Aleatory refers to something that is dependent on an uncertain event or outcome, often associated with chance or randomness. In legal contexts, the term is commonly used in relation to contracts or agreements that are contingent upon uncertain future events. Aleatory contracts typically involve parties assuming risk based on the occurrence or non-occurrence of future events, such as insurance policies, gambling agreements, or certain types of financial derivatives. These contracts allocate risk between the parties based on the uncertain nature of the events involved. The term “aleatory” underscores the element of chance or unpredictability inherent in such contracts and emphasises the importance of considering potential future outcomes when entering into agreements of this nature.
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This glossary post was last updated: 29th March, 2024.
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