On the basis of creation of obligation a contract can be classified into two fold, namely general contract and contingent contract. Contingent contract is also one of the important parts of contract that plays significant role particularly in the area of insurance or indemnity. It remains incomplete to the study of contract until knowing about the contingent contract.
Contingent means dependent or conational and such condition is of uncertain in nature. It means there is no certainty about something, which may or may not happen in the day to come. It is a contract in which the performance remains due. At the time of making of contract, parties are bound by legal relationship but no obligation is emerged at that time. Obligation always based upon the event which may or may not happen in future. Thus, it is a contract, the performance of which is dependent upon, the happening or non- happening of an uncertain event, collateral to such contract, A aggress to pay B Rs. 10,000 if B’s house will burnt. This is a contingent contract. Here is no certainty the house B will burnt at the time of contract and there is no obligation at the time of making contract.
A promise, under the contract to be performed, may be absolute or unconditional when promissory undertakes to perform it any time and there is no precondition for the creation of an obligation. A promise is conditional when performance is due only if an event, collateral to contract, does or does not happen in future. A contract, for an illustration, to pay certain amount of money on the expiry of a fixed duration or on the death of a person is not contingent contract because these events are of certain in nature. But a contract to pay certain money on the destruction of a house due to earthquakes a contingent contract because that contingency may or may not happen is uncertain.