Well-drafted commercial pacts can avoid litigation: Experts

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SME Times News Bureau | 31 Mar, 2012
As the economy propels at close to seven per cent growth rate, it is fundamental to regulate and document business relationships regardless of the size of operation, corporate executives and legal experts said Friday.

Commercial contracts represent a combination of commercial and legal factors. For businesses and organisations, the key requirement is to ensure that legal arrangements allow full commercial benefits to be realised, a group of experts said at a workshop organised by The Associated Chambers of Commerce and Industry of India (ASSOCHAM).

Special secretary at the ministry of law and justice N.K. Nampoothiry said all contracts should be supported by legal documents detailing the nature of business and must necessarily include an exit clause.

They should be drafted well, highlighting ingredient clauses and analysing relevant precedents, the competition and compliance issues, achieving clarity and precision in drafting and finding out how to avoid over-complex sentences and structures, he said.

Former chief justice at the Supreme Court A.M. Ahmadi said uncertainties and differences of opinions among parties lead to unnecessary litigation and dampen economic activity. Others who spoke were Mr Suman Jyoti Khaitan, chairman of ASSOCHAM legal affairs committee, Mr S.C. Agarwal, chairman and managing director of SMC Group, and Mr Deepak Dayal, managing partner at Dayal Legal Associates.