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Business Laws

Introduction

Tina K. Stephen

Tina K. Stephen
 Contract Management Process
Contract Management Process

1. Single Contract

2. Pre-contractual Documents

 LOI, MoU
Dresser Rand S. A. v. Ms. Bindal Agro Chem.
Ltd. & Another, AIR 2006 SC 871
 the Apex Court held that it is now well settled that a letter of intent
merely indicates a party's intention to enter into a contract with the
other party in future. A letter of intent is not intended to bind either
party ultimately to enter into any contract. It is no doubt true that a
letter of intent may be construed as a letter of acceptance if such
intention is evident from its terms. It is not uncommon in contracts
involving detailed procedure, in order to save time, to issue a letter of
intent communicating the acceptance of the offer and asking the
contractor to start the work with a stipulation that a detailed contract
would be drawn up later. If such a letter is issued to the contractor,
though it may be termed as a letter of intent it may amount to
acceptance of the offer resulting in a concluded contract between the
parties. But the question whether the letter of intent is merely an
expression of an intention to place an order in future or whether there
is a final acceptance of the offer thereby leading to a contract, is a
matter that has to be decided with reference to the terms of the letter.
Entire Agreement Clause
 2.1 The Contract constitutes the entire agreement of
Parties with respect to the subject matter hereof and
supersedes all previous agreements, negotiations and
undertakings in respect thereof.
 Parties shall not be bound by or liable in respect of any
statement, representation, promise or understanding not
set forth in the Contract.

L.E.B Tina K. Stephen


Contract Management Process
3. Big deals have multitude of contract documents
a. Tender specification/LOI

b. GCC – it contains general terms


i Scope of the Contract
ii Governing Law
iii Force majeure
iv Representation, Warranties and Guarantee
v Confidentiality
vi Dispute Resolution.

c. SCC/SLA- Procurement, IT services, security services

d. Work-order
General Conditions of Contract (GCC)
GCC

IR MARKETING PROCUREMENT

Outsourcing

Employment of
Contract labour
L.E.B Tina K. Stephen
SCC/SLA
SCC/SLA-

1. What specific services needs to be provided will be


defined
2. Manner in which the services are to be rendered.
3. Performance measure matrix

 An SCC in a service context is called an SLA

L.E.B Tina K. Stephen


Work-order
 A company generates a specific work order after a GCC
and SCC is created and signed.

 The rigts of the vendor/party begins only once the work


order is generated.

L.E.B Tina K.
Stephen
Order of Precedence.
 All Contract Documents and subsequently issued Alteration

Orders are essential parts of the Contract and will be in full

force and effect as if they were expressly set out in the body of

the Contract. In resolving conflicts or inconsistencies between

the Contract Documents, the following order of precedence


shall be followed:
Order of Precedence.

 i.) Alteration Orders / Amendment orders;

 ii.) Work Order;

 iii.) Special Conditions of Contract;

 iv.) General Conditions of Contract;

 v.) Instructions;

 vi.) Letter of Intent or Letter of Award issued by Reliance in favour of


Contractor.

 vii.) Scope of work & technical specifications


.
Authentication of documents, proceedings and contracts –
Section 21 Companies Act

(b) contracts made by or on behalf of a company,

may be signed by any key managerial personnel or an


officer

of the company duly authorised by the Board in this behalf.

L.E.B Tina K. Stephen


“key managerial personnel”,
 “key managerial personnel”, in relation to a company,
means—
 (i) the Chief Executive Officer or the managing director or
the manager;
 (ii) the company secretary;
 (iii) the whole-time director;
 (iv) the Chief Financial Officer; and
 (v) such other officer as may be prescribed;

L.E.B Tina K.
Stephen
Different Kinds of Contracts
 ORAL AGREEMENTS

 The simplest form of agreement.

 Implied from the situations or the acts of the parties .

 Specifically excluded in certain situations

 Difficult to enforce in the court of law as it is not in a written


form.

Tina K. Stephen
Different Kinds of Contracts
 GENTLEMAN’S AGREEMENT

 Informal in character

 Oral in form

 Through mutually beneficial etiquette

Tina K. Stephen
Different Kinds of Contracts
 WRITTEN CONTRACTS

 Contracts with your service provider

 Contract with your vendor

 Contract with your employees etc…

Tina K. Stephen
Different Kinds of Contracts
 STANDARD FORM OF CONTRACT

 Often referred to as the take it or leave it contracts.

 Where companies have to enter into a large number of contracts


on a day to day basis

 Eg: standard form construction contract.

Tina K. Stephen
 Formation of Contracts

Tina K. Stephen
What is a contract

Agreement Enforceable Contract


by law

An agreement enforceable by law is a CONTRACT


Agreement

 Is there any difference between agreement and


contract?
Agreement

 Agreement = Offer + Acceptance


OFFER/PROPOSAL

 When one person signifies to another his willingness to


do or to abstain from doing anything with a view of
obtaining the assent of the other to such act or
abstinence, we say there is a proposal.
Proposal or offer

 There may be,

 an express offer or
 an implied offer.
Proposal

 A proposal may be by

1. Word of mouth
2. In writing
3. By the conduct of a party
Contract
 Proposal
 Eg:

 Traveling by bus
 Entering into a restaurant and having food
General Offers
 Mongrel goes missing in Chennai, woman offers Rs 5
lakh reward

 http://timesofindia.indiatimes.com/city/chennai/Mongrel-g
oes-missing-in-Chennai-woman-offers-Rs-5-lakh-reward/
articleshow/35321295.cms

Tina K. Stephen
General Offers

 Get well pharma are the producers of or drugs for


curing fever. They advertise that if any one who takes
this medicine and then contracts fever has be given
Rs.10.000/- as compensation. Ms.Susan takes the
same but still falls ill.

 Carlil v. Carbolic Smoke Balls Com.


Offers inviting offer

 Mr.Satya: What is the price of the Mime Hall


 Mr.Srivastava: The price is 10 Lakh Rupees.
 Mr.Satya: Immediately sends a reply, wants to buy.
 Mr.Srivastava: does not want to sell.

Stating the lowest price is not an offer.


Offers inviting offer

 Where a party without expressing his final willingness,


proposes certain terms on which he is willing to
negotiate does not make an offer but only invites the
other party to make an offer on those terms.
 Eg:
 Catalogue kept in a shop
 Announcements to hold auction
Agreement

 Agreement = Offer + Acceptance


Contract Management

AGREEMENT
CONTRACT
CP FC LO CON
Contract

Proposal Promise Agreement Contract


(Proposal Accepted) (Consideration)
Contract
 In order that an agreement becomes enforceable there
should be the following elements
 Agreement not to merely social in character
 There should be an intention to create a legal obligation
 There must be consensus ad idem
 There must be lawful consideration
 Parties should have the capacity to contract
 Object must be lawful

Tina K. Stephen
Thank you

Tina K. Stephen