Professional Documents
Culture Documents
1) INTRODUCTION
2) WAGER CONTRACTS
a. Definition & meaning
b. Essentials of Wagering Contract:
3) EFFECTS OF WAGERING AGREEMENT
4) LAWS RELATED TO WAGER
5) AGREEMENTS COLLATERAL TO WAGERING AGREEMENTS
6) CONTINGENT CONTRACT
7) DEFINITION OF CONTINGENT CONTRACT
8) ESSENTIAL OF CONTINGENT CONTRACT
INTRODUCTION
The above definition excludes event which have occurred. Hence Sir
William Ansons definition, a promise to give money or moneys worth upon
the determination and ascertainment of an uncertain event, is nearer and
more accurate.
Essentials of Wagering Contract:
1. Mutual chances of gain and loss
There must be two parties, or two sides, and mutual chances of gain
and loss, i.e., one party is to win and the other to lose upon the
determination of the event. It is not a wager where one party may win but
cannot lose, or if may lose but cannot win, or if he can neither win nor lose,
if one of the parties has the event in his own hands, the transaction lacks
an essential ingredient of wager. It is of the essence of the wager that each
side should stand to win or lose according to the uncertain or unascertained
event in reference to which the chance or risk is taken.
2. Two parties
There must be two persons, either of whom is capable of winning or losing.
3. Uncertain Event
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Contract Of Gaming
A gaming contract consist of the mutual promises which the players of
the game necessarily make, express or by implication, in paying for a stake
as to its transfer upon the result of the game. Such contract may be a wager
if the parties are two.
In K.R. Lakshmanan (Dr) v State of Tamil Nadu , the Supreme Court
had an occasion to decide whether horse racing amounts to gaming as
defined under the Madras City Police Act 1888, and the madras gaming act.
It stated:
Gambling in a nutshell is a payment of a price for a chance to win a
prize. Games may be of chance or of skill and chance combined. A game of
chance is determined entirely or in part by lot or mere luck. A game of skillalthough the element of chance necessarily cannot be entirely eliminated- is
one in which success depends principally upon the superior knowledge,
training, attention, experience and adroitness of the player.
Speculative Transactions
A speculative contract is not necessarily a wagering contract, and
must be distinguished from agreements by way of wager. This distinction
comes into prominence in a class of cases where the contracts are entered
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between
the
two
is
narrow
one.
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15
That act was passed to.to close the doors of the courts of justice in the
presidency to suits upon contracts collateral to wagering transactions where
such collateral contracts have been entered into or have arisen since the act
came
into
force,
purpose
which
it
has
effectually
answered.
Derivatives
The position of derivatives under the common law
Two
English
decisions
have
caused
concern
among
market
participants that certain derivatives transactions may fall foul of the gaming
and wagering laws. In Universal Stock Exchange v. Strachan the court held
that wagering contracts included contracts for differences. Halsbury defines
contracts for differences as;
Agreements between those who are only ostensible buyers and sellers
of stock and shares where the common interest of the parties is to pay or
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contracts
akin
to
cash-settled
derivatives
were
contracts
for
Those
3.
futures
4.
made
exchange,
on
or
an
exempt
recognised
futures
futures
market,
exchange.
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1. The performance must depend upon the happening or non (-) happening
of an event.
2. The event must be uncertain, i.e., it may or may not happen. If the event
is sure to happen, the contract is not contingent but an absolute one.
Example:
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Indian Contract Act has laid down various rules regarding contingent
contracts which are as follows:
Examples:
(1) A promises to pay B Rs. 1,000 if he marries C. Rs. 1,000 are payable only
if B marries C
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Example:
A promise to pay Rs. One lakh to B if B's ship does not return. The ship is
sunk. The contract can be enforced after the ship is sunk and not before.
Example:
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Example:
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Example:
A promises to pay B a sum of money if a certain ship does not return within
a year. The contract may be enforced if the ship does not return within the
year, or is burnt within the year.
Examples:
(1) A agrees to pay B Rs. 1,000 if two straight parallel lines should cut each
other.
(2) A agrees to pay B Rs. 1,000 if B will marry A's daughter C. C was dead at
the time of the agreement. The agreement is void.
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distinction
between
contingent
contracts
and
wagering
such.
In
contingent
contracts,
however,
the
event
and
its occurrence carries a significance over and above the financial transaction
contingent on the event. Thus, the interest of the parties in the occurrence
of the event is one distinguishing factor between the two types of
agreements.
The
next
significant
difference
is
that
in
wagering
agreements, promises are necessarily reciprocal, in the sense that there will
always be a winner and a loser, and either party has something to gain one
way or another. In contingent contracts, the promise can simply be
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