Q.
(a) Ali promises to pay Babu a sum of money if he can grow his area sales by 20% this year. The contract may be enforced if the company can hit the years target, and becomes void if the company did not even achieve this year's target.
(b) Allan promises to pay Brian a sum of money as compensation if Brian's car is stolen in the journey. The contract may be enforced if really Brian's car got stolen during the journey or disappeared when the journey is completed.
Hence, if the company could not hit the year's target and even though Babu grew his business by 20%, the contract is still null and void.
Collateral event here is the company has to hit the whole year target before Babu can be considered in this contract of a handsome sum of incentive.
(b) The 2 parts are: that Brian would get a sum of money if his car is stolen, or if it has disappeared (without reason as to why). This is like insurance, where you get compensated for loss. So, if there is no lost and the car returned to Brian after the journey, there is no contract to pay him the sum.
Collateral event here is the lost of Brian's car in the journey (scope of time and where - high risk territory), would trigger the Contingent Contract to pay the sum of money. If there is no journey or it never complete the journey, the contract is not enforceable.
S.32 Contingent Contract - is a contract to do or not to do something, if some event, collateral to the contract, does or does not happen.
Ref:
S.32 and 36 Contracts Act, 1950.