Legal Definitions - contingency

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 estatetransaction, 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.