A business contract should be drafted carefully, ensuring clarity, legality, and enforceability. While the Indian Contract Act, 1872 does not prescribe a fixed format, a well-structured business contract generally includes the following essential components:
This agreement is entered into between:
(Party 1 and Party 2 shall be collectively referred to as “Parties” and individually as “Party”).
A brief description of the business arrangement, including the nature of the transaction and obligations of both parties.
2.1 Scope of Work: Detailed description of the responsibilities and duties of each party.
2.2 Deliverables: Any specific products, services, or obligations that must be met.
2.3 Timelines: Key deadlines, project duration, and milestones.
3.1 Amount: Total amount to be paid.
3.2 Payment Schedule: Mode of payment (Bank Transfer, Cheque, etc.), due dates, and penalties for late payments.
3.3 Taxes & Duties: Who will bear taxes, GST, or other applicable duties.
4.1 Each party represents that they have the legal capacity and authority to enter into this agreement.
4.2 The services/products will comply with all applicable laws and standards.
Both parties agree to maintain the confidentiality of sensitive information shared during the business relationship.
6.1 Each party agrees to indemnify the other against any claims, damages, or legal actions arising due to breaches or negligence.
6.2 Liability limits (if any) should be clearly defined.
7.1 This agreement can be terminated under the following conditions:
8.1 Any disputes arising from this contract shall be resolved through mediation/arbitration/court proceedings in [Jurisdiction/City].
8.2 The governing law applicable to this contract shall be Indian law.
Neither party shall be liable for delays or failures due to unforeseeable circumstances like natural disasters, war, or government restrictions.
10.1 Entire Agreement: This contract constitutes the entire agreement between the parties.
10.2 Amendments: Any modifications must be made in writing and signed by both parties.
10.3 Assignment: Neither party shall assign rights or obligations without prior written consent.
The parties have executed this Agreement as of the date first written above.
For [Party 1 Name]
Signature: _______________
Name: ___________________
Designation: _____________
Date: _______________
For [Party 2 Name]
Signature: _______________
Name: ___________________
Designation: _____________
Date: _______________
This format ensures clarity, enforceability, and compliance with the Indian Contract Act, 1872 while protecting the interests of both parties. Let me know if you need modifications or a contract for a specific type of business!
