BTL 841 - Wager Contract

 

The Banking Tutor’s Lessons

BTL 841                                                                                                18-11-2025

Wager Contract 

A wager contract, or wagering agreement, is an agreement to pay money or property based on the outcome of an uncertain future event. 

These contracts are typically void and unenforceable in court because they are considered to be against public policy, though they may not be illegal.       

A and B bet on whether it will rain tomorrow. A agrees to pay B Rs 1000/-  if it rains, and B agrees to pay A Rs 1000/- if it doesn't. This is a wagering contract because the outcome is uncertain, and their only interest is the money. 

Insurance contracts are not wagers because the policyholder has an "insurable interest" and the purpose is risk protection, not just gambling. 

Sekhar Pariti

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