In common parlance the terms & quot; agreement & # 39; and & # 39; Contract & # 39; are used as synonyms. But in legal jargon, these two terms are not the same. The enforceability of an agreement makes a Contract. It is said that, every Contract is an agreement, but every Agreement is not a contract.
In India, the whole law covering the concept of & # 39; is embodied in the Indian Contract Act, 1972. Commencing from our day - to - day life to the day important decisions of the business world everyone is exposed to either one (express) or the other (implied) form of an agreement; it's account opening form or a joint venture / technical collaboration; agreements touch life of every person.
Increasing business activities makes it imperative to carefully draft or vet agreement since this is the stage where potential disputes can be avoided and course of actions can be framed or freezed.
India has immensely benefited by replacing the drafting techniques with the rest of the world. Each type of agreement has some specific clauses, which need extra caution and care.
This item of this item the drafting an agreement vis-à-vis important clauses in an agreement. This article will focus on drafting the general commercial agreements. ; is used as a synonym of the term & # 39; Contract & # 39;
Indemnity
Such clauses are inevitable and need to be capped. Further, amount of risk involved in the indemnification needs to be Independence and consequential, indirect and accidental damages should be avoided. Root cause analysis is required for these existence of such clauses need careful drafting. clauses. If not required in a particular situation, such clauses should be avoided.
Jurisdiction
The case excluding one ___ ___ 0 ___ ___ 0 ___ ___ 0 ___ ___ 0 ___ ___ 0 ___ ___ 0 The contract arising the jurisprudence of the Indian courts, however, the Indian courts was not without jurisprudence.
It was held that the agreement instituting the jurisdiction was void as it was opposed to the public policy [Rajendra Sethia vs. Punjab National Bank (AIR 1991 Delhi 285)]The plea The plea. The plea. The plea. The plea. The plea. That party is considered to be Foreign Court will not be held. This can be considered for stay of a suit but can not be a ground for rejection of a claim.
Arbitration
In the attempt to control litigation costs and expediting the process of dispute resolution, many companies are discontinued, the number of disputes in the industry has increased tremendously. ADR mechanisms are & # 39; Mediation and arbitration & # 39 ;. Mediation is a voluntary process through which the parties meet Arbitration through a single arbitrator, mutually designated by the parties can seek to enforce through the courts. , is a cost effective and speedy way for dispute resolution. Generally companies seek mediation and if they fail, they prefer to refer th e dispute to Arbitration. Therefore Arbitration clause is very must.
Intellectual Property Rights
Intellectual Property Rights (IPR) has gained significant importance amidst globalization and liberalization. Well Mell acquisition of Intellectual Property (IP) rights is of little importance if it can not be enforced effectively. The party must seek protection of the intellectual property rights on the subject products is the imperative. same time, indemnification should be taken for Intellectual Property Rights infringement of any third party.
Force Majeure
Here comes the & # 39; Force Majeure & # 39; for situation that patience if the damage clause is severe. clause to rescue. Such clauses can not be attributed to some of the reasons beyond its control / unpredictable circumstances viz. delivery failure due to transport strike, non payment of dues due to Banker strike, act of god, lock-outs, war, riot, sabotage etc. Such context needs care, the party suffering from any factor considering Force Majeure must inform the other party about the existence of such factor responsible for nonperformance and must take due care for compliance of its obligations under the agreement at its earliest possible other it may lead to termination of the agreement itself. The period of delay / non-performance should be excluded from the total term of the agreement.
Termination Clause
This case depends on the position and requirement of the circumstances this case comes handy. contracting parties. Sometimes, the parties intentionally agree not exclusive clause to provide some lock-in period or to provide exit under some certain situations viz. in case of material breach of the terms of the agreement / insolvency etc.
Other precautions
Exclusive agreements should be avoided. Any agreement, which is a restatement on the civil rights of a party, is generally void. Agreements, one party is to disclose some confidential information to the other for for other without breaching the terms of the agreement. without employing agreement, clause containing any restraint on the civil rights of the employee should be avoided. should be kept in mind and according to the safeguards should be provided viz. in case of leases; refund of security deposit should be protected, in case of delay in refund the possession of concessions should be retained, in case of non-vacated liquidated damages should be provided and so on. The clause relating to the governing law should be be In conglomerates, the specific policies of the entity needs to be adhered to whether it & # 39 & # 39. ; s anti-corruption, anti-boycott or any other to save it from the transparency in a transaction, minimize opportunities of disputes by bringing as much clarity as is possible and also to avoid any misinterpretation.
To conclude, we can say that, & # 39; Clauses & # 39; play a crucial role in agreements and contracts and help in creating a legal relationship which is transparent and forward looking.
CS. Monika Bhardwaj, B. Com (Hons.), ACS
