An aleatory contract is usually a contract in which the overall performance of one particular or each parties is contingent upon the occurrence of a specific event. Essentially the most popular form of aleatory contract are insurance policies. Such insurance coverage contracts may perhaps be a boon to a single celebration but make a major loss for the other, as additional in positive aspects may possibly be paid out than actual premiums received, or vice versa.
The term was a classification developed in later medieval Roman law to cover all contracts whose fulfilment depended on opportunity, such as gambling, insurance coverage, speculative investment and life annuities. Several modern day forms of derivatives and alternatives could in some cases also be regarded as aleatory contracts. For example, the French civil code contains a chapter on aleatory contracts, with certain provisions for gaming (gambling) and life annuities.
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