Mind you, exploitative contract provisions are illegal
When courts can refuse to enforce contracts

In Indian contract law, there are five grounds on which courts may refuse to enforce contracts (see Section 23 of the Indian Contract Act, 1872). One of these grounds is that, a Court may refuse to enforce a contract if it deems the contract to be opposed to public policy.

Public policy is essentially synonymous with “policy of the State in question”.

There is no exhaustive list of the broad principles of public policy — although we do have a non-exhaustive list of its broad principles, thanks to decided cases which have exposed them. The term “public policy” is incapable of precise definition.

In the most general sense:

Public policy may be understood to— be the values which form the groundwork of the law of a country.

Since we have a written Constitution which is the suprema lex of our country, it is a good starting point to look for the values which underline our legal system. It’s likely a contractual provision which places a monetary cost to disincentivize the exercise of a Fundamental Right will be opposed to public policy. It’s also likely a contractual provision opposed to the Directive Principles of State Policy (principles, but not rights, which guide all State conduct) will be opposed to public policy.

Exploitative provisions are unenforceable

Here’s the low-down for you— in Central Inland Water Transport Corporation v. Brojo Nath Ganguly (SC, 1986), the Supreme Court of India has stated the law unequivocally:

If a contract contains an exploitative provision the court finds unconscionable, that provision will render the contract opposed to public policy.

That people must not be exploited is a principle of our public policy. It follows from the Directive Principles of State Policy enshrined in our Constitution, which contain a number of guarantees against exploitation.

Since such a contract with an exploitative provision would thus be opposed to public policy, the courts would refuse to enforce the whole contract. In contract law terminology, the court will red-pencil the contract— metaphorically, it will take a red pencil and run it through the entire contract, trashing it entirely.

In some cases, courts do blue-pencil the contract— metaphorically, it takes a blue pencil, strikes out the offending provision but allows the remainder of the contract to stand. However, Indian law is very clear on this point— if a contract is opposed to public policy, you don’t get any concessions; the court will have to red-pencil it.

In other words, let me state this unequivocally:
['Sagnik Sarkar']
['Technology', 'Law', 'Startup', 'Contracts', 'Company']