What characterizes an Aleatory Contract?

An aleatory contract is characterized by its dependence on an uncertain event. This type of contract involves a situation where the performance by one party is contingent on the occurrence of a specified event, which does not guarantee that one party will benefit while the other does not. In the context of insurance, for example, the insurer provides coverage in exchange for premiums. However, the payouts or benefits only come into effect if a particular event (like a natural disaster or a loss) occurs. This uncertainty and the unequal exchange of value — where one party may pay a premium without ever receiving anything in return if an insured event doesn't happen— is fundamental to aleatory contracts.

This distinguishes aleatory contracts from other types, where the obligations are typically fixed and do not hinge on uncertain events.