There are certain conditions that validate a trade restriction during the sale of goodwill, which are: Section 27 of the Indian Contract Act declares all agreements limiting trade, zero pro tanto, with the only exception is the sale of goodwill. However, it is important to understand that these agreements are non-illegal. In other words, these agreements are not illegal, but they cannot be brought to justice if one of the parties does not fulfill its part of the agreement. Unlike customary law, partial agreements aimed at restricting trade or appropriately restricting under the Contracts Act are also not valid. An agreement is invalid when it prevents a person from asserting his contractual rights through ordinary legal proceedings or when he limits the period within which he can assert his rights. The contract is not valid if it waives the right of a party in respect of it or if it releases part of its liability, in respect of a contract at the end of a certain period to prevent a party from asserting its rights, is, to that extent, void. If the restriction is not absolute, this section does not apply. If one of the two competent courts is excluded by an agreement, this does not affect the absolute annulment of the court and a clause is not contrary to Article 28. The delegitimization of a trade restriction agreement is explained by the history of the conflict between free markets and freedom of treaties. Guaranteeing freedom of contract would be tantamount to legitimize trade restriction agreements, which would lead the parties to agree to curb competition. According to the common law, the current position stems from the case – section 27 of the act refers only to one exception that applies the restriction of trade, that is, the sale of goods. Another exception is the Partnership Act.
A contract concluded by the parties is called an international commercial contract and clause 13 of the agreement provides for a unilateral agreement by which the sellers alone have the right to refer any dispute to arbitration and to bring any dispute against the buyers before a competent court. Such a clause, which has the character of a unilateral agreement that prevents the plaintiff buyer from asserting the rights of the contract either by arbitration or by an ordinary civil court, is, under section 28 of the Indian Contract Act, as amended by the 1996 amendment – Emmsons International Ltd. Metal distributors (U.K.)  This section only annuls the agreement that completely prevents a party from asserting the rights of this Treaty before the ordinary courts. It does not apply if a party agrees not to restrict the application of its law before the ordinary courts, but only to accept a selection of one of the ordinary courts for which an appeal would normally be heard. . . .