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Definitive Contract Checklist Updated Nishvitha Inputs 1

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Shahnoor Ali 7452 KCLF 18
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35 views

Definitive Contract Checklist Updated Nishvitha Inputs 1

Uploaded by

Shahnoor Ali 7452 KCLF 18
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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INDUCTION MODULE

The Definitive Contract Checklist

How about having a definitive checklist which you can pick up whenever you want to
draft a contract or negotiate one? You can take a print out of the checklist each time
you want to draft a contract and customize them. You have to simply see the different
heads of clauses, insert them as per the party’s intent, customize them and then place a
tick mark indicating you have done so, for each clause. You will never miss a clause.

Classification: Public
Induction Module
The Definitive Contract Checklist

Instructions for using the Definitive Contract Checklist


You can use this checklist to get started with drafting simple contracts on your own. You
can also use it to review a contract and check if all important clauses are covered. It will
enable you to draft contracts of varying difficulty levels with great ease, irrespective of
their complexity. You will learn the ways in which you can tweak the clauses to
accurately reflect commercial intent in different situations.

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The Definitive Contract Checklist

The Definitive Contract Checklist

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The Definitive Contract Checklist

No. Heads of Clauses

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The Definitive Contract Checklist

1. Title ❏
● This should signify the name of the agreement;
● It should describe the nature and purpose of the agreement;
● The name should be bold and capitalised in order to highlight it;
● The name should not be generic, but should be specific to the
nature of the agreement;
● Please exercise caution while naming your document as an
‘Agreement’ or ‘Deed’ (although they are often used
interchangeably).

For e.g. Leave and License Agreement, Services Agreement,


Shareholders Agreement, Exclusive Distribution Agreement, etc.

Please note that the title name will be thereafter defined as


“Agreement” and used as such throughout the document.

A deed is often used to represent an immediate transfer of interests


(such as ‘Sale Deed’) whereas an agreement may entail such transfer
at a later date (such as an ‘Agreement for Sale’). Thus, it is important
to understand the transaction and the specific nature while naming the
document.

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The Definitive Contract Checklist

2. Date of Execution and Effective Date ❏


● The date on which the parties sign to execute the agreement is
called the date of execution;

● The date from which the rights and obligations under the
agreement shall take effect, is referred to as the ‘Effective Date’;

● Specify the place of execution while mentioning the Effective


Date;

● Please note that the effective date and date of execution may or
may not be the same date depending upon the terms of the
agreement;

● The effective date could be at a later date, after the date of


execution, when specific prerequisite conditions are fulfilled, or it
could be at an earlier date as well, i.e., retrospectively effective.

3. Details of the Parties ❏


● This should be written in a manner that parties are clearly
identifiable and there is no confusion. Additionally, it will also
provide for the parties’ heirs and successors, who shall survive the
agreement.

● For individuals, personal details like name, address, PAN Card,


Aadhar number, father’s details, etc., will be mentioned.

● For entities, their registration number and acts under which they
are registered will be clearly mentioned.

● Parties are to be defined in their introductory paragraph itself,


after their details have been provided, in order to identify them as
such and to avoid repeating their full name throughout the
agreement.

● A statement must be inserted after the details of the parties have


been laid out, defining an individual party as “Party” and both
parties collectively as “Parties”.

For e.g., if two parties are entering into an agreement for sale, the
buying party will be defined as “Buyer”, whereas the selling party will
be defined as “Seller”, and so on. The defined terms will be as per the
nature of the transaction in the agreement. The Buyer and Seller shall
be individually termed as “Party” whereas collectively they will be
referred to as “Parties”.

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4. Recitals ❏
● Ideally begin recitals using the term ‘WHEREAS’;
● Para 1 - Information, background and business details of Party 1;
● Para 2 - Information, background and business details of Party 2;
● Para 3 -The detail of when the offer was made by Party 1 and
accepted by Party 2 and the purpose for entering into the
particular agreement;
● Para 4 - The parties agree to enter into the agreement considering
mutual promises, representations and warranties, signifying that
the agreement shall govern the terms and conditions of their
transaction (this is referred to as Statement of consideration and
is often written in bold, capitalised format).

The Recitals should capture the valid offer and acceptance of both
parties and their legal intent to execute the agreement and the
obligations thereunder.

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Induction Module
The Definitive Contract Checklist

© Addictive Learning Technology Pvt. Ltd.


Any unauthorized use, circulation or reproduction P-8
shall attract suitable action under applicable law.
Classification: Public
Induction Module
The Definitive Contract Checklist

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The Definitive Contract Checklist

Please refer to the Checklist for the sample clauses here.

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