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

The governing principle here is that jurisdiction of a court is a creature of statute, fixed by law, and cannot be created by the private agreement of the parties to a contract. Parties can only choose between courts that already have jurisdiction under the law, they cannot manufacture jurisdiction in a court that has none. Each option is tested against this principle below.

1. It is open to parties to confer jurisdiction on a court that does not possess it under law: This directly contradicts the governing principle. If courts allowed private agreement alone to create jurisdiction, the entire statutory scheme fixing which courts can hear which disputes would become optional, which is not the law. This proposition is incorrect.
2. It is not open to parties to confer jurisdiction on a court that does not possess it under law: This is the correct statement of the principle. No matter how the parties word their agreement, jurisdiction that a court does not have under the general law cannot be conjured up by consent. This proposition is correct.
3. It is open to parties to confer jurisdiction through a written and registered agreement: This suggests that following a particular form, writing and registration, can cure the underlying lack of jurisdiction. Form does not fix the substantive problem, a court either has jurisdiction under the statute or it does not, regardless of how formally the parties record their agreement. This proposition is incorrect.
4. It is open to confer jurisdiction if it is absolutely in the interest of the parties: This suggests that the parties' convenience or mutual benefit can override the statutory allocation of jurisdiction. Convenience is not a recognised basis for creating jurisdiction where none exists, so this proposition is also incorrect.

Only option (B) reflects the settled rule that jurisdiction is fixed by law and cannot be conferred by agreement where none exists, regardless of the form of the agreement or how beneficial it might be to the parties.

Therefore, the correct answer is 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.

Answer 3

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 4

An ouster clause lets contracting parties pick one among several courts that already have jurisdiction over their dispute; it can never manufacture jurisdiction in a court the law has not given it. Testing each statement against that rule shows which one breaks it.

1. Option A (jurisdiction is statutory, not consensual): This matches the settled position. Territorial, pecuniary and subject matter jurisdiction come from the Code of Civil Procedure and other statutes. Parties cannot manufacture jurisdiction by agreeing to it if the law never granted it to that court. This statement is correct.
2. Option B (choice between competent courts is valid): When two or more courts are each independently competent under the law, an agreement to litigate in only one of them merely narrows the choice; it does not oust any court of jurisdiction it never had, nor does it deny either party access to justice. Such a clause is upheld and is not contrary to public policy. This statement is correct.
3. Option C (High Court jurisdiction works differently): Where a High Court has ordinary original civil jurisdiction because part of the cause of action arose within its territorial limits, an ouster clause can validly restrict proceedings to that High Court to the exclusion of another court that would otherwise also have had jurisdiction. This is consistent with how ouster clauses operate and does not contradict the rule. This statement is correct.
4. Option D (an ouster clause without underlying jurisdiction is still valid): This directly contradicts the rule. If the chosen court has no territorial or pecuniary jurisdiction over the dispute to begin with, no amount of agreement between the parties can hand it that jurisdiction. Consent supplements a choice among existing lawful fora; it cannot create a forum's power where none exists. This statement is not correct.

Since options A, B and C all state the law accurately and only option D asserts something the law does not permit, option D is the one that is not correct.

Therefore, the correct answer is 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.

Answer 5

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 6

A valid exclusive jurisdiction clause rests on a short list of requirements: it must not shut out the courts entirely, the chosen court must actually have jurisdiction, and the parties must have actually agreed to the arrangement. Checking each option against that list shows which one is not a requirement at all but the very defect that voids such a clause.

1. Option A (consonance with section 28): Section 28 voids any agreement that absolutely bars a party from approaching a court. A clause that only narrows the choice of forum, without shutting the door on litigation altogether, satisfies section 28. This is a genuine condition for validity.
2. Option B (chosen court must be competent): The whole premise of an exclusive jurisdiction clause is that the parties are picking one among courts that could lawfully hear the case. If the chosen court is not competent, the clause has nothing to stand on. This is a genuine condition for validity.
3. Option C (agreement, express or implied): A clause restricting forum choice needs the parties to have actually consented to it, whether that consent is written into the contract or clearly implied from their conduct. Without consensus on this point, there is no binding restriction at all. This is a genuine condition for validity.
4. Option D (court lacking jurisdiction under general law): This describes the opposite of a condition for validity. If the parties name a court that has no jurisdiction over the dispute under the general law, the clause fails regardless of how clearly they agreed to it. This is the condition that defeats the clause, not one that supports it.

Because A, B and C are genuine prerequisites while D describes exactly what makes such a clause fail, D is the one that cannot be a condition for validity.

Therefore, the correct answer is The parties agree to the jurisdiction of a court that does not have the jurisdiction over the matter under the general law.

Answer 7

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 8

Section 28 of the Indian Contract Act declares agreements that restrict legal proceedings to be void, but the section itself carves out specific savings for certain kinds of clauses. Counting those savings correctly answers how many exceptions are appended to it.

1. One exception: This undercounts the provision. Section 28 saves more than a single category of agreement from being void; it separately protects future arbitration agreements, agreements to arbitrate existing disputes, and certain bank or financial institution guarantees. A single exception does not account for all three.
2. Two exceptions: This also undercounts. Even before the guarantee related saving was added by amendment, the section already carried two distinct arbitration related exceptions, one for disputes that may arise in future and one for disputes that have already arisen. Adding the later guarantee exception brings the total past two.
3. Three exceptions: This matches the structure of section 28. Exception 1 saves contracts to refer future disputes to arbitration. Exception 2 saves contracts to refer disputes that have already arisen to arbitration. Exception 3, inserted by the Banking Laws (Amendment) Act, 2012, saves guarantee agreements of banks and financial institutions from being struck down under this section. Three separate savings clauses are appended in total.
4. Four exceptions: This overcounts. There is no fourth statutory saving clause attached to section 28 beyond the two arbitration exceptions and the banking guarantee exception.

Counting the two arbitration exceptions together with the banking guarantee exception gives exactly three, so the option stating three exceptions matches the actual text of section 28.

Therefore, the correct answer is Three exceptions.

Answer 9

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.

Answer 10

Section 28 of the Indian Contract Act voids two distinct kinds of clauses in its main text, and the question asks which of the listed agreements fall within that voiding rule.

1. Option A (absolute restriction on enforcing rights through ordinary tribunals): This is drawn directly from clause (a) of section 28. An agreement that completely bars a party from going to the usual courts to enforce a contractual right is void to that extent, since it removes access to legal proceedings altogether.
2. Option B (limiting the time to enforce rights): This is drawn from clause (b) of section 28. An agreement that shortens the period within which a party may sue, compared to what the ordinary law of limitation allows, is also void to that extent, because it cuts down a legal right through private agreement rather than through statute.
3. Option C (Both A and B): Since clause (a) voids the agreement described in option A and clause (b) voids the agreement described in option B, both descriptions correctly state situations that section 28 renders void. This option correctly combines them.
4. Option D (Neither A nor B): This would be correct only if section 28 did not touch either kind of agreement, but the text of the section expressly voids both, so this option contradicts the statute.

Because both the absolute bar on legal proceedings and the shortened limitation period are separately voided by section 28, the combined option covering both is the accurate one.

Therefore, the correct answer is Both (A) and (B).