Mitigating Legal Risks Through Contracts Poorvi Chothani, Esq. LawQuest, Mumbai, India

What is a Contract?

What are the Risks Associated With Contracts?

Key Elements of a Contract… contd. Dispute Resolution Costly affair Less costly than arbitration Arbitrators can modify the contractual rights of the parties May substitute their discretion as rights expressly given by agreement Judges powers limited determine and enforce the contractual rights of parties Less time Consuming Very Lengthy Process Confidentiality Public Domain Practical experience of technicalities in question No experience in the subject matter of the dispute Informal Arbitrators appointed by parties Formal No control over Judges Arbitration Litigation

Contract Review….. Contd Governments and other statutory authority/ies Example: Labour Laws Procedural Compliance relating to Securities laws i.e. Stock Exchange/ SEBI requirements Ask for proof of requisite registrations or licenses Domestic/Foreign FDI – Direct/Indirect RBI Approvals Ensure Compliance with Current Policies Insist on Board Resolution Granting Authority Authorized Signatory

Contract Review….. Contd Proper stamp duty been paid on the agreements Immovable property valuing Rs.100 or more Registration, admitted execution and registered by the registrar. Execution of Agreements

Substantive Review Rights and Obligations of parties to the Contract Scope and Deliverables Examine Capacity and Authority of Contracting Party Capacity to Contract Private Limited- 2 Public Limited – 7 Shareholder Preferably odd number of directors Decisions taken by majority Directors Private Limited- Rs 1,00,000 Public Limited – Rs 5,00,000 Capital Structure Manufacturing and Supply Agreements Purchase Orders/Tenders Example Review every clause of the Agreement/Contract Substantive Review

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