Short answer: Most commercial disputes turn on five clauses: what triggers payment, what happens on delay, how liability is limited, how either side can exit, and where and how a dispute is decided. Getting those right at signature is far cheaper than arguing about them later.
Payment and delivery triggers
Vague payment triggers — 'on completion', 'after delivery' — are the single most common source of recovery disputes. Tie payment to an objectively verifiable event and a document that evidences it.
Limitation of liability and indemnity
A liability cap is only useful if it is drafted against a clear definition of the losses it covers and the carve-outs it does not. Indemnities should be reciprocal where the risk is reciprocal.
Termination and exit
Provide for termination for breach with a cure period, termination for convenience where commercially appropriate, and — importantly — what happens to work in progress, data, materials and payments on exit.
Dispute resolution and governing law
Decide deliberately between court and arbitration. An arbitration clause should state the seat, the number of arbitrators, the language and the appointment mechanism; a vague clause produces a preliminary fight before the real dispute begins.
For cross-border contracts, governing law, seat and enforceability of an eventual award in the counterparty's jurisdiction should be considered together.
Frequently asked questions
- Is an unstamped agreement unenforceable?
- Stamping requirements vary by instrument and state and can affect how a document is received in evidence. Have stamping confirmed for the specific agreement rather than assuming.
- Do purchase orders and emails form a contract?
- They frequently do, and a course of dealing can supply terms nobody read. That is precisely why written terms that override informal exchanges are worth having.
- Should the arbitration seat be Chennai?
- It depends on where the parties and assets are and what supervisory court you want. It is a commercial decision with legal consequences, so take it consciously.
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This article is general information about Indian law and procedure as at the date of publication. It is not legal advice, and outcomes depend on the facts of each matter. Please take advice on your own situation before acting.
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