Friday, December 14, 2012

Contract Drafting: Indian Style

Ken Adams at the Koncision Blog provides a commentary about the continued use of the somewhat archaic language in contracts involving Indian parties. The examples he cites include “unless repugnant to the context or meaning thereof” and “NOW THIS MEMORANDUM WITNESSETH AND IT IS HEREBY AGREED BY AND BETWEEN THE PARTIES HERETO AS FOLLOWS:”

The simple question being posed is whether this usage aids effective interpretation of the contract or whether it hinders the same. The answer appears to be quite obvious.

Perhaps the plain-English drafting movement could pick up more steam in the Indian context.


R.Verma said...

Very obvious. No comment required.

vswami said...

Reproduce below, what i wrote in the article, INVESTOR PROTECTION - A MYTH? (2005) KLJ pg 17, 21; the burden of the song underlying the quoted viewpoints, it is to be noted, is not materially different from that of this write-up. However, it calls for a further study whether the style of drafting is any better across the globe!


A seller of Apartments often takes from the purchasers large sums
promising "lifetime maintenance" of the building. Invariably, one finds
that, in none of the relevant documents it is made clear what the term "lifetime" in this context means. That is, whether it is of the building, or of the purchaser, or of the seller. This is obviously a Grey area, so much so the chances of the purchaser are left high and dry at some point of time
in future seem real and cannot be ruled out. Especially, if the seller is a partnership firm.
In the documents of sale (i.e., agreement to sell and sale deed), just as in any other contract agreement, in the initial paragraphs, are set out the
names, addresses and other particulars of the parties thereto. Always added, as a matter of conventional drafting, is a stipulation to the effect
that the seller/purchaser named therein includes his/their heirs, legal representatives and assigns. It goes on to stipulate to the effect that wherever/whenever the context requires or admits, the term,- seller/purchaser also includes his/their successor-in-business, or successor-in-interest. However, the question whether or not, or in what circumstances, any such stipulation (intended to be covered by the words in italics herein) could be called to his help by the purchaser is difficult to
answer. For example, take a case where the seller is a partnership firm and it is succeeded in business by another firm. In that case, it would entirely depend upon the terms and conditions subject to which the new firm takes over the business. To put it differently, one cannot always take it for granted that all assets and liabilities (including all the obligations,besides the rights and interests) of the old firm would be taken over by or devolve on the new firm in entirety. As such, should the terms of succession so provide, it may transpire that the rights and interests of the purchaser derived from the old firm do not survive after the succession;
that is, against the successor-firm.
Law pundits' independent views, if any different,invited to enlighten.