It is a well settled principle of contract law that parties cannot by contract exclude the jurisdiction of all courts. Such a contract would constitute an agreement in restraint of legal proceedings and contravene Section 28 of the Indian Contract Act, 1872. However, where parties to a contract confer jurisdiction on one amongst multiple courts having proper jurisdiction, to the exclusion of all other courts, the parties cannot be said to have ousted the jurisdiction of all courts. Such a contract is valid and will bind the parties to a civil action.

Section 28. Agreements in restraint of legal proceedings, void-Every agreement, -
(a) by which any party thereto 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; or
(b) which extinguishes the rights of any party thereto, or discharges any party thereto, from any liability, under or in respect of any contract on the expiry of a specified period so as to restrict any party from enforcing his rights, is void to the extent.

Parties cannot by agreement confer jurisdiction on a court which lacks the jurisdiction to adjudicate. But where several several courts would have jurisdiction to try the subject matter of the dispute, they can stipulate that a suit be brought exclusively before one of the several courts, to the exclusion of the others.

According to the given passage, which of the following statements is true?

Correct Answer: Parties cannot by contract exclude the jurisdiction of all courts.

Step-by-Step Explanation:

Step 1: Analyze the question and given passage
The question asks us to identify the statement that is true according to the provided passage about contract law and Section 28 of the Indian Contract Act, 1872.

Step 2: Evaluate the statements against the passage text

1. "Parties cannot by contract exclude the jurisdiction of all courts."
- Looking directly at the very first sentence of the passage: "It is a well settled principle of contract law that parties cannot by contract exclude the jurisdiction of all courts."
- This statement directly matches the text of the passage and is therefore true.

2. "Parties cannot by contract make a choice of jurisdiction"
- The passage states that where several courts have jurisdiction, parties can stipulate that a suit be brought exclusively before one of those courts. Thus, parties can make a choice of jurisdiction among competent courts, making this statement false.

3. "Parties can by contract confer jurisdiction on any court."
- The passage explicitly states: "Parties cannot by agreement confer jurisdiction on a court which lacks the jurisdiction to adjudicate." Therefore, they cannot confer jurisdiction on any court, making this statement false.

4. "Parties can by contract extinguish their rights under any contract."
- Section 28(b) specifically highlights that an agreement which extinguishes the rights of any party so as to restrict enforcement is void. Therefore, parties cannot validly do this under the law, making this statement false.

Conclusion:
The correct and true statement according to the passage is: Parties cannot by contract exclude the jurisdiction of all courts.