Multiple choice

Which of the following are the characteristics of a contingent contract?

  1. The performance of a contingent contract depends upon the happening or nonhappening of a certain event in future.

  2. The event must be uncertain.

  3. The event must be collateral to the main contract.

  4. All of these
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

A contingent contract has all three characteristics: its performance depends on a future event (collateral to the main contract), that event must be uncertain, and the contract is enforceable only if/when the event occurs. Examples include insurance contracts and contracts contingent on litigation outcomes.

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