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Report No. 97

3.7. Uncertainty resulting from the present position.-

A revision of the law, by invalidating even prescriptive contractual clauses, is not only required on the merits (for the reasons mentioned above), but, will also make the law simpler. At present, in every case, a subtle distinction has to be applied as to whether a clause merely bars a remedy or extinguishes the right. The decision hangs on a fine distinction that is not easy of application, creating uncertainty in the minds of parties for a conflict of approach in actual cases in courts. For example, it has been held that a condition in a life insurance policy that no suit shall be brought on the policy after one year from the death of the insured is void.1 But a condition in a fire insurance policy that the company shall not be liable for loss or damage after the expiry of twelve months from the happening of the loss or damage, unless the claim was the subject of a pending action or arbitration, does not contravene section 28.2-3

1. G. Rainey v. Burma Eiro & Marine Ins. Co., AIR 1926 Rang.

2. A.N. Ghost, v. Reliance Ins. Co., AIR 1924 Rang 15 (16, 17): ILR 11 Rang 475.

3. See other cases cited in Pearl Ins. Co, v. Alma Ram, AIR 1960 Punj 236 (240, 244) (FB).

Section 28 of the Indian Contract Act, 1872 - Prescriptive Clauses in Contracts Back

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