Agreement in restraint of legal proceedings refers to a contract or agreement between two parties that restricts one or both parties from initiating legal action against the other. This kind of agreement is not legal and is considered void by the court of law. This is because it obstructs the process of justice and takes away the legal rights of an individual or entity.
Agreements in restraint of legal proceedings are of two types, general and specific restraint. A general restraint is one that prohibits a person from filing a suit or taking legal action for any matter against the other party. In contrast, specific restraint is one that restricts the legal action for a specific cause only.
Under the Indian Contract Act, an agreement in restraint of legal proceedings is considered invalid and unenforceable. Section 28 of the Indian Contract Act clearly states that any agreement which restricts a person from exercising his legal rights is void. However, there are some exceptions to this rule. An individual can enter into a compromise agreement or a release deed under which the parties agree to settle the dispute amicably and waive their rights to pursue legal action in the future.
In conclusion, agreements in restraint of legal proceedings are considered against the principles of law. Such agreements are void and unenforceable under the Indian Contract Act, and parties should avoid entering into such agreements. It is recommended that individuals seek legal advice before entering into any contract or agreement to avoid any future legal issues.