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Simple English definitions for legal terms
contingent fund
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A quick definition of contingent fund:
A contingent fund is money set aside for unexpected expenses that may arise in the future. It is usually created by a municipality or a business to cover costs that cannot be classified under any specific purpose. This fund is also known as a contingency reserve and is used to pay for unforeseen expenses that may occur in the future.
A more thorough explanation:
A contingent fund is a type of fund created by a municipality or business to cover unexpected expenses that may arise in the future. It is usually set aside for expenses that cannot be classified under any specific purpose for which taxes or revenues are collected. For example, a city may create a contingent fund to cover unforeseen expenses such as emergency repairs or natural disasters.
Another example of a contingent fund is a reserve fund set up by a business to cover unknown costs that may arise in the future. This fund is used to cover expenses that are not part of the company's regular budget, such as unexpected legal fees or equipment repairs.
Overall, a contingent fund is a way for organizations to prepare for unexpected expenses and ensure that they have the financial resources to cover them.