Wagering agreements are void under Section 30 of the Indian Contract Act, 1872. However, certain transactions resemble wagering transactions but are…

Wagering agreements are void under Section 30 of the Indian Contract Act,1872. However, certain transactions resemble wagering transactions but are valid in the eyes of law which are following: (i) Chit fund: Chit fund does not come within the scope of wager (Section 30). In case of a chit fund, a certain number of persons decide to contribute a fixed sum for a specified period and at the end of a month, the amount so contributed is paid to the lucky winner of the lucky draw. (ii) Commercial transactions or share market transactions: In these transactions in which delivery of goods or shares is intended to be given or taken, do not amount to wagers. (iii) Games of skill and Athletic Competition: Crossword puzzles, picture competitions and athletic competitions where prizes are awarded on the basis of skill and intelligence are the games of skill and hence such competition are valid. According to the Prize Competition Act,1955 prize competition in games of skill are not wagers provided the prize money does not exceed - 1,000. (iv) A contract of insurance: A contract of insurance is a type of contingent contract and is valid under law and these contracts are different from wagering agreements.