Business Contract Drafting, Vetting, and Negotiation | Unimarks Legal Solutions
A contract that looks complete but is missing one enforceable clause is not a contract but a liability. Most business disputes in India do not arise from bad intentions. They arise from agreements that were drafted without understanding what Indian law requires to make a clause stick.
What We Do
We draft agreements from instructions — not from templates. Every agreement we produce is tailored to the specific transaction, the specific parties, the specific regulatory environment, and the specific risk allocation the client needs. We begin by understanding the commercial objective of the agreement, then structure the legal terms to achieve that objective while protecting the client's position.
Who We Do It For
Businesses and Entrepreneurs.Corporations and Investors.Franchise businesses, Partnerships, Startups. We review agreements presented by the counterparty, identifying unfavourable terms, missing protections, ambiguous language that creates dispute risk, and clauses that may be unenforceable under Indian law
What We Deliver
We advise on negotiation strategy and attend negotiations where our presence adds value. Our role is to ensure that the terms agreed in negotiations are accurately reflected in the final document, a gap that frequently creates disputes when the term sheet or heads of terms are loosely drafted and the formal agreement is negotiated without legal oversight.
Comprehensive Business Agreement Services
At Unimarks Legal Solutions, we draft, vet, and negotiate commercial agreements for businesses, startups, founders, investors, franchisors, employers, and technology companies across India. Every agreement we produce is built on the Indian Contract Act, 1872 and the foundational statute that determines whether your contract is enforceable, whether a penalty clause will hold, and whether a court will grant you specific performance or only damages when the other party defaults.
We have drafted and reviewed agreements across M&A transactions, franchise structures, technology licensing, employment relationships, joint ventures, vendor arrangements, e-commerce platforms, and real estate transactions for clients ranging from first-time founders to mid-market enterprises and multinational entities entering the Indian market.
Get Your Contract Drafted or Reviewed — Free Consultation” → /contact-us/
Which Agreement Do You Need? Start Here.
| Your Situation | Agreement Type | Key Legal Framework |
|---|---|---|
| Co-founders starting a business together | Founders’ Agreement / Shareholders’ Agreement | Indian Contract Act, Companies Act 2013 |
| Hiring an employee or senior executive | Employment Agreement / Service Contract | Indian Contract Act, ID Act, Shops Act |
| Engaging a freelancer or consultant | Independent Contractor / Consultancy Agreement | Indian Contract Act, TDS implications |
| Sharing confidential information before a deal | Non-Disclosure Agreement (NDA) | Indian Contract Act, Section 27 (non-compete limits) |
| Selling your product or service to a business | Sales Agreement / Service Agreement | Indian Contract Act, MSMED Act (if MSME buyer/seller) |
| Distributing your product through a third party | Distribution / Dealership Agreement | Indian Contract Act, Competition Act 2002 |
| Licensing your brand, technology, or IP | IP Licensing / Technology Transfer Agreement | Copyright Act, Patents Act, Trade Marks Act |
| Expanding via franchise | Franchise Agreement | Indian Contract Act, Consumer Protection Act |
| Raising funding from investors | Term Sheet / SHA / Convertible Note | Companies Act 2013, FEMA, SEBI regulations |
| Acquiring or merging with another business | SPA / APA / M&A Agreement | Companies Act 2013, Competition Act, SEBI |
| Collaborating with another business | Joint Venture / Strategic Alliance Agreement | Indian Contract Act, Companies Act 2013 |
| Leasing commercial premises | Commercial Lease Agreement | Transfer of Property Act, Registration Act, Stamp Act |
| Protecting your website or app users | Terms of Service / Privacy Policy | IT Act 2000, DPDP Act 2023, Consumer Protection Act |
The stamp duty question every business owner overlooks: Under the Indian Stamp Act, 1899 and respective State Stamp Acts, agreements relating to property, shares, and certain commercial transactions must be stamped at the prescribed rate before execution. An unstamped or inadequately stamped instrument is inadmissible as evidence in Indian courts — regardless of how well the contract is drafted. We advise on stamp duty implications before every agreement is finalised.
Discuss Your Agreement – Free Legal Consultation” → /contact-us/]
Our Agreement Practice Areas
Drafting, Reviewing, and Negotiating Contracts
Drafting Business Contracts: We prepare legally binding contracts customized to your business requirements, ensuring all critical terms are clearly defined and enforceable. Each contract is drafted to address the specific needs and circumstances of your business, whether it involves partnerships, vendor relationships, or client service agreements. We focus on building a solid legal foundation for your transactions to avoid misunderstandings and disputes down the road. Our drafting process is thorough, considering every potential issue to ensure that your contract is complete and provides maximum protection.
Contract Review: Our team reviews existing contracts to verify they meet legal standards, protect your interests, and minimize risks. We conduct an in-depth analysis of each clause to identify potential risks, ambiguities, or missing elements that could be detrimental to your business. By evaluating contractual terms through a legal and business lens, we help ensure compliance with relevant regulations and industry standards. Our detailed reviews provide peace of mind that your contracts are effective and enforceable, reducing the chances of disputes or liabilities.
Negotiation of Terms: We assist in negotiating contract terms with counterparties to achieve favorable conditions, covering areas like pricing, timelines, and deliverables. Our negotiation support goes beyond just financial considerations; we also focus on operational aspects, such as performance obligations, dispute resolution mechanisms, and confidentiality requirements. Our goal is to strike a balance between securing favorable terms and maintaining good business relationships with your partners. With our legal expertise, you can confidently enter negotiations knowing that your best interests are represented and protected.
Employment Agreements: We draft and review comprehensive contracts for hiring employees, covering essential aspects such as compensation, roles and responsibilities, confidentiality obligations, non-compete clauses, and termination terms. Our contracts are designed to ensure compliance with employment laws while protecting both the employer’s and employee’s interests. We also provide advice on customization to suit different job roles, helping create a clear understanding of expectations and legal obligations.
Independent Contractor Agreements: We prepare detailed agreements for hiring freelancers or independent contractors, outlining the scope of work, deliverables, payment terms, timelines, and intellectual property rights. These agreements help establish a clear understanding of the contractor’s role, responsibilities, and deliverables, reducing potential conflicts and ensuring both parties are aligned in terms of expectations and outcomes.
Non-Disclosure Agreements (NDAs): Our team drafts NDAs to protect sensitive business information shared with employees, contractors, or business partners. We ensure these agreements cover all necessary aspects to keep your business information secure, including confidentiality clauses that outline the type of information protected and the consequences of a breach. This is crucial for maintaining a competitive advantage in today’s business landscape.
Non-Compete and Non-Solicitation Agreements: We create agreements to prevent employees or contractors from competing with your business or soliciting clients after their departure. These agreements are customized to be enforceable within the applicable jurisdiction, safeguarding your business relationships, intellectual property, and market position. They provide peace of mind by ensuring that key personnel cannot undermine your business after they leave.
- Sales Agreements: We draft comprehensive Sales Agreements for the sale of goods or services, which include detailed provisions for pricing, delivery schedules, warranties, payment terms, and potential liabilities. Our agreements are tailored to protect both the seller’s and buyer’s interests, ensuring that expectations are clearly defined and enforceable. By addressing potential risks upfront, we help businesses avoid disputes and create a solid foundation for successful transactions.
Purchase Agreements: Our team prepares Purchase Agreements for acquiring products or services, ensuring every detail is meticulously covered, including pricing structures, payment schedules, delivery conditions, and quality standards. These agreements are designed to provide transparency and protection to both buyers and sellers, reducing misunderstandings and fostering long-term business relationships.
Distribution Agreements: We draft Distribution Agreements that define the relationship between manufacturers or suppliers and distributors. These agreements cover key aspects such as distribution territories, pricing models, payment schedules, exclusivity rights, marketing obligations, and performance targets. By clearly establishing each party’s responsibilities, our distribution agreements help ensure a smooth and efficient supply chain while minimizing risks and conflicts.
IP Licensing Agreements: We draft comprehensive intellectual property (IP) licensing agreements that cover a range of IP assets, including patents, trademarks, copyrights, and software. These agreements clearly define the scope of use, royalties, and the duration of the license to ensure the rights of the IP owner are protected while allowing licensees to use the property under mutually agreed terms. Our tailored IP licensing agreements aim to safeguard valuable intellectual assets and help maximize their commercial potential through structured licensing arrangements.
Franchise Agreements: Our team specializes in preparing franchise agreements that establish the rights and obligations of both franchisors and franchisees. These agreements cover essential aspects like franchise fees, royalty payments, branding standards, training obligations, and territory restrictions. We ensure that the franchise relationship is clearly defined to promote a successful partnership, while also ensuring compliance with local franchising laws. Our franchise agreements help protect the brand integrity of the franchisor while providing clear guidelines to the franchisee to operate successfully within the brand framework.
Technology Transfer Agreements: We draft detailed technology transfer agreements that govern the transfer or licensing of technological innovations, ensuring that intellectual property rights are clearly defined. These agreements include terms regarding the usage, confidentiality obligations, sublicensing rights, and conditions for modification or further development of the technology. Our technology transfer agreements aim to provide legal clarity to both parties, ensuring that technology is used in a manner that benefits both the licensor and licensee while safeguarding the innovation’s integrity and market value.
Commercial Lease Agreements: We draft comprehensive Commercial Lease Agreements for leasing commercial properties, which cover crucial aspects such as rental terms, maintenance responsibilities, tenant improvements, and renewal options. Our agreements are designed to clearly define the obligations of both landlords and tenants, thereby minimizing disputes and ensuring a smooth tenancy experience. We also incorporate terms related to property use, compliance with local regulations, and dispute resolution mechanisms to offer complete protection for both parties involved.
Property Sale and Purchase Agreements: Our team prepares detailed Property Sale and Purchase Agreements for commercial or industrial properties, covering all essential legal terms related to ownership transfer, including payment terms, due diligence, representations, and warranties. We ensure that every aspect of the transaction is clearly documented to protect both buyers and sellers, reducing the likelihood of disputes. Our agreements are customized to reflect the specific needs of each transaction, whether it involves office buildings, warehouses, or manufacturing units.
Lease Renewal and Termination: We advise on and draft Lease Renewal and Termination clauses to protect the interests of landlords and tenants. Our services include preparing renewal options that are favorable to both parties, negotiating revised rental terms, and drafting termination agreements that comply with legal requirements. We ensure that renewal and termination processes are transparent and legally enforceable, thereby providing peace of mind to both landlords and tenants.
Franchise Agreements
Franchise Contracts: We draft franchise contracts that comprehensively outline the scope of the franchise relationship, including the specific rights and responsibilities of both franchisors and franchisees. This includes franchise fees, initial investments, marketing obligations, performance standards, and any additional support provided by the franchisor. By clearly defining the terms of the franchise, we ensure that both parties have a shared understanding of their obligations and expectations, thereby fostering a productive and mutually beneficial business relationship.
Franchise Disclosure Documents: Our team prepares thorough and comprehensive franchise disclosure documents to ensure compliance with franchising regulations and transparency. These documents provide potential franchisees with all the necessary information regarding the franchise opportunity, including financial performance, franchise fees, ongoing support, training, and any litigation history. We make sure these disclosure documents adhere to all regulatory requirements, ensuring both compliance and a strong foundation of trust between franchisors and franchisees.
Mutual NDAs: We draft mutual NDAs to ensure that both parties are legally obligated to protect each other’s confidential information during business negotiations or collaborations. These agreements are essential when sensitive information is shared between companies that are exploring potential partnerships or business deals. By clearly specifying what constitutes confidential information and setting guidelines for its use and disclosure, we help build trust between parties and minimize the risk of unauthorized use of proprietary information.
One-Way NDAs: Our team drafts agreements where only one party is obligated to protect the other’s confidential information, often used in employment or contractor relationships. These NDAs ensure that sensitive business data, including trade secrets, business plans, and client lists, are kept secure by employees, contractors, or other parties who gain access to such information. By clearly defining the obligations of the receiving party, we help protect your business from data leaks and misuse of critical information.
Proprietary Information Agreements: We draft contracts to protect proprietary business information, trade secrets, and confidential data. These agreements go beyond traditional NDAs by offering broader protection for proprietary processes, know-how, and intellectual property that are crucial to a company’s competitive advantage. Our proprietary information agreements are tailored to meet the specific needs of your business, ensuring that all sensitive data is adequately protected both during and after the term of the agreement.
Terms of Service Agreements: We draft Terms of Service (ToS) agreements for websites, apps, and online platforms, clearly setting out rules for users, including acceptable behavior, use restrictions, and liability limitations. Our ToS agreements are designed to protect both business operators and users by defining the terms under which services can be accessed, ensuring compliance with applicable regulations, and minimizing risks related to misuse or liability.
Privacy Policies: Our team prepares privacy policies that comply with data protection regulations, such as GDPR or the Indian IT Act, to ensure the proper collection, storage, and use of user data. These privacy policies clearly outline how user information is handled, the purposes of data collection, user rights regarding their data, and measures taken to safeguard privacy. We prioritize transparency to build trust with users while ensuring adherence to all legal requirements.
End-User License Agreements (EULA): We draft End-User License Agreements (EULA) that define the terms and conditions under which end-users can use software or digital products. Our EULAs specify usage rights, restrictions, licensing fees, and maintenance/support terms, ensuring that intellectual property is protected, while clearly outlining user responsibilities. This helps to mitigate risks and reduce disputes related to unauthorized use or misuse of software.
Vendor and Affiliate Agreements: We prepare Vendor and Affiliate Agreements for online vendors or affiliate partners, covering essential elements such as commission structures, marketing obligations, and intellectual property use. Our agreements ensure that the roles and responsibilities of each party are clearly defined, including compliance requirements and dispute resolution mechanisms. This helps businesses build successful affiliate networks and partnerships while protecting their brand reputation and intellectual property.
Share Subscription Agreements: We draft agreements for the purchase of shares by investors, detailing not only the terms of investment but also specifying the number of shares, payment terms, investor rights, and responsibilities. Our agreements are crafted to provide clarity on share allotment, dividend entitlements, and exit strategies, ensuring transparency and protection for both the investor and the company. This helps in establishing a mutual understanding and a solid foundation for long-term business relationships.
Convertible Note Agreements: Our team prepares detailed agreements for convertible debt instruments, allowing investors to convert loans into equity at a later date. These agreements are particularly useful for startups and early-stage companies looking to raise funds while deferring valuation discussions. We ensure that all key elements, such as conversion triggers, interest rates, valuation caps, and maturity dates, are well-defined. This enables both investors and companies to manage expectations effectively and minimizes the risk of disputes in the future.
Venture Capital and Private Equity Agreements: We assist businesses in drafting comprehensive agreements for venture capital or private equity funding, covering all aspects such as equity distribution, governance, board representation, and exit provisions. Our agreements are designed to protect both the investors’ interests and the company’s operational independence. We also incorporate clauses for milestones, performance targets, and rights of first refusal to provide flexibility and security. Whether negotiating investor protections or drafting waterfall provisions for profit distribution, our team is dedicated to ensuring a balanced and fair outcome for all parties involved.
Asset Purchase Agreements (APA): We specialize in drafting detailed Asset Purchase Agreements (APA) for businesses looking to buy or sell assets. These agreements cover a wide range of assets including intellectual property, equipment, inventory, and customer contracts. Our APAs clearly define the terms and conditions of the transaction, ensuring that all parties involved understand their rights and responsibilities. We work meticulously to outline specific provisions such as purchase price allocation, closing conditions, representations, warranties, and indemnification clauses. By addressing every detail, we help our clients mitigate potential risks and ensure a smooth transaction process.
Share Purchase Agreements (SPA): Our team prepares comprehensive Share Purchase Agreements (SPA) for the sale or purchase of a company’s shares. These agreements are crucial for businesses looking to acquire or divest ownership stakes, and they ensure that all critical terms are clearly articulated. We focus on valuation terms, conditions precedent, representations and warranties from both buyers and sellers, indemnity provisions, and closing procedures. Our goal is to facilitate a transparent transaction that safeguards the interests of both parties while ensuring compliance with all legal and regulatory requirements. Whether dealing with minority or majority stakes, our SPAs are tailored to reflect the unique circumstances of each transaction.
Merger and Acquisition (M&A) Agreements: We provide comprehensive services for drafting Merger and Acquisition (M&A) Agreements, which govern the merger or acquisition of companies. Our M&A agreements include all necessary components such as due diligence processes, valuation methodologies, payment structures, and employee retention plans. We guide our clients through every step of the M&A process, from initial negotiations to closing the deal, ensuring all regulatory approvals are obtained and all stakeholder interests are aligned. Additionally, we address issues like integration planning, potential liabilities, and non-compete clauses to ensure a successful transition post-acquisition. Our approach is designed to help businesses navigate the complexities of mergers and acquisitions effectively, minimizing risks and maximizing value.
- JV Agreements: We draft agreements for joint ventures that comprehensively define profit-sharing, control, decision-making, and responsibilities between collaborating businesses. These agreements cover key aspects such as contributions of capital, intellectual property, and resources, as well as specifying how profits and losses will be shared. Additionally, we address governance structures, dispute resolution procedures, exit strategies, and the roles each party will play throughout the duration of the venture. This clarity helps establish a solid foundation for a successful and equitable joint venture relationship.
- Strategic Partnership Agreements: Our team prepares detailed agreements for strategic alliances between businesses, focusing on mutual benefit and long-term collaboration. These agreements specify the objectives of the partnership, the scope of work, contributions of each party, as well as revenue-sharing arrangements and timelines. By outlining resource-sharing, marketing efforts, and operational responsibilities, we ensure that both parties are aligned in their goals and expectations. Furthermore, we include robust mechanisms for conflict resolution and performance evaluation, fostering trust and accountability in the strategic alliance.
Loan Agreements: We draft Loan Agreements specifying repayment terms, interest rates, and security arrangements to provide a clear understanding between lenders and borrowers. Our loan agreements are meticulously tailored to ensure that both parties’ interests are protected and that the terms are fair and legally enforceable. We include detailed clauses that cover contingencies, default provisions, and repayment schedules, helping minimize the risk of disputes and fostering a reliable financial relationship.
Credit Facility Agreements: Our team prepares Credit Facility Agreements for businesses seeking credit facilities from banks, outlining the terms of the credit, including interest rates, repayment schedules, and covenants. These agreements are essential for ensuring that businesses have the financial resources they need while protecting lenders’ interests. We work closely with our clients to ensure that the terms are favorable and aligned with their financial goals, providing the flexibility and support needed to manage cash flow and investment opportunities effectively.
Credentials
| Credential | Detail |
|---|---|
| IP matters handled | 25,000+ trademarks, 200+ patents — commercial agreements underpin every IP transaction |
| Startups and businesses advised | 5,000+ |
| Years of commercial practice | 15+ |
| Transaction types | M&A, startup investment, franchise, technology licensing, employment, e-commerce, real estate |
| Litigation background | Commercial Courts, Madras HC, Arbitration — our drafting is shaped by how disputes actually arise |
| Offices | Chennai · Cochin · Hyderabad |
The litigation advantage in drafting: Our commercial litigation practice gives us direct visibility into how poorly drafted agreements are argued in court. We draft agreements knowing what an opposing counsel will challenge, what a judge will ask for, and what a court will enforce. That perspective from practitioners who have been on both sides of contract disputes shapes every clause we produce.
Have Your Contract Drafted or Reviewed – Free Consultation” → /contact-us/
Business Contracts and Agreements FAQ's
Under Section 10 of the Indian Contract Act, 1872, a contract is enforceable if it is made by the free consent of parties who are competent to contract, for a lawful consideration and with a lawful object, and is not expressly declared void. Free consent means consent not vitiated by coercion, undue influence, fraud, misrepresentation, or mistake (Sections 13–22). Competence means parties who are of legal age (18+), of sound mind, and not disqualified by any law. Lawful consideration means the parties are exchanging something of value that is not prohibited by law. An agreement that fails any of these requirements is either void or voidable.
Oral contracts are generally valid and enforceable under the Indian Contract Act, 1872 — there is no general requirement that contracts be in writing. However, certain contracts must be in writing and registered to be valid or enforceable: contracts for immovable property above ₹100 (Registration Act, 1908), deeds of mortgage, gifts of immovable property, and certain commercial agreements specified by state legislation. Even where writing is not mandatory, a written agreement is always preferable it eliminates disputes about what was agreed, provides documentary evidence in court, and prevents misunderstandings that arise from the natural unreliability of memory.
Non-compete clauses that operate during the employment relationship preventing an employee from working for a competitor while employed are generally enforceable in India as reasonable restrictions. Non-compete clauses that operate after the employment relationship ends are void under Section 27 of the Indian Contract Act, which prohibits agreements in restraint of trade. Indian courts have consistently held that post-employment non-compete clauses are unenforceable regardless of how they are drafted, because they deprive the individual of their right to earn a livelihood. What remains enforceable post-employment: non-solicitation of clients and employees (for a reasonable period and geographic scope), and NDAs protecting confidential information. Agreements that are enforceable in the US or UK may be entirely void in India always review non-compete provisions under Indian law before relying on them.
Under the Indian Stamp Act, 1899 and the applicable State Stamp Acts, certain commercial instruments must be stamped at the prescribed rate before or at execution. An unstamped or inadequately stamped instrument is inadmissible as evidence in a court of law meaning you cannot use it to enforce your rights in litigation, regardless of how well it is drafted. Stamp duty rates vary by agreement type and by state Maharashtra, Karnataka, Delhi, and Tamil Nadu each have their own stamp schedules. Common agreements attracting stamp duty include: share subscription agreements, mortgage agreements, lease deeds, partnership deeds, and loan agreements. Before executing any significant commercial agreement, confirm the applicable stamp duty and pay it correctly.
Under Section 10 of the Specific Relief Act, 1963 (as amended in 2018), specific performance of a contract is enforceable as a matter of course — not merely at the court’s discretion. This 2018 amendment significantly strengthened the position of commercial parties who want actual performance (delivery of the property, completion of the project, transfer of the shares) rather than just monetary compensation. Specific performance is not available for contracts of personal service (you cannot compel someone to perform employment obligations), for contracts where monetary compensation is adequate, or where the contract itself is void under the Indian Contract Act.
An enforceable NDA under Indian law should clearly define: (a) what constitutes confidential information specific enough to avoid disputes about what is covered; (b) the obligations of the receiving party what they can and cannot do with the information; (c) permitted disclosures when disclosure to employees, advisors, or regulators is permitted; (d) the duration of confidentiality obligations both during the agreement and post-termination; (e) exclusions from confidentiality — information that is already public, independently developed, or received from a third party without restriction; (f) the remedy for breach injunctive relief under Section 37 of the Specific Relief Act is the most important remedy, because damages may be difficult to quantify; and (g) the governing law and jurisdiction for dispute resolution. Non-compete provisions embedded in NDAs must comply with Section 27 of the Indian Contract Act.
A shareholders’ agreement (SHA) for an Indian company typically addresses: equity ownership and vesting schedules (founder equity subject to reverse vesting is standard for investor-backed startups); governance and board composition (founder vs investor board seats, reserved matters requiring investor approval); investor rights (information rights, pro-rata rights in future rounds, anti-dilution protection either broad-based weighted average or full ratchet); transfer restrictions (right of first refusal, right of first offer, drag-along and tag-along rights); exit provisions (IPO, strategic sale, put options after a specified period); and dispute resolution (typically arbitration for institutional investors). For companies receiving foreign investment, the SHA must comply with FEMA pricing guidelines — shares cannot be issued to non-residents below the fair market value determined by a SEBI-registered valuer.
In an Asset Purchase Agreement (APA), the buyer acquires specific assets of the target business plant, equipment, inventory, IP, customer contracts, goodwill without acquiring the legal entity itself. Liabilities not expressly assumed stay with the seller. APAs are used when the buyer wants asset-level protection from the target’s historical liabilities. In a Share Purchase Agreement (SPA), the buyer acquires the shares of the company taking the entire legal entity with all its assets and liabilities, known and unknown. SPAs require thorough due diligence and comprehensive representations and warranties (with indemnification for undisclosed liabilities). The tax treatment differs significantly: in an APA, stamp duty is payable on the transfer of individual assets at varying rates; in an SPA, stamp duty is payable on the transfer of shares, generally at a lower rate. Competition Act filings with the Competition Commission of India are required for transactions above the prescribed thresholds regardless of APA or SPA structure.
Yes. Arbitration clauses in commercial contracts are enforceable under the Arbitration and Conciliation Act, 1996. A valid arbitration clause must specify: the number of arbitrators, the seat of arbitration (which determines the supervisory court at seat in Chennai, meaning Madras High Court supervises), the applicable rules (ad hoc under the Act, or institutional under SIAC, DIAC, LCIA India, or MCIA rules), and the governing law. Courts in India are now significantly more arbitration-friendly than in earlier decades, the 2015 and 2019 amendments to the Arbitration Act have accelerated the enforcement process and limited court interference. For international commercial contracts with a foreign party, an arbitration clause with a neutral seat (Singapore is common) provides neutrality and the benefit of the New York Convention for the enforcement of the award.
Since India has no dedicated franchise legislation, the franchise agreement is the entire legal basis of the franchise relationship. Critical franchisor protection clauses include: IP licence (clearly defined, revocable on breach, returning all branded materials on termination); quality control obligations on the franchisee with audit and inspection rights; territory definition and exclusivity (or non-exclusivity) with performance obligations; termination triggers (breach, insolvency, failure to meet standards, non-payment of fees) with notice periods and cure periods; post-termination restrictions (non-compete for a reasonable period within the territory); dispute resolution (arbitration for commercial confidentiality); and clear fee structure (franchise fee, royalty, marketing fund contributions). Without a non-compete restriction post-termination, the former franchisee can immediately compete using the knowledge and goodwill built during the franchise a common and costly oversight.
The Digital Personal Data Protection Act, 2023 requires data fiduciaries (entities that collect and process personal data of Indian residents) to: obtain clear and informed consent from data principals before processing their personal data; provide a privacy notice specifying the purpose of processing; appoint a Data Protection Officer if required; implement reasonable security safeguards; and comply with data principal rights — including the right to access information, the right to correction, the right to erasure, and the right to nominate a person to exercise these rights in the event of death or incapacity. A DPDP Act-compliant privacy policy must address all of these elements in plain language. Earlier privacy policies drafted under the IT Act, 2000 rules are not automatically DPDP compliant — they require review and update before the Act’s provisions are enforced.
Under the Limitation Act, 1963, the limitation period for a suit for breach of contract is three years from the date the breach occurred, or from the date the right to sue first accrued. For recovery of money under a contract (debt recovery), the limitation period is also three years. For claims under a guarantee, time runs from the date of demand and refusal. Once the limitation period expires, the remedy is barred not the right, but the ability to enforce it through court proceedings. This is why acting promptly on contract breaches is essential. Limitation periods can sometimes be extended by acknowledgement of liability in writing (Section 18 of the Limitation Act) a fact that is relevant both for drafting correspondence after a breach and for defending against stale claims.
An indemnification clause requires one party (the indemnifier) to compensate the other party (the inddemnitee) for losses arising from specified events typically breaches of representations and warranties, third-party claims arising from the indemnifier’s actions, or specific identified risks. Key drafting elements: the scope of losses covered (direct losses only, or also indirect losses, consequential losses, loss of profits?); the cap on total indemnification liability (typically a multiple of the contract value unlimited indemnity is rarely commercially justifiable); survival period (how long after the agreement terminates can indemnification claims be made?); notice and cooperation obligations; and the relationship between indemnification and other remedies. Under Indian law, unlimited penalty clauses may be subject to judicial review under Section 74 of the Indian Contract Act courts can reduce penalties to the actual damage proved. Indemnification clauses should be drafted with this in mind.
Under the Micro, Small and Medium Enterprises Development Act, 2006, buyers who purchase goods or services from MSME suppliers are required to make payment within 45 days of acceptance of goods or services. If payment is not made within 45 days, the buyer is liable to pay compound interest at three times the RBI bank rate on the outstanding amount from the date payment was due. This obligation applies regardless of what the supply agreement says — even if the agreement specifies 90-day or 120-day payment terms, those terms are overridden by the MSMED Act for MSME suppliers. Buyers dealing with MSME vendors should factor this into their payment structures. MSME suppliers who are not paid within 45 days can file a complaint through the MSME Samadhaan portal for expedited recovery.
In a free 30-minute consultation, we review: the nature and purpose of the agreement you need; the key commercial terms that need to be captured; any specific risk areas or counterparty concerns relevant to your transaction; the stamp duty and registration implications; whether arbitration or court jurisdiction is appropriate for your dispute resolution clause; and a realistic estimate of drafting time and professional fees. For agreement review requests, we assess the document you send us before the call and come prepared with the key issues identified. You leave with a specific action plan whether that is a drafting brief, a list of negotiation priorities, or an immediate fix to a critical clause in an existing agreement.
About the Author
Advocate Suresh Kumar has a law practice specialising in Intellectual Property Rights, Commercial legal advisory, debt recovery, commercial litigation, and dispute resolution for domestic and international clients. He is enrolled with the Bar Council of Tamil Nadu and Puducherry and represents clients before all courts and forums in Chennai, Tamil Nadu. This article reflects his understanding of the current legal position and is intended solely for informational purposes.
Disclaimer
This article is published by Unimarks Legal for informational purposes only. It is not intended to constitute legal advice or to create an attorney-client relationship. The contents are based on Indian law as applicable at the time of writing and are subject to change. Readers should not act upon the information in this article without seeking independent legal counsel. Every legal situation is unique, and the application of law depends on specific facts and circumstances. Past results do not guarantee future outcomes. This publication is made in compliance with the Bar Council of India Rules, which prohibit advertising or solicitation by advocates. Any information received through this article should not be construed as legal advice.
For specific legal guidance on your matter, you may consult a qualified advocate in your jurisdiction.
