Aleatory contract

Aleatory contract

An aleatory contract is a contract in which the performance of one or both parties is contingent upon the occurrence of a particular event. The most common type of aleatory contract are insurance policies. Such insurance contracts may be a boon to one party but create a major loss for the other, as more in benefits may be paid out than actual premiums received, or vice versa.

Gambling contracts and many modern forms of derivatives and options may in some cases also be considered aleatory contracts. For example, the French civil code contains a chapter on aleatory contracts, with specific provisions for gaming (gambling) and life annuities.

References

Search another word or see aleatory contracton Dictionary | Thesaurus |Spanish
Copyright © 2014 Dictionary.com, LLC. All rights reserved.
  • Please Login or Sign Up to use the Recent Searches feature