Corporate & Commercial: FAQs

Yes. The Information Technology Act, 2000 recognises electronic contracts and electronic signatures, including Aadhaar-based e-sign. The exceptions are negotiable instruments other than cheques, powers of attorney, trusts, wills, and contracts for the sale or conveyance of immovable property.

Most contracts are valid even if oral, but some must be in writing, including arbitration agreements, assignments of copyright and patents, and transfers of immovable property. A written contract is always easier to prove and enforce.

Yes. Stamp duty is charged under the Indian Stamp Act, 1899 and State stamp laws, at rates that depend on the document and the State. An unstamped or under-stamped contract is not void, but it cannot be relied on in evidence until the duty and penalty are paid. The Supreme Court held in In re Interplay (2023) that this does not invalidate an arbitration clause.

Not automatically. Under section 74 of the Indian Contract Act, a court awards reasonable compensation up to the named sum. A genuine pre-estimate may be awarded without proof of loss where loss is hard to prove, but where loss can be proved and none is shown, nothing is payable (Kailash Nath Associates v. DDA, 2015).

Between businesses, generally yes. Courts read such clauses strictly against the party relying on them, will not let a party escape liability for its own fraud, and may strike down unconscionable terms in standard-form contracts imposed on a much weaker party. In consumer contracts, unfair terms can be declared void under the Consumer Protection Act, 2019.

Under the MSMED Act, 2006, a buyer must pay a registered micro or small enterprise within the agreed period, which cannot exceed 45 days, or within 15 days if nothing is agreed. Late payment attracts compound interest at three times the bank rate, and the supplier can refer the dispute to the MSME Facilitation Council.

Generally three years. Under Article 55 of the Limitation Act, 1963, a suit for compensation for breach of contract must be filed within three years from when the contract is broken; for successive breaches, from each breach; and for a continuing breach, from when it ceases. A written acknowledgement of liability signed before the period expires starts a fresh period (section 18). Time spent in pre-institution mediation under section 12A of the Commercial Courts Act does not count.

Yes. Since the Specific Relief (Amendment) Act, 2018, specific performance is no longer discretionary: a court must order it unless a statutory bar applies, for example where the contract depends on personal qualifications, involves continuous duties the court cannot supervise, or is by its nature terminable, or where the party seeking it has not shown that it was ready and willing to perform its own part. A party facing a breach can also, after 30 days’ written notice, have the work done by someone else and recover the cost (section 20).

If the contract has a force majeure clause, its terms decide what happens, read under section 32 of the Indian Contract Act. If it does not, the contract may be frustrated under section 56 when performance becomes impossible, but the threshold is high: in Energy Watchdog v. CERC (2017) the Supreme Court held that a rise in cost, or performance becoming more onerous, does not by itself frustrate a contract. A clearly drafted force majeure clause with a notice procedure is the safer course.

Yes. Section 19 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 requires employers to organise workshops and awareness programmes at regular intervals, and orientation programmes for members of the Internal Committee. Every employer with ten or more employees must constitute an Internal Committee.

Yes, if it collects personal data. Rule 4 of the SPDI Rules, 2011 already requires a published privacy policy, and from 13 May 2027 the Digital Personal Data Protection Act, 2023 will require a standalone notice for every request for consent, along with security safeguards, breach reporting and a grievance process.