PRACTICAL GUIDE TO DRAFTING COMMERCIAL CONTRACTS. – By Bhumesh Verma.

Author: Kshitij Kothari, 1st Year, B.A LL.B (Hons), School of Law, Jagran Lakecity University, Bhopal. The Author has written the article while pursuing the internship programme with us. ABOUT THE AUTHOR: Mr. Bhumesh Verma is the Managing Partner of Corp Comm Legal, an independent Indian law firm headquartered in New Delhi. Besides, he is the convener of the Global Business Lawyers’ League and The Indian Lawyers’ League. He is a notable alumnus of Delhi University from 1994 batch. He started his journey as a lawyer by working at Ajay Bhal & co. (now AZB & partners). In the year 2000, he was selected as a Chevening Scholar by the UK government. With that scholarship, he graduated from the College of Law at York, London, and also make himself experienced by working in London with Ashurst’s’. He comes up with a remarkable experience and illuminating career of 25 years & a counting. With over 25 years’ experience, he is one of the leading Indian senior corporate practitioners ranked inter alia in the ‘A-List’ of the Top 100 Indian Lawyers by India Business Law Journal from time to time, most Admired Indian Lawyers, most followed Indian lawyers on LinkedIn, etc. An avid reader, a sought-after speaker, guest faculty, and a prolific writer, he has contributed to in-house journals of many international law firms on Indian laws and published more than 400 articles so far. Bhumesh sir is a guest faculty at many law schools and has an avocation of delivering and gaining knowledge and a hobby of interacting with the young budding lawyers, professionals, and profound individuals in the field of law. INTRODUCTION Introduction to Contracts We enter into contracts day after day. Taking a seat during a bus amounts to getting into a contract. When you put a coin within the slot of a weighing balance, you’ve got entered into a contract. You attend a restaurant and take snacks; you’ve got entered into a contract. In such cases, we don’t even realize that we are making a contract. In the case of individuals engaged in trade, commerce, and industry, they keep it up business by getting into contracts. The law concerning contracts is to be found within the Indian Contract Act, 1872. A contract is an agreement which is binding when enforceable by law. Contracts may be oral or written, but it is good to have a contract as written and signed and analyzed by both the parties. Contracts are the pillars and founding stone of the business world, and maybe simple or complex. We have seen above that the 2 elements of a contract are: (1) an agreement; (2) legal obligation. Section 10 of the Act provides for a few more elements that are essential to constitute a legitimate contract. It reads as follows: “All agreements are contracts if they’re made by the free consent of parties, competent to contract, for a lawful consideration and with a lawful object and aren’t hereby expressly declared to be void.” Thus, the essential elements of a legitimate contract are often summed up as follows Agreement, Intention to make legal relationship, Free and genuine consent, Parties competent to contract, Lawful consideration, Agreements not declared void or illegal, Lawful object, Certainty of meaning, Possibility of performance and Necessary Legal Formalities. Introduction to Contract Drafting Contract drafting is a highly professional, lucrative, entertaining, and certainly a money-making part of any legal profession. Drafting a contract is that the act of writing out the terms and details of the contract, to stipulate the legal obligations of the 2 parties, so that they fully understand the terms of the agreement and their respective duties towards each other. Contracts could also be drafted by anyone, but an attorney is usually needed to make a reliable and secure contract, especially for more complex contracts. Lawyers spend their ages to become an excellent agreement drafter. Exercising and encapsulating good contract drafting skills is essential for making once way to doing well in reputed law firms, especially in the transactional practice areas which are normally hectic. Therefore, contract drafting is a crucial skill that every lawyer must acquire. Sales agreements, real estate purchase contracts, employment agreements, confidentiality agreements, finder’s agreements, or insurance contracts, are a few examples of contract. For example, if you want an advocate to help you drafting or reviewing a contract of a real estate transaction, to the same you may have to ensure your finances and the transaction itself is secured. Furthermore, you have to pen down the possible consequences on the grounds of the contract breached. ESSENTIAL BOOK INFORMATION Practical Guide to Drafting Commercial Contracts is a concise handbook enumerating the key aspects about drafting effective commercial agreements. The book is written in a lucid and an understandable language where the author explains the factors and mindset that a draftsman must consider while drafting an agreement to reflect the intent of the client or the parties. A carefully drafted contract must be precise, comprehensive, devoid of contradictions, grammatically accurate and amenable to clear legal interpretation in case of disputes arising therefrom. The book includes various clauses as how the drafter must draft the contract, what he should include and what he should not. Also, the book explains us are the different prospectus that the client will rely upon to get best out of what the drafter is providing him. The book explains the wide range of the usage to legal terms and also the terms which are to be incorporated in the draft to make the clients and the world familiarize with the business language. Business language is a category of language which is used in the office world and has a different meaning compared to the rest of the world. This book makes us aware about the business terms which are to be incorporated in the draft. The book makes us aware about various clauses such as operative clause, all conditions that must be followed to consider the contract etc. It also acquaints us about the boiler plate clause that are mainly found at the end of most legal documents. These clauses encapsulates a wide range of provisions such as what could be the next step if a document is declared unenforceable, how the disputes will be resolved, which laws govern the specific contract, etc. In termination clause, where one should draft various pre details as to if something uncertain happens then what we have to do. In force majeure clause if something uncertain happens then what could be the further steps to be taken into consideration. The book also talks about E-contracts which in this online world are becoming a trend. For example, we agree to all the conditions with the online shopping platforms and in return they provide us with the guarantees and warranties to the products we buy through online shopping platforms. Thus, through these means we enter into a contract that we merely do not consider, but they are. The book also guides the reader to specifically be cautious about the grammatical mistakes, numbering each page, providing general provisions which afterwards must be followed with the exceptions, avoiding repetitions of clause, avoiding difficult words, use simple business language and many more stuff related to the same. The book also gives a variety of template of agreements which can be used as a reference for the readers for their drafting work or can make them aware as what an ideal agreement must consist of. The book in total contain templates of essential and regular business contracts like non-disclosure agreement, supply agreement, share purchase agreement, shareholders’ agreement, joint venture agreement, procurement contracts, arbitration agreement, employment agreements, leasing and licensing documents, business transfer agreement etc. Each template is prepared from practical and business-use perspectives which are preceded by an Introduction and the Drafting Notes. CONCLUSION Contract drafting book is an indispensible guide and reference for any lawyer, draftsman, arbitrator, etc., as it not only incorporates the practical and essential templates that can serve as a reference for the various contracts but also provides a sense about the purpose and critical points of the contract. For each of the chapters in the book, also with the templates, the book contains an introduction and the drafting notes, allowing readers to understand the essence and importance of the agreement clauses. The book constitutes and primarily focuses on Partnership, Procurement of Goods and Services, Mergers, Acquisitions and Joint Ventures, Real Estate, Employment, Confidentiality, Franchise Business Model, Trademark, Patent, Copyright Publishing, Agency, Hire Purchase, Turnkey/EPC and Project Finance. One chapter is exclusively devoted to one of the essential clauses in any contract i.e., the Dispute Resolution clause, and it covers the involution of the same clause in comparison to different contracts. This book will prove useful for young budding lawyers, practicing professionals and even to the faculty member to make them understand the practical implications of variety of contracts. The book primarily focuses on beginning points for practitioners and can be further useful for all considering the vast number of contracts dealt in day to day life. I have no doubts to admit that I really enjoyed this book and as a 2nd semester student I was able to intake an essence of knowledge on contract drafting which I believe can later be polished as I will reach and pass my subsequent semesters. As a reader, I will be giving this book a rating of 4 out of 5. The only default I felt was that the book could have added a separate analysis of a draft agreement as well which I think could have added to the overall understanding of the subject matter this book is based on and only due to this reason, I am deducting 1 mark. Overall, a highly recommended read for all the legal readers out there! Disclaimer: Views and opinions as expressed in the Research Articles are solely of the author and any member of the core team of the website shall not be liable for the same. Editorial Credits: Kashish Khurana, Sheetal Verma

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