Aleatory Contract

A mutual agreement between two parties in which the performance of the contractual obligations of one or both parties depends upon a fortuitous event.

The most common type of aleatory contract is an insurance policy in which an insured pays a premium in exchange for an insurance company's promise to pay damages up to the face amount of the policy in the event that one's house is destroyed by fire. The insurance company must perform its obligation only after the fortuitous event, the fire, occurs.