Section 27

Section 27 of the Indian Contract Act, 1872, provides that every agreement by which any party is restricted absolutely from enforcing his rights under or in respect of any contract, by the usual legal proceedings in the ordinary tribunals, or which limits the time within which he may thus enforce his rights, is void to that extent. According to this section, 'Every agreement by which any party is restricted absolutely from enforcing his rights under or in respect of any contract, by the usual legal proceedings in the ordinary tribunals, or which limits the time within which he may thus enforce his rights, is void to that extent.' However, a contract to refer present or future differences to arbitration is not void under this section. The court in the case of Booz Allen and Hamilton Inc. v. SBI Home Finance Ltd. observed that an agreement that ousts the jurisdiction of a court is void, but an agreement that provides for arbitration is valid.