Ten Clauses Every Commercial Contract Should Address
Draft: sample article prepared for review — publication-ready content will be finalised with the practice before it goes live.
A checklist of the clauses that quietly decide most commercial disputes — and the questions to ask before you sign anything.
Most contract disputes in India are not fought over exotic legal questions. They are fought over gaps — things the parties assumed were 'understood' and never wrote down. Whether you are signing a vendor agreement, a distribution arrangement or a service contract, these ten clauses deserve deliberate attention.
The checklist
- 1. Scope and deliverables — defined precisely enough that both sides could measure performance without asking each other.
- 2. Term, renewal and termination — for convenience and for cause, with notice periods and exit consequences stated.
- 3. Payment terms — amounts, milestones, taxes, and what happens when an invoice is disputed.
- 4. Representations and warranties — who asserts what, and the remedies if an assertion proves false.
- 5. Indemnity — which risks each party carries, including third-party claims, and any caps or carve-outs.
- 6. Limitation of liability — a clause that should be read twice, not skimmed, because it reallocates real risk.
- 7. Confidentiality — surviving the contract, with sensible carve-outs for information that is public or independently developed.
- 8. Intellectual property — ownership of pre-existing IP and anything created under the contract.
- 9. Dispute resolution — governing law, jurisdiction or arbitration seat, and whether escalation must precede formal proceedings.
- 10. Force majeure and notice — events that excuse performance, and the addresses at which formal notices are valid.
A drafting habit worth keeping
Before signing, ask one question per clause: if this goes wrong in year two, what exactly happens? If the contract does not answer clearly, the gap will be filled later — by negotiation from a weaker position, or by a court interpreting silence.
Templates and precedents are useful starting points, but every material contract should be reviewed against the specific deal, the counterparty and the risk you are actually taking on.
This article is general information for businesses and individuals in India. It is not legal advice, and reading it does not create an advocate-client relationship. Please consult a qualified legal professional about your specific situation.