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Report No. 97

1.2. Point for consideration.-

Under section 28 of the Indian Contract Act, 1872-to state the point in brief1-an agreement which limits the time within which a party to an agreement may enforce his rights under any contract by proceedings in a court of law is void to that extent. But the section does not invalidate an agreement in the nature of prescription, that is to say, an agreement which provides that, at the end of a specified period, if the rights thereunder are not enforced, the rights shall cease to exist. As will be explained in greater detail in later Chapters of this Report,2 this position creates serious anomalies and hardship, apart from leading to unnecessary litigation prima facie, it appeared to the Commission that the section stood in need of reform on this point. The arguments for and against amendment of the section will be set out later. For the present, it is sufficient to state that the problem is one of considerable practical importance as such stipulations are frequently found in agreements entered into in the course of business.

1. For detailed discussion, see Chapters 2 and 3, infra.

2. Chapters 2-3, infra.

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

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