Contract Act 1872 Section 35
Contract Act 1872 Section 35 covers contracts contingent on uncertain events and their enforceability.
Contract Act Section 35 deals with contracts that depend on uncertain future events. It explains when such contracts become enforceable or void based on the happening or non-happening of the event. Understanding this section is crucial for parties entering agreements involving conditions or contingencies.
This provision is important in commercial transactions where performance depends on events like approvals, inspections, or external factors. It helps define rights and obligations clearly, reducing disputes over contract validity when uncertain events occur.
Contract Act Section 35 – Exact Provision
This section clarifies how contracts tied to uncertain events operate. It states that contracts conditioned on an event happening are enforceable only if that event occurs. Conversely, if the event does not happen, the contract ceases to be valid. Similarly, contracts conditioned on an event not happening are valid only if the event indeed does not occur.
Defines validity of contracts contingent on uncertain future events.
Specifies when such contracts become void.
Applies to both happening and non-happening of events.
Ensures clarity on enforceability based on event outcomes.
Explanation of Contract Act Section 35
This section governs contracts dependent on uncertain events, setting rules for their validity.
States that contracts conditioned on an uncertain event happening are valid only if the event occurs.
Contracts conditioned on an event not happening are valid only if the event does not occur.
Affects parties who agree to perform based on future uncertain events.
Requires the event to be genuinely uncertain and future.
If the event does not happen as expected, the contract becomes void.
Purpose and Rationale of Contract Act Section 35
This section protects parties by ensuring contracts based on uncertain events have clear outcomes. It prevents indefinite obligations when events fail to occur and promotes fairness by linking enforceability to actual event outcomes.
Protects contractual fairness by linking validity to event occurrence.
Ensures parties are not bound when conditions fail.
Prevents disputes over obligations tied to uncertain events.
Maintains certainty in agreements involving contingencies.
When Contract Act Section 35 Applies
This section applies when contracts include conditions dependent on future uncertain events. It is invoked when parties’ obligations hinge on whether such events occur or not.
Applies to contracts with conditional or contingent clauses.
Can be invoked by any party to the contract.
Affects contracts in commercial, personal, and legal transactions.
Scope limited to uncertain future events, not past or certain events.
Exceptions include contracts where conditions are impossible or unlawful.
Legal Effect of Contract Act Section 35
Section 35 determines whether a contract is enforceable or void based on the happening of the uncertain event. It affects the contract’s validity and parties’ obligations, linking performance strictly to the event outcome. This section complements Sections 10 to 30 by clarifying conditions precedent and subsequent in contract formation and enforcement.
Validates contracts contingent on uncertain events only if conditions are met.
Voids contracts if the specified event does not occur.
Clarifies parties’ rights and duties based on event outcomes.
Nature of Rights and Obligations under Contract Act Section 35
The section creates conditional rights and obligations. Parties are bound to perform only if the uncertain event occurs as agreed. Obligations are mandatory upon event fulfillment but cease if the event fails, making duties contingent rather than absolute.
Rights and duties depend on occurrence or non-occurrence of events.
Obligations are conditional and not absolute.
Non-performance due to event failure does not amount to breach.
Parties have no liability if contract becomes void under this section.
Stage of Transaction Where Contract Act Section 35 Applies
This section primarily applies during contract formation and performance stages. It defines when obligations arise or cease based on uncertain events, impacting enforcement and remedies.
Relevant at contract formation when conditions are agreed.
Applies during performance to determine if duties arise.
Impacts breach analysis if event does not occur.
Influences remedies and enforcement based on contract validity.
Remedies and Legal Consequences under Contract Act Section 35
If the uncertain event occurs, parties must perform as agreed; failure to do so can lead to damages or specific performance. If the event does not happen, the contract is void, and no remedies for non-performance apply. This section thus limits remedies to cases where conditions are fulfilled.
Right to sue for performance if event occurs and party defaults.
Damages may be claimed for breach after event happens.
No remedies if contract void due to event non-occurrence.
Specific performance applicable only when contract is valid.
Example of Contract Act Section 35 in Practical Use
Person X agrees to buy machinery from a seller if the buyer’s factory receives government approval within six months. The contract states that if approval is not granted, the contract is void. When the approval is granted, X must complete the purchase. If approval is denied, neither party is bound to perform.
Shows how contracts depend on uncertain government approvals.
Clarifies when obligations arise or cease based on event outcome.
Historical Background of Contract Act Section 35
This section was introduced to address uncertainties in contracts involving future events. Historically, courts struggled with enforcing agreements where performance depended on uncertain conditions. The provision evolved to provide clear rules for such contingencies, reducing litigation and promoting fairness.
Created to manage contracts with conditional events.
Courts initially applied it inconsistently before codification.
Amended to clarify validity and voidability of contingent contracts.
Modern Relevance of Contract Act Section 35
In 2026, Section 35 remains vital for contracts in sectors like real estate, insurance, and e-commerce, where conditions precedent are common. It supports digital contracts with conditional clauses and helps resolve disputes in online transactions involving uncertain events.
Applies to digital and electronic contracts with contingencies.
Important for commercial contracts with conditional performance.
Relevant in resolving disputes in modern e-commerce agreements.
Related Sections
Contract Act Section 2 – Definitions of contract terms.
Contract Act Section 10 – Requirements of a valid contract.
Contract Act Section 31 – Contingent contracts to do or not do something.
Contract Act Section 36 – Contracts contingent on impossible events.
IPC Section 415 – Cheating, relevant where consent is obtained by deception.
Evidence Act Section 101 – Burden of proving contract terms.
Case References under Contract Act Section 35
- Hadley v. Baxendale (1854, 9 Exch 341)
– Established principles on damages for breach of contracts contingent on future events.
- Gherulal Parekh v. Mahadeodas Maiya (1959, AIR 781)
– Clarified enforceability of contracts conditional on uncertain events.
- Union of India v. Raman Iron Foundry (1974, AIR 1590)
– Discussed contracts contingent on government approvals.
Key Facts Summary for Contract Act Section 35
- Section:
35
- Title:
Contracts Contingent on Uncertain Events
- Category:
Validity, Contingent Contracts
- Applies To:
Parties entering contracts with conditional clauses
- Transaction Stage:
Formation and Performance
- Legal Effect:
Validity depends on event occurrence; void if event fails
- Related Remedies:
Damages, Specific Performance if event occurs
Conclusion on Contract Act Section 35
Contract Act Section 35 provides essential clarity on contracts dependent on uncertain future events. It ensures that parties are bound only when agreed conditions occur, protecting them from indefinite obligations. This fosters trust and certainty in commercial dealings involving contingencies.
Understanding this section helps businesses and individuals manage risks effectively. It also guides courts in resolving disputes fairly when contracts hinge on uncertain events. Overall, Section 35 remains a cornerstone for conditional contracts in modern Indian contract law.
FAQs on Contract Act Section 35
What is a contract contingent on an uncertain event?
It is a contract where performance depends on a future event that may or may not happen. The contract’s validity and obligations arise only if the event occurs as agreed.
When does a contract under Section 35 become void?
If the uncertain event on which the contract depends does not happen, the contract becomes void and parties are released from obligations.
Who can invoke Section 35?
Any party to a contract containing a condition based on an uncertain future event can invoke Section 35 to determine enforceability.
Does Section 35 apply to impossible events?
No, contracts contingent on impossible events are governed by Section 36, which declares such contracts void from the start.
How does Section 35 affect remedies for breach?
Remedies like damages or specific performance apply only if the uncertain event occurs and the contract is valid. If the event fails, no remedies for non-performance exist.