What type of contract is characterized by an unequal exchange of consideration due to the uncertainty of loss?

An aleatory contract is defined by its nature of involving an unequal exchange of value that hinges on the occurrence of a particular event or loss, which is uncertain. This kind of contract is typical in insurance agreements, where one party pays a premium and the insurer promises to pay a benefit only upon the occurrence of a specified event, like death or a covered loss. The risk is assumed by the insurer, and since the event that triggers the payment is uncertain, the actual costs for the insurer might be far less than the total premiums received from policyholders.

In essence, the uncertainty of loss makes it an aleatory contract, because the consideration exchanged (the premiums versus the eventual payout) is not guaranteed to be equivalent. The randomness and reliance on an unpredictable future event highlight the unique characteristics of aleatory contracts compared to other contract types, which might not incorporate this level of uncertainty or imbalance in exchange.