Aleatory contracts


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Related to Aleatory contracts: contract of adhesion, Unilateral 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 the parties exposes himself to lose something which will be a profit to the other, in consideration of a sum of money which the latter pays for the risk. Such is the contract of insurance; the insurer takes all the risk of the sea, and the assured pays a premium to the former for the risk which he runs.
     3.-2. In the second kind, each runs a risk which is the consideration of 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 soon after, but he may live so as to receive three times the amount of the price he paid for it. Merlin, Rep. mot Aleatoire.

References in periodicals archive ?
As a corollary of the above, our opinion is that the gaming and betting are contracts falling within the species of aleatory contracts, but, as they are characterized by traits that individualize them in a very pronounced way within this species, they are well defined and original institutions both from a purely legal point of view and in terms of their social component.
The aleatory contracts (that the former doctrine named gaming and betting (1)) are the contracts of onerous title, wherein the limits and even the existence of the obligation for one of the parties, or for both is not known at the moment of the contract conclusion because it depends upon an uncertain and future event, in this case the uncertainty being referred to the fulfillment or failure of the event (condition) or to the moment of fulfillment only (uncertain term).
One can easily notice that the aleatory element is essential and distinctive for aleatory contracts, compared to the commutative ones.
The odds of winning or loss in aleatory contracts must be considered at the conclusion of the contract so that the parties conclude knowingly the contract.
As for the aleatory contracts, in general, the evident disproportion between the benefits of the parties is a possible consequence of the aleatory nature of the contracts.