Commercial Agreements & Contracts In IndiaTypes Of Agreements – Disputes & Precautions

April 17, 20160
  • Drafting of Agreement With Precaution  to Prevent Dispute
    Types of Contract , Dispute & Precautions
  • Everyday thousands and lakhs of agreements and contracts are signed between various companies throughout the world . Even the nature , scope & purpose of such agreement differ with the requirement & place of execution .
  • Before we share as to what is the main reason which is leading to most of the disputes , we will discuss on the types of agreements first so that the grey area can be easily understood .
  • Types of AgreementsThe following types of agreements are prominent & widely executed  in different parts of the world:
  • a)Supply Agreement ,b)Service & Supply Agreement,c) Technical Agreement,d) Franchisee Agreements ,e) Non Disclosure & Confidentiality Agreements ,f)Tri-partie agreement, g)Joint Venture Agreement,h) Authorisation Agreement,i) Marketing Agreement,j) Job Work Agreement,k)Licencing Agreement,l) Technology transfer  Agreement etc
Precautions In Agreement

When it comes to drafting of the aforesaid agreements , it is usually observed, at our end, that most of the drafters  are mainly worried about inclusions of scope of the work , payment terms , dispute & jurisdiction , secracy , intellectual property rights , termination etc .

But , what leads to most disputes are the areas which are neither thought nor included in the body of the agreement and these lead to grivenaces & ultimately emerges as a dispute .

There are various precautions which if taken while drafting agreements can save one from unnecessary litigation. We are discussing some of them as below :
i. address every what’s 
ii. address every if’s
iii. address every when’s 
iv . address every where’s
v. address every who’s
vi. address every documentation 
vii. address parameters of quality , completion & handover 
viii. avoid copy paste
ix. address apprehensions
x. broaden the definitions etc 
Why Problem & Dispute Occurs
AMLEGALS ,after handling disputes arising out of agreement for almost two decades,  have had observed that the reason of most of the dispute in an agreement is almost very common and such mistakes were observed in very big companies with in house legal team  as well .
The reasons of disputes are as below  :
a. drafted by simply copy paste from a previously executed agreement
b. could not apprehend the situations which may arise in a particular agreement 
c. could not define the terms 
d.could not address the documentation aspects 
e. lacked in arriving and including what’s, if’s, when’s , where’s , who’s etc
f.could not anticipate the problems & practical issues 
g.made in hurry under the pressure of management
h.lack of proper discussion with the concerns
i.neither  consulted a law firm nor got it vetted etc 
The aforesaid mistakes should be avoided so that  65% of the diputes could be prevented.
One should make agreement with patience ,define & include every apprehensions after lengthy discussions on the subject issue .
The business agreement are for business .With due respect to inhouse legal team we still maintain that one should take help of a law firm since the litigations aspets in a court  can be well understood , analysed , deployed & included by a law firm only .


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