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Simple English definitions for legal terms
contingency
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A quick definition of contingency:
Contingency: A contingency is something that might happen in the future, but we're not sure if it will. It depends on certain conditions that may or may not be met. For example, if you buy something, there might be a contingency that says you have to pay within a certain number of days or you'll have to pay extra. This word is often used in contracts, like when a lawyer gets paid only if they win the case. It can also be used in real estate, where a buyer might have a contingency that lets them back out of the deal if they can't get a loan in time.
A more thorough explanation:
Contingency refers to an event that may or may not happen in the future. It depends on a condition that is uncertain or incidental. This term is often used in contracts, agreements, and fee arrangements.
- Contingency fee: A lawyer may receive a contingency fee for their legal services only if they successfully represent their client. The fee depends on the outcome of the dispute.
- Bonus contingency: An employer may offer a bonus to an employee that depends on their performance and loyalty.
- Mortgage contingency: In a real estate transaction, a mortgage contingency clause protects the buyer. It allows the buyer to secure a mortgage loan within a certain time period. If they cannot secure the loan, they can exit the contract without penalty.
These examples illustrate how contingency depends on a condition that may or may not happen. The contingency fee depends on the outcome of the dispute, the bonus depends on the employee's performance and loyalty, and the mortgage contingency depends on the buyer securing a loan within a certain time period.