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Commercial negotiation concentrates on price, scope and term. Those are the clauses the business understands and argues about. The clauses that decide what happens when the relationship breaks — security, guarantee, acknowledgment, jurisdiction, dispute resolution, limitation of liability — are usually accepted as boilerplate on both sides, and they are the clauses we are later instructed to enforce.
The pattern repeats. A company holds a signed agreement, an admitted outstanding, and no practical route to recovery: the counterparty is an asset-light entity, no guarantee was taken from the people who control it, the security cheques were never supported by documentation recording the debt, the dispute clause points to a forum that cannot grant interim relief quickly, and the last written acknowledgment is more than three years old. Every one of those is a drafting decision made years earlier.
None of this makes a contract adversarial. It makes it complete. A counterparty acting in good faith loses nothing by agreeing to a clear payment mechanic, a workable arbitration clause and a guarantee that means what it says.
A defined due date, a documented acceptance mechanic, and an interest provision that will actually be allowed. Section 74 permits a court to award reasonable compensation where a penalty is stipulated, so a punitive rate is not recoverable simply because it was agreed. Section 73 confines compensation to loss naturally arising or within the parties’ reasonable contemplation — which is a reason to record contemplated loss in the contract rather than argue it afterwards.
The liability of a surety is co-extensive with that of the principal debtor unless the contract otherwise provides. That single sentence is why a guarantee from the people who control an asset-light counterparty is often worth more than every other term combined — and why drafting that makes the guarantee conditional, or that permits variation of the principal contract without the surety’s consent, quietly destroys its value.
Section 3 is an absolute bar: a court must dismiss a time-barred suit even where limitation is not pleaded. Sections 18 and 19 are the commercial answer — a fresh written acknowledgment, or a part payment, each obtained before the existing period expires, restarts the period. A contract that builds in periodic confirmations of balance, and a receivables process that collects them, protects the claim far more effectively than the interest clause does.
The agreement must be in writing under Section 7. A clause that names the seat, the number of arbitrators and the appointing mechanism is operative; one that does not invites an application before anything can begin. Section 8 requires a court to refer the parties to arbitration where a valid agreement exists, Section 17 permits the tribunal to grant interim measures, Section 34 keeps challenge grounds narrow, and Section 36 makes the award enforceable as a decree.
MSAs and statements of work, supply and distribution agreements, outsourcing and facilities contracts. The work concentrates on scope and change control, payment and acceptance mechanics, limitation and exclusion of liability, indemnities that are actually claimable, and an exit that does not strand the business.
Personal and corporate guarantees drafted so that the co-extensive liability in Section 128 of the Contract Act is preserved rather than diluted; indemnities scoped to identifiable loss; and the security documentation that turns a promise into something enforceable against an asset.
Shareholders agreements, founder arrangements, share subscription and transfer documentation. Attention to reserved matters, transfer restrictions, deadlock, and the enforceability of the exit and drag arrangements, which is where these agreements are most often found wanting.
Employment contracts and service rules, consultancy and contractor agreements, non-disclosure and confidentiality documentation. Service rules matter beyond employment law: Section 19(i) of the POSH Act requires sexual harassment to be treated as misconduct under the service rules, and a recommendation cannot be acted on cleanly if that linkage is missing.
Facility letters, loan and hypothecation documents, inter-creditor arrangements and settlement agreements. This is the documentation the firm sees most often from the enforcement side, before the Debts Recovery Tribunals and in SARFAESI proceedings.
A standard set the business can issue without legal review on every deal, with a fallback position and a walk-away line marked for each negotiable clause. For companies with volume, this reduces cost more than any per-contract arrangement.
For most companies this is the engagement that pays for itself first. A portfolio review takes the live contracts and the receivables ledger together and marks three things: which agreements would fail on enforcement and why; which counterparties are outside limitation or approaching it, applying Section 3 and the acknowledgment and part-payment provisions in Sections 18 and 19 of the Limitation Act; and where a fresh acknowledgment, a guarantee or a security document can be obtained now, while the relationship is still commercially alive and the counterparty has a reason to sign.
The output is a marked list in commercial order rather than a legal opinion: what to fix before the next renewal, what to collect now, and what is already beyond saving and should be provided for. Where a matter has passed the point of documentation, it moves to the recovery side of the practice.
The firm's enforcement work is described under practice areas, and the recovery thresholds the firm accepts are set out on the contact page.
Companies with occasional contracting instruct us matter by matter. Companies with recurring volume generally do better on a standing arrangement, for two reasons that have nothing to do with price. The drafting standard stays consistent across every agreement the business issues, and the firm retains the institutional memory of what was conceded to which counterparty and why — which is exactly the knowledge that disappears when work is spread across whoever is available.
That model is set out on the fractional general counsel page. It can be scoped to contracts alone, or to contracts together with the compliance work most companies carry anyway — POSH obligations under the POSH Act 2013 and data protection obligations under the Digital Personal Data Protection Act 2023.
Senior Partner Advocate Subodh Bajpai (LLM, MBA XLRI) leads the team, with advocates and associates on each engagement. More about the practice is at Unified Chambers and Associates.
Enforceability is decided by a small number of clauses that most templates treat casually. Whether the payment obligation is expressed so that a default is provable on documents. Whether security is real and properly documented. Whether the dispute resolution clause routes the matter somewhere that can actually give relief in time. Whether the counterparty has bound anyone beyond the contracting entity. Section 10 of the Indian Contract Act 1872 sets out the essentials of a valid contract, but validity is a low bar — a contract can be perfectly valid and still leave you with nothing to execute against.
Because the two are the same problem seen at different times. Our practice is built on enforcement — proceedings before the Debts Recovery Tribunals, SARFAESI, cheque dishonour under Section 138 of the Negotiable Instruments Act 1881, and recovery litigation. That work is a continuous record of which clauses hold and which fail under pressure. A firm that only drafts learns nothing about the day the contract is tested; a firm that only litigates arrives too late to fix it. We draft with the enforcement file in mind.
So that the breach is provable without a trial on facts. That usually means a defined due date rather than a course of dealing, an acknowledgment mechanism, and interest expressed in a way that survives scrutiny. Section 74 of the Contract Act allows a court to award reasonable compensation where a penalty is stipulated, so a punitive interest rate is not necessarily recoverable as written. Section 73 limits compensation to loss that naturally arose or was in the reasonable contemplation of the parties, which is why a well-drafted contract records what the parties contemplated rather than leaving it to be argued later.
They remain among the more effective commercial security devices in India, provided the underlying documentation supports them. Section 138 of the Negotiable Instruments Act 1881 makes dishonour an offence punishable with imprisonment up to two years or fine up to twice the cheque amount, or both. Section 139 raises a presumption that the cheque was issued for a legally enforceable debt, which the accused must rebut. Section 143A permits interim compensation of up to twenty per cent of the cheque amount at the preliminary stage, and Section 148 empowers the appellate court to order — and appellate courts ordinarily do order — a deposit of a minimum of twenty per cent of the fine or compensation as a condition of the appeal. The commercial value lies in that structure, and it depends on the contract recording the debt clearly.
It can add a great deal, if it is drafted as a guarantee. Section 128 of the Contract Act provides that the liability of the surety is co-extensive with that of the principal debtor unless the contract otherwise provides. That co-extensive liability is the point of the instrument. Guarantees are frequently weakened by drafting that makes them conditional on exhausting remedies against the principal, or by variations to the principal contract agreed without the surety’s consent. Where a company is dealing with a counterparty whose assets sit with its promoters, the guarantee is often the only clause that matters.
Enough to be operative without a court application to fix it. Section 7 of the Arbitration and Conciliation Act 1996 requires the arbitration agreement to be in writing. A workable clause names the seat, the number of arbitrators and the appointing mechanism, and the language. Section 8 obliges a court to refer parties to arbitration where a valid agreement exists, Section 17 allows the tribunal to grant interim measures, Section 34 keeps the grounds for setting aside an award narrow, and Section 36 makes the award enforceable as a decree. Section 29B provides a fast-track procedure that is worth electing for lower-value commercial contracts.
Directly, and it is the risk companies manage worst. Section 3 of the Limitation Act 1963 creates an absolute bar — a court must dismiss a suit filed out of time even if limitation is not pleaded. Section 5 permits condonation of delay in appeals and applications but not in original suits. The provisions that matter commercially are Sections 18 and 19: a fresh acknowledgment in writing, or a part payment, made before the existing period expires, restarts the limitation period — an acknowledgment obtained after expiry cannot revive a claim already barred. A contract and a receivables process that generate periodic written acknowledgments are worth more than an aggressive interest clause, because they keep the claim alive.
Yes, and it is often the more useful engagement. A review of a live contract portfolio identifies where the payment, security, guarantee, jurisdiction and dispute clauses would fail on enforcement, which counterparties are outside limitation or approaching it, and where an acknowledgment or a fresh security document can be obtained now while the commercial relationship is still working. That is a different exercise from a pre-signature review, and it usually identifies claims that can still be protected while the relationship is commercially alive.
Yes. Companies with recurring contracting volume generally find a standing arrangement more workable than instructing matter by matter, because the drafting standard stays consistent and the firm holds the institutional memory of what was agreed with whom. That model is described on the fractional general counsel page, and it can be scoped to contracts alone or to contracts together with POSH compliance and regulatory work.
Senior Partner, LLM, MBA (XLRI Jamshedpur). Reviewed with the advocates and associates of Unified Chambers and Associates, a partner-led practice at the Delhi High Court Complex.
Last reviewed: 26 August 2026
Provisions on this page are cited to the enacted text, not to a secondary summary.
Whether you need a single agreement drafted, a template set the business can issue without review, a negotiation handled, or a signed portfolio marked for enforceability and limitation, our partner-led team can take it from where it stands.
This page is general legal information about commercial contracting in India and the services the firm provides. It is not legal advice, and no advocate–client relationship arises from reading it. Advice on any particular contract depends on its own facts.