Commercial Contracts

A master service agreement (MSA) is a framework contract that governs the overall terms of a commercial relationship, with individual engagements documented through statements of work or work orders. Key terms include the scope and nature of services, pricing and payment terms, intellectual property ownership for work product, confidentiality obligations, data handling and privacy requirements, representations and warranties, indemnity provisions, limitation of liability, term and termination rights (including termination for convenience), dispute resolution mechanism, and governing law. A well-drafted MSA avoids renegotiating foundational terms for each new engagement, saving time and reducing transaction costs.

An indemnity clause is a contractual obligation by one party to compensate the other for specified losses, damages, or liabilities. In commercial contracts, indemnities typically cover losses arising from breach of representations and warranties, IP infringement claims, breach of confidentiality, violation of applicable laws, and third-party claims arising from a party’s performance of the contract. The scope, caps, and exclusions on indemnities are among the most negotiated terms in any commercial agreement. Uncapped indemnities or broadly worded indemnity clauses can create significant financial exposure. We advise on structuring indemnity provisions that appropriately allocate risk between the parties.

Yes, as a general principle. The Indian Contract Act does not require most commercial agreements to be in writing. A verbal agreement supported by offer, acceptance, consideration, and the intention to create legal relations is enforceable. However, certain types of agreements must be in writing by statute, including assignments of copyright and other IP, agreements relating to immovable property, arbitration agreements, and agreements under the Companies Act. The practical problem with verbal agreements is proof. In a dispute, you must establish the terms of the agreement through evidence, which is significantly harder without a written record. We always recommend documenting commercial arrangements in writing, even for straightforward engagements.

A non-disclosure agreement (NDA) is a contract that obliges one or both parties to keep specified information confidential. NDAs are used before sharing proprietary information in the context of business discussions, potential partnerships, investment negotiations, vendor engagements, and employment. Key terms include the definition of confidential information (which should be specific enough to be meaningful), the permitted purposes for use, the duration of the obligation, exceptions (information that is publicly available, independently developed, or required to be disclosed by law), and remedies for breach. A mutual NDA binds both parties. A one-way NDA protects only the disclosing party. We advise on when NDAs are needed and draft them to provide meaningful protection rather than boilerplate.

Force majeure is a contractual provision that excuses one or both parties from performing their obligations when performance is prevented by extraordinary events beyond their control, such as natural disasters, pandemics, war, government actions, or strikes. Indian law does not imply a force majeure clause automatically. If your contract does not include one, your remedy is limited to the doctrine of frustration under Section 56 of the Indian Contract Act, which only applies when performance becomes impossible (not merely difficult or uneconomical). A well-drafted force majeure clause specifies the triggering events, the obligations of the affected party (including notice requirements and mitigation efforts), the consequences (suspension or termination), and the time period after which either party may terminate. After COVID-19, this clause receives far more attention in contract negotiations than it used to.