Aleatory Contract

An aleatory contract is a type of written agreement where the parties involved agree that certain outcomes or events will dictate the benefits or obligations of the contract. In simpler terms, the contract’s performance depends on uncertain events. Common examples include insurance contracts, where the insurer pays out only if a specific event, like a car accident, occurs. Because the outcome is uncertain, each party assumes a risk regarding whether they will gain or lose from the contract, depending on how the situation unfolds.