What is Wagering Agreement? State the various circumstances under which an agreement is not a wager.
Section 30 only says that agreements by way of wager are void. The section does not define wager . According to William Anson, wager is a promise to give money or money’s worth upon the determination or ascertainment of an uncertain event.
In the words of Justice Hawkins, “A wagering contract is one by which two persons, professing to hold opposite views touching the issue of a future uncertain event, mutually agree that dependent on the determination of that event, one shall pay or hand over to him, a sum of money or other stake, neither of the contracting parties having any other interest in that contract than the sum or stake he will so win or lose, there being no other real consideration for the making of such contract by either of the parties.
In short-wager may be defined as an agreement between two parties to the effect that if a given uncertain event is determined in one way, one of them shall pay a certain sum of money to the other and if it is determined the other way, the latter shall pay to the former. For example, 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 riot. This agreement is a wager.
Essential of a Wagering Agreements:
- It is a promise to pay money or money’s worth.
- The promise must be conditional on an event happening or not happening.
- Eyed must be uncertain. An event may be uncertain on account of two reasons: (a) It has not happened so far, or (b) It has already happened, but the parties are ignorant of the results.
- Each party must stand equally to win or lose. The gain of one party must be the loss of other. An agreement is not wager if either of the parties may win, but cannot lose or may lose, but cannot win.
- Neither party should have any interest in the event other than the sum or stake he will win of lose.
- Neither party should have control over the happening of the event one way or other.
Circumstances under which an agreement is not a wager:
A contract of insurance is not a wager. In insurance, the insured or assumed has an insurable interest in the subject-matter and parties are interested in the, protection of subject-matter. A contract of insurance is based on scientific calculation of risks.
Share market transactions in which delivery of stocks and shares is intended to be given and taken are not wager.
A subscription or contribution or an agreement to subscribe or contribute toward any plate prize or sum of money of the value of Rs. 500 or above to be awarded to the winners of a horse race is not void, and hence enforceable.
A crossword competition involving a good Measure of skill for its successful solution is not a wagering agreement. However, if prizes of a crossword competition depend upon the correspondence of the competitors, solution with a previously prepared solution kept with the editor of a newspaper, it is a lottery and wagering transaction.
Games of skill, e.g. picture puzzles or athletic competitions are not wager. If skill pays a substantial part in a result and prizes are awarded to the merits of solutions, the competition is not a lottery.