Section 28 of ICA : Section 28: Agreements In Restraint Of Legal Proceeding Void
ICA
JavaScript did not load properly
Some content might be missing or broken. Please try disabling content blockers or use a different browser like Chrome, Safari or Firefox.
Explanation using Example
Let's say Ravi enters into a contract with a construction company to build a house. The contract includes a clause that states Ravi cannot take any legal action against the construction company if he finds any defects in the construction after one year from the date of completion. According to Section 28 of the Indian Contract Act, 1872, this clause would be void because it restricts Ravi's right to take legal action by limiting the time within which he may enforce his rights.
However, if the contract had a clause stating that any disputes arising from the construction would be resolved through arbitration, this would be valid under the exceptions provided in Section 28. This means Ravi and the construction company could agree to settle any disputes through an arbitrator, and the decision of the arbitrator would be final and binding on both parties.
Additionally, if Ravi's contract was a loan agreement with a bank where the bank included a clause to extinguish any rights or discharge liabilities under the contract after a specified period of not less than one year from a certain event, this would also be valid under the exceptions of Section 28, as banks and financial institutions are allowed to include such clauses in their guarantee agreements.