Contingent Contract With Case Law In Wayne
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Contingent means that an event may or may not occur in the future, depending on the fulfillment of some condition that is uncertain. This term is often used in contracts where the event will not take effect until the specified condition occurs.
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.
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.
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.
Both strategies manage uncertainty, but contingent contracts remain more rigid, whereas contingency agreements offer greater flexibility.
There can be a contingent contract wherein a party promises to do or not do something if a future uncertain event happens within a fixed time. Such a contract is void if the event does not happen and the time lapses.
