This document summarizes key issues and implications related to commercial agreements. It discusses important elements like the date of execution, parties involved, recitals/preambles, operative clauses covering scope of work, payments, intellectual property rights, termination, and dispute resolution. It provides examples for different clauses that are typically included in agreements to address these important contractual issues.

1. COMMERCIAL AGREEMENTS:
IMPORTANT ISSUES &
IMPLICATIONS
PRESENTED BY
RUPENDRA PORWAL
ADVOCATE
FCS, LL.M.( UNIVERSITY OF MANCHESTER, UK)
rupendraporwal@rallymarklegal.com
M-+91 9838597775
www.rallymarklegal.com
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2. Relevance and importance of documents/records
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NC REV PET. No 2605/2012
Dr. NJ Karnawat Vs Patel Ishwar Lal Mangalal

3. 1. DATE OF EXECUTION OF AN AGREEMENT:
This Software Development and Licensing Agreement (Herein after referred to
as “Agreement”) has been entered into on -----------(Date)of...................(Month)
20.......... (year) at-----------------------.
 An Agreement is perfectly valid even if it is undated
or the date given is an impossible one, e.g. the 30th
day of February.
 But the execution date is a matter of great importance
to know the date from which a particular Agreement
is operative.
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4.  Date of an Agreement is essential not only for its
operative part but also for registration of documents
under Registration Act, 1908.
 Similarly date of execution is essential for mutation
purposes.
 Date of execution is vital for counting the period of
limitation.
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5. Ex. If several parties to an Agreement sign it on different
dates, then which date should be considered as the
date of execution of the Agreement.?
Ans: In general, the last of such dates shall be considered
as the date of execution of the Agreement.
Addition of clause in Agreement:
“If the Agreement has been signed on different
dates by the Parties, the date on which the last party
is signing the Agreement shall be deemed to be date
of execution of the Agreement.”
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6. 2. PARTIES TO AN AGREEMENT:
it is necessary and expedient that full description of the
parties are stated in the Agreement so as to prevent
difficulty of identification at later stage.
(For A Corporate Party)
M/s ABC Limited, an Indian Company ( Reg. No.------------------) , having its registered and
corporate office address at ----------------------------------------------------------------------------------
…………………………………….. and represented by Mr.
……………………………………………(Email- xyz@yahoo.com ) the Director/Authorised
Signatory of the Company (hereinafter referred to as the “First Party” which expression shall
mean and include, unless repugnant to the context, its assigns, affiliates, nominees
representatives and successors in the interest) of First Part.
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7. (For an Individual)
Mr. Chandran, a US Citizen, holding Passport No.( AKY 1234567890)
and having address at 297/33 Besent Nagar, opp. RBI Colony,
Chennai- 605004, Tamil Nadu (hereinafter referred to as the “Second
Party” which expression shall mean and include his assigns,
nominees representatives and heirs in the interest) of Second Part.
OR
Mr. Chandran, son of shri---------------------------------------------, aged
about……………years and presently residing at……………………….
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8. 3. Recitals/Preambles:
Preamble is summarized presentation of intent of parties
for executing the Agreement.
 Preamble usually Covers:
• Past history/background of transaction;
• Present business structure of the parties;
• Object of the transaction;
• Terms of engagements etc.
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9. Example:
A. WHEREAS First Party booked, a flat No. 1003 (10th floor) in Block- T of Rohtas Plumeria
Homes, located at TGC- 3/3, Vibhuti Khand, Gomti Nagar, Lucknow-226010, having super
area of 1667 sq. ft. ( Approximately 155.9 sq. meter) along with underground car parking
(Hereinafter referred to as “Flat”), for the total consideration of Rs. 36,65,557/- (Rupees
thirty six lakh sixty five thousand and five hundred fifty seven only) inclusive of all
charges and levies except as stated in clause 4.4 of this Agreement (Hereinafter referred
to as “Purchase Consideration”), with Andes Town Planners (P) Limited, a subsidiary of
Rohtas Projects Limited, a real estate developers, having its registered office at 55T,
Sector 8, Jasola Vihar, New Delhi-110055 ( Hereinafter referred to as “Andes Town
Planners”).
B. WHEREAS Andes Town Planners allotted the Flat to First Party and First Party paid the
entire Purchase Consideration of Flat to Andes Town Planners as per agreed terms and
conditions..
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10. A. WHEREAS First Party has sole and absolute rights, interest and title in the Flat.
B. WHEREAS Second Party has inspected the Flat and they are, aware of the current status of
Flat including its scheduled handing over of possession and, satisfied with the same.
C. WHEREAS First Party desire to transfer any/all rights, interest and title in the Flat in favour
of Second Party on the terms and conditions more fully described in this Agreement.
D. AND WHEREAS in consideration of the mutual covenants and obligations herein, it is
hereby agreed to and between the Parties as under.
CAUTION:
Recitals/Preambles should be inserted with great caution because it may control the operative
part of the agreement if the same is ambiguous, and may operate as estoppels by the parties
showing the existence of a different state of things from that stated in the recitals.
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11. 4. OPERATIVE PART OF AGREEMENT
NOW THIS AGREEMENT WITNESSETH AS FOLLOWS:
1. Preamble and Annexure:
The Preamble and Annexure(s), if any, shall form integral
part of this Agreement and shall always be read and
construed in conjunction with this Agreement.
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12. 5. DEFINITIONS:
“Affiliate” means any entity, institution or other business structures
controlled and /or managed and/ or operated by the Second Party.
“Computer Software” means customized software solutions, more
fully described in Schedule-I, in any and all stages of development
and/or final form, and includes, without limitation, the literal elements
of programs (source codes, object codes or otherwise), its audio-visual
components (menus, screens, structure and organisation), any human
or machine readable form of the program, and any writing or medium in
which the program or the information therein is stored, written or
described, including, without limitation, diagrams, flow charts, designs,
drawings, specifications, models, data and bug reports.
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13. “Confidential Information”
means information shared by the Parties and designated as
Confidential Information about each other’s business that of
which is not available to the general public and which may be
learned, and/or generated, made, conceived, or contributed by the
Parties towards performance of this Agreement. This includes,
without limitation, information relating to organization, intellectual
property, business and customer information, trade secrets,
customer lists, employment policies, personnel, and information
about products, processes, including ideas, concepts,
projections, Know-how, technology, manuals, drawings, designs,
specifications, all data, documents, applications, statements,
programs, plans, papers, resumes, records and other documents
containing and/or relating to such confidential information, and
any and all information of value to Parties, or which gives them an
edge in/over competition in the respective market.
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14. 6. REPRESENTATION AND UNDERTAKINGS:
The Broker represents that he/it is competent to enter in to this
Agreement, solicit, and counsel the Prospective Customers for
booking/reservation of the Units in Dubai, United Arab Emirates.
The Broker represents that he / it is duly licensed by the competent
authority (ies) and registered under the regulations applicable to the
Real Estate Brokers in the Emirates of Dubai, UAE. The Broker confirms
that annexed registration certificate is true copy of certificate issued by
RERA.
The Broker undertakes that it/he shall keep its/his license operative and
valid at all times during the period of this Agreement including licenses
of its/his employees and representatives involved in solicitation of the
Prospective Customers.
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15. 7. SCOPE OF WORK AND ACTIVITIES:
 Scope of works provides details of
commitment/obligations/actions of parties.
Also provides limitation of the transaction.
Ex:
Second Party hereby engages the First Party to provide Software
Services and deliver Computer Software according to the
specifications stated in Schedule-I.
The First Party shall deliver the Computer Software and grant
license to the Second Party FOR A PERIOD OF 1 YEAR FROM THE
INSTALLATION AND SUCCESSFUL TRIAL OF SOFTWARE.
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16. 8. COMMENCEMENT OF ACTIVITIES :
This clause shall specify the mode of execution
of the transaction.
Ex.
The First Party shall commence design and development of
Computer Software within a period not exceeding seven (7)
working days from the date of receipt of advance amount at the
time of execution of this Agreement. The design and
development of Computer Software shall be carried out in the
stages.
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17. 9. Cost of Computer Software and manner of
payment:
 Total cost of Computer Software shall be---------------------------- (-------------
------Only)( Herein after referred to as “ Total Cost”) and to be paid by
the Second Party to the First Party in the manner as stated herein.
 Second Party will pay 25% of Total Cost of Computer Software
amounting to ------------------------- (---------------------------------Only) to First
Party at the time of execution of this Agreement.
 On completion of stage-I development, the First Party shall, within 7
days, raise invoice for 20% of Total Cost of Computer Software
amounting to ------------------------- (---------------------------------Only) against
the Second Party.
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18.  On completion of stage-II development, the First Party shall, within 7 days,
raise invoice for 20% of Total cost of Computer Software amounting to ------------
------------- (---------------------------------Only) against the Second Party. The Second
Party shall, within 7 days from the date of dispatch of invoice, pay the amount
to the First Party.
 On completion of stage-III development, the First Party shall, within 7 days,
raise invoice for 20% of Total cost of Computer Software amounting to ------------
------------- (---------------------------------Only) against the Second Party. The Second
Party shall, within 7 days from the date of dispatch of invoice, pay the amount
to the First Party.
 The balance amount of 15% of Total Cost of Computer Software amounting to --
----------------------- (---------------------------------Only) shall be paid within 3 days of
installation of Computer Software at the Designated Location of the Second
Party.
 Second Party shall pay all above amounts by way of crossed cheque drawn in
favour of “ABC Software Systems Pvt. Ltd” or remit the amount in the
designated bank account of the First Party as intimated from time to time. Date
of Handing over of Cheque or credit of amount to bank account shall be
deemed to the date of payment.
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19. 10 . Intellectual Property Rights:
 Second Party is hereby granted a revocable, nonexclusive and
indivisible single license for a period 3 years to use/apply the
Computer Software exclusively, for its business activities at the
Designated Location. For removal of doubts, the Affiliates of the
Second Party shall not be allowed to use/apply Computer Software
for their business activities even if germane or otherwise to the
business activities of the Second Party.
 License period of Computer Software shall commence from the date
of its installation at the Designated Location.
 Computer Software shall be treated as the exclusive intellectual
property of First Party and Second Party shall:
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20. (1) utilize such Computer Software or any portions or aspects thereof
(including any methods or concepts utilized therein)solely for
performance business activities under this Agreement;
(2) not modify, disassemble, or decompile such Software, or reverse engineer
any portion of the Computer Software, or permit others to do so, without
First Party’s written consent;
(3) return such Computer Software and any copies, in whole or in part, to
First Party upon its request; and
(4) not reproduce or copy such Computer Software in whole or in part without
written consent of First Party except as provided in Article below.
 Second Party may make copies of Computer Software for
testing, installation, backup or archival purposes
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21. 11. Non Competition:
During the term of this Agreement, the Parties shall not compete
with each with respect to subject matter of this Agreement.
12. Warranties and Indemnity:
Parties agree that in case of breach of any of the provision of this
Agreement, a Party shall have right to claim actual losses/damages/costs
caused/incurred, in relation to such breach, from the other Party, however
maximum liability of a Party under such claim or claims shall not exceed
Rs. 100,000/- ( Rupees One Hundred Thousand Only). In no event shall
Parties be liable for any indirect or consequential losses/damages as may
arise with reference to breach of terms and conditions of this Agreement.
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22. 13. Insurance:
The Parties will be responsible for obtaining all insurance
covers with reference to their roles and responsibilities as
defined in this Agreement. Respective Parties shall be
responsible to bear insurance costs as may arise therein.
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23. 14. Expiry and Termination of Agreement:
 This Agreement shall be valid for a period of 3 years.
 In the event of any material breach of, or material default under this
Agreement, the non-defaulting party shall give the other party written
notice of such breach or default. The other party shall have a period
of fifteen (15) days from the date of receipt of such written notice
within which the breach or default may be rectified. In the event of
failure to cure such breach or default, this Agreement may be
terminated immediately by written notice of the non-breaching or non-
defaulting party’s election to terminate to the other party.
 This Agreement may also be terminated mutually by the Parties
thorough a written instrument.
 The termination of this Agreement shall be subject to the rights and
obligations of the Parties.
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24. 15. Independent Party ( Relationship between Parties):
The Agreement has been executed on principal to principal basis and in
no event be deemed as to create a relationship of agency or partnership
between the Parties.
16. Force Majeure:
 Any failure by either Party to carry out any of its obligations shall not be
deemed to be a breach of this Agreement, if such failure is caused by a
force majeure event. For the purposes of this Agreement force majeure
event shall include, inter alia, strikes, lockouts, boycotts, embargoes,
governmental restrictions, wars, war-like actions, civil commotion, riots,
uprising, revolutions, epidemics, fires, floods, storms, earthquakes,
other natural occurrence or any other event beyond the control of such
Party.
 The performance of the Parties’ obligations shall be suspended for as
long as the force majeure event continues to exist.
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25. 17. Applicable Laws and dispute settlement:
The terms and conditions of this Agreement and performance
hereunder shall be construed in accordance with the laws of India.
In the event of breach of this Agreement, both Parties shall make
reasonable efforts to reach an amicable settlement thereof. If the
Parties cannot reach an amicable settlement, all disputes arising in
connection with this Agreement shall be settled, without recourse
to any court of law, under the laws of Arbitration and Conciliation
Act, 1996 by a single arbitrator appointed by First Party. Arbitration
proceedings shall be held at Lucknow, India. The language of the
Arbitration proceedings shall be English.
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26.  This Agreement shall be governed in all respects by the laws of the
State of Israel.
 All disputes arising in connection with this Agreement shall, to the
extent possible, be settled under the Rules of International Chamber
of Commerce (“ICC”) by a single arbitrator selected by the parties. If
the parties are unable to agree upon a single arbitrator within twenty
(20) days of written demand there for made by a party, then the
single arbitrator will be appointed by the ICC in accordance with the
said Rules. The decision of the arbitrator shall be final and binding
upon the parties without any right of appeal or review on grounds of
law or equity before any judicial or government body. The arbitration
proceedings shall be carried out in English language only.
 The venue of arbitration proceedings shall be at London, UK.
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27.  This Agreement shall be governed in all respects by the laws of
India.
 All disputes arising in connection with this Agreement shall be
settled thorough court proceedings.
 The Courts at Lucknow, Uttar Pradesh shall have exclusive
jurisdiction.
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28. 18. Assignment:
This Agreement can not be assigned by a Party without
the written consent of other Party.
19. Modification:
This Agreement and any attachment hereto shall be
modified only by an instrument in writing and signed by
the Parties.
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29. 20. Entire of Agreement:
This Agreement between the Parties supersedes all previous
communications, representations, understandings, either oral or
written, between the Parties or any official or representative
thereof.
21. Form of Notices:
Any notice given by a Party under this Agreement must be in writing and
in English language only unless the other Party otherwise notifies in
advance. The Notice served on the address or sent by facsimile or
electronic mail and marked to the attention of the person mentioned below
will be deemed to have been given or served properly:
Where sent by post: three (3) working days after the date of
posting by registered post or courier;
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30.  Where sent by facsimile: On the day it is faxed as
evidenced by a successful transmission report
provided that received by the recipient during
business hours;
 Where sent by electronic mail: On the day
electronic mail sent as evidenced by the sent
report provided that received by the recipient
during business hours;
 Where delivered personally: On the date of actual
delivery.
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31. 21: INTERPRETATION:
 Headings are inserted for ease of reference only and
have no legal effect. References to articles, clauses, sub
clauses are references to articles, clauses, sub clauses
of this Agreement.
 The singular shall include the plural and vice versa.
Words like “it”, “he” “she” “her”, “his”, “their” shall be
understood and construed with reference to the subject
matter referred therein.
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32. IN WITNESS WHEREOF:
Both parties hereto cause this Agreement to be executed as on the day,
month and year first above written.
First Party Second Party
Director/ Auth. Signatory Director/ Auth. Signatory
Witness-1 Witness-2.
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33.  Company : By a person authorized under the articles of
association or by a resolution of board/shareholders.
 Co-operative society : By a person authorized in this behalf by or
under rules or regulations or bye laws, of the such society or by a
resolution of management committee of society.
 Firm: by any partner or partners of the firm, authorized (impliedly
under sec. 19, Partnership Act, or expressly by power of attorney),
on behalf of the firm.
 Individual: Self or by a representative duly authorized by Power
of Attorney.
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34. 1. Minor or mentally ill person : it must be signed by his natural
guardian or where a guardian has been appointed by a
competent court, then by such guardian.
2. Illiterate persons: Illiterate person who is not able to sign may
put thumb mark (as per usage, left thumb mark in the case of
males and right thumb mark in the case of females), and if that
hand or thumb is defective or injured, then other hand or thumb
shall be used, and other person should make an endorsement
above or under the mark to show whose mark and of which
hand’s thumb it is.
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35. Section 29 of the Stamp Act, 1899 provides that Stamp Duty:
1. Instrument listed in Schedule-I, stamp duty shall be paid on the
by the person drawing, making or executing such instrument.
2. On Lease Agreement- To be paid by Lessee.
3. On Sale deed: To be paid by Purchaser.
Section 17 of Registration Act, 1908 requires compulsory registration
of documents. Ensure that Agreement is not falling within the list of
documents prescribed in referred section.
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36. Validity of Agreement in following situations:
Q.1 If an Agreement is signed by parties on scanned copy.
Q2. If Agreement has been signed at different places.
Q3. Parties agree to jurisdiction of the court at a particular place.
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CONSULTANTS
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occasioned to any person acting or refraining from action as a result of any material in this publication. On any specific matter,
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