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How to draft an agreement? – A primer

November 06, 2014
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Understanding the implications of an agreement is critical for any business operations. There are various features and parameters in an agreement which makes it a viable and tenable document  to avoid lengthy and cumbersome court battles later on in the event of a breach. This module is designed to equip the takers of this course to make such a decision. This module will impart the skills both for drafting simple agreements as well to interpret the likely legal effect of various provisions mentioned in an agreement drafted by the other party.

Objectives of drafting an agreement

An agreement can be verbal or in written form. However, most of the business understandings are always noted down in black and white in the form of an agreement. This helps in minimizing the possibilities of disagreement on what exactly the parties’ intention was at the time of entering into the business relationship. From this perspective, the objectives of drafting an agreement are:

Information required before drafting an agreement

Though each agreement is unique in itself, it is necessary to gather certain information from the proposed parties to the agreement in order to appropriately document the understanding between them. Some of such queries are enumerated below. Answer to these queries would help in meeting the documentation objective.

Legal issues to be ensured

There are certain contractual legal concepts which need to  be kept in mind while drafting or reviewing any agreement. These concepts, although already covered in the Indian Contract Act, 1872, are presented here in a capsule.

Main provisions of an agreement

Like any other document an agreement has various parts. Each of these parts must be there in an agreement to impart and ensure surety  to the understanding that the parties propose to document through an agreement.

Other issues – Besides the provisions stated above, there are certain statutory provisions which need to be complied with while entering into an agreement. These are:

How do smart businessmen or good commercial lawyers approach drafting?

 

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