Suppose a contract is signed by two parties, Party A and Party B. Suppose that the contract stipulates a severe financial penalty to be paid by Party A depending on whether or not an unrelated party, Party C, performs some action.
Party A has no control whatsoever over Party C.
If Party C chooses of his own accord to perform the prohibited action, does Party A have to pay the penalty?
To me, such a contract sounds more like a form of insurance (or maybe gambling). It seems like it might be invalid simply as a business agreement between two parties who are not in the insurance or gambling businesses.
But such a case is at the heart of a threatened lawsuit, so I thought it was worth checking here to see if anyone knows of case law that might weaken the threat against Party A.