Principle:I. Every 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, or which limits the time within which he may thus enforce his rights is void to that extent.II. Every agreement which extinguishes the rights of any party thereto, or discharges any party thereto from any liability, under or in respect of any contract on the expiry of a specified period so as to restrict any party from enforcing his rights, is void to that extent.III. A contract will not be rendered illegal by virtue of the fact that it involves 2 or more persons who agree that any dispute which may arise between them will be referred to arbitration, and only the amount awarded in such arbitration will be recoverable in respect of the dispute referred.IV. A contract will also not be rendered illegal if it is with respect to the reference of matter/questions already arisen, for arbitration.Facts: Tom enters into an agreement with Imran for the sale of Tom’s old VCD collection. Tom includes in the agreement the condition that Imran would not be able to sue him for any defect in the VCDs or if he discovers any fraud etc., effective immediately after taking possession of the VCDs after the payment had been made. In case any dispute arises, it would be referred to arbitration, with Tom and Imran appointing one arbitrator each and who, in turn, would appoint the third arbitrator. Imran buys the VCDs and takes them home. However, he discovers that several of them have scratches and do not run on the VCD player, while there are some empty CD cases as well. When he discovers this fraud, he drags Tom to court for having fooled him.Is there any defect in the agreement with reference to the principles given?a) Yes, it cannot provide for arbitration as the sole means of dispute resolution.b) Yes, it restricts the rights of Imran absolutely.c) Nod) It cannot be determinedCorrect answer is option 'C'. Can you explain this answer?

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Principle:

I. Every 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, or which limits the time within which he may thus enforce his rights is void to that extent.

II. Every agreement which extinguishes the rights of any party thereto, or discharges any party thereto from any liability, under or in respect of any contract on the expiry of a specified period so as to restrict any party from enforcing his rights, is void to that extent.

III. A contract will not be rendered illegal by virtue of the fact that it involves 2 or more persons who agree that any dispute which may arise between them will be referred to arbitration, and only the amount awarded in such arbitration will be recoverable in respect of the dispute referred.

IV. A contract will also not be rendered illegal if it is with respect to the reference of matter/questions already arisen, for arbitration.

Facts: Tom enters into an agreement with Imran for the sale of Tom’s old VCD collection. Tom includes in the agreement the condition that Imran would not be able to sue him for any defect in the VCDs or if he discovers any fraud etc., effective immediately after taking possession of the VCDs after the payment had been made. In case any dispute arises, it would be referred to arbitration, with Tom and Imran appointing one arbitrator each and who, in turn, would appoint the third arbitrator. Imran buys the VCDs and takes them home. However, he discovers that several of them have scratches and do not run on the VCD player, while there are some empty CD cases as well. When he discovers this fraud, he drags Tom to court for having fooled him.

Is there any defect in the agreement with reference to the principles given?

a)
Yes, it cannot provide for arbitration as the sole means of dispute resolution.
b)
Yes, it restricts the rights of Imran absolutely.
c)
No
d)
It cannot be determined

Correct answer is option 'C'. Can you explain this answer?

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Principle:I. Every agreement by which any party thereto is restricted...

Based on principle (i), every 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, or which limits the time within which he may thus enforce his rights is void to that extent. Principle (iii) further states that a contract will not be rendered illegal by virtue of the fact that it involves 2 or more persons who agree that any dispute which may arise between them will be referred to arbitration, and only the amount awarded in such arbitration will be recoverable in respect of the dispute referred. In the instant case, the agreement provided for dispute resolution by arbitration and did not bar the rights of Imran absolutely. Thus, there was no defect in the agreement.

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The primary objective of the Micro Small and Medium Enterprises Development Act, (“MSME Act”) is to facilitate the promotion and development and enhance the competitiveness of micro, small and medium enterprises. The MSME Act contains provisions for dispute resolution which are applicable to disputes involving suppliers. Section 18 of the MSME Act provides that any party with a dispute regarding amount due to a Supplier may make a reference to the MSME Facilitation Council (“Council”) for conciliation. If conciliation is unsuccessful, the Council may either take up the dispute itself for arbitration or refer the parties to an arbitral institution. Section 18(4) further provides that the Council or center providing the alternative dispute resolution services shall have jurisdiction to act as an arbitrator or conciliator in a dispute between the Supplier located within its jurisdiction and a buyer located anywhere in India.Section 18 became contentious when multiple cases arose where a party involved in a dispute with a Supplier filed proceedings in court challenging its applicability to their dispute in light of the arbitration agreement entered between the parties. In general, presence of an arbitration agreement would not invalidate arbitration proceedings that have been initiated under the MSME Act, since the MSME Act is a special statute which would override any agreement between the parties. This position was also upheld by the Supreme Court. However, in those cases, the Supplier had initiated proceedings under section 18 of the MSME Act before the Buyer invoked arbitration under the agreement. These cases did not deal with a scenario where the Buyer invoked arbitration under the agreement where there was no reference of a dispute to the Council. For such situations, it has been held that, if the intention of section 18(4) of the MSME Act was to create a legal bar on a party who has a contract with a Supplier under the MSME Act from invoking section 11 of the Arbitration Act, then the legislature would have expressly provided that the MSME Act overrides any arbitration agreement entered under the MSME Act. Section 18(4) would come into play only in cases where a reference was made to the Council under section 18(1). The Court noted the use of the word “may” in section 18(1) and held that in light of the language used, it cannot be said to be mandatory for a Buyer to refer its dispute to the Council under section 18. Since the jurisdiction of the Council had not yet been invoked, there was nothing barring the court from appointing an arbitrator in terms of the arbitration agreement between the parties.By making section 18 of the MSME Act directory, Buyers have been given a way out to circumvent the provisions under the MSME Act.Q. Which among the following is true regarding the author’s view with respect to the provision of dispute resolution under the MSME Act? 1. The author is supportive of the inclusion of a dispute resolution provision under the act. 2. The author feels that there exists loophole in the dispute resolution provision. 3. The author is of the opinion that the MSME Act could not ameliorate the competitiveness of the micro, small and medium enterprises.

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The primary objective of the Micro Small and Medium Enterprises Development Act, (“MSME Act”) is to facilitate the promotion and development and enhance the competitiveness of micro, small and medium enterprises. The MSME Act contains provisions for dispute resolution which are applicable to disputes involving suppliers. Section 18 of the MSME Act provides that any party with a dispute regarding amount due to a Supplier may make a reference to the MSME Facilitation Council (“Council”) for conciliation. If conciliation is unsuccessful, the Council may either take up the dispute itself for arbitration or refer the parties to an arbitral institution. Section 18(4) further provides that the Council or center providing the alternative dispute resolution services shall have jurisdiction to act as an arbitrator or conciliator in a dispute between the Supplier located within its jurisdiction and a buyer located anywhere in India.Section 18 became contentious when multiple cases arose where a party involved in a dispute with a Supplier filed proceedings in court challenging its applicability to their dispute in light of the arbitration agreement entered between the parties. In general, presence of an arbitration agreement would not invalidate arbitration proceedings that have been initiated under the MSME Act, since the MSME Act is a special statute which would override any agreement between the parties. This position was also upheld by the Supreme Court. However, in those cases, the Supplier had initiated proceedings under section 18 of the MSME Act before the Buyer invoked arbitration under the agreement. These cases did not deal with a scenario where the Buyer invoked arbitration under the agreement where there was no reference of a dispute to the Council. For such situations, it has been held that, if the intention of section 18(4) of the MSME Act was to create a legal bar on a party who has a contract with a Supplier under the MSME Act from invoking section 11 of the Arbitration Act, then the legislature would have expressly provided that the MSME Act overrides any arbitration agreement entered under the MSME Act. Section 18(4) would come into play only in cases where a reference was made to the Council under section 18(1). The Court noted the use of the word “may” in section 18(1) and held that in light of the language used, it cannot be said to be mandatory for a Buyer to refer its dispute to the Council under section 18. Since the jurisdiction of the Council had not yet been invoked, there was nothing barring the court from appointing an arbitrator in terms of the arbitration agreement between the parties.By making section 18 of the MSME Act directory, Buyers have been given a way out to circumvent the provisions under the MSME Act.Q. Porwal Sales, the Buyer in this case, filed an application under section 11 of the Arbitration Act for appointment of an arbitral tribunal under an arbitration agreement between the parties. One of the objections raised by Flame Control Industries was that since it was a supplier within the meaning of the MSME Act, and in light of section 18(4), the jurisdiction of the court to entertain an application under section 11 of the Arbitration Act would be ousted. On the reading of the passage, determine whether the pleading of the Supplier would be entertained?

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Directions: Read the following passage carefully:Arbitration has been the toast of the legal community for a long time. It has been long expected that arbitration will replace business litigation to a great extent one day. Lawyers have been encouraging parties to have an arbitration agreement in all their business transaction documents for more than two decades now. However, arbitration has not been proven to be effective too often.A lot of lawyers have begun to re-evaluate if they should put in those arbitration clauses blindly in the agreements they draft. Also, a lot of people who have already put in binding arbitration clauses in their agreements, are finding arbitration very difficult to navigate and too expensive when disputes actually arise.Even after 23 years since the introduction of Arbitration and Conciliation Act of 1996, arbitration seems to be slowly evolving and not really making a dent on pendency of litigation situation and more costly unlike litigation. The Act empowers the arbitrator to terminate the proceedings where without any sufficient cause, the claimant fails to communicate his statement of claim within the stipulated period. If the respondent fails to submit his statement of defence within the predetermined period, the arbitrator shall continue with the proceedings without treating such a failure in itself as an admission of claimants allegations.Would it ever become the mature alternative that Indian businesses can safely rely on for reliable, fast, efficient and cost-effective dispute resolution, especially given the terrible state of civil justice?The BN Srikrishna Committee Report on Institutionalisation of Arbitration Mechanism in India states that a lack of governmental support to promote arbitration is also one of the reasons why arbitration has not become the most preferred way of resolution. The report goes on to suggest that there should be awareness programmes and training to make arbitration a more popular concept. However, such awareness campaigns are very unlikely to attract parties to arbitration given the way it functions at present.Quality of arbitration and arbitrators can often be suspect. The courts have settled the legal proposition that an arbitration agreement is not required to be in any particular form. Courts in India regularly interfere and do not respect party autonomy. The award is expected to be up for appeal or review in the higher courts and that really does not instill confidence in the parties involved in disputes. These factors are putting off parties from adopting arbitration. At present, it appears that only in a handful of matters involving very large claims, arbitration is still viable in India.[Extracted, with edits and revisions, from why arbitration is not working in India?, article by Livelaw, 7th October, 2019]Q.According to the passage, what recommendation is made in the BN Srikrishna Committee Report to promote arbitration in India?

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The primary objective of the Micro Small and Medium Enterprises Development Act, (“MSME Act”) is to facilitate the promotion and development and enhance the competitiveness of micro, small and medium enterprises. The MSME Act contains provisions for dispute resolution which are applicable to disputes involving suppliers. Section 18 of the MSME Act provides that any party with a dispute regarding amount due to a Supplier may make a reference to the MSME Facilitation Council (“Council”) for conciliation. If conciliation is unsuccessful, the Council may either take up the dispute itself for arbitration or refer the parties to an arbitral institution. Section 18(4) further provides that the Council or center providing the alternative dispute resolution services shall have jurisdiction to act as an arbitrator or conciliator in a dispute between the Supplier located within its jurisdiction and a buyer located anywhere in India.Section 18 became contentious when multiple cases arose where a party involved in a dispute with a Supplier filed proceedings in court challenging its applicability to their dispute in light of the arbitration agreement entered between the parties. In general, presence of an arbitration agreement would not invalidate arbitration proceedings that have been initiated under the MSME Act, since the MSME Act is a special statute which would override any agreement between the parties. This position was also upheld by the Supreme Court. However, in those cases, the Supplier had initiated proceedings under section 18 of the MSME Act before the Buyer invoked arbitration under the agreement. These cases did not deal with a scenario where the Buyer invoked arbitration under the agreement where there was no reference of a dispute to the Council. For such situations, it has been held that, if the intention of section 18(4) of the MSME Act was to create a legal bar on a party who has a contract with a Supplier under the MSME Act from invoking section 11 of the Arbitration Act, then the legislature would have expressly provided that the MSME Act overrides any arbitration agreement entered under the MSME Act. Section 18(4) would come into play only in cases where a reference was made to the Council under section 18(1). The Court noted the use of the word “may” in section 18(1) and held that in light of the language used, it cannot be said to be mandatory for a Buyer to refer its dispute to the Council under section 18. Since the jurisdiction of the Council had not yet been invoked, there was nothing barring the court from appointing an arbitrator in terms of the arbitration agreement between the parties.By making section 18 of the MSME Act directory, Buyers have been given a way out to circumvent the provisions under the MSME Act.Q. Viru Sahastrabuddhi entered into an agreement with Ranchordas Chachand for supply of laboratory equipment. The agreement document had an arbitration clause stating that in a situation of dispute arising during the transaction, the parties would resort to arbitral proceedings before initiating an action in the court of law. The dispute arose between the parties regarding the untimely supply of the equipment and delayed payment made by Viru Sahastrabuddhi. Ranchordas filed a petition under the MSME Act stating that the facilitation council should adjudicate over the matter before proceeding to the arbitration. On the basis of reading of the passage, determine the maintainability of the pleadings made by Mr. Chachand.

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Directions: Read the following passage carefully:Arbitration has been the toast of the legal community for a long time. It has been long expected that arbitration will replace business litigation to a great extent one day. Lawyers have been encouraging parties to have an arbitration agreement in all their business transaction documents for more than two decades now. However, arbitration has not been proven to be effective too often.A lot of lawyers have begun to re-evaluate if they should put in those arbitration clauses blindly in the agreements they draft. Also, a lot of people who have already put in binding arbitration clauses in their agreements, are finding arbitration very difficult to navigate and too expensive when disputes actually arise.Even after 23 years since the introduction of Arbitration and Conciliation Act of 1996, arbitration seems to be slowly evolving and not really making a dent on pendency of litigation situation and more costly unlike litigation. The Act empowers the arbitrator to terminate the proceedings where without any sufficient cause, the claimant fails to communicate his statement of claim within the stipulated period. If the respondent fails to submit his statement of defence within the predetermined period, the arbitrator shall continue with the proceedings without treating such a failure in itself as an admission of claimants allegations.Would it ever become the mature alternative that Indian businesses can safely rely on for reliable, fast, efficient and cost-effective dispute resolution, especially given the terrible state of civil justice?The BN Srikrishna Committee Report on Institutionalisation of Arbitration Mechanism in India states that a lack of governmental support to promote arbitration is also one of the reasons why arbitration has not become the most preferred way of resolution. The report goes on to suggest that there should be awareness programmes and training to make arbitration a more popular concept. However, such awareness campaigns are very unlikely to attract parties to arbitration given the way it functions at present.Quality of arbitration and arbitrators can often be suspect. The courts have settled the legal proposition that an arbitration agreement is not required to be in any particular form. Courts in India regularly interfere and do not respect party autonomy. The award is expected to be up for appeal or review in the higher courts and that really does not instill confidence in the parties involved in disputes. These factors are putting off parties from adopting arbitration. At present, it appears that only in a handful of matters involving very large claims, arbitration is still viable in India.[Extracted, with edits and revisions, from why arbitration is not working in India?, article by Livelaw, 7th October, 2019]Q. What does the passage suggest about the state of arbitration in India for matters involving very large claims?

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Principle:I. Every 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, or which limits the time within which he may thus enforce his rights is void to that extent.II. Every agreement which extinguishes the rights of any party thereto, or discharges any party thereto from any liability, under or in respect of any contract on the expiry of a specified period so as to restrict any party from enforcing his rights, is void to that extent.III. A contract will not be rendered illegal by virtue of the fact that it involves 2 or more persons who agree that any dispute which may arise between them will be referred to arbitration, and only the amount awarded in such arbitration will be recoverable in respect of the dispute referred.IV. A contract will also not be rendered illegal if it is with respect to the reference of matter/questions already arisen, for arbitration.Facts: Tom enters into an agreement with Imran for the sale of Tom’s old VCD collection. Tom includes in the agreement the condition that Imran would not be able to sue him for any defect in the VCDs or if he discovers any fraud etc., effective immediately after taking possession of the VCDs after the payment had been made. In case any dispute arises, it would be referred to arbitration, with Tom and Imran appointing one arbitrator each and who, in turn, would appoint the third arbitrator. Imran buys the VCDs and takes them home. However, he discovers that several of them have scratches and do not run on the VCD player, while there are some empty CD cases as well. When he discovers this fraud, he drags Tom to court for having fooled him.Is there any defect in the agreement with reference to the principles given?a) Yes, it cannot provide for arbitration as the sole means of dispute resolution.b) Yes, it restricts the rights of Imran absolutely.c) Nod) It cannot be determinedCorrect answer is option 'C'. Can you explain this answer?

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Principle:I. Every 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, or which limits the time within which he may thus enforce his rights is void to that extent.II. Every agreement which extinguishes the rights of any party thereto, or discharges any party thereto from any liability, under or in respect of any contract on the expiry of a specified period so as to restrict any party from enforcing his rights, is void to that extent.III. A contract will not be rendered illegal by virtue of the fact that it involves 2 or more persons who agree that any dispute which may arise between them will be referred to arbitration, and only the amount awarded in such arbitration will be recoverable in respect of the dispute referred.IV. A contract will also not be rendered illegal if it is with respect to the reference of matter/questions already arisen, for arbitration.Facts: Tom enters into an agreement with Imran for the sale of Tom’s old VCD collection. Tom includes in the agreement the condition that Imran would not be able to sue him for any defect in the VCDs or if he discovers any fraud etc., effective immediately after taking possession of the VCDs after the payment had been made. In case any dispute arises, it would be referred to arbitration, with Tom and Imran appointing one arbitrator each and who, in turn, would appoint the third arbitrator. Imran buys the VCDs and takes them home. However, he discovers that several of them have scratches and do not run on the VCD player, while there are some empty CD cases as well. When he discovers this fraud, he drags Tom to court for having fooled him.Is there any defect in the agreement with reference to the principles given?a) Yes, it cannot provide for arbitration as the sole means of dispute resolution.b) Yes, it restricts the rights of Imran absolutely.c) Nod) It cannot be determinedCorrect answer is option 'C'. Can you explain this answer? for CLAT 2024 is part of CLAT preparation. The Question and answers have been prepared according to the CLAT exam syllabus. Information about Principle:I. Every 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, or which limits the time within which he may thus enforce his rights is void to that extent.II. Every agreement which extinguishes the rights of any party thereto, or discharges any party thereto from any liability, under or in respect of any contract on the expiry of a specified period so as to restrict any party from enforcing his rights, is void to that extent.III. A contract will not be rendered illegal by virtue of the fact that it involves 2 or more persons who agree that any dispute which may arise between them will be referred to arbitration, and only the amount awarded in such arbitration will be recoverable in respect of the dispute referred.IV. A contract will also not be rendered illegal if it is with respect to the reference of matter/questions already arisen, for arbitration.Facts: Tom enters into an agreement with Imran for the sale of Tom’s old VCD collection. Tom includes in the agreement the condition that Imran would not be able to sue him for any defect in the VCDs or if he discovers any fraud etc., effective immediately after taking possession of the VCDs after the payment had been made. In case any dispute arises, it would be referred to arbitration, with Tom and Imran appointing one arbitrator each and who, in turn, would appoint the third arbitrator. Imran buys the VCDs and takes them home. However, he discovers that several of them have scratches and do not run on the VCD player, while there are some empty CD cases as well. When he discovers this fraud, he drags Tom to court for having fooled him.Is there any defect in the agreement with reference to the principles given?a) Yes, it cannot provide for arbitration as the sole means of dispute resolution.b) Yes, it restricts the rights of Imran absolutely.c) Nod) It cannot be determinedCorrect answer is option 'C'. Can you explain this answer? covers all topics & solutions for CLAT 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Principle:I. Every 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, or which limits the time within which he may thus enforce his rights is void to that extent.II. Every agreement which extinguishes the rights of any party thereto, or discharges any party thereto from any liability, under or in respect of any contract on the expiry of a specified period so as to restrict any party from enforcing his rights, is void to that extent.III. A contract will not be rendered illegal by virtue of the fact that it involves 2 or more persons who agree that any dispute which may arise between them will be referred to arbitration, and only the amount awarded in such arbitration will be recoverable in respect of the dispute referred.IV. A contract will also not be rendered illegal if it is with respect to the reference of matter/questions already arisen, for arbitration.Facts: Tom enters into an agreement with Imran for the sale of Tom’s old VCD collection. Tom includes in the agreement the condition that Imran would not be able to sue him for any defect in the VCDs or if he discovers any fraud etc., effective immediately after taking possession of the VCDs after the payment had been made. In case any dispute arises, it would be referred to arbitration, with Tom and Imran appointing one arbitrator each and who, in turn, would appoint the third arbitrator. Imran buys the VCDs and takes them home. However, he discovers that several of them have scratches and do not run on the VCD player, while there are some empty CD cases as well. When he discovers this fraud, he drags Tom to court for having fooled him.Is there any defect in the agreement with reference to the principles given?a) Yes, it cannot provide for arbitration as the sole means of dispute resolution.b) Yes, it restricts the rights of Imran absolutely.c) Nod) It cannot be determinedCorrect answer is option 'C'. Can you explain this answer?.

Solutions for Principle:I. Every 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, or which limits the time within which he may thus enforce his rights is void to that extent.II. Every agreement which extinguishes the rights of any party thereto, or discharges any party thereto from any liability, under or in respect of any contract on the expiry of a specified period so as to restrict any party from enforcing his rights, is void to that extent.III. A contract will not be rendered illegal by virtue of the fact that it involves 2 or more persons who agree that any dispute which may arise between them will be referred to arbitration, and only the amount awarded in such arbitration will be recoverable in respect of the dispute referred.IV. A contract will also not be rendered illegal if it is with respect to the reference of matter/questions already arisen, for arbitration.Facts: Tom enters into an agreement with Imran for the sale of Tom’s old VCD collection. Tom includes in the agreement the condition that Imran would not be able to sue him for any defect in the VCDs or if he discovers any fraud etc., effective immediately after taking possession of the VCDs after the payment had been made. In case any dispute arises, it would be referred to arbitration, with Tom and Imran appointing one arbitrator each and who, in turn, would appoint the third arbitrator. Imran buys the VCDs and takes them home. However, he discovers that several of them have scratches and do not run on the VCD player, while there are some empty CD cases as well. When he discovers this fraud, he drags Tom to court for having fooled him.Is there any defect in the agreement with reference to the principles given?a) Yes, it cannot provide for arbitration as the sole means of dispute resolution.b) Yes, it restricts the rights of Imran absolutely.c) Nod) It cannot be determinedCorrect answer is option 'C'. Can you explain this answer? in English & in Hindi are available as part of our courses for CLAT. Download more important topics, notes, lectures and mock test series for CLAT Exam by signing up for free.

Here you can find the meaning of Principle:I. Every 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, or which limits the time within which he may thus enforce his rights is void to that extent.II. Every agreement which extinguishes the rights of any party thereto, or discharges any party thereto from any liability, under or in respect of any contract on the expiry of a specified period so as to restrict any party from enforcing his rights, is void to that extent.III. A contract will not be rendered illegal by virtue of the fact that it involves 2 or more persons who agree that any dispute which may arise between them will be referred to arbitration, and only the amount awarded in such arbitration will be recoverable in respect of the dispute referred.IV. A contract will also not be rendered illegal if it is with respect to the reference of matter/questions already arisen, for arbitration.Facts: Tom enters into an agreement with Imran for the sale of Tom’s old VCD collection. Tom includes in the agreement the condition that Imran would not be able to sue him for any defect in the VCDs or if he discovers any fraud etc., effective immediately after taking possession of the VCDs after the payment had been made. In case any dispute arises, it would be referred to arbitration, with Tom and Imran appointing one arbitrator each and who, in turn, would appoint the third arbitrator. Imran buys the VCDs and takes them home. However, he discovers that several of them have scratches and do not run on the VCD player, while there are some empty CD cases as well. When he discovers this fraud, he drags Tom to court for having fooled him.Is there any defect in the agreement with reference to the principles given?a) Yes, it cannot provide for arbitration as the sole means of dispute resolution.b) Yes, it restricts the rights of Imran absolutely.c) Nod) It cannot be determinedCorrect answer is option 'C'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of Principle:I. Every 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, or which limits the time within which he may thus enforce his rights is void to that extent.II. Every agreement which extinguishes the rights of any party thereto, or discharges any party thereto from any liability, under or in respect of any contract on the expiry of a specified period so as to restrict any party from enforcing his rights, is void to that extent.III. A contract will not be rendered illegal by virtue of the fact that it involves 2 or more persons who agree that any dispute which may arise between them will be referred to arbitration, and only the amount awarded in such arbitration will be recoverable in respect of the dispute referred.IV. A contract will also not be rendered illegal if it is with respect to the reference of matter/questions already arisen, for arbitration.Facts: Tom enters into an agreement with Imran for the sale of Tom’s old VCD collection. Tom includes in the agreement the condition that Imran would not be able to sue him for any defect in the VCDs or if he discovers any fraud etc., effective immediately after taking possession of the VCDs after the payment had been made. In case any dispute arises, it would be referred to arbitration, with Tom and Imran appointing one arbitrator each and who, in turn, would appoint the third arbitrator. Imran buys the VCDs and takes them home. However, he discovers that several of them have scratches and do not run on the VCD player, while there are some empty CD cases as well. When he discovers this fraud, he drags Tom to court for having fooled him.Is there any defect in the agreement with reference to the principles given?a) Yes, it cannot provide for arbitration as the sole means of dispute resolution.b) Yes, it restricts the rights of Imran absolutely.c) Nod) It cannot be determinedCorrect answer is option 'C'. Can you explain this answer?, a detailed solution for Principle:I. Every 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, or which limits the time within which he may thus enforce his rights is void to that extent.II. Every agreement which extinguishes the rights of any party thereto, or discharges any party thereto from any liability, under or in respect of any contract on the expiry of a specified period so as to restrict any party from enforcing his rights, is void to that extent.III. A contract will not be rendered illegal by virtue of the fact that it involves 2 or more persons who agree that any dispute which may arise between them will be referred to arbitration, and only the amount awarded in such arbitration will be recoverable in respect of the dispute referred.IV. A contract will also not be rendered illegal if it is with respect to the reference of matter/questions already arisen, for arbitration.Facts: Tom enters into an agreement with Imran for the sale of Tom’s old VCD collection. Tom includes in the agreement the condition that Imran would not be able to sue him for any defect in the VCDs or if he discovers any fraud etc., effective immediately after taking possession of the VCDs after the payment had been made. In case any dispute arises, it would be referred to arbitration, with Tom and Imran appointing one arbitrator each and who, in turn, would appoint the third arbitrator. Imran buys the VCDs and takes them home. However, he discovers that several of them have scratches and do not run on the VCD player, while there are some empty CD cases as well. When he discovers this fraud, he drags Tom to court for having fooled him.Is there any defect in the agreement with reference to the principles given?a) Yes, it cannot provide for arbitration as the sole means of dispute resolution.b) Yes, it restricts the rights of Imran absolutely.c) Nod) It cannot be determinedCorrect answer is option 'C'. Can you explain this answer? has been provided alongside types of Principle:I. Every 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, or which limits the time within which he may thus enforce his rights is void to that extent.II. Every agreement which extinguishes the rights of any party thereto, or discharges any party thereto from any liability, under or in respect of any contract on the expiry of a specified period so as to restrict any party from enforcing his rights, is void to that extent.III. A contract will not be rendered illegal by virtue of the fact that it involves 2 or more persons who agree that any dispute which may arise between them will be referred to arbitration, and only the amount awarded in such arbitration will be recoverable in respect of the dispute referred.IV. A contract will also not be rendered illegal if it is with respect to the reference of matter/questions already arisen, for arbitration.Facts: Tom enters into an agreement with Imran for the sale of Tom’s old VCD collection. Tom includes in the agreement the condition that Imran would not be able to sue him for any defect in the VCDs or if he discovers any fraud etc., effective immediately after taking possession of the VCDs after the payment had been made. In case any dispute arises, it would be referred to arbitration, with Tom and Imran appointing one arbitrator each and who, in turn, would appoint the third arbitrator. Imran buys the VCDs and takes them home. However, he discovers that several of them have scratches and do not run on the VCD player, while there are some empty CD cases as well. When he discovers this fraud, he drags Tom to court for having fooled him.Is there any defect in the agreement with reference to the principles given?a) Yes, it cannot provide for arbitration as the sole means of dispute resolution.b) Yes, it restricts the rights of Imran absolutely.c) Nod) It cannot be determinedCorrect answer is option 'C'. Can you explain this answer? theory, EduRev gives you an ample number of questions to practice Principle:I. Every 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, or which limits the time within which he may thus enforce his rights is void to that extent.II. Every agreement which extinguishes the rights of any party thereto, or discharges any party thereto from any liability, under or in respect of any contract on the expiry of a specified period so as to restrict any party from enforcing his rights, is void to that extent.III. A contract will not be rendered illegal by virtue of the fact that it involves 2 or more persons who agree that any dispute which may arise between them will be referred to arbitration, and only the amount awarded in such arbitration will be recoverable in respect of the dispute referred.IV. A contract will also not be rendered illegal if it is with respect to the reference of matter/questions already arisen, for arbitration.Facts: Tom enters into an agreement with Imran for the sale of Tom’s old VCD collection. Tom includes in the agreement the condition that Imran would not be able to sue him for any defect in the VCDs or if he discovers any fraud etc., effective immediately after taking possession of the VCDs after the payment had been made. In case any dispute arises, it would be referred to arbitration, with Tom and Imran appointing one arbitrator each and who, in turn, would appoint the third arbitrator. Imran buys the VCDs and takes them home. However, he discovers that several of them have scratches and do not run on the VCD player, while there are some empty CD cases as well. When he discovers this fraud, he drags Tom to court for having fooled him.Is there any defect in the agreement with reference to the principles given?a) Yes, it cannot provide for arbitration as the sole means of dispute resolution.b) Yes, it restricts the rights of Imran absolutely.c) Nod) It cannot be determinedCorrect answer is option 'C'. 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