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Question

Given below is a statement of legal principle followed by factual situation. Apply the principle to the facts and select the most appropriate answer.

PRINCIPLE: An agreement is void to the extent that it restricts absolutely, a party from enforcing his contractual rights by usual proceedings in any ordinary court.

FACTS: A and B entered into a transaction in Delhi for sale of goods based in Delhi. The contract stated that in case of a dispute, only civil courts in Chennai would have jurisdiction. Neither A, nor B resided or carried on business in Chennai.

DECIDE

A

The contract is valid since it is still an Indian court that has jurisdiction.

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B

The contract is void since it ousts the jurisdiction of the competent court.

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C

The contract is void since the consent of the court is required before entering into such a contract.

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D

The contract is valid since Chennai courts have expertise with respect to contractual matters.

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Solution

The correct option is C The contract is valid since it is still an Indian court that has jurisdiction.
As per the provided principle option (A) is correct because the contract does not absolutely restrict the party to approach to any court, rather it just restricts the party to go to the other court. Therefore restriction was not absolute and this is a valid contract.

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Similar questions

Q. PRINCIPLE: An agreement is void to the extent that it restricts absolutely, a party from enforcing his contractual rights by usual proceedings in any ordinary event.
FACTS: A and B entered into a transaction in Delhi for sale of goods based in Delhi. The contract stated that in case of a dispute, only civil courts in Chennai would have jurisdiction. Neither A nor B reside or carried on business in Chennai.

Q. Consists of legal proposition(s) principle(s) (herein after referred to as 'principle') and facts. Such principle may or may not be true in the real and legal sense, yet you have to conclusively assume them to be true for the purposes of this Section. In other words, in answering these questions, you must not rely on any principle except the principles that are given herein below for every question.
Further, you must not assume any facts other than those stated in the question. The objective of this section is to test your interest towards study of law, research aptitude and problem-solving ability, even if the 'most reasonable conclusion' arrived at may be absurd or unacceptable for any other reason. It is not the objective of this section to test your knowledge of the law.
Therefore, to answer a question, the principle is to be applied to the given facts and to choose the most appropriate option.
Principle: Every agreement, by which any party is restricted absolutely from enforcing his right in respect of any contract, by the usual legal proceedings in the ordinary Tribunals, is void to that extent. The law also provides that nobody can confer jurisdiction to a civil court by an agreement between parties.
Facts: A and B entered into a valid contract for rendering certain services. A clause in the contract was that in case of any dispute arose out of the contract; it shall be referred to for Arbitration only. Is the contract valid?

Q. Legal Principle: An agreement made with the intention of entering into legal relationship gives rise to a contract.
Factual Situation: Two firms entered into a written contract for the sale and purchase of tissue paper. The agreement contained a clause to the effect that 'this agreement is not entered into, nor is this memorandum written, as a formal or a legal document, and shall not be subject to legal jurisdiction in the law courts'. Since the goods were not delivered, the buyers brought an action for non-delivery.
Issue: Are the sellers liable?

Q. Solve.
X Ltd. was appointed as an agent by Y Ltd. by an agreement. One of the causes of the agreement provided, This agreement is not entered into as a formal or legal agreement and shah not be subject to legal jurisdiction in the law courts Is this agreement a valid contract?

Q. Given below is a statement of legal principle followed by factual situation. Apply the principle to the facts and select the most appropriate answer.
A was arrested by the policy for committing an offence and was subsequently granted bail by the Court. One of the conditions imposed by the Court for granting bail was that A arrange for a surety for

R s . 50, 000

. A approached B to be a surety. B agreed, but insisted that they enter into a contract whereby A would deposit

R s . 50, 000

into B's account, which would be returned to A by B after the case was over.

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