Every day, people use the word “wage” to mean “bet or gamble.” An agreement of Wager is a deal between two different parties in which one party agrees to pay money if some unknown event happens, and the other party agrees to pay the same amount back if the event doesn’t happen. A wagering agreement refers to a deal in which money or the value of money is given based on whether or not a possible, unpredictable event happens. The fundamentals of a wagering agreement are the presence of two parties of sound mind to make a profit or a loss.
Section 30 of the Indian Contract Act says that an agreement made through a bet is invalid. And no suit shall be brought to get back anything that is thought to have been won on a chance or given to someone to hold until the end of a game or the other uncertain event on which a bet is made.
The Essential Conditions of Wager
The following are the conditions of the wagering agreement:
1-Uncertain Act: The agreement must be based on something that can only be known for sure. It was decided that a bet is usually about something that may occur in the future, but it can also be about something that already happened, as long as neither party knows how it turned out or when it happened.
2-Possibility of profit or loss: Both parties can win or lose depending on the unpredictable event. An agreement can’t be called wagering if it lacks the desire to win or lose.
3-Neither party controls the events: If one party can affect the outcome, the agreement will lack an essential component of a wager.
4-Promise to remunerate: There must be a promise to repay the other party.
Types of Wager
1-Moneyline betting: This moneyline betting is straightforward as it is done only in sports competitions and games and is based upon the match’s outcome. It is illegal and is mainly seen in cricket in the IPL.
2-Spread betting: This form of wager/betting is placed on the most favored team to win by a particular margin or on the underdog to win or lose by a little margin.
3-Overbetting: This sort of betting is done in a game where the bettor bets on the total number of targets scored by both teams through a combination of a given number, which is a futuristic occurrence nobody can control.
4-Under betting: The bettor wagers that the total number of goals & points scored by both teams will be within a particular limit. This bet also involves the game’s outcome.
5-Prop betting: This is unique and creative as it is unrelated to the game’s final result. In this example, the bettor bets on the first half of the game, a super over in cricket, etc. So-called prop betting.
Can a Wagering Contract be Enforceable?
The concept can understand the Effects and Enforceability of a wagering contract that under the Indian Contract Act, it is explicitly declared as void ab initio, and hence, even section 65 of the Indian Contract Act doesn’t apply to it as the contract is void. Still, it needs to be mentioned that these types of arrangements have been prohibited by the law, which again implies that the wagering contracts are null and legible except in Gujarat and Maharashtra. Thus, wagering arrangements are invalid, and no suit may be launched to recover whatever was allegedly earned or entrusted to a person to abide by the result of a game or other unknown event on which a wager is made. In Badridas Kothari v. Meghraj Kothari AIR 1967, the court ruled that a promissory note for a wagering debt was not enforceable. Before paying the winner, the depositor recovers from the stakeholder. In GherulalParekh v. MahadeoDas 1959 AIR 781, the Supreme Court ruled that a wager is not illegal under Section 23 of the Indian Contract Act. Hence, all collateral processes and transactions are enforceable.
Showcase of talent is not as Wager
Horse race competition
All wagering agreements are contingent, but not all contingent agreements are wagering. A wagering contract is a futuristic contract dependent on a future event. Future situations may require a wagering contract.
The Indian Contract Act of 1872 doesn’t define a bet, so the courts must determine what qualifies as a bet and what does not. Section 30 says all betting contracts are void, which is ambiguous. This section’s definition of wage and scope should be changed. The incentive drives a wagering arrangement. Both sides must have a realistic probability of victory and equal possibilities to succeed or fail.