Wednesday, March 21, 2012

BRF 2011 (Solved)

Wagering Agreements
According to Sir William Anson “A wagering agreement is a promise to give money or money’s worth upon the determination or ascertainment of an uncertain event.”
Cockburn C.J. defined it as ‘A contract by ‘A’ to pay money to ‘B’ on the happening of a given event in consideration of ‘B”s promise to pay money to ‘A’ on the event not happening.” Thus, a wagering agreement is an agreement under which money or money’s worth is payable, by one person to another on the happening or non-happening of a future, uncertain event.
The essence of gaming and, wagering is that one party is to win and the other to lose upon a future event, which at the time of the contract is of an uncertain nature-that is to say, if the event turns out one way A will lose but if it turns out the other way, he will win. For examples: A and B bet as to whether it would rain on a particular day or not A promising to pay Rs. 100 to B if it rained, and B promising an equal amount to A, if it did not. This agreement is wager.
Wagering Agreements are Void
An agreement by way of wager is void. Section 30 provides “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 the result of any game or other uncertain event on which any wager is made”. Thus, in India all agreements by way of wager are void. Wagering Agreement Void and not Illegal. In India, unless the wager amounts to a lottery, which is a crime according to Section 294-A of the Indian Penal Code, it is not illegal but simply void. Thus, except in case of lotteries, the collateral transactions remain enforceable.
Contracts of insurance are not wagering agreements:
Contracts of insurance are not wagering agreements even though the payment of money by the insurer may depend upon a future uncertain event. Contracts of insurance differ from the wagering agreements in the following respects:
a)     It is only person possessing an insurable interest that is permitted to insure life or property, and not any person, as in the case of a wager.
b)     In the case of fire and marine insurance, only the actual loss suffered by the party is paid by the company, and not the full amount for which the property is insured. Even in the case of life insurance, the amount payable is fixed only because of the difficulty in estimating the loss caused by the death of the assured in terms of money, but the underlying idea is only indemnification.
c)      Contracts of insurance are regarded as beneficial to the public and are, therefore, encouraged. Wagering agreements, on the other hand, are considered to be against public policy.

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