constitute a wager.

2.2 Contingent contract

a. According to Indian contract act 1872
 According to Section 31 of the Indian Contract Act 1872, 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. In simple words, contingent contracts are those where the performance of the
contract depends on the happening or non-happening of some uncertain future event.
Contracts of Insurance, indemnity, and guarantee fall under the category of contingent
contract.
 Example: A contract between Rita and Gita stipulates that if Gita's house is burned, Rita will
pay 59,000 rupees. This is a contingent contract.

b. Essential elements of contingent contract

 The performance of a contingent contract depends on the occurrence or non-occurrence of

an event or condition.
 This event is collateral to the contract. This event is not a part of the contract. A promise of
performance or consideration for a promise should not be attached to the event.
 The event must be uncertain. If the event is certain, then it is not a contingent contract.
 The contingent should not be a mere will of the promisor.
c. Enforcement of contingent contract

Section 32-36 of the Indian Contract Act 1872 states some rules for the enforcement of
contingent contracts. These are as follows:

Section 32

In Section 32, until and unless an uncertain future event occurs, contingent contracts may
not be enforceable by law. If the event becomes impossible, the contract becomes void. For
example, Ram contracts to pay Shyam a sum of money when Shyam marries Gita. Gita dies
without being married to Shyam. The contract becomes void.

In this scenario, the uncertain future event (marriage) does not occur. Gita dies before
marriage, and Shyam could not marry Gita. Therefore, it is no longer a valid agreement, and
Ram is not bound to pay Shyam.

Section 33

In Section 33, the enforcement of contingent contracts for future events can be enforced
only once the happening of those events becomes impossible, and not before. For example,
Aryan agrees to pay Rahul a sum of money if a certain ship does not return. The ship is sunk.
The contract can be enforced when the ship sinks.

In Section 34,
when the contract depends on the performance of a future act that will take place at some
future point, that act becomes impossible when the performer does something that makes it
impossible for him to perform the act within a set time period or under any other
circumstance. For example, Ram agrees to pay Shyam Rs. 15,00,000 if Shyam marries Gita.
Gita marries Rahul. The marriage of Shyam to Gita is now impossible, although it is possible
that Rahul may die and that Gita may later marry Shyam.

Section 35

In Section 35,
contingent contracts, either to do or not to do anything if an uncertain event does not occur
within a fixed period of time, may be enforced by law when the specified period has expired
and the uncertain event has not occurred or when it becomes certain that it will not occur
before the time fixed has expired. For example, Kabir promises to pay Rahul a sum of money
if a certain ship does not return within a year. The contract may be enforced if the ship does
not return within the year, or is burnt within the year.

Section 36

In Section 36,
if an impossible event occurs, contingent contracts to do or not to do anything are void,
regardless of whether the parties knew about the impossibility at the time they signed the
agreement. For example, Raju agrees to pay Tinku 1,000 rupees if Tinku will marry Raju's
daughter Sneha. Sneha was dead at the time of the agreement. The agreement is vold.
 3.CHARACTERISTICS OF BOTH WAGER AND CONTINGENT CONTRACT
While both types of agreements involve an element of uncertainty related to future events,
their legal treatment, purpose, and enforceability differ significantly. A comparative study of
these agreements is essential to understand their characteristics, implications, and
relevance under Indian contract law. Below is a detailed exploration of the characteristics of
such a study:

3.1. Legal Framework Analysis

A central focus of this study is the legal foundation provided by the Indian Contract Act,
1872:
 Section 30: Explicitly declares agreements by wager void, except under certain exceptions
like horse racing, subject to regulation by state laws. This reflects the legislature's intent to
discourage speculative and gambling-related activities.
 Sections 31 to 36: Govern contingent contracts, defining them as contracts that depend on
the occurrence or non-occurrence of a specific event. These provisions outline the
conditions under which contingent contracts become enforceable and how they are treated
under law.
The study explores these sections to understand their scope, limitations, and implications for
Indian contract law.

3.2. Dependence on Uncertainty

Both agreements rely on uncertain future events, but the nature and significance of this
uncertainty vary:
 Agreements by Wager: The uncertainty itself is the central focus of the agreement. Parties
enter into such agreements purely to speculate on the outcome of an event, often with no
legitimate or lawful interest in the event itself.
 Contingent Contracts: The uncertainty is a condition incidental to a lawful purpose. For
instance, an insurance policy depends on an uncertain event, such as an accident or natural
disaster, but the agreement serves a legitimate need to mitigate risks.

3.3. Enforceability Under Law

 Agreements by Wager: Section 30 of the Act renders wagering agreements void, meaning
they are not legally enforceable. However, they are not considered illegal unless they
contravene other laws or public policy. For example, private betting among friends is void
but not criminal, whereas organized betting or gambling may be illegal under specific laws.
 Contingent Contracts: These contracts are legally enforceable, provided they satisfy the
essential elements of a valid contract under Section 10 of the Indian Contract Act, including
lawful consideration, mutual consent, and the absence of unlawful objectives.

3.4. Public Policy Considerations

Public policy plays a pivotal role in the distinction between the two types of agreements:
 Agreements by Wager: Viewed as contrary to public policy, as they encourage speculative
behaviour that may lead to financial and social harm. The prohibition reflects a societal
interest in discouraging gambling and protecting individuals from potential exploitation.
 Contingent Contracts: Aligned with public policy, as they serve lawful and beneficial
purposes. For example, contingent contracts in the insurance industry promote financial
security and risk management, contributing positively to economic and societal stability.

3.5. Purpose and Intent

 The objectives behind these agreements further distinguish them:
 Agreements by Wager: Entered into with the sole intention of making a profit or gaining
money based on an uncertain event’s outcome. The parties do not have any genuine or
lawful stake in the event itself.
 Contingent Contracts: Designed to fulfil legitimate objectives, such as safeguarding
interests, securing obligations, or managing risks. For instance, a contract to compensate a
builder for damages in case of unforeseen delays demonstrates a practical and lawful
purpose.

3.6. Judicial Interpretations

A comparative study must examine the role of judicial interpretations in shaping the
understanding of these agreements:
 Agreements by Wager: Indian courts consistently uphold their void nature. For example, in
the case of Gherulal Parakh v. Mahadeodas Maiya, the Supreme Court of India emphasized
that wagering agreements are void but not illegal unless explicitly prohibited by law.
 Contingent Contracts: Courts have clarified the conditions for their enforceability. In
Noranda’s Morardas Gaziwala v. S.P. Amardeep Singh, the courts explained that contingent
contracts are valid only if the event on which they depend is not unlawful or impossible to
occur.

3.7. Economic Implications

The economic relevance of these agreements highlights another point of contrast:
 Agreements by Wager: They contribute little to lawful economic activities and may even
harm economic stability by fostering reckless financial behaviour.
 Contingent Contracts: Play a vital role in supporting business operations, mitigating risks,
and ensuring financial stability. For instance, insurance contracts help businesses and
individuals manage uncertainties, thus fostering economic resilience.

3.8. Practical Applications

The utility of these agreements varies significantly:
 Agreements by Wager: Limited practical application in lawful economic or social contexts,
although exceptions like regulated lotteries and horse races provide some utility.
 Contingent Contracts: Widely applicable across various sectors, including insurance, finance,
real estate, and business agreements. Their enforceability makes them indispensable for risk
management and fulfilling conditional obligations.

3.9. Moral and Social Implications

 Agreements by Wager: Often perceived negatively, as they may lead to addiction, financial
ruin, and social unrest. Their void status under the law reflects these concerns.
 Contingent Contracts: Viewed positively, as they align with moral and legal standards,
supporting trust, security, and mutual benefit in contractual relationships.

3.10. Technological and Modern Developments

In today’s rapidly changing legal and technological environment, the relevance of this
comparative study extends to new challenges:
 Agreements by Wager: The rise of online betting platforms and cryptocurrency-based
wagering has created legal Gray areas, necessitating updated laws and enforcement
mechanisms.
 Contingent Contracts: Advanced technologies like blockchain and smart contracts are
expanding the scope of contingent contracts, offering new opportunities for automated and
transparent enforcement.
 3.11. Policy Recommendations
A comparative study provides valuable insights into policy considerations:
 Strengthening regulatory mechanisms for wagering activities to prevent illegal or unethical
practices.
 Encouraging the use of contingent contracts to promote lawful and beneficial agreements in
emerging sectors like fintech and e-commerce.

4. LEGAL VALIDITY
4.1. Agreements by Wager: Legal Validity
Section 30 of the Indian Contract Act, 1872 explicitly addresses the legal status of wagering
agreements:
"Agreements by way of wager are void; and no suit shall be brought for recovering anything
alleged to be won on any wager, or entrusted to any person to abide by the result of any
game or other uncertain event on which any wager is made."
Key aspects of the legal validity of wagering agreements are:
 Void but Not Illegal:
o Wagering agreements are declared void under Section 30, meaning they are not
enforceable by law. However, they are not categorized as illegal unless expressly
prohibited by other laws.
o This distinction allows parties to enter into such agreements without facing criminal
penalties, but they cannot seek legal recourse to enforce them.
 Exceptions:
o Certain forms of wagers are recognized as exceptions, such as horse racing, provided
the stakes are within state-regulated limits. Lotteries organized by state
governments are also permitted under separate legislation.
o For instance, horse racing is exempted under specific state laws, where wagers
placed through authorized channels are considered lawful.
 Judicial Interpretations:
o In the case of Gherulal Parakh v. Mahadeodas Maiya (1959), the Supreme Court of
India held that wagering agreements are void but not illegal, and they do not affect
collateral agreements unless expressly prohibited.
 Public Policy:
o The void status of wagering agreements reflects their inconsistency with public
policy. These agreements are considered speculative and morally questionable, as
they promote gambling and can lead to financial and social harm.

4.2. Contingent Contracts: Legal Validity

Sections 31 to 36 of the Indian Contract Act, 1872, govern contingent contracts, defining
their conditions and enforceability:
 Definition (Section 31):
A contingent contract is one where the performance of the contract is conditional upon the
occurrence or non-occurrence of a future uncertain event.
Key aspects of the legal validity of contingent contracts include:
 Enforceable by Law:
 o Contingent contracts are valid and enforceable if they meet the essential criteria of a
contract outlined in Section 10 of the Act, including lawful consideration, free
consent, and a lawful object.
o For example, an insurance contract is a classic contingent contract, enforceable
upon the occurrence of an insured event like fire or theft.
 Conditions for Enforceability:
o The event on which the contract depends must not be illegal, immoral, or impossible
to occur.
o If the contingent event becomes impossible, the contract becomes void.
 Judicial Support:
o Courts in India have upheld the enforceability of contingent contracts provided they
comply with legal requirements. For example, in N.P. Ramsay v. State of
Maharashtra, the court held that the contingency must be reasonable and lawful for
the contract to remain valid.
 Aligned with Public Policy:
o Contingent contracts are consistent with public policy, as they promote risk
management and safeguard legitimate interests. Their enforceability encourages fair
and lawful agreements in various sectors like insurance, guarantees, and
indemnities.

4.3. Distinction in Legal Validity

Aspect Agreement by Wager Contingent Contract

Declared void under Valid and enforceable if all

Legal Status Section 30; not conditions are met.
enforceable.
Public Policy Contrary to public policy Aligned with public policy;
Alignment due to speculative nature. promotes lawful objectives.

Purely speculative; no Legitimate purpose, often

Purpose genuine interest in the risk mitigation.
event.
Cannot be enforced in Enforceable upon occurrence
Enforceability of specified events.
court.

Betting on cricket Insurance contracts,

Examples matches, private contracts dependent on
gambling. natural events.

4.4. Implications of Legal Validity

 Economic Relevance:
o While wagering agreements contribute little to economic stability, contingent
contracts are vital tools for managing risks and ensuring business continuity.
o For example, the insurance industry, which relies heavily on contingent contracts, is
a significant contributor to economic security.
 Impact on Society:
o The void nature of wagering agreements reflects the law’s effort to discourage
socially harmful practices like gambling.
 o Contingent contracts, on the other hand, support societal welfare by protecting
individuals and businesses from unforeseen losses.
 Modern Challenges:
o The rise of online gambling platforms and technological advancements has blurred
the lines between wagering agreements and legitimate online financial activities.
o Similarly, contingent contracts are evolving with the use of smart contracts and
blockchain, posing new legal and regulatory challenges.

The legal validity of agreements by wager and contingent contracts under the Indian
Contract Act, 1872, highlights the fundamental differences in their enforceability and
societal roles. By declaring wagering agreements void, the law seeks to curb speculative and
potentially harmful activities. Conversely, by upholding the enforceability of contingent
contracts, the Act encourages lawful and beneficial practices that contribute to economic
and social welfare. This distinction underscores the importance of aligning contractual
provisions with public policy, ensuring fairness, and promoting legal and economic stability
in India.

5.Case law
.
5.1 case law on wager agreement

1. Dr. K.R. Lakshmanan vs State of Tamil Nadu and Another (1996)

Citation: AIR 1996 SC 1153

Court: Supreme Court of India

Issue:
The legality of horse racing and betting under the Tamil Nadu Gaming Act, 1930. The
question was whether horse racing constitutes gambling or a game of skill.

Judgment:
The Supreme Court ruled that horse racing is a game of skill, not chance, as it depends on
factors like a horse's training, jockey's skill, and race conditions. Consequently, it does not fall
under "gambling" as defined by the Tamil Nadu Gaming Act.

Key Points:

1. Horse Racing as a Game of Skill: The outcome is influenced by knowledge and expertise, not
pure luck.
2. Betting Legality: Betting on horse races in licensed premises is lawful and regulated.

3. Constitutional Rights: The ban on horse racing and betting infringed upon the right to trade
and commerce under Article 19(1)(g).

Significance:
The judgment safeguarded the racing industry, distinguishing games of skill from gambling
and ensuring regulation over prohibition.
 2. State of Andhra Pradesh vs K. Satyanarayana & Ors (1967)

Citation: AIR 1968 SC 825

Court: Supreme Court of India

Issue:
Whether the card game "Rummy" constitutes gambling under the Andhra Pradesh Gaming
Act, 1974, and if playing it for stakes makes it illegal.

Judgment:
The Supreme Court ruled that Rummy is a game of skill, not chance, as it requires memory,
skill in discarding cards, and strategy. Playing Rummy for stakes does not automatically
convert it into gambling unless there is evidence of the game being conducted as a
commercial activity or with profiteering motives.

Key Points:

1. Game of Skill: Rummy is distinct from games of chance like flush or brag.

2. Legality of Stakes: Playing for stakes is not unlawful unless accompanied by commercial
exploitation or organized gambling.

3. Prohibition Scope: The Andhra Pradesh Gaming Act does not prohibit games of skill.

Significance:
The ruling set a precedent distinguishing skill-based games from gambling, impacting laws on
gaming and betting in India.

5.2 case law on contingent contract

1. Frost v. Knight (1872)

Court: Court of Exchequer

Issue:
Whether an anticipatory breach of contract gives the aggrieved party an immediate right to sue for
damages.

Facts:
The defendant promised to marry the plaintiff upon the death of his father. While his father was still
alive, the defendant announced he would not fulfil the promise. The plaintiff sued for breach of
promise.

Judgment:
The court held that the plaintiff could sue immediately for anticipatory breach, even though the time
for performance (death of the father) had not yet arrived.

Key Principle:
An anticipatory breach occurs when one party unambiguously indicates they will not fulfil their
obligations. The aggrieved party can immediately seek damages without waiting for the performance
date.

Significance:
The case established the doctrine of anticipatory breach in contract law, allowing immediate remedies
for non-performance.
 2. Nemi Chand & Ors. vs. Harak Chand & Ors.

Court: Supreme Court of India

Issue:
The dispute centred on whether a family settlement was valid and binding when its terms were
challenged by one of the parties involved.

Facts:
The parties, members of a joint Hindu family, entered into a settlement to resolve disputes over
ancestral property. One party later contested the agreement, arguing that it lacked legal
enforceability.

Judgment:
The Supreme Court upheld the validity of the family settlement, stating that such agreements are
favoured in law as they resolve family disputes amicably and avoid prolonged litigation. The court
emphasized that technicalities should not be used to undermine genuine settlements.

Key Principles:

1. Family Settlements: These are binding if entered into voluntarily and intended to resolve disputes.

2. Avoidance of Litigation: Courts Favor family arrangements to promote harmony and avoid discord.

Significance:
The ruling reinforced the importance of honouring family settlements as a means to maintain peace
and protect relationships within families.

6.CONCLUSION
The comparative study of agreements by wager and contingent contracts under the
Indian Contract Act, 1872, highlights the significant differences in their legal
treatment, purpose, and societal impact. While both agreements hinge on the
occurrence of uncertain future events, the law distinguishes between them based on
their underlying intent, enforceability, and alignment with public policy.

Agreements by wager, as defined under Section 30 of the Act, are declared void to
discourage speculative ventures that lack substantive economic value and may lead
to financial instability or social harm. These agreements are not enforceable in courts
of law, reflecting the legislature's intention to uphold public morality and prevent
gambling-related consequences. Exceptions, such as government-regulated lotteries
or horse racing, demonstrate a limited acknowledgment of certain regulated wagers.

In contrast, contingent contracts, governed by Sections 31 to 36 of the Act, are legally

valid and enforceable, provided they comply with the fundamental principles of a
valid contract. These agreements are designed to address legitimate needs, such as
managing risks or ensuring performance under specified conditions. Contingent
contracts, widely used in industries such as insurance, guarantees, and indemnities,
play a crucial role in fostering economic security and promoting trust in commercial
transactions.

The analysis underscores the importance of public policy in shaping the legal
framework surrounding these agreements. By rendering wagering agreements void
and upholding the validity of contingent contracts, the Indian Contract Act, 1872,
reflects a deliberate effort to balance individual freedoms with societal welfare. The
Act aims to deter harmful speculative practices while encouraging lawful agreements
that serve constructive and socially beneficial purposes.

In modern contexts, technological advancements, such as online betting platforms

and smart contracts, present new challenges and opportunities for the legal
framework governing these agreements. Policymakers and courts must adapt to
these changes to ensure that the principles underpinning the Indian Contract Act
remain relevant and effective in addressing contemporary issues.

In conclusion, the comparative study of agreements by wager and contingent

contracts highlights the Indian Contract Act's role as a dynamic legal instrument. By
promoting fairness, discouraging speculative behaviour, and supporting lawful
transactions, the Act contributes to a stable and equitable legal and economic
environment in India.

7.REFERENCES

1. INDIAN CONTRACT ACT 1872

2. https://www.scconline.com/blog/post/2019/04/08/bom-hc-not-unlawful-for-
an-advocate-to-enter-into-a-contingent-contract-while-appearing-in-capacity-of-a-
counsel-in-arbitration-proceedings/

3. http://student.manupatra.com/Academic/Abk/Law-of-Contract-and-Specific-
Relief/Chapter8B.htm

4. https://www.lawnn.com/difference-contingent-contract-wagering-
agreement/#google_vignette
5. https://www.srdlawnotes.com/2017/06/difference-distinction-between-
wagering.html
6.THE LAW OF CONTRACT-1 BY R.K BANGIA
7. LAW OF CONTRACT & SPECIFIC RELIEF -BY DR AVTAR SINGH

ELEMENTS OF MERCANTILE LAW – BY N.D KAPOOR