Business Law

Agreements by way of Wager (Section 30)

Definition: Agreements by way of wager are void; and no suit shall be brought for
recovering anything alleged to be won on any wager, or entrusted to any person to abide by
result of any game or other uncertain event on which any wager is made.
Meaning and Essentials: Wagering agreements are a guess, gamble or uncertain venture
about a future occurrence which if it comes about in ones favour the other would have to part
with the money that he/she has put up as his/her stake. Gambling contracts are void as per
Indian law.
1. Uncertain event- Uncertainty in the minds of the parties about the determination of
the event in one way or other is necessary. A wager generally contemplates a future
event; but it may even relate to an event which has already happened in the past, but
the parties are not aware of its result or the time of its happening.
2. Equal chances of gain or loss to the parties - There is no wager if there are no
mutual chances of gain or loss, each party should stand to win or lose. . If one party
wins and there werent any chances of them losing, then in that case there is no wager.
If winning or losing is completely based on skill there will be no wager. It should be
dependent on chance.
3. Neither party to have control over the event- Neither party should have control
over the happening of the event one way or the other.
4. No other interest in the event- Neither party should have any interest in the
happening of the event other than the sum or stake, he will win or lose.
Effect of wagering transactions: Wagering agreement being void cannot be enforced in any
court of law.
Wagering agreement not unlawful: Though a wager is void and unenforceable it is not
forbidden by law. Hence a wagering agreement is not unlawful under section 23 of the
Contract Act and therefore the transactions collateral to the main transaction is enforceable.
Exceptions: Horse Race: This section does not render void a subscription or contribution, or
an agreement to subscribe or contribute, toward any plate, prize or sum of money, of the
value or amount of five hundred rupees or upwards to the winner or winners of any horse
race.
Purpose: The principle and purpose behind Sec. 30 to treat an agreement by way of wager as
void is that, the law discourages people to enter into games of chance and make earning of
trying luck instead of spending their time , energy and labour for more fruitful and useful
work for themselves, their family and society.