Indian Contract Act 1872

Agreements in Restraint of Legal Proceedings Void

Indian Contract Act 1872

Section 28: Agreements in restraint of legal proceedings

Section 28 of the Indian Contract Act 1872 states that every agreement by which any party thereto is restricted absolutely from enforcing his rights under the law, by the usual legal proceedings in the ordinary tribunals, or which limits the time within which he may thus enforce his rights, is void.

Exceptions

There are three exceptions to this rule:

1. An agreement to refer a dispute to arbitration.
2. An agreement to refer a dispute that has already arisen to arbitration.
3. A promise to compensate for something done or to be done, if such promise is in writing and registered.

In all other cases, an agreement in restraint of legal proceedings is void.