Contingent Contract With Case Law In King
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FAQ
Technically, yes — a seller can back out of a contingent offer. Before agreeing, they can choose to reject or counter the original offer with their own terms. Once the offer is accepted, if the contingencies aren't met, the seller can back out but there may be legal or financial implications involved.
Adequacy ensures fairness in the exchange, legality ensures compliance with the law, and mutuality ensures balance in the agreement. However, there are exceptions to the rule of consideration, such as promissory estoppel, completed gifts, agency, and contracts of gratuitous bailment.
An exception clause is a provision in a contract that acts as a safety net, protecting parties from certain unforeseen events or circumstances.
| Contracts. Section 2(f) of The Indian Contract Act, 1872 says that “Promises which form the consideration or part of the consideration for each other, are called Reciprocal Promises”.
Some cases may constitute exception. However, the event must not be of impossible character. In a contingent contract, there should be some event collateral to the contract. If the event consist in the performance of the contract itself by one party it is not a contingent contract.
Example of a Contingency Contract One straightforward example might be a child who agrees with their parent that if they get an A in a particular class, they will get a new bicycle. Of course, the contract may be verbal, and it may be between family members.
Contingent contracts to do or not to do anything if an uncertain future event happens cannot be enforced by law unless and until that event has happened. If the event becomes impossible, such contracts become void.
There must be a valid contract to do or not to do something. The performance of the contract must be conditional. The said event must be collateral to such contracts and the event should not be at the discretion of the promisor. These are some rules that have to be followed for a contingent contract to be enforceable.
In the case of conditional contracts, conditions that need to be fulfilled are certain, i.e., bound to happen, which is not the case with contingent contracts, as such conditions may or may not happen.
A contingency clause in a real estate contract is a condition that must be met for the contract to become legally binding. Essentially, it provides a way for the buyer or seller to exit the agreement without penalty if certain conditions are not fulfilled within a specified timeframe.
