ADVANCED CERTIFICATE COURSE ON BASICS OF
CONTRACT DRAFTING
COURSE COMPLETION
You shall receive a Certificate upon successful completion of the Course. It is pertinent to note
that Certificates shall only be sent when you successfully complete the Course – i.e. Study all
Modules and Submit the completed Assignments. The Submissions shall be made on or before
the last date. No submission shall be considered after that. We shall send the Certificates by
10th July to everyone i.e. within 8 days of the Course Completion.
The TOP PERFORMERS shall get an opportunity either to publish their task content on our
Website or Letter of Recommendation or Merit Certificate or Free Publication in our Journal or
Internship Opportunity to work with us at a very vital position or Opportunity to design the
Courses for hundreds of candidates. The Top Performers shall be announced within 25 days of
the Course Completion.
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MODULE 1[A]: INTRODUCTION TO
AGREEMENTS
1. INTRODUCTION
Every agreement or contract starts with Negotiations. The second step talks about the
agreement formation which subsequently leads to a contract and thereby contract
drafting.
Agreements are nothing but the Negotiations of the parties, penned in writing.
As per the Indian Contract Act, coupled with a general understanding, an acceptance of
the Proposal in lieu of certain consideration, is an agreement.
An agreement roughly defines the Rights, Duties and other benefits granted to the
contracting parties.
However, the terms to an Agreement varies with respect for the nature of the proposal
and the object of Transaction.
2. FEATURES OR ESSENTIALS OF AN AGREEMENT
In a broader sense, talking about formal day to day commercial agreements, following features:
A. Identity and Information of the Parties: Every Written Agreement must and at the
foremost, bear the name of the contracting parties along with their proper contact details. All the
relevant information pertaining to the identities of the parties that is required in the contractual
transaction, must be elaborately provided and made known to both of them.
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B. Term of Agreement: The term, i.e. the duration for which the agreement shall remain in
force, must be provided in the written agreement. It is very important that the contracting parties
remain clear and aware about the time duration during which both of them have to performed
their assigned portion of obligation.
C. Commercial Benefit: It is pertinent to note that every commercial agreement is drafted with
the aim of achieving some commercial gain or profit. The details and technicalities of any such
commercial gain, that the parties intend to achieve via the performance of the agreement must be
made known to each other by virtue of being mentioned in the document.
D. Obligation of Parties to the Agreement: Under an agreement, both the parties have to
perform their portion of duties. The Mention of clear obligations for both the parties is essential
in order to avoid any further non- performance by either of them.
E. Purpose of Agreement: In order to be counted as a valid legal agreement, the purpose or the
aim of the same must be legal and unambiguous. It is very important to clearly mention the
objective of the agreement I order to avoid any illegality whatsoever.
F. Termination Details: In times of unforeseen circumstances, many agreements stand as
terminated. Such termination, if not planned in prior, generally stand to be gravely unjust to one
party. In order to reach at a mid- place with this respect, the terms of termination should also be
present in an ideal agreement.
G. Signature of the parties: At the end of the agreement, the parties must affix their signature
in order to testify that they have gone through the details of the same and are willing to perform
the same in its entirety.
As per Section 2(e) of The Indian Contract Act 1872, “Every promise and every set of
promises, forming the consideration for each other, is an agreement.”
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It can hence very well be inferred from the definition that even a Promise is counted as an
agreement.
An agreement comes into picture when a proposal by one party is accepted by the other
party.
According to Section 2(b) of Indian Contract Act, 1872, when a person to whom the
proposal is made, signifies his assent thereto, the proposal is said to be accepted. An
accepted Proposal results into a promise.
Therefore in other words, it can very well be said that an Agreement is nothing but a
promise or an accepted proposal.
The relationship between Contract, Agreement, Promise, and Proposal can hence be
summarized as:
A Contract is a Legal Agreement- An Agreement is a promise- A promise is an Accepted
Proposal. Hence the most essential element to an agreement is a proposal and a corresponding
acceptance, for it is a result of Proposal on one side and its acceptance on the other.
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3. DOCUMENT
It is not denied in any way that Agreements may either be oral or in writing. However, in
normal course, the legal agreements or commercial agreements are maintained in writing.
This is done with the intention to avoid any further retraction by one party, causing
substantial and unjust loss to the other.
The drafted agreement in day to day language is referred to as “Document”. In simple
terms, a document refers to the “Textual Draft” or “Textual Record” of an agreement.
There have been three Indian Statutes that comprehensively and rather in similar terms,
define the term “Document.”
1. 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.
The term Document as provided by the Act includes:
- A writing;
- Words printed, lithographed or photographed;
- A map or plan;
- An inscription on a metal plate or stone;
- A caricature.
2. Section 3(18) of the General Clauses Act, 1897, states that a "Document" shall include any
matter written, expressed or described upon any substance by means of letters, figures, or marks
or by more than one of those means, which is intended to be used or which may be used for the
purpose of recording that matter.
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3. Section 29 of the Indian Penal Code, 1860, “The word ‘Document’ denotes 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 as evidence of that matter”.
Thus the word "Document" has been used in a wide sense and it includes instruments,
deeds, agreements etc. Documents will also include Electronic records.
4. VALIDITY OF AN AGREEMENT
It must be kept in mind that agreements which are sound legally and are valid per se,
qualify to be a part of legal agreements or contract.
The Indian Contract Act, 1872 specifies agreements that are valid under law and which
can be enforced against the parties.
The Indian Contract Act 1872 provides that all agreements except those which are
explicitly invalidated by the Act or by any other law for the time being in force.
The agreements which are specifically vitiated by this Act are provided as under:
- According to Section 20 of the Indian Contract Act, 1872, an agreement caused by
mistake of facts are void i.e. if the mistake of fact is with regard to the subject matter.
- According to Section 23 of the Indian Contract Act, 1872, an agreement is void if the
object or consideration is against the public policy.
- According to Section 24 of the Indian Contract Act, 1872, an agreement is void if any
part of a single consideration for one or more objects, or any one or any part of any one
of several consideration of a single object, is unlawful.
- According to Section 27 of the Indian Contract Act, 1872, an agreement in restraint of
trade or business or lawful profession is void. But a buyer can put a condition on the
seller of goodwill not to carry on the same business provided the conditions are
reasonable.
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- According to Section 28 of the Indian Contract Act, 1872, an agreement in restraint of
legal proceedings is void.
- According to Section 29 of the Indian Contract Act, 1872,an agreement, the meaning
of which is not certain or capable of being made certain are void.
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