[FAQs] Why Written Contracts are a Must – Clear | Secure | Legally Binding

Though, contracts, deeds etc. can be written, oral, or implied also. However, it is always preferable to enter into written contracts as it is always difficult to prove the terms of an oral or implied contract than those of a written one.

Some of the benefits of having a written contract are:

• The process of writing down the contract’s terms and signing the contract forces both parties to think about and be precise about the obligations they are undertaking. With an oral contract, it is too easy for both parties to say “yes” and then have second thoughts.
• With an oral contract, the parties may have different recollections of what they agreed on (just as two witnesses to a car accident will disagree over what happened).
• A written agreement eliminates disputes over who promised what.
• Some types of contracts must be in writing to be enforced. The Copyright Act, 1957 requires a copyright assignment or exclusive license to be in writing.
• If you have to go to court to enforce a contract or get damages, a written contract will mean less dispute about the contract’s terms as the burden of proof lies with you.

Section 3 of the Indian Evidence Act, 1872 states that a “Document” means any matter expressed or described upon any substance by means of letters, figures or marks or by more than one of those means, intended to be used or which may be used, for the purpose of recording that matter.

• A writing is a document;
• Words printed, lithographed or photographed are document;
• A map or plan is a document;
• An inscription on a metal plate or stone is a document;
• A caricature is a document.

Documents for formation of an Entity:

• Memorandum of Association & Articles of Association
• Partnership Deed
• LLP Incorporation document and LLP Agreement
• Trust Deed Conversion of Partnership into Limited Company
• Association of Persons agreement
• Section 8 company – Memorandum and Articles of Association
• Memorandum of Association and Rules and Regulations of Society

Documents relating to Cyber Law:

• Software Services Agreement
• Internet services agreement
• Privacy Policy and User Agreement
• Software Escrow Agreement
• Website Development Agreement
• Internet Gateway Merchant Legal Agreement
• Technology related contracts.

The process by which disputes between the parties are settled or brought to an amicable result without the intervention of Judicial Institutions and without any trail is known as Alternative Dispute Resolution (ADR). ADR offers to resolve all type of matters including civil, commercial, industrial and family etc., where people are not being able to start any type of negotiation and reach the settlement.

Types of ADR:

• Arbitration: The dispute is submitted to an arbitral tribunal which makes a decision (an “award”) on the dispute that is mostly binding on the parties. It is less formal than a trial, and the rules of evidence are often relaxed. Generally, there is no right to appeal an arbitrator’s decision. Except for some interim measures, there is very little scope for judicial intervention in the arbitration process.
• Conciliation: A non-binding procedure in which an impartial third party, the conciliator, assists the parties to a dispute in reaching a mutually satisfactory agreed settlement of the dispute. Conciliation is a less formal form of arbitration. The parties are free to accept or reject the recommendations of the conciliator. However, if both parties accept the settlement document drawn by the conciliator, it shall be final and binding on both.
• Mediation: In mediation, an impartial person called a “Mediator” helps the parties try to reach a mutually acceptable resolution of the dispute. The mediator does not decide the dispute but helps the parties communicate so they can try to settle the dispute themselves. Mediation leaves control of the outcome with the parties.

Agreement of Reference to Common Arbitrator

THIS AGREEMENT is made at                        on this              day of                   

BETWEEN

Mr. A                                      s/o                                           residing at                                      hereinafter referred to as the Party of the First Part.

AND

Mr. B s/o                                        residing at                                                     hereinafter referred to as the Party of the Second Part.

WHEREAS by an Agreement (Building contract) dated the   day of               , 20  entered into between the parties hereto the Party of the First Part entrusted the work of constructing a building on his plot of land situated at… to the Party of the Second Part on the terms and conditions therein mentioned.

AND WHEREAS the Party of the Second Part has commenced the construction of the building according to the plans sanctioned by the Municipal Corporation and has completed the construction to the extent of the 1st floor level.

AND WHEREAS the Party of First Part has made certain payments to the Party of the Second Part on account but the Party of the Second Part is pressing for more payments which according to the Party of the First Part he is not bound to pay and, therefore the work has come to a standstill.

AND WHEREAS disputes have therefore arisen between the parties hereto regarding the interpretation of certain provisions of the said agreement and also regarding the quality of construction and delay in the work.

AND WHEREAS the said agreement provides that in the event of any dispute or difference arising between the parties the same shall be referred to arbitration of a common arbitrator if agreed upon or otherwise to two Arbitrators and the Arbitration shall be governed by the provisions of the Arbitration & Conciliation Act, 1996.

AND WHEREAS the parties have agreed to refer all the disputes regarding the said contract to Mr.                                             Architect, as common Arbitrator and have proposed to enter into this Agreement for reference of the disputes to the sole arbitration of the said Mr.  .

Now It Is Agreed Between the Parties Hereto as Follows:

• That the following points of dispute arising out of the said agreement dated                               are hereby referred to the sole arbitration of the said    for his decision and award.
• The points of dispute are:

1. 1. Whether the Party of the Second Part has carried out the work according to the sanctioned plans and specifications.
   2. Whether the Party of the Second Part has delayed the construction.
   3. Whether the Party of the Second Part is overpaid for the work done up to now.
   4. Whether Party of the First Part is bound to make any further payment over and above the payments made up to now for the work actually done.
   5. All other claims of one party against the other party arising out of the said contract up to now.

• The said Arbitrator shall allow the parties to file their respective claims and contentions and to file documents relied upon by them within such reasonable time as the Arbitrator may direct.
• The said Arbitrator shall give hearing to the parties either personally or through their respective Advocates but the Arbitrator will not be bound to take any oral evidence including cross examination of any party or person.
• The said Arbitrator shall make his Award within a period of four months from the date of service of a copy of this agreement on him by any of the parties hereto provided that, the Arbitrator will have power to extend the said period from time to time with the consent of both the parties.
• The Arbitrator will not make any interim award.
• The Arbitrator will have full power to award or not to award payment of such costs of and incidental to this arbitration by one party to the other as he may think fit.
• Subject to the provisions of the Arbitration & Conciliation Act, 1996 the award will be binding on the parties hereto.
• The Arbitration shall subject to what is herein provided be governed by the provisions of the Arbitration and Conciliation Act, 1996.

IN WITNESS WHEREOF the parties have put their respective hands the day and year first hereinabove written. SIGNED by the within named

Mr. A                            Signed by the within named Mr. B      

In the presence of:

Model Arbitration clauses in an agreement

1. Every dispute, difference, or question which may at any time arise between the parties hereto or any person claiming under them, touching or arising out of or in respect of this agreement (deed) or the subject matter thereof shall be referred to the arbitration of XY, or if he shall be unable or unwilling to act, to another arbitrator to be agreed upon between the parties or failing agreement to be nominated by  or, failing agreement to two arbitrators one to be appointed by each party to the difference (whether consisting of one or more than one person) and in case of difference of opinion between them to an umpire appointed by the said two arbitrators before entering on the reference and the decision of the arbitrator (or such arbitrators, or umpire as the case may be) shall be final and binding on the parties.
2. In the event of any dispute, difference or question arising out of or in respect of this agreement or the commission of any breach of any terms thereof or of compensation payable thereof or in any manner whatsoever in connection with it, the same shall be referred to the Chamber of Commerce  (or the Association of                            ) for arbitration as provided in Rules framed by the said Chamber (or Association) for the purpose. The decision or award so given shall be binding on the parties hereto.
3. All disputes arising between the partners as to the interpretation, operation, or effect of any clause in this deed or any other difference arising between the partners, which cannot be mutually resolved, shall be referred to the arbitration of  failing him to any other arbitrator chosen by the partners in writing. The decision of such an arbitrator shall be binding on the partners.

Employment agreement is an agreement that is entered into between two parties, i.e., the employer and employee. It is a document that describes the responsibilities and duties expected of an employee. It also describes the profile of the job and the title. The document ensures that the employee knows his place in the organisation and what is expected of him.

Employment agreements should be created in a way that is just and fair for all the employees. If this is followed, employees will do their tasks and responsibilities well and without any negative emotions toward their employers.

Usually, employment contracts contain only vague references to the “policies and procedures to which the employee will be bound”. The employer should provide the employee with all of the company policies and other documents that relate to the contract or are referred to in the contract.

• Identify the long-term requirement of employees.
• Identify the workmen and employees not covered under definition of workmen, respectively.
• Local laws of the State should be borne in mind while drawing up the contracts.
• Issue appointment letters which clearly define the employment terms and conditions.
• Employment contracts, where necessary, should be put in place with clauses for wages, benefits, non-compete, confidentiality, term, termination etc.
• Depending on the requirement, use fixed term contracts for workmen.
• The terms and conditions of the employment should be clearly explained to employees before execution and should be drafted without any ambiguity.

An AGREEMENT made on this          day of                 , 20                       

BETWEEN

                                                                    (Name of Company) represented by its Managing Director                                                         (hereinafter called the “Employer” of the One Part.

AND

                                                       (Name of the Employee & his details) (hereinafter called the “Employee” of the Other Part.

WHEREAS

The Employer is engaged in the business of                                              and maintains business premises at                                                                          .

• The employer wants to appoint a suitable person to work as for his business concern;
• The Employee,  the  party  of  the  other  Part,  has  agreed  to  serve  as

                                            for the business concern on the terms and conditions hereinafter set forth.

Now This Agreement Witnessed and the Parties Hereto and Hereby Agree as Follows:

• Agreement to Employ and Be Employed: The Employer hereby employs the Employee as                        at                                         and the Employee hereby accepts and agrees to such employment.
• Description of Employee’s Duties: Subject to the supervision and pursuant to the orders, advice, and direction of the Employer, the Employee shall perform such duties as are customarily performed by one holding such position in business concern. The Employee shall additionally render such other and unrelated services and duties as may be assigned to him from time to time by employer.
• Manner of Performance of Employee’s Duties: The Employee shall at all times faithfully, industriously, and to the best of his/her ability, experience, and talent, perform all duties that may be required of and from him/her pursuant to the express and implicit terms hereof, to the reasonable satisfaction of employer. Such duties shall be rendered at the abovementioned premises and at such other place or places as employer shall in good faith require or as the interests, needs, business, and opportunities of employer shall require or make advisable.
• Duration of Employment: The term of employment shall commence on                       and continue till such date the Employee works in the business concern subject, however, to prior termination as provided in Clause 9 hereof or by resignation by the Employee. In case of resignation, the Employee shall give one month prior notice to the Employer and on failure to do so, shall forego his salary for the notice period.
• Remuneration: The Employer shall pay a salary of                                  to the Employee for the services rendered to the business concern. The details of the salary are mentioned in Annexure A of the document. In addition to the foregoing, the employer shall also reimburse the expenses incurred by the Employee while travelling for and on behalf of the Employer pursuant to the employer’s direction.
• Employee’s Loyalty to Employer’s Interest: The Employee shall devote all his time, attention, knowledge, and skill solely and exclusively to the business and interests of the Employer, and the Employer shall be entitled to all benefits, emoluments, profits, or other issues arising from or incident to any and all work, services, and advice of the Employee. The Employee expressly agrees that during the term hereof he will not be interested, directly or indirectly, in any form, or manner, as partner, officer, director, stockholder, advisor, employee, or in any other form or capacity, in any other business similar to the employer’s business or any allied trade, except that nothing herein contained shall be deemed to prevent or limit the right of employee to invest any of his surplus funds in the capital stock or other securities of any corporation whose stock or securities are publicly owned or are regularly traded on any public exchange.
• Non-Disclosure of Business Information: The Employee will not at any time, in any form or manner, either directly or indirectly divulge, disclose, or communicate to any person, firm, or corporation in any manner whatsoever any information of any kind, nature, or description concerning any matters affecting or relating to the business of employer, including, without limitation, the names of any its customers, the prices it obtains or has obtained, or at which it sells or has sold its products, or any other information concerning the business of employer, its manner of operation, or its plans, processes, or other date of any kind, nature, or description without regard to whether any or all of the foregoing matters would be deemed confidential, material, or important.
  The parties hereby stipulate that, as between them, the foregoing matters are important, material, and confidential, and gravely affect the effective and successful conduct of the business of employer, and its good will, and that any breach of the terms of this section is a material breach of this agreement.
• Leave: The Employee will be entitled for one day leave for a completed month of service. Apart from this the employee will also be entitled to medical leave of 15 days in a year subject to submission of medical certificate in case the medical leave period exceeds three days.
• Termination of Service

1. 1. The Employer shall terminate the services of the Employee without any previous notice, if the employer is satisfied based on medical evidence that the employee is unfit and is likely for considerable period to continue to be unfit by reason of ill health for discharge of his/her duties.
   2. The Employer shall terminate the services of the Employee without any previous notice, if the Employee is found guilty of any insubordination, intemperance, moral turpitude or other misconduct or of any breach or non-performance of any of the provisions of these conditions, or if otherwise found unsuitable for the efficient performance of his/her duties.

• Settlement of Dispute: Any claim or controversy that arises out of or relates to this agreement, or the breach of it, shall be settled by arbitration in accordance with the provisions of the Arbitration and Conciliation Act, 1996 and relevant labour legislations.
• Waiver or Modification Effective Only in Writing: No waiver or modification of this agreement or of any covenant, condition, or limitation herein contained shall be valid unless in writing and duly executed by the party to be charged therewith. Furthermore, no evidence of any waiver or modification shall be offered or received in evidence in any proceeding, arbitration, or litigation between the parties arising out of or affecting this agreement, or the rights or obligations of any party hereunder, unless such waiver or modification is in writing, duly executed as aforesaid.
• Governing Law: This agreement and performance hereunder and all suits and special proceedings hereunder shall be construed in accordance with the laws of the State of                              , India.
• Binding Effect of Agreement: This agreement shall be binding on and inure to the benefit of the respective parties and their respective heirs, legal representatives, successors, and assigns.

In Witness Whereof

On behalf of the party of the ONE PART and by the party of the OTHER PART have hereto and hereby set their hands the day, month and year above mentioned:

1. Signature of the Party of the ONE PART (Employer)
2. Signature of the Party of the OTHER PART (Employee)

A settlement agreement is a legal contract that resolves the disputes among all parties by coming to an agreement. It is a legal document where all parties in a court case, in civil law, agree to an outcome of any judgment being made in advance.

Usually, in settlement agreements, there is no need for a long court case which saves the clients both time and money. Settlement agreements are formed through mediation rather than through a trial.

Here are some situations in which a settlement agreement can apply:

• Any property damage claim;
• Mediation/Conciliation Settlement Agreements;
• Corporate Settlement Agreements;
• Family Business Settlement; and
• Employment disputes.

Settlement of Family Business

This Deed of Family Arrangement is executed on this                              in the year 2020

BETWEEN

AB S/o MN aged                        years, occupation                                                            r/o                                                              (hereinafter called as the first party)

AND

CD S/o XM aged              years, occupation and r/o                                      (hereinafter called as the second party)

WHEREAS

• The first party has started and carried out the business and undertaking described in Schedule ‘A’ by his own initiative and efforts with his own capital and funds.
• The second party, who is son of the pre-deceased son of the first party and residing with him under the care and parentage of the first party and assisting him in conduct of the aforesaid business for which he was being paid share in The second party thus having contributed his labour and skill for the development of the business rendered valuable services for the same and rendered himself entitled for an equal share in the said business. It has been settled and decided to distribute the business amongst the parties so also the properties. The first party shall hold the share in business and properties described in Schedule ‘B’ and the second party shall hold the share in business and properties described in Schedule ‘C’.
• The movable and immovable properties, which is also described in Schedule ‘A’ have been acquired by the first party out of the funds of the said business in his name and for his use and benefits.

Now This Deed Witnesseth as Follows:

• The second party shall hold, own and possess as full and absolute owner of the business and properties described in Schedule ‘C’ without any demand or claim by the first party any account whatsoever for which, he has expressly granted, conveyed, transferred and assigned by the first party.
• The business and properties have been distributed amongst the parties to this deed. It is hereby decided and declared that the first party hereinafter shall hold, own and possess as full and absolute owner of the business and properties described in Schedule ‘B’ and the second party shall not interfere in the same and he has relinquished his rights in the said part of business and properties described in Schedule ‘A’.

IN WITNESS WHEREOF the parties to this DEED have put and subscribed their respective hands in presence of witnesses on this          day of                           in the year

                at                                      .

1. Signature of the 1st Party
2. Signature of the 2nd Party

Witnesses

1. (Name, designation and address)
2. (Name, designation and address)

A society may be defined as an association of persons united together by mutual consent to deliberate, determine and act jointly for same common purpose. When a charitable organisation intends to have an open participation of large number of people in its functioning and decision making, it must be registered as a Society.

According to section 20 of the Societies Registration Act, 1860, the following societies can be registered under the Act: ‘charitable societies, military orphan funds or societies established at the several presidencies of India, societies established for the promotion of science, literature, or the fine arts, for instruction, the diffusion of useful knowledge, the diffusion of political education, the foundation or maintenance of libraries or reading rooms for general use among the members or open to the public, or public museums and galleries of paintings and other works of art, collection of natural history, mechanical and philosophical inventions, instruments or designs.’

• The Act makes it obligatory for employers of an industrial establishment where 100 or more workers are employed to clearly define the conditions of employment, by way of standing orders/services rules and to make them known to the workmen employed.
• However, in the N.C.T. of Delhi, the Act applies to an industrial establishment where 50 or more workmen are employed or were employed in the preceding 12 months.
• The employer is required to prepare draft standing order, which he propose to adopt and submit the same to the Certifying Officers for certification.
• The employer is required to act in conformity with the certified standing orders in dealing with the day today affairs of the workmen. Certified standing orders have the force of the law like any other enactment.

If the Court sends a Show Cause Notice, the person to whom such notice is given must give it the highest priority. The show cause notice must not be taken lightly and its seriousness should be understood.

The reason being that by sending a reply to the show cause notice, he/she can avoid criminal charges put on him and also the liabilities which arise from them.

Points to be kept in mind while writing a reply to show cause notice:

• A proper explanation has to be provided at the
• It should be kept as brief as
• It must be written in such a manner that the Court is satisfied with the fact that he/she is aware of the gravity of the situation.

Conditions must be met for the provisions of section 143 not to apply:

• the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier;
• the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice; in writing, to the drawer of the cheque, within thirty days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and
• the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice.

Reply to Legal Notice under section 138 of Negotiable Instruments Act, 1881

Name of the Advocate XXXXX Advocate New Delhi-110019 Ph.011- 2437XXXX

Dt. 21.07.2015

To,

Sh…………………………….. Advocate,

…………………………… , Delhi High Court,

New Delhi-110001

Sub: Reply to Your Legal Notice u/s 138 Negotiable Instrument Act, 1881 Dated 02.04.2023

Dear Sir,

Your legal notice dated 2.4.2023 has been placed before me by my client Sh…………… at Connaught Place, New Delhi – 110001 and I, the undersigned, have been instructed to reply to your said notice by my client on his behalf as under:

1. That, at the outset you are being informed that the notice under reply, you have sent on behalf of your above said client, contains false and frivolous facts provided by your said client against my client, thereby your notice under reply deserves to be withdrawn, with unconditional apology by your client, because the claim made by you is without any basis and is based upon concocted facts, as no claim is made out against my client and in favour of your client.
2. That, in fact, my client did not place any order for supply of any machines whatsoever, as alleged by But, with a view to dispose of your old stock of outdated machines, you requested my client to place them at his shop for sale. Keeping in view old relations my client agreed to your client’s proposal, which was subject to the condition that payment would be made only after those machines were sold out. However, those machines were not only outdated, but were also mechanically faulty, because of which till date they are lying with my client, which your client is at liberty to take back with 2 days’ prior notice. It is pertinent to mention here that the cheque in question was handed over by my client blank and the same was to be used only upon instructions of my client, after he could sold out your all those machines.
3. That, however, your client has cheated my client by misusing that cheque which is not in the handwriting of my client. As a matter of fact, your client has committed fraud in the matter and, consequently, is liable to be proceeded under the relevant provisions of law.
4. That, therefore, it is denied that the cheque in question was issued by my client to your client in discharge of any Rather, your client has misused that blank cheque with ulterior motives, after forging the same.

Reply on merits

• That the contents of para 1 of your legal notice are wrong and denied and whatsoever is stated above is reiterated. It is denied that my client purchased from you client any machines whatsoever. Rather, my client helped your client to keep your machines in his godown/shop for disposal. Therefore, it is denied that the cheque in question was issued in discharge of any liability towards my client, as alleged in this para.
• That the contents of para 2 are denied for want of However, it is reiterated that my client ever issued any cheque, in the manner as alleged by you.
• That, in reply to para 3 of your legal notice, what is stated above is reiterated. It is submitted that your client was not entitled to use that cheque for encashment and deposit the same in his bank.
• That the contents of paras 4 & 5 are denied for want of knowledge. However, it is reiterated that any cheque was issued in discharge of any liability towards my client to your client.
• That the contents of para 6 need no comments. However, it is denied that my client committed any offence whatsoever.

In view of aforesaid facts and circumstances, you are being advised to further advice your client to withdraw the said notice under reply and further advise him not to drag my client in any frivolous litigation, failing which my client shall be constrained to contest the same, besides proceeding against your client under the relevant provisions of law, at the costs, risks and consequences of your client only. Copy kept for future record and reference.

Yours Sincerely,

Advocate

Mention few tips to improve drafting of legal documents.

• Keep Readers in Mind: What you write should resonate with what the recipients or readers want. For figuring out the exactness, you should get deep with their expectations. The tone & intent of the document should be based on the requirement of the audience.
• Jot Points Prior Writing: Every legal document should be optimally It is a key to its success. For it, create a layout by jotting all contextual points. Take those points as a guide for the effective legal document writing.
• Avoid Formal & Technical Terms: The formal and technical terms is called Legalese in legal writing. These can be typical legal phrases and jargon. The inclusion of words like aforementioned, herein, wherein, and hereto can make your writing offbeat, forced and detached. So, replace them with more concise, clear and simple words.
• Keep Writing to The Point: Your every word should be comprehensively brief. Keep your sentences short and concise, contributing to the entire case. Avoid extraneous Complex sentences have a great scope for redundancies. So, try to make them short and simple.
• Active Voice Brings Clarity on Subject: Passive voice creates confusion. It turns out more complicated when there is no mention of the subject of any doing. On the flip side, active voice makes it crystal clear who the doer or subject is. So, instead of writing “People were terminated”, say, “XYZ terminated people”.