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Which feature is essential to a wagering agreement, which Section 30 of the Indian Contract Act, 1872 makes void?

Question and options

Which feature is essential to a wagering agreement, which Section 30 of the Indian Contract Act, 1872 makes void?

  1. Each side may win or lose, with no interest in the event beyond the stake

  2. The event must depend on pure chance alone and not on any skill of either party at all

  3. The stake must be a sum of money, and not goods or any other property of value

  4. One side must have an insurable interest in the outcome of the event concerned

Answer and explanation

Correct answer: A - Each side may win or lose, with no interest in the event beyond the stake

A wager is a promise to pay money or money's worth on the happening of an uncertain event, where each side may win or lose and neither has any interest in the event other than the stake; Section 30 of the Indian Contract Act, 1872 makes such agreements void. The stake need not be money, and an insurable interest is what takes a contract of insurance out of the wagering class.

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