Question

Which of the following propositions is CORRECT:

• A. It is, in general, open to the contracting parties to confer by their agreement jurisdiction on a court which does not possess the jurisdiction under the law.
• B. It is not open to the contracting parties to confer by their agreement jurisdiction on a court which does not possess the jurisdiction under the law.
• C. It is open to the contracting parties to confer by their written and registered agreement jurisdiction on a court which does not possess the jurisdiction under the law.
• D. If it is absolutely in the interest of the contracting parties, then only it is open to the contracting parties to confer by their agreement jurisdiction on a court which does not possess the jurisdiction under the law.
• A. Jurisdiction of civil courts is created by statute and cannot be created or conferred by consent of the parties upon a court which has not been granted jurisdiction by the law.
• B. Where two or more courts have under the law jurisdiction to try a suit or proceeding, an agreement between the parties that the dispute between them will be tried in one of such courts, is not contrary to public policy.
• C. Ouster clauses can oust the jurisdiction only of civil courts and not of the High Court, provided such jurisdiction exists in the High Court on account of part of cause of action having arisen with its territorial jurisdiction.
• D. An ouster clause is valid even if it confers exclusive jurisdiction on a court that otherwise has no territorial or pecuniary jurisdiction over the matter.
• A. It should be in consonance with section 28 of the Indian Contract Act, i.e. it should not absolutely restrict any party from initiating legal proceedings pertaining to the contract.
• B. The court which the parties have chosen for exclusive jurisdiction must be competent to have such jurisdiction.
• C. The parties must either impliedly or explicitly agree to subject themselves to the jurisdiction of a specific court for the resolution of their contractual dispute.
• D. The parties agree to the jurisdiction of a court that does not have the jurisdiction over the matter under the general law.
• A. One exception.
• B. Two exceptions.
• C. Three exceptions.
• D. Four exceptions.
• A. An agreement by which any party thereto is restricted absolutely from enforcing his rights under or in respect of any contract, by the usual legal proceedings in the ordinary tribunals.
• B. An agreement which limits the time within which any party thereto may enforce his contractual rights.
• C. Both (A) and (B).
• D. Neither (A) nor (B).

Answer 1

The Correct Option is B

Step 1: Understanding the Question:
The question asks for the correct legal proposition regarding the ability of contracting parties to choose a court's jurisdiction by mutual agreement.
Step 2: Detailed Explanation:
The provided passage states a fundamental principle of civil procedure very clearly: "...a contract cannot confer jurisdiction on a court that did not have such a jurisdiction in the first place." This means that jurisdiction (be it subject-matter, pecuniary, or territorial) is conferred upon a court by statute (law), not by the consent or agreement of the parties. Parties can, however, choose one court among two or more courts that are legally competent to hear the matter. This is known as an 'ouster clause' or 'exclusive jurisdiction clause'.
Let's analyze the options:
(A) This statement suggests that parties can confer jurisdiction on a court that lacks it. This is directly contradicted by the passage and the law. Incorrect.
(B) This statement accurately reflects the law that parties cannot confer jurisdiction on a court that does not already possess it by law. This aligns perfectly with the passage. Correct.
(C) The method of agreement (written, registered) does not change the fundamental rule. Consent, in any form, cannot create jurisdiction where none exists. Incorrect.
(D) The interests of the parties are irrelevant. The lack of statutory jurisdiction cannot be overcome by the parties' convenience or desire. Incorrect.
Step 3: Final Answer:
The correct proposition is that parties cannot by agreement confer jurisdiction on a court that lacks it under the law.

Answer 2

Step 1: Understanding the Question:
The question asks to identify the incorrect statement about 'ouster clauses' (also known as exclusive jurisdiction clauses).
Step 2: Detailed Explanation:
An ouster clause is a contractual term by which parties agree to submit their disputes to a specific court, thereby 'ousting' the jurisdiction of other otherwise competent courts.
(A) This is a correct statement of law. Jurisdiction is statutory, not consensual.
(B) This is the very definition of a valid ouster clause. When multiple courts have jurisdiction, parties can validly agree to choose one. This is not against public policy and is permissible under Section 28 of the Contract Act. This is a correct statement.
(C) This statement is potentially misleading but not the most incorrect one. Parties can agree to oust the jurisdiction of one High Court in favour of another, provided both High Courts have concurrent original jurisdiction over the matter. So the premise that a High Court's jurisdiction cannot be ousted is not universally true in the context of choosing between multiple competent courts. However, compared to option D, it is less fundamentally flawed.
(D) This statement is fundamentally incorrect and directly contradicts the core principle of ouster clauses. For an ouster clause to be valid, the court chosen by the parties must have jurisdiction (territorial, pecuniary, etc.) under the general law. As the passage says, "the Court must already have jurisdiction to entertain such a legal claim." An agreement conferring jurisdiction on a court that has none is void and unenforceable. Therefore, this proposition is NOT CORRECT.
Step 3: Final Answer:
The statement that an ouster clause is valid even if it confers jurisdiction on a court that otherwise has none is patently false and against the established principles of law. Thus, it is the incorrect proposition.

Answer 3

Step 1: Understanding the Question:
The question asks to identify which option is NOT a valid condition for an exclusive jurisdiction clause. In other words, which condition, if present, would make the clause invalid.
Step 2: Detailed Explanation:
Let's analyze the conditions for a valid exclusive jurisdiction clause:
(A) The clause should not impose an absolute bar on legal proceedings, but merely limit the choice of forum. This is a primary requirement under Section 28. This is a valid condition.
(B) The chosen court must be a court of competent jurisdiction. This is the most crucial requirement, as established in law and mentioned in the passage. This is a valid condition.
(C) There must be a clear agreement (express or implied) between the parties to confer exclusive jurisdiction on one court. This is necessary to show consensus ad idem. This is a valid condition.
(D) This option states that parties agree to the jurisdiction of a court that lacks jurisdiction under the law. This is the very factor that renders an exclusive jurisdiction clause void and unenforceable. Therefore, this CANNOT be a condition for the clause to be valid; it is a condition for its invalidity.
Step 3: Final Answer:
An agreement to confer jurisdiction on a court that has no jurisdiction under general law is the reason an exclusive jurisdiction clause fails. Hence, it cannot be a condition for its validity.

Answer 4

Step 1: Understanding the Question:
The question asks for the number of exceptions provided under Section 28 of the Indian Contract Act, 1872.
Step 2: Key Formula or Approach:
This is a direct question based on the statutory provision of Section 28 of the Indian Contract Act. One must know the structure of the section.
Step 3: Detailed Explanation:
Section 28 declares agreements in restraint of legal proceedings as void. However, the section itself provides for certain exceptions, saving specific types of agreements from being void. These are:
Exception 1: Saving of contract to refer to arbitration disputes that may arise. This saves future arbitration clauses, where parties agree that any future dispute will be referred to arbitration.
Exception 2: Saving of contract to refer questions that have already arisen. This saves agreements to refer existing disputes to arbitration.
Exception 3: Saving of a guarantee agreement of a bank or a financial institution. This exception was added via the Banking Laws (Amendment) Act, 2012, and came into effect in 2013. It protects certain clauses in bank guarantees from being declared void under this section.
Step 4: Final Answer:
Counting the above, there are a total of three exceptions appended to Section 28 of the Indian Contract Act.

Answer 5

Step 1: Understanding the Question:
The question asks to identify the types of agreements that are declared void by the main provision of Section 28 of the Indian Contract Act.
Step 2: Key Formula or Approach:
The answer lies in the text of Section 28 itself. The section reads:
"Every agreement, —
(a) by which any party thereto is restricted absolutely from enforcing his rights under or in respect of any contract, by the usual legal proceedings in the ordinary tribunals, or
(b) which limits the time within which he may thus enforce his rights,
is void to that extent."
Step 3: Detailed Explanation:
Let's examine the options in light of the statutory text:
(A) This option is a direct quote of clause (a) of Section 28. It describes an agreement that completely bars a party from going to court, which is void.
(B) This option is a direct quote of clause (b) of Section 28. It describes an agreement that shortens the statutory period of limitation for filing a suit (e.g., the law allows 3 years to sue, but the contract says you must sue within 1 year). Such an agreement is also void.
(C) Since both (A) and (B) accurately describe agreements that are rendered void by Section 28, this is the correct and most complete answer.
(D) This is incorrect as both (A) and (B) are rendered void.
Step 4: Final Answer:
Section 28 explicitly voids both agreements that absolutely restrict legal proceedings and those that limit the time for enforcing rights. Therefore, Both (A) and (B) are correct.