Drafting a Contract: Before you start

Drafting a contract is both an art and a skill. Anyone drafting a contract needs to make sure that they understand and include the most important aspects. The following are the most fundamental points to keep in mind before you start drafting a contract:

1. What does the contract actually want to achieve?
2. Who's going to pay whom? How? How much? When?
3. What other services are going to be provided along with the primary good or service?
4. How will the delivery happen and who will pay for it?

Once these are in place, it is important to clarify the following points in the contract:

1. Acceptance
• What will constitute acceptance?
• What are the conditions for acceptance?
• Is the acceptance a pre-requisite for payment?
2. Intellectual property
• What is the intellectual property being exchanged?
• What rights over the intellectual property are being transferred?
• What are the limitations on these rights?
3. Confidential information
• Is there any confidential information being exchanged?
• Is the contract itself supposed to be confidential?
• For how long does this information have to remain confidential?
4. Penalties and Dispute Resolution
• In case of any breach, are there pre-defined penalties?
• In case of any dispute, how should it be resolved?

Below is a more detailed explanation of these ideas by Soumya Shekhar.

For a basic understanding the Indian Contracts Act that governs these contracts and some of the terms used above, visit our article on an Introduction to the Contract Act 1872.