Multiple choice

A contracts to pay B Rs. 5,00,000/- if B`s house is destroyed by fire. It is

  1. a wagering contract

  2. a contingent contract

  3. a wagering contract plus a contingent contract

  4. neither a contingent contract nor a wagering contract
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

This is a CONTINGENT contract, not a wagering contract. Contingent contracts depend on a future uncertain event (fire destroying the house) but are enforceable because they have a legitimate interest - protection of property. Wagering agreements involve betting on uncertain events without insurable interest and are void.

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