Definition - What does Contingency mean?
The term contingency can simply be defined as an event that is unlikely to occur. In relation to a contract, it refers to the provision which states that all or part of the terms mentioned in the contract may become void or have to be altered on the occurrence of a particular event.
Justipedia explains Contingency
For example, there is often a contingency clause in a contract of real estate purchase that if the buyer is not satisfied with the inspection report revealing the physical state of the property then he or she is not bound to complete the purchase.