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Updated: Feb 20, 2022

Written by: Gaurav Sorout

The word 'Agreement' is used to mean a guarantee or responsibility guarantees which establish thought for gatherings to an agreement. A wager is an agreement in which money is payable from one party to a different party on the happening or non-happening of an uncertain event. Now if we'll take an example of a situation that if a and b enter into an agreement that A will pay 1000 RS to B if it rains today now this agreement may be a wager because during this event if it does not rain today then b will need to pay 1000 RS. And there's a mutual chance of gain or loss for both A and B. Agreements that entered between parties under the condition that cash is payable by the primary to the second party on the incident of a questionable occasion afterward, and therefore the second party to the principal party when the occasion doesn't occur, are called Wagering Agreement or Wager. In a standard man language, we will define the term wager as a bet. Generally, wagering agreements are void.

It is a game of chance wherever winning or losing is uncertain and also the event on which chance of winning or losing depends on both sides. The risk of loss or the likelihood of gaining isn't one-sided. The essential part of the wagering agreement is that neither of the parties must have any interest within the contract apart from the sum that the person goes to win or lose.

In the case of GherulalParakh v Mahadeodas[i], honourable judge J. Subba Rao acknowledged Sir William Anson's definition of “wager” as, “a promise to supply money or money's price upon the determination or ascertainment of an unsure event, brings out the concept of wager declared void by section 30 of the contract act.” Different states have totally different provisions concerning Gambling. According to section 3 of the Odisha prevention of gambling act 1955, anyone who takes half in gambling or gaming shall be punishable with imprisonment of 1 month or fine which may touch Rs 100 or with each.


  • The consideration for the promise under a wagering agreement is to pay or get money.

  • The cash is payable on the happening or the non-happening of an Event.

  • The agreement depends on a future and unsure event.

  • The essence of gaming and wagering is that one party will win and the other party will lose.

  • In a wagering agreement, no party has control over the event.

  • Commercial transactions are valid, but to pay the price differences during the wagering agreement is void.


Shares- Agreements for the sale and buy of any commodity or share market transactions during which there is a genuine intention to do legitimate business isn't wagering agreements.

Contract of Insurance- Here the contract of insurance seeks to compensate the loss faced by the insured on the happening of an uncertain event. Just in case of life assurance, the quantity payable on happening of death of the insured is agreed and decided beforehand.


Each agreement of protection needs for its legitimacy the presence of interest. Protection affected without interest is on the brink of a betting understanding and thusly void. Interest implies the danger of misfortune to which the guaranteed is perhaps getting to be uncovered by the occurrence of the occasion guaranteed against. Within the bet, but, neither one among the parties is risking misfortune apart from that which is formed by the agreement itself.


In India, according to Section 30 of the Contracts Act, wagering agreements are expressly declared to be void. Therefore it cannot be implemented in any Court of law.

Agreements by way of wager are void, and no suit shall be brought for recovering something supposed to be won on any wager or entrusted to anyone to abide by the results of any game or different uncertain event on which any wager is formed.

Though a wagering agreement is void and unenforceable, but it isn't forbidden by law. However, in the States of Gujarat and Maharashtra, the wagering agreements have been declared to be illegal. As far as collateral transactions are concerned, because the wagering agreements are void but not illegal, they are not void. Therefore, they're enforceable. E.g., where a private lends money to a special person to enable him to pay off a gambling debt, the lender can recover the cash so paid.

End Notes [i] Sir William Anson, the law of contracts, quoted with approval by the supreme court in Gherulal Parekh v Mahadeodas Mahiya, [1959] Supp 2 SCR 406, AIR 1959 SC 781.

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akash sharma
akash sharma
May 16, 2021

Wonderfully penned down article. All the nuances of the topic have been cleared with great precision!!!!

- Akash Sharma

Gaurav Sorout
Gaurav Sorout
May 16, 2021
Replying to

Thanku bhai❤️

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