ALEATORY CONTRACTS

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ALEATORY CONTRACTS


ALEATORY CONTRACTS, civil law. A mutual agreement, of which the effects, with respect both to the advantages and losses, whether to all the parties,or to some of them, depend on an uncertain event. Civ. Code of Louis. art.2951. 2.-1. These contracts are of two kinds; namely, 1. When one of theparties exposes himself to lose something which will be a profit to theother, in consideration of a sum of money which the latter pays for therisk. Such is the contract of insurance; the insurer takes all the risk ofthe sea, and the assured pays a premium to the former for the risk which heruns. 3.-2. In the second kind, each runs a risk which is the considerationof the engagement of the other; for example, when a person buys an annuity,he runs the risk of losing the consideration, in case of his death soonafter, but he may live so as to receive three times the amount of the pricehe paid for it. Merlin, Rep. mot Aleatoire.

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