1.

DISTINCTION BETWEEN CONTINGENT CONTRACTS AND WAGERING AGREEMENTS;

1.validity A contingent contract is a valid contract in the eyes of law. A wagering agreement is void and even illegal in the states of Gujarat and Maharashtra. 2.Performance A contingent contract depends on the happening or not happening of some uncertain future event collateral to the contract. A wagering contract depends on happening of some uncertain event. 3.Interest In a contingent contract , the parties have real interest in the happening or not happening of the event like insurable interest in the property insured. The parties should not have any interest in the event except for the stake by winning or loosing the bet. 4.Future event In a contingent contract the future uncertain event is merely a collateral event incidental to the main agreement. In a wagering agreement , the future event is the sole determining factor of the contract. 5.Consequences In a wagering agreement, one party wins and the other looses.the loss of the party is the gain of the other party. In a contingent contract the question of the winning or loosing does not arise at all.

6.promises. In a contingent contract the promise on the part of the party is contingent to the happening of an uncertain event. A wagering agreement consists of mutual promises by both the parties conditional on the happening or not happening of an event.

2.Nature and extent of suretys liability

Section 128 of the contracts acts defines the nature and extent of suretys liability .it provides that liability of the surety is co-extensive with that of that of the principal debtor. The liability of the surety arises immediately on the default of the deptor.so, where a debt guaranteed by the surety ,becomes payable only after a notice of demand ,the liability of the surety arises only after such notice.the surety connot be called upon to pay unless the principal debtor has made a default.but the moment the principal debtor defaults immediately the surety becomes liable. The creditor may choose to proceed against the surety first , unless there is an agreement to the contrary.the rule that a surety cannot be held liable if the principal debtor is not liable may not be true in all cases. When the original agreement between the creditor and the principal debtor is void. Similarly a discharge of the principal debtor by the operation of law does not discharge the surety. The nature of suretys liability can be summed up as under. 1.The liability of surety is of secondary nature. A surety is liable only on default of the principal debtor.

2.The liability of the surety arises immediately on the default by the principal debtor.the creditor has a right to sue the surety directly without first proceeding against the principal debtor. 3.Where a creditor is having securities given by the principal debtor against his borrowings in addition to the suretys guarantee, the creditor is under no obligation to realise these securities before proceeding against the surety. 4. The surety is sometimes called a Favoured debtor. 5. this is because ,it is not open to the creditor to call upon the surety to pay under the contract of guarantee unless the creditor has performed his part of the contract.A surety is an object of some favour both at law and at equity.A contract of guarantee must thus be strictly construed in favour of the surety.