Derogation 3 – Saving a guarantee agreement of a bank or financial institution – This section may be a written contract by which a bank or financial institution has entered into a clause in a guarantee or agreement guaranteeing the removal of rights or the discharge of part of that part of a liability of or with respect to that guarantee or agreement after the expiry of a certain period which has no less than one year the occurrence or non-appearance of a particular event for the cancellation or dismissal of that part of that responsibility. The first paragraph of Section 28 of the Indian Contract Act has been replaced by a new paragraph. The new paragraph changes the entire base of the original section 28. Therefore, it is clear that this new paragraph in section 28 is tantamount to declaring that a clause in an agreement not only excludes an appeal, but also destroys the right to be, that it is as it stands, that it is not entitled. It will therefore result in a substantial change in contract law. Under Section 28, an agreement that limits the time within which a contracting party can assert its rights is, in this respect, not applicable. Therefore, under this provision, an agreement that an action in the event of a breach of an agreement must be brought within a shorter period of time than that provided by the statute of limitations is therefore not applicable. Indeed, such an agreement has absolute influence to prevent the parties from asserting their rights after the expiry of the deadline set by the agreement, even if it may be within the statute of limitations. However, such an agreement must be distinguished from one which does not limit the time within which a party can assert its right, but which provides for the release or forfeiture of rights if no action is taken within the time frame set by the agreement. In Food Corporation of India v. New India Insurance Co.Ltd. [2] The Supreme Court, which also considered a clause in the federal insurance obligation, found that the agreement did not contain any clause contrary to section 28 of the Contracts Act because it does not restrict the filing of an action within six months of the date of termination of the contract claimed by the insurance company. , but it was agreed that, at the end of a six-month period from the date of termination of the contract, Food Corporation would not be entitled to benefit from this loan and this clause could not be construed as a limitation of the normal limitation period for filing the action.
