WAGERING AGREEMENT

WAGERING AGREEMENT

WAGERING AGREEMENT

Coming across Wagering Agreements and Contracts while studying The Indian Contract Act, 1872, in the CPT examination, we wanted to study it in detail.  Hence, taking Wagering Agreement in The Contract Act as our topic, we begun our research.  Accordingly, we started taking interest in the topic and now we present it.


WAGERING AGREEMENT

 Our topic is WAGERING AGREEMENTS

IN THE CONTRACT ACT, 1872.  We are going to throw light upon what is wagering agreement and its related essentials, effects, exceptions along with cases.  This agreement has been also misunderstood as a contingent agreement or insurance contract, which will be discussed.

WAGERING AGREEMENT

by persons who are not competent to contract. (Sec 10 & 11) Agreements with unlawful consideration or object. (Sec 23) Agreements the meaning of which is uncertain. (Sec 29) WAGERING AGREEMENTS. (SECTION 30) Agreement to do impossible acts. (Sec 56)
Agreements

WAGERING AGREEMENT

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must be dependent upon uncertain event. There must be mutual chances of gain or loss. Whether an agreement is a wager or not depends on the activity and not on the words of the agreement.
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The parties must not have any other interest in the event. The parties must not have any control over the event. The promise must be to pay money or moneys worth.

WAGERING AGREEMENT

Effects Of Main Transactions: - The winner in wager cannot recover the stake money
from the other party to the agreement. - The winner cannot recover the money deposited with a third person (stakeholder). - Where the money has already been paid to the winner, cannot be recovered back from him. - A new promise to pay the stake money (already won) upon a wager, is also void.

WAGERING AGREEMENT

Effects On Collateral Transaction:

- Wagering agreements are void but not unlawful, except in Gujarat and Old Bombay. - Therefore, the transactions to the main transactions are not void. - Thus these transactions are valid and enforceable. - Eg: A, borrowed Rs. 500 from C, laying a bet with B on a car in a race. A loosing the bet, paid Rs. 500 to B. Yet A is liable to repay the amount to C, as the contract is a collateral to the wagering agreement, thus not being void.
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GAMBLING :

something of material value (referred to as "the stakes") on an event with an uncertain outcome with the primary intent of winning additional money and/or material goods. - The outcome of the wager is evident within a short period. - Gambling in India is heavily restricted, although there is extensive illegal gambling throughout the country. - The Indian gambling market is estimated to be worth US$60 billion per year, of which about half is illegally bet and black money.
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- Gambling is the wagering of money or

In organized sports, match fixing, game fixing, race fixing, or sports fixing occurs as a match is played to a completely or partially pre-determined result, violating the rules of the game and often the law. Where the sporting competition in question is a race then the incident is referred to as race fixing. EXAMPLE :(August 2010 Cricket: England v/s Pakistan- England by the 4th day of their test match, is up winning against Pakistan by an inning and 225 runs, making this Pakistan's worst loss in Cricket in 58 years. It is discovered, however, that the team was subject to match fixing causing a halt of the game and controversy to who is responsible and who is not.)
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Gherulal Parekh vs. Mahadeo Das(1959)The question for determination in this appeal was whether an agreement of partnership with the object of entering into wagering transactions was illegal within the meaning of s. 30 of the Indian Contract Act. It has been laid down by the Supreme Court, in Gherulal Parekh vs. Mahadeo Das that though a wager is void and unenforceable, it is not forbidden by law. Hence, a wagering agreement is not unlawful, under section 30, of the Contract Act, and therefore, the transactions collateral to the main transaction are enforceable.

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GAMES OF SKILLS HORSE RACES TRANSACTIONS OF SALE INSURANCE CONTRACTS

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GAMES OF SKILLS: -Prize competitions which are games of skill, e.g., picture puzzles, athletic competitions. Thus, an agreement to enter into a wrestling contest in which the winner was to be rewarded by the entire sale proceeds of tickets, was held not to be wagering contract.

-A crossword competition is not a wager since it involves skill. -Prize competitions in games of skill are not wagers provided the prize money does not exceed Rs. 1000.

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HORSE RACES: -An agreement to contribute or subscribe towards any plate, prize or sum of money, of the value or amount of five hundred rupees or upwards to be awarded to the winners of any horse-race is valid agreement and not a wager. -However, any transaction connected with horse racing which is declared illegal

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TRANSACTIONS OF SALE: -Transactions for the sale and purchase of stocks and shares, or for the sale and delivery of goods, with a clear intention to give and take delivery of shares or goods, as the case may be. -Where the intention is only to settle in price difference, the transaction is a wager and hence void.
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INSURANCE CONTRACT: -An insurance contract which is essentially a contract of speculation is not a wagering contract. -There is an insurable interest in an insurance contract while there is no such interest in a wagering contract.

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In a wagering agreement, any of the party does not have and insurable interest in the subject matter of the agreement except resulting gain or loss. This is the main distinguishing feature of a valid contingent contract when comparing to a wagering contract.

That is why an insurance contract is different from a wagering agreement.

 

Therefore, the parties who enter in to the wagering agreements must play on their own risk and cannot rely on court of law for any relief.
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 For an example,
- A and B enter in to wagering agreement and each deposits Rs.1000 with a third party Y advising him to pay the total sum for the winner. - But no suit can be brought by any of the winner or loser for the purpose of recovering the sum due to the winner from Y. - Thus, it is impossible for a loser to bring an action against the winner for recovering his Rs.1000. However, it is very clear that the wagering agreements are void and cannot be enforceable before the law.
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The agreements is bound by mutual or reciprocal promises. 2) All wager agreements are contingent contracts. 3) In a wager, the uncertain event is beyond the power of both the parties. 4) The parties are notCONTINGENT interested in the occurrence of the WAGERING AGREEMENT the money earned or lost. event, apart from AGREEMENT 5) The future event is the sole determining factor of the contract. 6) Wagers are void.
1) 1) 2) 3) 4) 5) 6)

The agreement need not contain any mutual promises. All contingent agreements are not necessarily wager agreements. The uncertain event may be within the power of one of the parties. In a contingent agreement, the parties are interested in the occurrence of the event. The future event is merely collateral or incidental. Contingent agreement is not void unless it is dependent on the occurrence of an impossible event.
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Thus we conclude that 1) Wagering Agreements are Void. 2) Though agreements collateral to a wager are valid and enforceable by law. 3) The promise is dependent on an uncertain event. 4) The promise must be to pay in money or moneys worth. 5) The parties must not have any control over the event. WAGERING 6) Wagering agreement sAGREEMENT are totally different from 23

www.google.com www.britanica.com www.ladbrokes.com www.ask.com www.apexwagering.com World Book Britanica Encyclopedia Encarta

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