Contingent Contracts Under Laws of Tanzania.

Contingent Contracts (Section 31) of The Law of Contract Act [CAP. 345 R.E. 2019].

A contingent contract is a contract to do or not to do something depending on the occurrence or non-occurrence of an uncertain future event, which is collateral to the contract. For example, if A agrees to pay B Tsh. 100,000 if B’s house is burnt, this constitutes a contingent contract.

Essentials of a Contingent Contract:

Dependency on a Future Event: The performance of a contingent contract relies on the happening or non-happening of an uncertain future event.

Collateral Event: The event upon which the contract depends must be collateral, meaning it is not part of the core reciprocal promises of the contract.

Example: If A agrees to deliver 100 bags of wheat and B agrees to pay upon delivery, the contract is conditional but not contingent, as the event (payment) is part of the mutual promises.

Example: If A promises to pay B Tsh. 100,000 if he marries C, the event is not collateral, and the contract is not contingent.

Not Based on Promisor’s Mere Will: The event must not be merely at the discretion of the promisor.

Example: A promise to pay B Tsh. 100,000 “if he so chooses” is not a contingent contract.

However, if the event is within the promisor’s control but not solely dependent on his will (e.g., A promises to pay B Tsh. 100,000 if A goes to Dar-es-salaam), it qualifies as contingent.

Rules Governing Enforcement (Sections 32 to 36):

Contracts Dependent on the Happening of an Event (Section 32): Such contracts can only be enforced if the event happens. If the event becomes impossible, the contract becomes void.

Example: A promises to buy B’s horse if A survives C. This contract is enforceable only if C dies while A is alive.

Example: A promises to sell a horse to B if C, to whom the horse is offered, refuses. Enforceable only upon C’s refusal.

Example: A promises to pay B on B’s marriage to C. If C dies unmarried, the contract becomes void.

Contracts Dependent on Non-Happening of an Event (Section 33): Such contracts are enforceable only when the event becomes impossible.

Example: A agrees to pay B if a ship does not return. If the ship sinks, the contract becomes enforceable.

Person’s Future Action as an Event (Section 34): When a contract depends on how a person acts, it becomes void if the person acts in a way that makes the performance impossible.

Example: A promises to pay B if B marries C. If C marries D, marriage with B becomes impossible.

Happening Within a Fixed Time (Section 35, Para 1): If a contract depends on a specific event happening within a fixed time, it becomes void if the event doesn’t occur within that time or becomes impossible before that time.

Example: A promises to pay B if a ship returns within a year. If it does, the contract is enforceable. If the ship burns before returning, it becomes void.

Non-Happening Within a Fixed Time (Section 35, Para II): If the contract depends on the non-occurrence of an event within a set time, it is enforceable if the event does not occur within that time or is known to be impossible earlier.

Example: A promises to pay B if a ship does not return within a year. If the ship is burnt or does not return within that time, the contract is enforceable.

Impossible Events (Section 36): Contracts that depend on an impossible event are void, regardless of whether the parties knew the event was impossible at the time.

Example: A promises to pay B Tsh. 100,000 if two parallel lines enclose a space – void.

Example: A agrees to pay B if B marries A’s daughter C, but C was already dead – void.