question_answer

Direction: Question numbers 1-35 consists of legal proposition(s)/ principle(s) (hereinafter referred to s '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 wiring these questions, you must not rely on any principle except the principles those 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 towards 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 law. Therefore, to were a question, 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 service. 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?

A) Arbitration is also valid dispute settlement machinery recognized by law and hence the entire contract is valid.

B) The parties were trying to confer jurisdiction to some authority to decide a dispute and hence the clause would be invalid.

C) Arbitrator cannot be termed as an ordinary Tribunal. Hence, the agreement is void and would be unenforceable.

D) The contract is valid but the clause regarding Arbitration is void.