Can a Contract Stop You From Going to Court?

What the section addresses

Section 28 of the Indian Contract Act, 1872 provides that every agreement by which a party is restricted absolutely from enforcing rights under or in respect of a contract by the usual legal proceedings in the ordinary tribunals, or which limits the time within which rights may be enforced, is void to that extent.

The section has exceptions, including for arbitration agreements, which is why an arbitration clause is not caught by it. Referring a dispute to arbitration is choosing a forum, not removing the remedy.

The clause that appears most often

In commercial contracts the common form is a limitation clause: any claim must be brought within six months, or twelve months, of the event giving rise to it, failing which it is waived. That is a shorter period than the ordinary limitation for contract claims.

The Limitation Act, 1963 supplies the ordinary periods, generally three years for claims founded on contract. A clause purporting to compress that engages Section 28 directly, and it is worth noticing because it appears in vendor terms, service agreements and standard-form documents where nobody negotiates the tail end.

Where else it shows up

• Clauses stating that a party waives all rights and remedies not asserted within a short window.
• Terms providing that failure to object to an invoice within days waives all objections to it.
• Provisions purporting to exclude a party from approaching any forum other than one named.
• Clauses requiring a claim to be notified in a specific form as a precondition, drafted so narrowly that ordinary notice fails.
• Terms in consumer-facing agreements restricting recourse, which also engage the Consumer Protection Act framework on unfair terms.

What is not caught

It is worth being clear about the limits. An arbitration clause is not caught, since the exception preserves it. A clause requiring notice of a claim within a reasonable period as a procedural step is different from one extinguishing the right. And a clause selecting one of several courts that would otherwise have jurisdiction is generally treated as a choice of forum rather than a restraint.

That last distinction matters in practice, because exclusive jurisdiction clauses are extremely common in Indian contracts and are usually enforceable where the chosen court is one that would in any event have jurisdiction.

What to do when you see one

Ask for it to be removed, or for the period to track the ordinary limitation period rather than a shorter contractual one. In most negotiations this is a small ask, because the counterparty rarely has a strong reason for the compressed window beyond template inertia.

Where a clause is already in force and you are approaching its stated deadline, do not assume it is unenforceable and let time run. Whether a particular clause is caught depends on its wording and the facts, and the safer course is to act within the period while taking advice.