Signing Contracts When Indian Law Applies

These notes relate to signing contracts which are governed by the laws of India. If you are signing under English law, please refer to our Notes for Signing Contracts under English Law or signing contracts under US law.

Because there are laws in India which require stamp duty to be paid on some agreements and laws concerning registration of agreements, and these laws vary from state to state, legal advice is always recommended before you finalise an agreement or contract in India.  The notes below are to be taken as general guidance only, and you may also want to refer to our separate notes only.

COMPLETING YOUR CONTRACT TEMPLATE

These notes relate to signing contracts and agreements under Indian law, which can apply anywhere in the world by consensus between the people signing the contract.

DATE

The date usually appears at the beginning of the document but it is normally the last item to be completed as it will usually be dated when it has been signed by all parties.   Sometimes, however, work under an agreement will start before – or perhaps some time after – the date which appears in the agreement.  This can be catered for in the language of the contract.  For example, in our Agency Agreement (Doc IN101) there is a defined “Commencement Date” which specifies the date upon which performance of the Agreement commences.

PARTIES

Be sure to insert full and accurate details here.  The details will vary depending on whether a party to the contract is a company, partnership, individual or some other entity, and whether the party is based in India or another country.

Examples of how to fill in the details of each party are as follows:

Private Limited Liability Company (India)
XX Private Limited, a company incorporated in India under the Companies Act, 1956, whose registered office is at_________________________.

The registered office of an Indian company is its official address and can be found on the website of the Ministry of Corporate Affairs. The company registration number can also be found there.

If a private limited company is not incorporated in India, it will not have a registered office or company number.  You need to check on the appropriate wording depending on the country but the important thing is to get the exact name and usually, the head office or official address.

Here is an example for a US corporation:
“Blank, Inc., a corporation incorporated under the laws of the State of New York, and having its principal place of business at 123 Anywhere Street, New York, NY 10001, USA.”

Partnership
“ABC and XYZ, carrying on business in partnership under the name of “Patel & Partners” of ______________India”

Individual who carries on business under a trading name:
“ABC carrying on business as XYZ of [address]”

Individual
“ABC of [insert address]”

In the case of an individual it is usually best to insert that person’s home address.  Sometimes an individual is identified by reference to his father’s name:

“AB, son of [Father’s Name], resident of [Address],

Note:   Sometimes the (official) address which appears on page 1 of the contract after the name of a party will be different from the address at which that party conducts its operations under the agreement.  In that case, the “Notices” clause in the contract can refer to the address for routine communications.

MAIN TEXT OF THE CONTRACT
Where we have inserted wording in square brackets and/or in italics, this indicates that the wording is there by way of example – e.g. time periods or the name of an institution which will appoint an arbitrator.  Be sure to remove the square brackets and insert the selected language before finalising the contract.

Generally, of course, the entire text of the agreement will have to be carefully reviewed and amended to cater for your particular requirements.

It is advisable to refer the agreement to an advocate or legal adviser before it is finalised.  If you do not have a lawyer, ContractStore may be able to assist if you contact us.

SIGNING THE CONTRACT
Always ensure that whoever signs the contract has authority to do so.

Limited Company
In the case of a limited company or corporation, the Articles of Association may specify who can sign.  Under Indian law, the signature of a director can normally be relied upon by the other party as a director will usually have the authority through the Board of Directors with which to bind the company of which he/she is a director.

Partnership
The safest course is to get all the partners to sign. That is not always practical so check to ensure that the partner or partners who sign have authority to do so.

Sole Proprietor
The individual who owns the business should sign.

Public/Statutory Body/Statutory Corporation/Government entity
Where a public/statutory body/statutory corporation or government entity is a party to a contract, confirmation as to the authority of the person signing should be obtained.

Individual
In the case of an individual, clearly the individual should sign personally.

Someone with an effective power of attorney can validly sign a contract on behalf of one of the parties.

WITNESSES TO SIGNATURES
The underlying purpose of having a signature witnessed by a third party is for evidential reasons.  The witness would be able to confirm that the signature on the agreement is indeed the signature of the party whose name appears.

In India a contract may be effective without any signatures being witnessed, although it is always advisable to have a contract attested by witnesses.  In some countries, in order to be legally enforceable, the contract may have to be signed before a notary public.  As different jurisdictions have different rules, always check the position before finalising the contract.

When a signature is witnessed, as well as signing, it is sensible for the witness to write their name in block capitals and insert their home address.

NUMBER OF SIGNED CONTRACT COPIES
It is usual for each party to a contract to retain one original.  Thus, where there are two parties, two original copies should be signed and one retained by each party.

A contract can only be effective if the necessary formalities to create a binding agreement between the parties have been observed.  If in doubt, obtain legal advice from lawyers in the appropriate jurisdiction.

Examples of wording for signing or executing contracts

Simple Agreement:

Signed for and on behalf of XYZ Limited

________________________________________
Director

Signed by ABC

________________________________________

Simple Agreement with Witnesses:

Signed for and on behalf of XYZ Limited:

_______________________________________
Director

In the presence of:
Witness signature:
Name:
Address:

Signed by ABC:

______________________________________

In the presence of:
Witness signature:
Name:
Address:

Sometimes a company will execute a document using its company seal:

The Common Seal of the within named
Name of company
is hereunto affixed pursuant to a
resolution of its Board of Directors dated _________________

in the presence of
Mr. ________________ and
Mr.  ________________ of the
Company who have in token thereof
put their respective signatures hereunto.