Which of the following contracts requires that a loss must occur for payment to be made?

An aleatory contract is fundamentally characterized by its nature of being contingent upon an uncertain event occurring. In the context of insurance, including title insurance, the concept of an aleatory contract means that the contract involves a situation where one party's performance is dependent on the occurrence of a specific event, such as a loss or damage. For the insurer to fulfill their obligation of payment, a loss must take place, reflecting the very essence of risk and uncertainty inherent in insurance agreements.

In essence, the distinction of an aleatory contract lies in its imbalance in performance – one party (the insured) pays premiums, while the other (the insurer) only makes a payment if a certain event occurs, emphasizing the unpredictability of when or if that payment may be necessary. This aligns directly with how insurance works, as policyholders may pay over time without any eventual claim being made, yet the insurer is obligated to compensate once a qualifying loss transpires. This structure exemplifies the unpredictable nature of the risk that such contracts are designed to address.

Other types of contracts mentioned, while they have their own unique characteristics, do not entail this specific dependence on a loss event for a payment obligation to arise. For instance, a commutative contract involves a mutual exchange with predetermined