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Question
Consists of legal proposition(s)/ principle(s) (hereinafter referred to as 'principle') and facts. Such principles may or may not be true in the real and legal sense, yet you have to conclusively assume them to be true for the purposes of this Section. In other words, in answering these questions, you must not rely on any principle except the principles that are given herein below for every question.
Further, you must not assume any facts other than those stated in the question. The objective of this section is to test your interest in the study of law, research aptitude, and problem-solving ability, even if the 'most reasonable conclusion' arrived at may be absurd or unacceptable for any other reason. It is not the objective of this section to test your knowledge of the law.
Therefore, to answer a question, the principle is to be applied to the given facts and to choose the most appropriate option.
Principle: Every agreement, by which any party is restricted absolutely from enforcing his right in respect of any contract, by the usual legal proceedings in the ordinary Tribunals, is void to that extent. The law also provides that nobody can confer jurisdiction to a civil court by an agreement between parties.
Facts: A and B entered into a valid contract for rendering certain services. A clause in the contract was that in case of any dispute arose out of the contract; it shall be referred to for Arbitration only. Is the contract valid?
Options
Arbitrator cannot be termed as an ordinary Tribunal. Hence, the agreement is void and would be unenforceable.
The parties were trying to confer jurisdiction to some authority to decide a dispute and hence the clause would be invalid.
The contract is valid but the clause regarding Arbitration is void.
Arbitration is also a valid dispute settlement machinery recognized by law and hence the entire contract is valid.
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Solution
Arbitration is also a valid dispute settlement machinery recognized by law and hence the entire contract is valid.
Explanation:
Arbitration is also a valid dispute settlement machinery recognized by law and hence the entire contract is valid. Arbitration is a procedure in which a dispute is submitted, by agreement of the parties, to one or more arbitrators who make a binding decision on the dispute. The parties opt for a private dispute resolution procedure (Arbitration) instead of going to court. The contract between A and B provided that in case of a dispute, it would be resolved through an Arbitration only. The contract is valid because Arbitration is a valid dispute settlement means and sis recognized by the Indian legal system.
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In this Question, the problem consists of a set of rules and facts. Apply the specified rules to the set of facts and answer the question.
Rules
A. The act of using threats to force another person to enter into a contract is called coercion.
B. The act of using influence on another and taking undue advantage of that person is called undue influence.
C. In order to prove coercion, the existence of the use of threat, in any form and manner, is necessary. If coercion is proved, the person who has been so threatened can refuse to abide by the contract.
D. In order to prove undue-influence, there has to be a pre-existing relationship between the parties to a contract. The relationship has to be of such a nature that one is in a position to influence the other. If it is proven that there has been undue influence, the party who has been so influenced need not enforce the contract or perform his obligations under the contract.
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In this Question, the problem consists of a set of rules and facts. Apply the specified rules to the set of facts and answer the question.
Rules:
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B. A minor is not permitted by law to enter into a contract. Hence, where a minor enters into a contract with a major person, the contract is not enforceable. This effectively means that neither the minor nor the other party can make any claim on the basis of the contract.
C. In a contract with a minor, if the other party hands over any money or confers any other benefit on the minor, the same shall not be recoverable from the minor unless the other party was deceived by the minor to hand over money or any other benefit. The other party will have to show that (he minor misrepresented her age, he was ignorant about the age of the minor and that he handed over the benefit on the basis of such representation.
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