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Given Below is a Statement of Legal Principle Followed by a Factual Situation. Apply the Principle to the Facts and Select the Most Appropriate Answer. Principle an Agreement is Void to the Extent - Legal Reasoning

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MCQ

Given below is a statement of legal principle followed by a factual situation. Apply the principle to the facts and select the most appropriate answer.

PRINCIPLE An agreement is void to the extent that it restricts absolutely a party from enforcing his contractual rights by usual proceedings in any ordinary court.

FACTUAL SITUATION: A and B entered into a transaction in Delhi for sale of goods based in Delhi. The contract stated that in case of a dispute, only civil courts in Chennai would have jurisdiction. Neither A nor B resided or carried on business in Chennai.

Options

  • The contract is valid since it is still an Indian court that has jurisdiction

  • The contract is void since it ousts the jurisdiction of the competent court

  • The contract is void since the consent of the court is required before entering into such a contract

  • The contract is valid since Chennai courts have expertise with respect to contractual

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Solution

The contract is valid since it is still an Indian court that has jurisdiction

Explanation:
As per the given principle option "The contract is valid since it is still an Indian court that has jurisdiction" is correct. According to the principle, the contract stands void as it is restricting the company in its lawful trade.

Concept: Contract Law
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