Elucidate what is meant by a Contingent Interest.
A contingent interest is created in favour of a person to take effect only on the happening or not happening of a specified uncertain event, which may or may not happen.
A contingent interest is one in which neither any proprietary interest nor a right of enjoyment is given at present, but both depend upon future uncertain events which may or may not happen.
Where an estate is bequeathed to X until he gets married and after that event to Y, Y‘s interest in the bequest is contingent because it depends upon a condition precedent viz, the marriage of X, an event which may or may not happen. Y has at present no proprietary interest in the estate and he cannot alienate it, But as soon as X marries, the contingent interest of B becomes a vested interest because of the happening of the event (X’s marriage) on which it was contingent till then.
Thus a contingent interest is solely dependent upon the fulfilment of a condition, so that in a case of non-fulfilment of the condition, the interest falls through. The person having the contingent interest does not get the possession of that property but has the expectancy to receive it upon happening of that event but will not receive the property if the event does not happen as the condition is not fulfilled.
If the transferee dies before obtaining possession, the contingent interest fails and the property reverts to the transferor. However, a contingent interest is transferable.
Characteristics of Contingent interest
1. The interest is solely dependent upon the fulfilment of the condition after which it become a vested interest.
2. If the transferee dies before obtaining possession, the contingent interest fails and the property will remain with the transferor.
3. It is transferable. But whether it is heritable or not, it depends upon the nature of such any transfer and the condition.