INTRODUCTION:

The project is based on section 28 of the Indian Contract Act

(1972) with the title Changes in the Finality clause post 2005. This project would enumerate
the changes in the section and the changes in the decision making in our Honble Courts post
2005. This project has been constructed in such a manner so as to give an introduction to
what section 28 of the contract act is, and to highlight and bring out the broader
classifications under this section and the exception given by the act in the said section. This
project would also contain the effects and binding of this section over various sectors and
how it affects the contract, for example, this section plays a vital role in the banking sector
and the contracts made by the banks.

BRIEF SUMMARY ABOUT SEC 28:

Section 28 of the contract act defines that, if any contract is made with a clause that restrains
either of the parties to the contract from enjoying the fundamental right of resorting to a court
of law for redress and relief is invalid, then the contract in itself is void. For example a
contract is entered by the servant with the clause that he cannot sue for wrongful dismissal,
will be held void under this section. Any agreement by which any party thereto is restricted
from enforcing their right to legal proceedings or limits the time in which the party can
enforce their legal right will be held void, also any agreement that discharges any party
thereto from any liability on the expiry of a specified period so as to restrict any party from
enforcing his rights, is void to that extent. There are two exceptions specified in the section.
The first exception conveys that, if a contract is entered by any party with the clause that if
any dispute arises out of the contract it must be referred to arbitration and that only the
amount awarded in such arbitration shall be recoverable in respect of the dispute so referred.
The second exception is that if any legal issues or question arises out of the contract and it
has been exclusively mentioned in a clause that by which two or more parties agree to refer to
arbitration any question between them which has already arisen, or affect any provision of
any law in force for the time being as to references to arbitration. This Finality clause can be
furthermore explained clearly with case laws, Take the case of Hyman v Hyman, In this case,
a covenant in a separation deed provided that the wife would not apply to the divorce-court
for maintenance and it was held that it was void as being contrary to public policy.
AIM AND OBJECTIVES:

The researcher of the project aims to study about section 28 of Indian contract Act 1872, to
analyse its present validity and flaws present in it and also has dealt with the changes that has
to be made in order to make the section more effective.

RESEARCH METHODOLOGY:

This project is a doctrinal one. This project is upon Section 28 of the Indian contracts act with
respect to changes in the finality clause, thus the project would start with a brief
introduction about the section and then go on to bring out the changes in the section with the
help of judgements and articles, in the final sections of the project, the flaws, changes that
have to be made, and its effect on other sectors would be specified. For the completion of this
project books, articles by various authors and case laws have been referred.

SOURCES

Primary sources: Case laws.

Secondary sources: Books, Articles.

LITERATURE REVIEW:

To carry out the research work the following literature have been used:

CASE LAWS:

1. Hyman v Hyman, [1929] AC 601:

In this case, a covenant in a separation deed provided that the wife would not apply to
the divorce-court for maintenance and it was held that it was void as being contrary to
public policy.

2. Nihal Chand Shastri v Dilawar Khan, AIR 1933 All 417:

It was held that a special agreement between an advocate and his client that the latter
would not be sued for fees has been held void under this section`.
ARTICLES

1) Restraining legal proceedings - Recent trends By Shikha S. Jaipuriar

The author has given an brief introduction about the section and has stated the exception for
bank guarantees and the extent of jurisdiction of the act, which was helpful in construction of
this project.

2) Agreement in restraint of legal proceedings Judicial Inroads by DURAI

the article was very helpful as it had an vast review of the whole act and had many valid
points which pointed out the pros and cons of the act.