Contract Law: Agreements, Clauses, Finalization, NDAs, & Contracts

This assignment delves into the core concepts of contract law, beginning with a comparison of agreements and contracts, highlighting their differences in formation, enforceability, and scope. It then explores the crucial components of a contract, including preambles, recitals, definitions, and interpretations, emphasizing their role in establishing the parties' intentions and the contract's context. The assignment further examines boilerplate clauses like jurisdiction, entire agreement, force majeure, survival, and dispute resolution, detailing their significance in addressing potential issues and unforeseen circumstances. Contract finalization and execution are discussed as critical stages, emphasizing the importance of accuracy and accountability, and the potential consequences of errors. The role and benefits of non-disclosure agreements (NDAs) are analyzed, including the definition of confidential information and its exemptions. Finally, the assignment contrasts international and domestic contracts, highlighting the legal frameworks and challenges associated with cross-border agreements, including the application of UNIDROIT Principles and the significance of jurisdiction and governing law. This comprehensive analysis provides a thorough understanding of the key elements and considerations within the realm of contract law.

ASSIGNMENT

Answer 1
An agreement is well-defined under Section 2(e) of the Indian Contract Act, 1872. Whereas, the
contract is defined under Section 2(h) of the act1. An agreement is different from a contract on
the following stated points:
Firstly, an agreement is defined as an offer made by a party and is accepted by the other where
both parties agree on similar points. Whereas a contract basically an agreement entered into
between two or more persons, and all the vital elements of a binding contract are abided by the
parties.
Secondly, the agreement can be entered between two parties either verbally or in an inscribed
form whereas, the contract when in written form needs to be registered.
Thirdly, in an agreement, the parties are not obligated to perform their part whereas, under the
contract, the parties are obligated to accomplish their part as per the terms and conditions of the
contract.
Fourthly, the scope of the agreement is wider when compared to a contract because an
agreement includes within its ambit all agreements and contracts whereas; a contract covers only
the agreements which are enforceable as per the law.
Lastly, the most important difference is that every agreement cannot be a contract but, every
contract is an agreement2.
Preamble, recitals, definitions, and interpretation are considered crucial components of a
contract. The autonomy of the contract with reference to them is stated as below:
The preamble, highlights the name of the agreement, the date on which it is executed, and the
parties to the agreement. Moreover, if the contract is entered into between the business
organizations, then the preamble identifies the form of entity and the state of the association.
Example: The Purchase Agreement is made on 23 September 2021 between A, an individual
with an address 143, Georgia (buyer), and B, an individual with an address 165, Georgia (seller).
Recitals are basically a discretionary form of contract. The main objectives of recitals are to
provide a context to the agreements. In other words, it majorly focuses on the parties'
understanding of an instance and their objective of entering into an agreement. Example:
WHEREAS, Seller is the supplier of part for….
Definitions basically help the parties to contract to provide a brief explanation of the terms and
conditions of the contract.
1 Aditi Singh, “Contracts” (2019)
2 Lawrence Solan, “Contract as Agreement “ (2007)

Interpretations basically ascertain the aim of the parties to a contract, under which the contract
was entered into between the parties. That is, interpretation is to be made keeping in view the
intention of the parties while entering into a contract and the law under which it is governed3.
Answer 2
Boilerplate clauses are also known as the standard or the general clauses. Such clauses address
issues like what happens in instances where a document is declared unenforceable by law or how
a disagreement will resolute etc.
Though these clauses are inserted at the end of each contract, we cannot ignore such clauses.
The most common boilerplate clauses are as follows:
First is jurisdiction and the governing law. Though governing law and jurisdiction are distinct,
they should be linked with each other. The governing law clause specifies the laws which govern
the interpretation of the contracts. For example the New South Wales law, this clause is
important because the laws of each state are different. Also, a clause might have a specific
meaning in a statute and a different meaning in other.
Second is the entire agreement. The purpose which each contract provides is that the contract
should specify the parameters of the agreement. After negotiations, the party reaches a
conclusion and the terms and conditions of the contract are laid down by the parties to contract.
Also, they are obliged to follow the terms and conditions formed after the negotiations between
the parties.
Thirdly is the force majeure. This clause gained importance after the pandemic. It is important
for parties to contract to refer to this clause so that their obligations can be interpreted in
instances where there exist any unforeseeable situations. This clause highlights the terms and
conditions on which the contract can be terminated either by one party or both parties to the
contract. The reason for termination is an unforeseeable situation.
Though this clause is not legally defined, it is necessary to define this clause under their contract.
Its definition should enlighten upon the instances where a party has the right to apply its power
in instances where delay has been caused in the performance of a contract due to an event that
was not foreseeable.
Fourth is the survival clause. This clause permits certain provisions of the contract entered into
between the parties to remain in force even after the contract has been terminated by the parties.
This clause is only beneficial in instances where parties aspire of continuing something even
after the termination of the contract. For example, Non-disclosure agreements are entered into
between parties. So, the parties can enter into a contract where they mention the survival clause,
3 Uri Benoliel, “The Interpretation of Commercial Contracts:An Empirical Study” (2017)

that is, the information mentioned under the Non-Disclosure Agreement cannot be disclosed
even after the termination of the contract between the parties4.
Last is the Dispute Resolution. Any contract which is entered into between two or more parties
should specify the instances of dispute resolution. In other words, every contract should state the
manner of resolution of the disputes. That is, the method of dispute resolution should be adopted
by the parties, that are whether the contract will be resolved by mediation, arbitration, etc. in
cases of dispute5.
Answer 3
Contract Finalization is considered an essential element in any contract management. It is an
instance where the contract between the parties becomes enforceable. Moreover, being a risky
phase due care needs to be taken thru this part of the contract. It is considered an important phase
of a contract because it is after this phase that only the contract becomes enforceable between the
parties. It is important for the parties to ensure that the contract does not have any errors6.
In other words, it can be stated that contract finalization is a process that is set out after the
parties to the contract approve the final contract. That is, after making necessary changes to the
contract, the parties arrive at the terms and conditions which is acceptable to both parties in the
contract. If any revision needs to be carried out, the contract becomes suitable to be signed by the
parties and finalized.
Contract execution can be defined as an event where the parties are to contract to sign the
contract and the contract becomes legally enforceable. After the execution of the contract, no
amendments can be made to the language of the contract7. That is, execution of a contract occurs
after the terms and conditions of the contract have been approved between the parties and the
contract has been signed. After, the main execution parts start where the parties are obligated to
perform their part of the contract within a specific time frame.
It is important to execute a contract because it ensures accountability and certainty between the
parties to a contract. The parties to the contract are wholly liable for executing the contract.
Moreover, if the parties to the contract fail to properly execute the contract, then there may arise
certain issues like:
 Firstly, the contract between the parties becomes unenforceable under the law.
 Secondly, there arises ambiguity within the contract.
 Thirdly, it leads to several delays8.
4 Mohammad hosein Vakil moghadam, “ The Validity and legal effects of Biolerplate Clauses based on applicable
law (A Comparitive Study) (2020)
5 Ibid
6 “The Effects of BITs on Contract Execution in developing Countries: Some Implications for the Covid-19 Crisis”
(2022)
7 Ibid
8 Legal.io, “ Contract negotiation; a basic introduction”

On the other hand, contract negotiating is a method where the parties enter into a legally
binding agreement. It is a method where the party's contract negotiates, in order to agree on the
same terms and conditions so that there arises minimum financial, legal and operational risk to
the parties9.
Therefore, this process is necessary in order to ensure that the contract benefits both the parties
to contract and there arise no conflicts or confusions between parties in the future.
Answer 4
A non-disclosure agreement can be a legally obligatory contract between parties in order to
ensure that a confidential relationship is developed between the parties. This type of agreement
between parties ensures that the parties who are signing a guarantee that no information that is,
sensitive information will not be available to any other person.
Such agreements are majorly used when the businesses enter into a negotiation with any other
business. Such agreements permit the parties to contract to share delicate info deprived of any
fear that their information may be leaked. In such an instance, the non-disclosure agreement is
termed the mutual non-disclosure agreement10.
A non-disclosure agreement can be beneficial in the following ways:
Firstly, it defines upon what the “confidential matters” for which the agreement has been entered
into between the parties.
Secondly, it helps in ensuring secrecy between parties and legally binding them through the No-
Disclosure Agreement.
Thirdly, if any party infringes upon any provision of the agreement, the party infringing is liable
for compensation of damages to the other party.
(a) “Confidential Information” intends to mean and embrace any info revealed by a party to
another also directly or indirectly, in an inscription, vocally, by scrutiny of concrete
objects (including, without limitation, documents, prototypes, samples, media,
documentation, discs, and code). Confidential info shall embrace, without constraint, any
resources, trade secrets, network information, configurations, trademarks, brand name,
know-how, business, and marketing plans, financial and operative information, and all
other non-public data, material, or data relating to the current and/ or future business and
operations of the Disclosing Party and scrutiny, compiling, studies, precies, extracts or
other documentation organized by the Disclosing Party.
9 Legal.io, “ Contract negotiation; a basic introduction”
10 Sven H. De Cleyn, Jasmine Meysman and Johan Braet “A Critical Assessment in the Framework in the
Framework of the Technology Transfer Process: A Longitudinal Study”

(b) Exemptions to confidential information
Confidential Information, however, shall not include any information which:
 Firstly, any info that is in or arises into the realm of community rather than through
Breach of Agreement.
 Secondly, the data stood already in custody free restriction erstwhile to the receiving
from the Disclosing Party or,
 Thirdly, was self-sufficiently established by the Receiving Party without making any use
of the Confidential Information
 Fourthly, has been permitted for use by the Disclosing Party in the inscription
Answer 6)
International contracts are legally binding agreements between the parties
of different countries. The contract specifics the terms and conditions on
which the parties agree to enter into the contract. Such contracts are written
formally in order to ensure that no confusion arises in the future. Example of
international contracts is an International Sale Contract, International
Distribution Contract, International supply contract, International
Manufacturing Contract, etc.
In cases of international trade, the UNIDROIT Principles introduce certain
rules which are applicable in cases of commercial contracts. It is applicable
in cases where the parties to the contract have agreed to be governed by
those principles. Moreover, it is also applicable in instances where the parties
to the contract have not chosen any law by which their contract is to be
governed. Also, they are used in cases where an interpretation needs to be
carried out with respect to a Domestic Law11.
On the other hand, Domestic Contracts are those where there is an agreement between the parties
and they agree to work with common intent and agree on the same terms and conditions.
Contracts are legally binding and infringement leads to a party compensating the non-breaching
party for the loss suffered12. Such contracts are not considered legal unless they are signed
between the parties in front of a witness.
In India, Contract Act, of 1872 is the backbone of the backbone of the contracts entered into
between the parties. But on the other hand, if a contract is entered into between parties, one of
11 Michael Joachim Bonnel, “The law governing international commercial contracts and the actual role of the
UNIDROIT Principles” (2018)
12 Ibid

whom is situated in a different country then they are governed by various conventions such as
the United Nations Convention on Contracts for the International Sales of Goods or International
Arbitration clauses.
Furthermore, when parties reside in different countries, they face various problems. One such
issue is why countries' laws should abide by reference to their contract and what will be the
jurisdiction in case of any disputes. Therefore, it is necessary for the parties to contract in cases
of international contracts to decide what will be the proper law for the parties.
It was held by the court in case if Vita Food Product Inc v Unus Shipping Co. Ltd13 that the
parties to a contract are free to choose upon the law by which they want to be governed by. Also,
it is provided that the law which is chosen is their own and they cannot infringe it. Moreover, it
can be said that when the contract does not contain explicit provisions for proper law then the
principle laid in Bonython v Commonwealth of Australia is to abide by. It is stated under this
case that the proper law of a contract is basically the system of law by reference to which a law
was made14
13 Vita Food Products Inc v Unus Shipping Co Ltd [1939] UKPC
14 Bonython v Commonwealth of Australia PC 1951

BIBLIOGRAPHY
PRIMARY SOURCES
Bonython v Commonwealth of Australia PC 1951
Vita Food Product Inc v Unus Shipping Co. Ltd [1939] UKPC
SECONDARY SOURCES
Lawrence Solan, “Contract as Agreement “ (2007)
Uri Benoliel, “The Interpretation of Commercial Contracts:An Empirical Study” (2017)
Mohammad hosein Vakil moghadam, “ The Validity and legal effects of Biolerplate Clauses
based on applicable law (A Comparitive Study) (2020)
“The Effects of BITs on Contract Execution in developing Countries: Some Implications for the
Covid-19 Crisis” (2022)
Aditi Singh, “Contracts” (2019)
Michael Joachim Bonnel, “The law governing international commercial contracts and the actual
role of the UNIDROIT Principles” (2018)
Legal.io, “ Contract negotiation; a basic introduction”