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 Agreements –The 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 .