Leasing or renting a property can help you save your situation and achieve demands for your business without having to break the bank. While it may be a lifesaver and vital for you, it is good to understand all the details of the lease contract that you want to sign. Whether you are starting or want to expand your business, going through the path of leasing a property in your business is a good idea. After all, when well planned, a lease can help you build yourself as your business strengthens. But, if you need help understanding the terms and other factors in your free rental lease agreement, it will impact your business positively.

Take your time

Take your time deciding on a particular property, as you can explore other options in the market and know the best in terms of your set goals. That aside, you can take yet another step to analyze different properties depending on their agreement and go for the one that suits you best. With the best property in terms of location and contract, you can move to the negotiation phase.

Understand the terms and conditions

For any agreement or contract, there must be terms and condition that binds the two parties or stakeholder in the deal. Some leasing terms include the address of the target property, commitment to pay, due dates, and other crucial clauses of your ideal contract that need to be understood well. After you understand, it is essential to be comfortable with them. If not, seek to know what you need help understanding to ensure every term favors your business.

Negotiation

At this stage, you have found a suitable property whose contract you need clarity, which means it is time to get into murky mud. Negotiation will help you get the best property with the best terms. Other involved parties in the deal will also convince you that their contract offers the best in the market. It is important to clarify what is obtainable in the market regarding such properties. While at it, be sure to work with the best deal after proper negotiation, as that is how you will understand the most outstanding of them in the market.

Ensure your lawyer is present before you sign

Although at this point everything looks good, do not ignore tagging your lawyer along on the day of signing the free rental lease agreement. Your signature for any contract is binding, which means that you agree to every clause, term, and everything in the document. Having your lawyers back as your legal practitioner will help protect you and your entire business in the long run. It should be someone you can trust, one without conflict of interest.

Conclusion

When doing business or starting one, you may need to lease properties or equipment for your business to grow. You might think it is as simple as leasing, but you must sign an agreement with your ideal lender for everything to be in place. While at it, always remember to negotiate to get the best contractual agreement in the presence of your lawyer before you sign on terms to keep watch when given the target property.

The post Essential Things to Look at Before You Sign a Lease Agreement appeared first on LexForti .

This Talent Agreement (the “Agreement”) is a formal contract outlining the relationship and responsibilities between an Artist, Agency, and the Client. It is a document stipulating that the agency will seek employment opportunities for the artist and negotiate contracts on their behalf for a commission of the artist’s earnings. The following sections outline key clauses typically found within this agreement:

1. Service Provision: This clause provides a comprehensive account of the services the Artist will render, which may include performances, appearances in advertisements, or usage of the Artist’s voice or image.
2. Media Usage: This clause ensures that the Client can use the Artist’s name, image, or likeness as per the stipulations of the agreement.
3. Term: This clause outlines the period during which the Artist’s name, images, or likeness may be used. It binds the Artist to the stipulated timeframe.
4. Contract Termination: This clause provides detailed specifications regarding the conditions under which either party may cancel the contract after the agreed-upon term. It typically requires careful negotiation, considering factors such as the volume of work or the Client’s satisfaction with the Artist’s output.
5. Compensation and Payment: This clause establishes the full payment for the rights and services provided by the Artist. It may also include provisions for reimbursement of the Artist’s travel and accommodation expenses.
6. Representations and Warranties: This clause stipulates that the Artist will not permit or license the usage of their name, image, or likeness to any other party during the contract term. The Artist is thus committed to working exclusively with the Client in competitive scenarios.
7. Indemnification: This vital clause requires the Client to protect the Artist from any losses, damages, liabilities, fines, or other repercussions arising from disputes related to the Client’s requirements, products, or advertisements.
8. Breach of Agreement: This clause outlines the actions to be taken and remedies available in case of an agreement breach by either party. It encompasses scenarios including fraud, unauthorized actions, abuse of an image, invasion of privacy, and more.
9. Jurisdiction: This clause pertains to the enforceability of the contract in specific locations. It elucidates whether a contract signed in one country can be enforced in another, and also stipulates the location for any litigation, arbitration, or mediation processes in case of a dispute.
10. Miscellaneous: This multifaceted clause encompasses three sub-clauses: waiver, amendment, and notice. The waiver clause states that a party’s delay or waiver of enforcement is not a waiver of any breach or subsequent violation. The amendment clause asserts that modifications to the agreement must be made in writing and signed by all parties. The notice clause describes the process and destination for any notifications to the parties involved.

While a Talent Agreement can contain additional clauses, the above ones are typically considered critical and form the core of the document. The specific details and stipulations may vary, but all parties involved should pay careful attention to the Agreement’s terms when establishing a professional relationship.

The post TALENT AGREEMENT appeared first on LexForti .

Author: Rohit Pradhan

Introduction

If you’ve ever been part of a contractual agreement, you might have come across situations where the other party fails to honour their obligations. What can you do in such situations? Is there a way to enforce the original terms of the contract? The answer is ‘yes,’ and the solution lies in a powerful legal remedy known as ‘Specific Performance.’

What is Specific Performance?

Specific Performance is a unique legal concept in Indian Contract Law that allows you to enforce the exact terms of a contract. When a party breaches a contract, you’re not merely looking for financial compensation but the fulfillment of the original contract’s exact terms. For instance, if you’ve paid for shares of a specific company, and the seller refuses to transfer them to you, you can demand the actual shares and not just monetary compensation.

When Does Specific Performance Apply?

The Specific Relief Act, 1963, outlines enforceability of Specific Performance (Section 10). It applies when:

1. The actual damage caused by the contract breach cannot be accurately ascertained.
2. Monetary compensation wouldn’t provide adequate relief. This is typically the case for contracts involving immovable property or unique movable property that has a special value or interest to you and is not easily available in the market.

What Contracts Can’t Be Specifically Enforced?

(Section 14, Specific Relief Act, 1963). Specific performance isn’t applicable when:

1. Monetary compensation is an adequate relief.
2. The contract involves numerous minute details.
3. The contract is of a determinable nature.
4. The contract involves continuous duties that the court cannot supervise.
5. The contract is about referring present or future differences to arbitration.

Are There Exceptions?

Yes, there are exceptions where contracts that generally can’t be enforced can be specifically enforced. These include contracts to execute a mortgage, to take up and pay for any company debentures, or contracts for the construction of any building or execution of work on land, subject to certain conditions.

Deciding Where to File Your Case

The choice of venue for filing your case is a pivotal decision. In India, you generally file a specific performance case in the civil court holding jurisdiction over the contract’s subject matter, for instance, a property. But what if the subject matter is scattered across various places? In such cases, you can file the suit in any court exercising jurisdiction over a part of the subject matter.

Here’s an important twist though. If your contract specifies a particular jurisdiction, that becomes the place to institute the suit. The contract’s terms take precedence in determining the appropriate venue.

Understanding Jurisdiction

Jurisdiction refers to the legal authority of a court to hear and decide a case. In matters of specific performance, jurisdiction is typically determined by the location of the subject matter of the contract or the place of residence or business of the defendant. It’s important to consult with a legal professional to determine the appropriate jurisdiction for your case.

Continuous Breach Concept

Contract law sometimes deals with what’s known as a continuous breach. This situation arises when one party consistently fails to meet their contractual obligations over a certain period. So why does this matter? Every instance of non-performance constitutes a new breach and triggers a fresh cause of action. This mechanism potentially extends the three-year filing limitation for a specific performance suit, proving advantageous for the aggrieved party.

Your Legal Timeline: A Brief Overview

Legal matters demand swift action. In India, you must file a specific performance suit within three years of the contract breach. But, the concept of continuous breach redefines this timeframe. Each instance of non-performance resets the breach clock, creating a new cause of action.

Once you’ve filed the case, numerous factors influence the timeline, such as the case’s complexity, court availability, and overall legal process efficiency. Predicting an exact timeline is challenging, but prompt filing and preparation can help speed up the process.

Claiming Specific Performance

Specific Performance comes into play when no other remedy, including monetary compensation, would adequately compensate the aggrieved party. The court may invoke this remedy to place the injured party in the position they would have been had the contract been completely fulfilled.

The Reach of Specific Relief

While Specific Relief is a robust tool; it is meant solely for the enforcement of individual civil rights. Its power does not extend to the enforcement of penal laws.

The Importance of the Doctrine of Mutuality

This doctrine emphasizes that a contract should be enforceable by each party against the other. It ensures the balance of obligations and rights, making contracts fair and equitable.

Why is This Important for You?

Understanding the concept of Specific Performance is crucial if you’re partaking in contractual agreements. It empowers you to seek the original promise rather than settling for monetary compensation. In unique scenarios, like acquiring a rare piece of art or a unique immovable property, specific performance could be your best legal remedy.

Are You Looking for Expert Assistance?

Facing a contractual issue? Learn more about Specific Performance under the Specific Relief Act, 1963 and how it can help protect your rights in India. For additional information or assistance, feel free to connect with us via email at lex.forti@gmail.com or WhatsApp at +91-8757182705.

Final Thoughts on Specific Performance of Contract

While specific performance is a potent legal remedy, its application requires careful legal analysis. It’s essential to have competent legal guidance to ensure that your contractual rights are adequately protected.

The post Specific Performance of Contract : Enforcing Contractual Rights appeared first on LexForti .

The Author Niharika Mukherjee is an undergraduate law student at National Law School of India University (NLSIU) Bangalore.

Introduction

The recent inclusion of substituted performance as a statutory relief in the Specific Relief Act, 1963 has been considered to be of significance to construction contracts, for the reason that it will help to reduce delays and costs.[1] However, given the variety of types of contracts used in the construction sector, it is believed that this relief must be analyzed in context of each of these types, order to gain more accurate insights about its efficacy in different contractual settings.

In this light, it is pertinent to evaluate the relief in context of one of the most-used contracts in the construction sector- ‘turnkey’ or ‘design and build’ contracts. This type of contract, which, for clients, involves a ‘hands off’ approach and a focus on the ‘what, rather than how’ of the construction project, and is often aimed at facilitating innovative and technically complex work,[2] presents unique challenges in availing the remedy of substituted performance.

To this end, this article shall analyze the challenges of availing substituted performance in turnkey contracts. First, it shall examine the distinctive features of turnkey contracts. Secondly, it shall briefly explain the contractual relief of substituted performance. Thirdly, it shall discuss four major challenges in availing the remedy in these contracts, and present recommendations for optimizing contract terms to overcome these difficulties.

For this purpose, this article shall rely on model turnkey contracts drafted by Indian and international institutions,[3] apart from relevant case law and statutory provisions.

Turnkey Contracts

Turnkey contracts place responsibility for designing, engineering, procurement, and construction of an entire project on a single contractor, such that following completion, the client receives a ready-to-use facility.[4] Deriving from this structure, legal liability for all aspects of the suitability and performance of the project is placed on the contractor.[5] Often used in the construction sector, these contracts are usually ‘fixed price’ contracts,[6]  meaning that most risks associated with the project are allocated to the contractor.

Besides enhanced certainty as to time, cost and liability,[7]as also the low need for supervision associated with these contracts, which make them an attractive option for clients, turnkey contracts also have the advantage of according significant flexibility to contractors. This gives the latter freedom in designing the project and planning the work for optimum efficiency, given their capacities.[8] This feature distinguishes these contracts from conventional ‘item rate’ or ‘design-bid-build’ contracts, which necessitate contractors to follow a rigid design prepared in advance by the client themselves.[9]

One of the prominent types of turnkey contracts are Engineering Procurement Construction (EPC) Contracts, which are typically used for large infrastructure projects in sectors including transport, energy, and healthcare.[10] While many such projects in the public sector are relatively simple in terms of design, those in frontier areas of technology, such as hydrogen recovery or marine engineering, require specialized and complex skills in design and execution.[11]

Despite their numerous advantages, however, these projects also present several challenges. These include high dependence on a single contractor, severe information asymmetry between client and contractor, and low client control over the project.[12] This article argues that these challenges are of significance in analyzing the efficacy of substituted performance in turnkey contracts, which shall be discussed in later sections.

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Substituted Performance

The remedy of substituted performance was codified in India through the Specific Relief (Amendment) Act, 2018. This allows a victim of contractual breach to avail performance of the promise by a third party or their own agency, and recover the costs actually suffered in doing this, from the breaching party.[13] This remedy, it may be inferred, seeks to further the legislative intent to make the fulfilment of the actual ‘expectation interests’ of the victim the norm in cases of contractual breach.[14]

Earlier, such a remedy was commonly availed through ‘risk purchase’ or ‘risk and cost’ clauses in contracts,[15] as also under Section 73 of the Indian Contract Act, 1872.[16]

Nevertheless, three aspects of the statutory provision merit attention. First, it provides a definite procedure for availing the remedy, albeit one that does not override contractual terms, for preventing its unfair use.[17] Secondly, it clarifies that the remedy can be availed by a party only after it has got the work completed, arguably to ensure that the recovered damages are not used for unjust enrichment and are not disproportionate to the expenses actually incurred.[18]

Thirdly, it does not provide that the remedy of specific performance can only be availed in the absence of reasonable possibility of substituted performance.[19] This marks a clear deviation from a wide range of legal systems ranging across the United States of America, Europe, Singapore, and Japan,  in addition to common law in the UK.[20] This has been seen as a pro-client step, which at least in theory, allows the client to demand specific performance even though a reasonable possibility for availing substituted performance may exist, and refrains from burdening them with the duty to disprove that such a possibility exists.[21]

In relation to turnkey contracts, the remedy is advantageous primarily because it allows for timely relief where the contractor fails to perform their obligations under the contract.[22] This is particularly relevant where ‘time is of essence’, a common feature of turnkey contracts in, for instance, the oil and natural gas sector.[23]

Model turnkey contracts, therefore, frequently provide for this remedy. For instance, it becomes available under one model contract[24] when specified conditions arise and the client acquires the right to terminate the contract. These include situations where a contractor abandons the work, fails to comply with a notice to correct faults, or declares bankruptcy.[25]

Substituted Performance in Turnkey Contracts

Where situations similar to those listed above arise, the remedy of substituted performance has considerable utility in contracts where substituting parties are easily found and the transition does not require transfer of significant amounts of information and resources. It is therefore an effective remedy in simple construction contracts, such as in Karnataka Electricity Board v MS Angadi,[26] where a contract for building hume pipes was easily completed through a new contractor.[27]

In case of turnkey contracts, however, the availing of the remedy presents certain complexities. The foremost disadvantage encountered by the client is that it alters the basic framework of the contract itself- for the contract, when substituted for completion or rectification of the project, is in practical terms replaced by a design-bid-build or item rate contract. This is because, assuming that the substitution occurs after the design has been prepared by the original contractor, the new contractor is not required to submit their own design, and hence does not acquire back-to-back liability for the entire project as a turnkey contractor does.[28]

Several practical problems arise from this alteration, which, this article argues, can be examined in four categories. These shall be discussed below, and contract-based solutions shall be proposed to mitigate each of them.

Challenge of Information Asymmetry and Disclosure

Turnkey contracts typically involve minimal supervision and involvement from the client.[29] This may cause a client to lack access to vital information regarding the on-ground realities of the project, including those which affect its safety and overall efficacy.[30] As a result, for one, at the time of substitution, the client may not be able to immediately provide adequate information regarding these aspects to new bidders or potential contractors. Where time is of the essence, this can become a significant obstacle in efficient availing of the remedy. Secondly, this may later lead to allegations of misrepresentation by the new contractor, which can complicate execution further.[31]

To tackle this problem, this article suggests that contractual terms may envisage a greater inspection role for the client’s engineer, typically an engineering firm employed by a client to review the performance of the contractor in large-scale turnkey contracts.[32] Although it imposes higher costs on clients to employ such a professional, several model contracts, in practice, provide for such a professional, as also detailed descriptions of their duties, including submitting monthly inspection reports and conducting tests on a random sample basis.[33] A well-informed engineer may be relied upon by the new contractor to provide adequate disclosures and guidance in work completion.[34]

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Challenge of Skills and Resources Transfer

A related problem is that of making a smooth transition from a contractor that designed a project according to its own supplies and technical knowledge, to one that must complete it according to a pre-existing plan with its own resources. This gains significance where contractors occupy a niche position in the market.

To mitigate this, first, several model contracts contain clauses requiring the contractor to transfer selected subcontracts,[35] relevant Intellectual Property[36] and ‘designs, drawing, other documents’[37] to the client in case of termination with incomplete work remaining. Yet, in cases where technically insightful human resources may be the core competency relevant to the project, these measures may fall short. To reduce this difficulty, this article suggests that contracts for such complex work may include a provision requiring the original contractor to provide ‘assistance and cooperation’ to the new contractor, as provided by one model turnkey contract for some incomplete projects.[38]

Secondly, and relatedly, the possibility of defects in the partially completed work presents additional risks for clients or new contractors in the transition.[39] This risk is exacerbated by the fact that typically, ‘defect liability periods’ in turnkey contracts begin from the time that a contractor has completed a certain portion of the work, such as from when they attain a Provisional Certificate from the client.[40] This article suggests that in case of termination with incomplete work, such time frames are expressly provided to have begun regardless of the extent of work remaining, to avoid any disputes about the original contractor’s liability to later remedy defects arising from their own performance.

Challenges of Financing

As many turnkey contracts rely on project financing or credit,[41] this article envisages that the requirement for having completed the unfinished work before qualifying to recover the costs of substitution under Section 20 of the Specific Relief Act, 1963, may pose difficulties for some clients.[42] This is particularly apprehended where costs of completion far exceed those planned for under the contract, a situation that may arise where the technology available to the original contractor differs from that of the new contractor.[43]

Given that the Section does not override terms agreed upon by parties, it is submitted that where necessary, parties may consider providing for recovering the expenses of substituted performance at the time of entering into the substituted contract, rather than upon its completion.[44] This would prevent projects from being left incomplete on account of lack of funds available to the client.

Challenges of Finding Substitutes

The final, and arguably most intractable, challenge is that of finding substitutes where the work remaining requires skills specific to the original contractor, resembling contracts involving personal qualities.[45] Similar considerations may arise where pre-existing goodwill or the contractors’ reputation[46] were material to their selection for undertaking a high-value project for the client.

As noted earlier, Indian law advantages clients in such situations, in that it does not require them to disprove the possibility of substituted performance while demanding specific performance.[47] However, as these contracts often involve the performance of a ‘continuous duty’, difficulties may arise in availing specific performance,[48] in addition to practical difficulties where, for instance, the contractor has become insolvent.[49]

A proposed solution to reduce the indispensability of a turnkey contractor is to contract with multiple contractors, as in consortiums, for large-scale projects- thus reducing the risk of the project being left unfinished due to inability of one contractor to complete it.[50]

In addition to the above, general problems of substituted performance include those of variance of terms between the original and substituted contract,[51] and the reasonableness of availing substituted performance in case of minor deficiencies.[52] While these may be faced in turnkey contracts too, they can arguably be mitigated sufficiently through detailed construction plans, which are a typical component of these contracts.

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Conclusion

While it has been argued that the remedy of substituted performance leaves issues that call for ‘strict implementation of the law’ to ‘managerial resolution’[53] in construction contracts, this article argues that the remedy, specifically as introduced in Indian law, serves several objectives. For one, it prevents the burden of supervision of complex projects from being placed on the court, while enabling a different avenue for fulfilment of the party’s expectations.[54] For another, in leaving contracting parties free to deviate from the prescribed procedure,[55] it allows scope for parties to place additional safeguards in ‘risk and cost’ clauses, such that the remedy may be easily modified in accordance with the requirements of each contract type, while also ensuring the statutory right where such clauses are absent.

While ultimately, the efficacy of the remedy in turnkey contracts depends on the market conditions in the construction industry, it may be hoped that carefully drafted contracts, cognizant of market risks, shall help parties to utilize the remedy to their best advantage.

[1] Nishith Desai Associates, Construction Disputes in India (2020) 24.

[2] NITI Aayog, Engineering, Procurement and Construction of Civil Works- Model Agreement (2018). Hereinafter, ‘NITI Aayog Model Contract’ xix.

[3] Model EPC contracts referred to in this project include those published by the Fédération Internationale des Ingénieurs-Conseils (FIDIC), the Caribbean Community and Common Market (CARICOM), and NITI Aayog.

[4] PC Markanda, Building and Engineering Contracts (5^th edn, LexisNexis 2017) 3.107.

[5] Ibid 3.107.

[6] Delhi Jal Board v M/S Kaveri Infrastructure Pvt Ltd 2014 DLT 206 136.

[7] Michael Schneider, Turnkey Contracts: Concept, Liability and Claims (MCE International Company Lawyers’ Conference, Paris, 1986) 340.

[8] Prasanna Kulatilake, ‘Innovations in the Construction Industry: Problems and Potentials’ (2000) 1 Built Environment Sri Lanka 2 6.

[9] NITI Aayog Model Contract (n 2) xvi.

[10] Markanda (n 4) 3.107.

[11] Kinetics Technology, Company Brochure (2020) <https://kt-met.com/en/media/publications> accessed on 20 July 2021 5.

[12] James Doe, David Nitek and Noe Minamikata, ‘Construction Arbitration and Turnkey Contracts’ (Global Arbitration Review, 2019) <https://globalarbitrationreview.com/guide/the-guide-construction-arbitration/third-edition/article/construction-arbitration-and-turnkey-projects> accessed on 20 July 2021.

[13] Specific Relief Act 1963 Section 20.

[14] Mark Gergen, ‘A Theory of Self-Help Remedies in Contract’ (2009) 89 Boston University Law Review 1397 1436.

[15]   Badrinath Srinivasan, Substituted Performance in Contract Law: An Analysis (Proceedings of the Fourth International Conference of International and Domestic Arbitration: Current Scenario and Way Ahead, 2018) 1.

[16] Ibid 5. Such a claim under Section 73, Indian Contract Act, 1872 is made on the basis that such expenses ‘naturally [arise] in the usual course of things from such breach’ and constitute the ‘means of remedying the inconvenience’ caused by non-performance, which, under the section, must be taken into account while estimating damages.

[17] Specific Relief Act 1963 Section 20(2).

[18] Specific Relief Act 1963 proviso to Section 20(2).

[19]   Badrinath Srinivasan, ‘Hardship & Substituted Performance as Defences against Specific

Performance: Critique of the Recent Developments’ (2019) 31 National Law School of India University Review 53.

[20] Ibid 67.

[21] Ibid 66.

[22] Nishith Desai Associates (n 1) 27.

[23] Terje Salvesen, Contractual Incentives in EPC Contracts (University of Stavanger, 2011) 12.

[24] Fédération Internationale Des Ingénieurs-Conseils (FIDIC), Conditions of Contract for EPC/Turnkey Projects (1^st edn, 1999). Hereinafter, ‘FIDIC Model Contract’.

[25] Ibid Clause 15.2.

[26] Karnataka Electricity Board v MS Angadi (2009) 3 RAJ 682 (Kant), quoted in Markanda (n 4) 19.33.

[27] Ibid.

[28] Schneider (n 7) 340.

[29] A Merna and NJ Smith, ‘Project Managers and the Use of Turnkey Contracts’ (1990) 8 International Journal of Project Management 3 183.

[30] Joe, Nitek and Minamitaka (n 12).

[31] Ali Haider, Global Claims in Construction (Springer-Verlag London 2011) 54, 210.

[32] NITI Aayog Model Contract (n 2) Clause 16.1.1.

[33] Ibid Clause 4.7

[34] Haider (n 31) 54.

[35] World Bank Public-Private Partnership Legal Resources Centre, The Caribbean Renewable Energy Development Programme (CREDP) Toolkit: EPC Template (Updated March 2021) < https://ppp.worldbank.org/public-private-partnership/library/caribbean-renewable-energy-development-programme-credp-toolkit> accessed 18 July 2021 Clause 13.2.1. Hereinafter, ‘CARICOM Model Contract’.

[36] NITI Aayog Model Contract (n 2) Clause 21.4.

[37] CARICOM Model Contract (n 35) Clause 13.2.1.

[38] NITI Aayog Model Contract (n 2) Clause 13.5.1.

[39] Haider (n 31) 41.

[40] NITI Aayog Model Contract (n 2) Clause 15.1.1.

[41] Jonathan Hosie, Turnkey Contracting under the FIDIC Silver Book: What Do Owners Want? What Do they Get? (Mayer Brown 2007) 2.

[42] Specific Relief Act proviso to Section 20(2).

[43] Markanda (n 4) 19.6.

[44] Srinivasan (n 15) 5.

[45] Kapilaben and Ors v Ashok Kumar Jayantilal 2019 SCC ONLINE SC 1512.

[46] Ibid.

[47] Srinivasan (n 19) 2.

[48] Specific Relief Act 1963 Section 14(b).

[49] FIDIC Model Contract (n 24) Clause 15.2.

[50] Sajith Sreedharan, ‘Turnkey Project Execution with Consortium Contracts’ (Eka Infra Consultants, 2019) <https://www.ekainfra.com/turnkey-project-execution-with-consortium-contracts/> accessed on 21 July 2021.

[51] Markanda (n 4) 19.34.

[52] Ruxley Electronics v Forsyth (1996) AC 344, quoted in Haider (n 31) 77.

[53] Sintayehu Kabede and Tiewei Zhang, ‘Enforcement of Legal Remedies Against Construction Projects Time Overrun in Ethiopia: A Critical Appraisal’ (2020) 6 Heliyon 10.

[54] Kanishk Thakur and Dushyant Thakur, ‘Improving Substituted Performance in India: Attending to the Loopholes’ (2020) 10 Statute Law Review 10 1.

[55] Specific Relief Act 1963 Section 20(1).

The post Turnkey Contracts and Substituted Performance appeared first on LexForti .

Are you planning to launch a Franchise business?

or

expand it further?

If that’s the case, then it is highly suggested to get yourself a SOLID FRANCHISE AGREEMENT!

We will provide you with a water-tight contract which will immune your business from any possible litigious issues.

Contact us today and get yourself a Franchise Agreement!

What is a Franchise Agreement?

A Franchise is a set-up or arrangement where one organisation or a company follows the business idea, and business model of the parent company whilst also using the brand name of such parent company. In simpler terms, a franchise is essentially a business operating under an existing name.

Expert: Describing an outline of a sample Franchise Contract

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Why do we need a Franchise Agreement?

Whenever you go for a Franchise business, you are letting others use your brand’s business structure, brand name, and related IP for their profitability, in lieu of royalty.

Such delegation could be risky and in some cases, you could even lose ownership over your entity. It is very important that both parties establish distinct rights and obligations. By doing so, you will be removing any kinds of ambiguity and vagueness in your franchise business.

Such distinction could ONLY be achieved through a detailed and solid FRANCHISE AGREEMENT. Therefore, it is very CRUCIAL to have a Franchise Agreement.

The post Get yourself a Franchise Agreement appeared first on LexForti .

The post Influencer Agreement Sample Template – PDF appeared first on LexForti .

In this article, we get to understand, the three considerations that one should give a thought to while entering into a contract with a Social Media Influencer. Today’s post has been contributed by Nadia Bubennikova, who is the Head of influencer marketing agency at BuzzGuru who helps brands, game and app developers to reach their target audience and bring the highest ROI from their influencer marketing campaigns.

There has been a paradigm shift in the way, the brands target their desired audiences. With the increasing influence of social media influencers on their followers, brands are considering to approach Social media influencers to promote their products and services. It becomes important to know some basic ground rules before engaging an influencer. So what are those considerations?

Nadia Bubnnikova-

Here are our three things to consider:

Draft Approval Procedure:
The first clause to check when signing a contract with an Influencer is the draft approval procedure. Sometimes the advertising materials that the influencers produce do not meet our expectations regardless of how detailed the task assignment was, so it is in our best interest to make sure that the contract includes some regulations for such cases.

The best practice is to include the link to the task assignment for the integration into the agreement and clearly state that the advertising materials must be filmed according to the Task Assignment and you have 2 to 3 rounds of edits in case the influencer misses something out.

This way you will be protected from having to pay for an integration that is below your standards. Another useful point to include is the timing for the adjustment of the materials after you’ve provided feedback requesting some edits from the creator. Otherwise it may take weeks and you will go far behind schedule.

Services Description:
When entering an agreement with an influencer for a paid collaboration, you should state explicitly what is it, that you need from the creator. You should always describe the ad format, the length of the promo part, and other actions that might be a part of the services the influencer is to provide. For example, after the deal is closed and the service is provided it would be very useful to get full statistics on the publication.

After receiving the payment Influencer tend to avoid other extra actions and are very unlikely to share the stats, so our advice is to put all such details in the description of services. If something is missed out you won’t be paying for it.

Payment Procedure:
Make sure that the agreement is built around the post payment model, especially if it is your first time working with a specific influencer or their representative. This allows you to hedge all the possible risks.

Of course, some influencers and agencies insist on down payment as a deal confirmation, but it is crucial to avoid the 100% down payment. In case you are interested in a specific influencer and they do not agree to work on a post payment model in any way, try 20-30-50% down payment after you have received a draft of advertising materials from the service provider.

This way the influencer will already do some work as a proof for you and you will be able to send the down payment of 20-30-50% without any risk.

Richard Brandenstein-

Richard J. Brandenstein is a New York-based attorney, and FBR Law Partner, specializing in Administrative Law. The areas he specifically focuses on include New York State Disability and New York State Workers’ Compensation. With over 40 years of experience as an attorney, he also trains new legal staff in his company too. 

As a business, what three main considerations should be, while entering into an agreement with a Social Media influencer for product endorsement?

Here are the three things that should be considered before a brand or company decides to work with a social media influencer:

Analytics:

Influencers’ analytics are important to consider. This is because it will give you a better understanding of their audience in terms of their age, gender, and location. This will then allow you to determine whether they are suitable for your brand and whether their audience is likely going to purchase your products or use your services.

Engagement:

Engagement is another significant factor to consider. While a person may have millions of followers, this doesn’t mean that all of their followers are actively engaging with their content. As a result, you may find it more beneficial to choose a smaller influencer to work with in comparison to a larger one if it means that their followers engage with the content more. 

Compatibility:

The compatibility of the influencer and your brand is essential and something you should take into careful consideration. The influencer should be a good fit for the brand and be able to portray what you’re asking of them.

Interesting Read:  How NFTs get their value?

The post Expert Corner – Three things to consider while entering into a contract with a Social Media Influencer appeared first on LexForti .

Section 2 (h) of the Indian Contract Act, 1872 states that “an agreement enforceable by law is a contract.” A deeper analysis of the given definition would reveal that it contains two elements which itself got many sub-analyses, i.e., agreement and legal obligation. It also mentions the fact that all contracts are agreements but all agreements are not contracts.

Section 2 (h) also signifies that a valid contract is nothing but an agreement enforceable by law. In order to understand what a “valid contract” is, Section 2(h) must be read along with Section 10. Section 10 of the Indian Contract Act provides for several interwoven Sections of Indian Contract Act, 1872 that should be witnessed to state an agreement to be legally enforceable turning it to be a valid contract. 

The essentials of a valid contract are –

• Offer & acceptance, section 2(a) and section 2(b). Section 2(c) read along with section 2(a) & (b). 

There must be the elements of valid offer & valid acceptance. For e.g.- certain sections of the Contract Act,1872 includes Sec. 7, Sec. 7(1) & Sec. 7(2). 

• Intention to create legal relations: An offer must be such that when accepted it will result in a valid contract. A mere social invitation cannot be regarded as an offer, because if such an invitation is accepted it will not give rise to any legal relationship. e.g.- Balfour vs. Balfour, 1919 2 KB 571.
• Terms of the offer must be clear and definite: Knowledge of the Intention of the parties is very essential as without this the courts will not be able to decide what the parties want to do. Therefore, the terms of the offer must be clear and definite and not vague and loose. 
• Must create a legal relationship: It is essential for a valid proposal that it must be made with the intention of creating a legal relationship otherwise it will only be an invitation. A social invitation may not create a social relationship. An offer must lead to a contract which creates legal obligations and legal consequences in the case of non-performance of the contract.

CROSS-SECTIONAL ANALYSIS

Sec. 2(a) denotes, “when one person signifies to another his willingness to do or to abstain from doing anything, with a view to obtaining the assent of that other to such act or abstinence, he is said to make a proposal.”

Sec. 2(b) denotes, “when the person to whom the proposal is made signifies his assent thereto, the proposal is said to be accepted. A proposal when accepted becomes a promise.”

However, there must be lawful offer and lawful acceptance. 

The essentials of a lawful offer are – 

• An offer may be express or implied. (Sec. 9).
• An offer must be capable of creating legal relation.
• Definite, unambiguous and certain in nature. (Sec. 29).
• An invitation to offer is no offer.
• Offer must be communicated. (Sec. 4)
• Offer might be general or specific. 
• Offer must be in the view to obtaining free consent. (Sec. 13 & Sec. 14 read along with Sec. 15, 16, 17, 18, 20, 21 & 22.
• Two identical cross – offers do not make a valid offer.
• An offer can be made subject to any terms and conditions. Further, if the offeror does not communicate or inform the offeree about the deviated acceptance from the offeree, the offeror is deemed to have accepted the deviated acceptance. (Sec. 7)

The essentials of lawful acceptance are – 

• Acceptance must be given by the person to whom an offer is made. However, there is an exception in case of the agent and principal under Sec. 182.
• Acceptance must be absolute and unqualified. Under Sec. 7(1).
• Acceptance must be expressed in some usual and reasonable manner, unless the proposal prescribes the manner in which it is to be acted. Under Sec. 7(2).
• Acceptance must be communicated by the accepter.
• Acceptance must be given within a reasonable time and before the offer lapses and/or revoked. Under Sec. 6(2), Sec.7, Sec. 6(4), Sec. 6(1), Sec. 6(3).
• Acceptance must succeed the offer. 
• Rejected offers can be accepted only, if renewed.   

Sec 2(c) denotes the labelling of “promisor and promisee”. 

“The person making the proposal is called the promisor, and the person accepting the proposal is called the promisee.”

There must be a legal intention behind every offer and acceptance turning into promise and the promise along with lawful consideration turning into an agreement enforceable by law is a valid contract. (Sec. 2(d) and Sec. 23). 

In the landmark case of Balfour vs. Balfour, 1919 2 KB 571, Mrs. Balfour’s action was dismissed on the ground that there was no legal intention between Mr. and Mrs. Balfour’s verbal promise to a maintenance fee of 30 pounds to be send by Mr. Balfour every month as it was denoted as an outcome of domestic relation out of affection and love without any writing and registration. Sec. 25(1). 

Where a valid offer and valid acceptance establishes a promise between the offeror and the acceptor, the promise when gets combined with the mutual consideration leads to an agreement. 

Here, comes the Sec. 2(d) and Sec. 23. 

Sec. 2(d) denotes, “when at the desire of the promisor, the promisee or any other person has done or abstained from doing, or does or abstains from doing, or promises to do or to abstain from doing, such act or abstinence or promise is called a consideration for the promise.”

Now, Sec. 2(d) is read along with Sec.23 which implies, lawful consideration. A consideration is ‘lawful’, unless, it is forbidden by law; or is of such a nature that, if permitted it would defeat the provisions of any law; or is fraudulent; or involves or implies injury to the person or property of another; or is immoral; or is opposed to public policy.

Talking about the presence of Capacity of Parties, Sec. 11 states that “in order to be competent to contract the parties must be of the age of majority and of sound mind and must not be disqualified from contracting by any law to which they are subject.”   Sec. 12 talks about the sound mind while entering into a contract.      It is also read along with Sec. 68, which states that, “if any of the parties to the agreement suffers from minority, lunacy idiocy, drunkenness, etc., the agreement is not enforceable at law, except in special cases, e.g.- in the case of necessaries supplied to a minor or lunatic, the supplier of goods is entitled to be reimbursed from their estate.”

Consensus-ad-idem signifies the meeting of minds, which means the parties must give consent upon the same thing in the same sense. (Sec. 13). 

Further, free consent, laid down in Sec. 14 signifies, “consent is said to be free” when, it is not caused by-

• Coercion, Sec. 15.
• Undue Influence, Sec. 16.
• Misrepresentation, Sec. 18.
• Fraud, Sec. 17.
• Mistake, Sec. 20, 21 and 22.

Sec. 21 implies, “mistake of law of the country or mistake of law.”

Sec. 20 implies, “bilateral mistake” and Sec. 22 implies, “unilateral mistake”.

Sec. 56 lays down that, “an agreement to do an act impossible in itself is void.” 

It is read along with Sec. 32, which implies that, “a contingent contract to do or not to do something if an uncertain future event happens, cannot be enforced by law unless and until the event has happened. If the event becomes impossible, such contract becomes void.” 

Again, it can be in turn read along with Sec. 36 which implies that, “agreements contingent on impossible event is void.” 

 If we indulge deep into Sec. 56 and 32 and 36, it witnesses the assent of Sec. 53.

 Sec. 53 states that, “when a contract contains reciprocal promises, and one party to the contract prevents the other from performing his promise, then the contract becomes voidable at the option of the party so prevented.” 

Here again comes the presence of Sec. 2(f) which signifies that “promises which form the consideration or part of the consideration for each other, are called reciprocal promises.”

Now, as Sec. 56, 53, 32 altogether talks about Void and Voidable contract, an essence of Sec. 2(i) and Sec. 2(j) can be found. 

Sec. 2(i) talks about “an agreement which is enforceable by law at the option of one or more of the parties thereto, but not at the option of the other or others, is a voidable contract.” 

Sec. 2(j) talks about, “a contract which ceases to be enforceable by law becomes void, when it ceases to be enforceable.” (Read along with Sec. 2(g).

Sec. 24 to 30, specify, certain types of agreements which have been expressly declared void. 

The agreements that have been expressly declared void are as follows – 

• Agreements in restraint of marriage. (Sec. 26)
• Agreements in restraint of trade. (Sec. 27)
• Agreements in restraint of legal proceedings. (Sec. 28)
• Agreements, the meaning of which is uncertain. (Sec. 29)
• Agreements by way of wager. (Sec. 30). It can also be read along with Sec. 294-A of the IPC declaring ‘conducting of lottery’ a punishable offense. 
• Agreements contingent on impossible events. (Sec. 36) read along with (Sec. 32)
• Agreements to do impossible acts. (Sec. 56)

Drafting Of Observation

If we look into the definition of Sec. 2(a), i.e., the definition of a proposal/offer, it includes the following three essentials-

1. Expression of the willingness
2. It must be to another person
3. Must be made with a view to obtaining the assent of the other person
   

Now, under this Sec. we can also come across a hidden requirement, i.e., the assent of the other person (offeree) must be under free consent without any element of coercion, fraud, undue influence, misrepresentation or mistake. Thus, without proceeding further we come across the fact that Sec. 2(a) has the presence of Sec. 14 in it which in turn has the touch of Sec. 15, 16, 17, 18, 20, 21, 22.
Again, where Sec. 2(b) talks about the definition of acceptance, it itself includes the hidden clauses of free consent. After a lawful offer is made, it is lawfully accepted giving rise to a promise.
However, the promise must get clubbed with mutual consideration which is too wide in concept under Contract Law, 1872 due to the inclusion of three things, namely- a) the timeline of past-present-future, b) the scope of act, abstinence & promise, c) a general Law of Contract. This in turn gives rise to an agreement. And the agreement in turn must be enforceable in the court of law, thus constituting a valid contract.
Here, let’s take a pause, and analyze the sections and sub-sections hidden within it.
A promise, i.e., Sec. 2(c) must get clubbed with Sec. 2(d), but to constitute a valid agreement, Sec. 2(d) must get clubbed with Sec. 23. Here, its not the end. Again, Sec. 2(c), Sec. 2(d) and Sec. 23 must get clubbed with Sec. 2(h), which will compose to a valid contract.
However, there is a loophole. If we club Sec. 2(c), Sec. 2(d) and Sec. 23 we get an agreement. Now, look into the loophole. Sec. 2(h) states, only the word agreement in its definition, but not valid agreement. If we were to compose a valid contract, only a mere agreement is not enough. It must be a valid agreement. So, a valid agreement in turn is a compilation of a lot of sections and essentials. (As mentioned in the cross-sectional analysis).

The post Analysis of Sec. 2(h) of Indian Contract Act 1872 appeared first on LexForti .

INTRODUCTION

With the growth and advancement of technology, we are moving towards a more digitalised world. The modern era is dependent on the internet to a great extent. Hence the contracts are also getting digitalised. Basically, smart contracts are new age software-based contracts in which the software automates the business processes. It is self-performing in nature. 

KEYWORDS

Smart contract, software-based contract, blockchain, self-performing, contracts.

WHAT ARE SMART CONTRACTS?

As mentioned above, the smart contract is a new age software-based contract having a main feature of self-performing. The smart contracts are stored on blockchain and in this type of contracts the code explains the mechanisms of the transactions and final arbiter of the terms. Therefore, these contracts have become the building blocks of the entire ecosystem of decentralized applications and it represents a point of convergence of development of blockchain. Due to blockchain the requirement of intermediaries or third parties or human interactions are eliminated owing to its decentralized nature. This also ensures the smooth and trouble-free experience of virtual contract execution. Hence, there are no chances of human errors, however, once the agreement is completely codified, it cannot be altered or modified as per the need. 

Features

• It is self-performing
• It is once codified, cannot be modified or altered
• It uses blockchain technology for performance and executions of contract virtually
• For the performance and completion, it do not require submission of physical documents.

Presently, the smart contracts are best suited for two types of commonly used transactions:

• Confirming the payment of funds upon certain triggering events.
• Imposition of financial penalties if certain objectives or conditions are satisfied. 

HOW DO SMART CONTRACT WORKS?

In smart contracts, the code contains the terms. Therefore, the contract interprets and verify then automatically executes the transactions which are in accordance with the terms. For example, in case of rent, a contract of rent is made in smart contracts. The tenant will pay the rent to the house owner in cryptocurrency and once the payment is made and the house owner receives the receipt of successful transaction, he will release the key to the house. The system operates on If-Then principle and the people who are involved in blockchain will observe the transaction and will become the witnesses. The house owner will be surely paid when he releases the key and the tenant will definitely receive the key if he pays the amount. Therefore, one action will not be completed without the other and this states an efficient and effective system. 

USES

The smart contracts can be used in various such cases. Some of them are listed below:

1. Insurance- due to lack of automation process in insurance claims, this can lead to delay to process claims for months and it can be problematic to the customers. Here, adopting smart contracts can be extremely helpful. The smart contract can trigger the insurance claim automatically when certain events occur which ultimately saves time and costs. Furthermore, this makes the entire process smooth and effective.
2. Mortgages-  the smart contract assist in mortgages cases by  automatically joining the parties and by providing a frictionless process. It can also automatically process payments and release the liens from landlords when the loan is paid.
3. Supply chain management- for any company keeping a track of the flow of goods is a difficult task. Here, the smart contract helps and saves time, costs and makes the process more efficient by taking a note of the ownership rights as the products move through supply chain with confirmation who is responsible for the product at a given time.

SMART CONTRACT IN INDIA

The primary statute to regulate the contracts in India is the Indian Contract Act, 1872. Section 10 of the Act states that “all agreements are contracts if they hold the free consent of parties willing to contract, for a lawfully accepted consideration and with an object.” In simpler terms it means that an agreement to be enforceable by law must have an offer, acceptance and consideration. In smart contracts, there is offer, acceptance and consideration in form of cryptocurrency. Hence, the essential requirements of section 10 are fulfilled which means that the smart contracts are enforceable under the Indian law. However, cryptocurrency is not recognized in India as there is no such regulation which can regulate it. Here a question raises, whether cryptocurrency can be considered a valid consideration under the Indian law. In a 2020 judgment of the Supreme Court, the Hon’ble Court lifted the ban imposed by Reserve Bank of India on cryptocurrency which refused the banks and financial institutions from providing services to individuals or businesses who were engaged in cryptocurrency dealings. 

Now, question arises that whether digital signature are enforceable or not and can be admitted as an evidence in the court?

Section 5 and section 10 of the Information Technology Act, 2000 (“IT Act”)defines that a digital signature is legally acceptable and a contract of electronic means to be legitimate and enforceable. Section 65B of the Indian Evidence Act, 1872 (“Evidence Act”) states that the contracts signed digitally shall be admitted as an evidence in the courts. However, according to the Evidence Act, an electronic contract is considered valid only when if it is authenticated by way of a digital signature which should be in accordance with law and these signatures are enforceable and recognized under the IT Act and in accordance with the rules of the Central Government. In case of smart contracts, the contract may be identifiable to the contracting parties, however, these do not employ signatures in digital formats that the Indian law requires. Thus, the smart contracts may not enjoy the benefits of a contract under the Indian law.  

Smart contracts are enforceable in India, however, if caution is not followed with respect to the party that is being contracted then the consequences of a failed transactions shall be carried all by own as the law has no detailed system in place for the regulation of the smart contracts. The smart contracts might not be enforceable under the Indian law if the consideration in the contract is not mutual. As the Indian law recognizes the concept of mutual consideration, absence of the same will make the contract enforceable. This situation can occur in case of unilateral contracts. Although a smart contract without consideration can still be enforceable through code. However, if such contract is breached them it shall not be held as breach in the eyes of courts of India because for the courts there is no contract in the first place as there was no mutual consideration which is a significant requirement of a contract. 

CONCLUSION

It can be concluded after reading the above piece of information on smart contracts that smart contracts have many benefits with evident disadvantages. The smart contracts are enforceable in the Indian law, however, the protection cannot be granted as there is no regulation which can regulate this type of contracts. There are several other issues as well in smart contract such as policy issues including jurisdictions problems and the possibility of fraud and etc. Therefore, the Indian law needs amendments or laws for the regulation of smart contracts in India.

REFERENCES

1. Indian Contract Act, 1872.
2. The enforceability of smart contracts in India, https://www.mondaq.com/india/contracts-and-commercial-law/874892/the-enforceability-of-smart-contracts-in-india
3. Smart contracts: Functioning and legal enforceability in India, https://www.alliance.edu.in/ijls/ijls-2021/assets/documents/Smart-Contracts.pdf
4. Smart contracts in India, https://www.mondaq.com/india/fin-tech/1133130/smart-contracts-in-india

The post EXPLAINED: SMART CONTRACTS IN INDIA appeared first on LexForti .

Copying online templates could be disastrous to your business. Franchise agreements are highly customized and should be based on business goals. One faulty clause could lead to legal complications. Therefore, we suggest ALWAYS consulting an expert before drafting a Franchise Agreement.

FRANCHISE AGREEMENT SAMPLE DRAFT

FRANCHISE AGREEMENT

 THIS AGREEMENT (the “Agreement”) is made this ___day of ___, 20___, by and between:

Burger Legal Private. Ltd., a company incorporated under the laws of India, whose office is at………………..; (hereinafter referred to as “the Franchisor”)

AND

Mr Rohit Pradhan, s/o Dayanand Pradhan, Resident of Patna, having its PAN Number ABCDEF. (hereinafter referred to as “the Franchisee”)

The Franchiser and the Franchisee hereinafter collectively referred to as the “Parties” and individually as a “Party”.

1. RECITAL

WHEREAS:

1. The Franchisor has developed methods for establishing, operating and promoting restaurant selling varieties of burger and fast-food products (“BURGER LEGAL Cafes” or “Cafes”) using the service mark “BURGER LEGAL” and related trade names and trademarks (“Marks”) and the Franchisor’s proprietary methods of doing business (the “Licensed Methods”).
2. The Franchisor grants the right to others to develop and operate BURGER LEGAL Cafes, under the Marks and pursuant to the Licensed Methods.
3. The Franchisee desires to establish a BURGER LEGAL Cafe at a location identified herein or to be later identified, and the Franchisor desires to grant the Franchisee the right to operate a BURGER LEGAL Cafe at such location under the terms and conditions which are contained in this Agreement.

• DEFINITIONS

Commencement date shall be…

Confidential information shallmean all information…

Intellectual Property Rights shall include…

Location shall mean the premises of the ABC Complex at Rohini, Delhi.

Method shall mean the methods, techniques and processes developed by the Franchisor;

Trademarks shall mean the names, trademarks and service marks owned by the Franchisor and include inter alia;

Products shall mean, all varieties of Burgers, French Fries, Aerated drink and other eating items of the Franchisor bearing any of the Trademarks;

Term shall mean the period fifteen years from the commencement date;

Turnover shall mean gross revenue of the Franchisee’s store.

• GRANT OF FRANCHISE

In consideration of the onetime professional consultancy fees and the other payments, which shall be paid by the Franchisee at the time and in the manner set out in this Agreement and in further consideration of the observance and performance of the undertakings on the part of the Franchisee, the Franchisor grants to the Franchisee the right to establish and operate the Burger Legal stores at the Location for the Term.

• THE FRANCHISEE’S OBLIGATIONS

The Franchisee covenants and agrees with the Franchisor promptly to perform and observe the following covenants and conditions:

• Commencement

To commence the Project by the Commencement Date.

• Project to be carried out at the specific location only

Not to carry on the Project or any part thereof other than from the Location without the prior written consent of the Franchisor.

• Business Promotion

4.3.1 Actively to promote the Project and to exercise best endeavours in the conduct of the Project to promote the mutual business interests of the Franchisor and the Franchisee and shall cause to be provided at the Location such of the Products as are stipulated by the Franchisor from time to time.

4.3.2 As part of its endeavours to promote the Project, to organize a Media Conference at the time of launch and to organize such other promotional activities including but not limited to media promotions, brochure drops and on-location merchandising display as are mutually decided by the Parties from time to time.

• Products

4.4.1 Only to sell at the Location, the Products, which are specified by the Franchisor and which may be purchased from the Franchisor alone.

4.4.2 In no case will the Franchisee stock or sell any goods other than the Products and goods which the Franchisor otherwise deems to be unsuitable for sale at the Location.

4.4.3 The Franchisee shall pay for all Products acquired by him from the Franchisor according to the terms of payment as notified in writing from time to time by the Franchisor to the Franchisee.

4.4.4 Notwithstanding that risk in any Products supplied by the Franchisor to the Franchisee, shall pass to the Franchisee upon delivery, full legal and equitable title and interest in all and any Products supplied to the Franchisee shall remain in the Franchisor and shall not pass to the Franchisee until the Franchisor shall have received payment in full of all amounts due and owing from the Franchisee to the Franchisor for the time being (including any interest accruing and owing to the Franchisor) and from time to time in respect of all such Products supplied by the Franchisor to the Franchisee at any time.

4.4.5 The Franchisee shall pay the cost of delivery for the Products acquired from the Franchisor

• Non-modification of products

To sell the Products in the same condition as that in which it receives them and not to alter or remove or tamper with them or any markings or name plates or indications of the source of origin on them or any packaging supplied by the Franchisor except putting such notices as are required by the packaging laws of ……………. (Country) and will inform the Franchisor of any such laws and the alterations made for the compliance thereto.

• To be only sold to the end-users

Not during the term of this Agreement or any renewal or extension thereof without the written approval of the Franchisor, sell the Products other than to end-users.

• Maximum Prices

Not to charge customers prices in excess of the prices specified by the Franchisor in writing from time to time.

• Maintain Stocks

4.8.1 To commence the Project with a level and type of stock-in-trade of the Products as are in writing specified by the Franchisor and to maintain at all times during the Term, stocks of the Products at a level and of a type approved by the Franchisor from time to time.

4.8.2 To ensure that all stock is maintained in accordance with the Franchisor’s instructions and recommendations and to the standards prescribed by the Franchisor in writing from time to time.

• Books of Accounts

4.9.1 To keep such books of account and records and operate such finance and accounting and stock control systems for the Project made up in accordance with proper and accepted accounting practices and accurately maintain them up to date at all times.

4.9.2 To provide the Franchisor with true copies of quarterly audited profit and loss accounts and balance sheets for the Project made up in accordance with proper and accepted accounting practices, which shall be provided no later than 30 days after the end of each quarter

• Payments and Schedule

4.10.1 To pay to the Franchisor (or as the Franchisor directs) as per the relevant dates (time being of the essence):

(i) One time professional fee of……………….. (Amount in any currency) towards providing the professional consultancy for the Project, which shall be payable five months prior to the Commencement Date;

(ii) 4% of the turnover of the Burger Legal’s cafe payable on a quarterly basis;

(iii) The salaries of the staff recruited, trained and employed by the Franchisor in relation to the Project and any costs incurred on travel, accommodation or any incidental expenses incurred on recruitment and training of the manpower or in opening and operating the Project with prior sanction of the Franchisee, which the Franchisor shall bill on the actual.

4.10.2 All payments shall be made by the Franchisee by way of a bankers cheque/demand draft made payable at ……………….. (place) in favour of the Franchisor.

• No authorized representation

Not to make any representations, statements or warranties about the Project other than those which are expressly permitted by this Agreement or which the Franchisor may first authorise in writing.

• Right to inspection

4.12.1 To permit officers, servants and agents of the Franchisor during normal hours of business to inspect and observe the Project, and all parts of the Location; the stocks of the Products held by the Franchisee and the manner in which the goods are displayed and sold by the Franchisee.

4.12.2 To permit the Franchisor and its servants and agents to inspect and copy, books of account, records, finance and accounting systems at the Location.

• Intellectual Property

Not to be a party to the doing or neglecting to do any act whereby any industrial or intellectual property including trade secrets and business reputation owned by the Franchisor and any company related to it and which the Franchisee is authorised to use (including the goodwill of the business in respect of which this Franchise is granted and used in connection with the Project) may be prejudicially affected either during the Term or afterwards.

• Maintain secrecy

4.14.1 To maintain strict secrecy about the Methods of the Franchisor including any manuals issued by the Franchisor, any technical know-how, trade secrets, product information, market opportunities, advertising and publicity materials belonging to the Franchisor, both during the currency of this Agreement and after it is terminated.

4.14.2 To take all steps necessary to ensure that the Franchisee’s nominees, employees, agents and sub-contractors also observe such requirements of secrecy as stipulated in the previous clause and shall cause such nominees, employees, agents or sub-contractors to enter into a secrecy Agreement in a form approved by the Franchisor.

4.14.3 The Franchisee and his nominee, employees, agents or sub-contractors shall not during the currency of this Agreement and after its termination disclose any Confidential Information received by any of them from the Franchisor in the course of the Project unless such disclosure is required by law and will inform the Franchisor of any such disclosure that they are compelled to make.

4.14.4 The Franchisee and his nominees, employees, agents or sub-contractors shall not after the termination of this Agreement and thereafter use such Confidential Information without the prior written consent of the Franchisor.

4.13.5 In order to protect the trade secrets and other Confidential Information as also in lieu of the know-how received by Franchisee from the Franchisor so as to be able to fulfill its obligations as part of the Project, Franchisee agrees that during the Term and even after termination for a period of three years thereof, Franchisee shall not be concerned or interested either directly or indirectly in any business which is involved in the supply of goods which are similar to the Products sold at the Location or in providing services similar to the Services provided as part of the Project.

4.13.6 As part of its obligations to maintain secrecy the Franchisee will not at any time within three years after the termination of this Agreement:

(i) solicit the customers or former customers of the Project with the intent of taking their custom;

(ii) employ or offer to employ any person who immediately before such employment or offer of employment was employed by the Franchisor and not directly or indirectly to induce such person to leave his or her employment

• Assignment

Not to assign, charge or otherwise deal with the Project in any way without the prior written consent of the Franchisor.

• THE FRANCHISER’S OBLIGATIONS
  • Permitting the Franchisee to continue the Project

5.1.1 To permit the Franchisee to carry on the business of setting up, operating and promoting the Burger Legal under the style ……………….. and use the Trademarks or such other names or styles as may be specified in writing by the Franchisor in relation thereto.

5.1.2 To permit the Franchisee to operate the business of providing Products and Services under the style ……………….. and use the Trademarks or such other names or styles as may be specified or approved in writing by the Franchisor from time to time 5.1.3 To permit the Franchisee to use the Intellectual Property Rights in relation to the Project.

• Management Advise

5.2.1 To provide the Franchisee, as the Franchisor considers appropriate from time to time, with management, sales and administrative advice in the conduct of the Project and such other advice as the Franchisor considers appropriate to promote the mutual business interests of the Franchisor and the Franchisee.

5.2.2 To furnish the requisite technical expertise and assistance as the Franchisor deems necessary to the Franchisee for the completion, management and promotion of the Project.

• Directions on Layout of Location

5.3.1 To provide the Franchisee with directions as to:

(i) the layout and colour scheme arrangements for the Project at the Location;

(ii) the plant and equipment and the fixtures and fittings to be used in the Project, as well as for the installation of the same.

• Supply Products and ServicesTo exercise its best endeavours to fulfil orders for the Products made by the Franchisee, provided always that the Franchisor shall be under no obligation to fulfil any order for the Products made by the Franchisee, if the Franchisee is at the time in default of his liability to pay his dues.To provide to the Franchisee the technical know-how and expertise for the entire range of “specialized treatments” as developed and formulated by the Franchisor and to update the Franchisee as regards any improvements thereupon.
  • Employ staff and training
    • To recruit and employ such sufficiently competent staff as the Franchisor deems necessary for the efficient conduct and management of the Project
    • To provide initial training to such of the employees as recruited by the Franchisor at the level which in the opinion of the Franchisor is adequate to instruct, in order to efficiently conduct specialized treatments and sell the Products at the Location.
    • To provide supplementary training as and when the Franchisor deems necessary during the Term as well as further training in new techniques or concepts developed by the Franchisor

• IP RIGHT’S OWNERSHIP
  • The Franchisee acknowledges and recognises the exclusive right of the Franchisor to the Intellectual Property rights including without limitation Trademarks as well as the insignia, logo-grams, designs and other Intellectual Property Rights associated with the Franchisor.
  • The Franchisee will observe the following requirements in the use of the Trademarks:

• Use them in a proper trademark sense in the manner as prescribed by the Franchisor from time to time;
  • In the case of such of the Trademarks as are registered indicate that such marks are registered by use of the symbol ‘®’ and that the Franchisee is a licensee of such marks;
  • Not encumber, sub-license, assign, transfer or otherwise deal with his rights to the Trademarks;
  • Under no circumstances on any occasion will the Franchisee register any business, trade or corporate name or style associated with the Franchisor.

• The Franchisee shall forthwith notify the Franchisor of any infringements of such Intellectual Property Rights of which the Franchisor becomes aware provided however that the prosecution of any claim with respect to any Intellectual Property Rights shall be the sole responsibility and undertaken at the absolute discretion of the Franchisor.

• INDEMINITY BY THE FRANCHISEE

The Franchisee covenants and agrees with the Franchisor that the Franchisee shall assume sole and entire responsibility for and indemnify and save harmless the Franchisor from any and all claims, liabilities, losses, expenses, responsibility and damages by reason of any claim, proceedings action, liability or injury arising out of the Franchisee’s conduct of the Project or as a result of the Franchisee’s relations with his customers and other third parties or because of any breach of this Agreement by the Franchisee.

• FURTHER TERM

Provided that there shall not be any prior or existing breaches or non-observances of any of the covenants, conditions, Agreements, and provisos on the part of the Franchisee contained in this Agreement, the Franchisor will upon the written request of the Franchisee given not less than 3 months prior to the expiration of the term of the franchise hereby granted, grant a further term of the franchise for……………….. years and the Franchisee will accept such further term upon the Franchisor’s then prevailing terms and conditions.

• TERMINATION

This Agreement shall terminate:

(A) On the expiry of the Term;

(B) On the occurrence of any of the following events which are fundamental breaches of this Agreement terminating it forthwith:

(i) in the event of a breach by the Franchisee of any provisions of this Agreement and subsequent failure to remedy the breach within thirty days of having been notified by the Franchisor;

(ii) failure to make the payments on any of the relevant payment dates as specified in the Agreement (time being of the essence);

(iii) any assignment or disposal of the Project or the Location by the Franchisee;

(iv) any challenge by the Franchisee to the validity of any part of the Intellectual Property Rights; provided that the Franchisor may waive any breach of this Agreement by the Franchisee.

(C) If the Franchisee goes into either compulsory or voluntary liquidation (except for the purpose of reconstruction or amalgamation) or if a receiver is appointed in respect of the whole or any part of its assets or if the Franchisee makes assignment for the benefit of or composition with its creditors generally or threatens to do any of these things or any judgment is made against the Franchisee or any similar occurrence in any jurisdiction affects the Franchisee.

(D) If the Franchisee engages in any conduct prejudicial to the Project or the marketing of the Products or Services generally.

(E) If any material change occurs in the management or control of the Franchisee particularly any change of directors or shareholders.

1. EFFECTS OF TERMINATION

10.1 Upon termination of this Agreement for whatever reason the Franchisee shall:

(i) Immediately cease to operate and conduct the Burger Legal, provide Services and sell Products, however it shall not be relieved of the obligation to pay any monies due to the Franchisor pursuant to this Agreement;

(ii) Cease to exploit any Intellectual Property Rights owned by the Franchisor or any company related to it and licensed to the Franchisee in respect of the Project;

(iii) Forthwith cease to use any of the Trademarks and to desist from using any trademark confusingly or deceptively similar to the Trademarks or the style BIOTIQUE;

(iv) Deliver to the Franchisor any documentation including without limitation manuals, catalogues, instructions, notes, publicity promotional and advertising material, samples, letterheads, business cards relating to the Project;

(v) The Franchisee will furnish to the Franchisor an inventory of the unsold stock held by it and transfer to the manufacturer or any person, firm or corporation designated by the manufacturer: (vi) The Franchisee shall if required by the Franchisor sell and deliver to the Franchisor:

(a) the fixtures and fittings and plant and equipment owned and used by the franchisee in the Project as may be selected by the Franchisor;

(b) the Franchisee’s unsold stock of the Products which are in good saleable condition as may be selected by the Franchisor.

(vii) The purchase price for such fixtures and fittings and plant and equipment selected by the Franchisor shall be as agreed upon by the Franchisee and the Franchisor and failing Agreement as fixed by a reputed valuer of such items appointed by the Franchisor and shall be paid by the Franchisor to the Franchisee within ……………….. days of the date of termination of the Agreement or within ……………….. days of the date of valuation by a valuer, whichever is later, and the fee of the said valuer shall be paid by the Franchisee.

(viii) The sale to the Franchisor of the Franchisee’s unsold stock of the Products selected by the Franchisor shall be at the same price as given by the Franchisor to the Franchisee

(ix) Any freight charges incurred by the Franchisor in the acquisition by it of the Franchisee’s fixtures and fittings and plant and equipment and unsold stock of the products as aforesaid shall be paid by the Franchisee.

(x) The Franchisee shall permit and authorise the Franchisor to have reasonable access to the premises at which the fixtures and fittings, plant and equipment and unsold stocks are then located so as to enable the Franchisor to inspect and to take possession of any such items if purchased.

1. DAMAGES

Most specifically the FRANCHISEE acknowledges that:

(i) the FRANCHISOR has expended considerable time, investment and efforts in:

(a) locating an appropriate FRANCHISEE at an appropriate location;

(b) entering into discussions and negotiating with the FRANCHISEE;

(c) training the FRANCHISEE’s personnel;

(d) helping the FRANCHISEE build up considerable goodwill in its Centre so as to increase business.

(ii) the premature termination of this Franchise Agreement would result in huge losses to the FRANCHISOR which would then have to:

(a) locate another appropriate FRANCHISEE;

(b) invest in the FRANCHISEE Center by training personnel etc.;

(c) build-up goodwill in the new Centre so that the business of the new FRANCHISEE matches up to that of the earlier FRANCHISEE.

1. ENTIRE AGREEMENT

This Agreement sets forth the entire Agreement and understanding between the parties as to the subject-matter of this Agreement and merges all prior discussions between them and neither of the parties shall be bound by any conditions, definitions, warranties or representations with respect to the subjectmatter of this Agreement other than as expressly provided in this Agreement as duly set forth or subsequent to the date in writing and signed by a proper and duly authorized representative of the party to be bound thereby.

1. FORCE MAJEURE

The Franchisor shall not be liable to the Franchisee for any loss by the Franchisee caused by the failure of the Franchisor to observe the terms and conditions of this Agreement and on his part to be observed and performed where such failure is occasioned by any cause beyond the Franchisor’s reasonable control including the failure of the Franchisor to supply or delay in supplying any goods to be supplied by the Franchisor to the Franchisee whether on account of inter alia war, insurrection, fire, flood, earthquake, strikes, lock-outs, the unavailability of raw materials or similar cause.

1. WAIVER

Any waiver by the Franchisor of a breach of this Agreement or any other subsequent Agreement to which it may be a party in consequence of this Agreement shall not be deemed to be a waiver of any subsequent breach.

1. SEVERABILITY

If any provision of this Agreement is invalid or unenforceable, the balance of this Agreement shall remain in effect, and if any provision is inapplicable to any person or circumstances, it shall nevertheless remain applicable to all other persons and circumstances.

1. JURISDICTION

16.1 This Agreement shall be governed by Indian law in every particular including formation and interpretation and shall be deemed to have been made in India.

16.2 Any proceedings arising out of or in connection with this Agreement shall be brought only before the court of competent jurisdictions in ……………….

1. NOTICES

17.1 Any notice, request or other communication required to be given under this Agreement shall be served personally or mailed to the other party by registered post, addressed to the parties at their respective addresses set out at the beginning, or at any other address that each party shall provide to the other in writing.

17.2 Any notice served personally shall be considered given at the time of service. Any notice given by registered post shall be deemed to have been received within five days after the date of posting as shown on the post office receipt.

IN WITNESS WHEREOF, the Parties have executed this Agreement, as of the day and year first written above.

On behalf of Burger Legal Pvt. Ltd.

SIGNED AND DELIVERED BY:

(Name and designation)

SIGNED AND DELIVERED BY:

(Name and designation)

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