aleatory contract

9.9

An agreement where one or both sides must act only if an uncertain event happens

noun
/ˌeɪliˈɔːtəri ˈkɒntrækt/

Formal

: contrato aleatorio

Insurance policies are typical examples of aleatory contracts because payouts depend on accident or loss.

Examples

The court ruled that the agreement was an aleatory contract and not enforceable as a wager.
Many casinos use aleatory contracts in games of chance, where players only win if specific random outcomes occur.
An aleatory contract involves obligations that are triggered only if a specific uncertain event occurs.
An aleatory contract is common in insurance agreements.
Many aleatory contracts are based on unpredictable events.
An aleatory contract is a type of agreement where the obligations of one party depend on an uncertain event occurring.
Insurance policies are often considered aleatory contracts because their benefits are paid out only when certain unforeseen events happen.

Synonyms

conditional contract

vsaleatory contract

Formal

6.4

An agreement that only starts to have effect if a certain event happens

makes obligations hinge on a chance or uncertain event

Surface Forms

aleatory contract singular

aleatory contracts plural

Morphology

aleatory + contract

If a learner knows 'aleatory' (characterized by randomness or luck) and 'contract' (a binding agreement), the combined meaning 'a contract dependent on chance or an uncertain event' follows directly from standard English composition. The concept also has clear equivalents in many languages (e.g., Spanish 'contrato aleatorio', French 'contrat aléatoire'), which makes the logic readily accessible to learners who know the constituents.

Etymology

The noun aleatory contract comes from the old word 'alea', meaning a dice or game of chance, so imagine a deal that only happens if the dice roll a certain way. That's why an aleatory contract means a contract whose promises depend on an 'uncertain event'.