An aleatory contract is a contract where the exchange is uneven. The most common type of aleatory contract is an insurance policy. Such an insurance contract may be a boon to one party but create a major loss for the other, as more in benefits may be paid out than actual premiums received, or vice versa. For instance: You pay up $1,000 in premiums for an insurance policy and then you have a loss and the policy pays you $100,000 in return then the benefit is uneven. The insurance company collected $1,000 from you and paid you $100,000 in return. This can also end up the other way where you pay the insurance company without making any collection at all.
The term was a classification developed in later medieval Roman law to cover all contracts whose fulfilment depended on chance, including gambling, insurance, speculative investment and life annuities. Many modern forms of derivatives and options may in some cases also be considered aleatory contracts. For example, the French civil code contains a chapter on aleatory contracts, with specific provisions for gaming (gambling) and life annuities.
- Thomson-Gale Encyclopedia of American Law, courtesy of Jrank
- Black's Law Dictionary, 7th ed. 1999
- Barron's Dictionary of Insurance Terms, courtesy of Answers.com
- J. Franklin, The Science of Conjecture: Evidence and Probability Before Pascal (Baltimore: Johns Hopkins University Press, 2001), ch. 11.
- Text of French Civil Code (in English) Archived 2008-06-29 at the Wayback Machine.