Tag: Contract Law
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To Indemnify or Not?
[Posted by Umakanth Varottil] One of the key considerations while drafting or negotiating a contract is how to deal with consequences of violation of the contract by one of the parties. There are two possibilities. One is a simple claim for breach of contract. The other is the inclusion of a specific clause for indemnification.…
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The Supreme Court in BSNL v Reliance: Penalty and Liquidated Damages
[Posted by V. Niranjan] The complexity of the distinction between penalties and liquidated damages in English law is amply borne out by the fact that even McGregor’s remarkably concise and insightful account is forced to begin with a seventeenth century statute (18th edition, ¶¶13.001 onwards). For an elaborate account of the law, interested readers may…
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Incorporation of Contractual Terms by Reference
[Posted by Shantanu Naravane] Last week, an interesting issue of contractual interpretation fell for the consideration of the United Kingdom Court of Appeals in Malone v. British Airways, [2010] EWCA Civ 1225. The Court was called on to decide circumstances in which terms may be incorporated into a contract from other related agreements or documents,…
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“Subject to contract” agreements and Good Faith
[Posted by Mihir Naniwadekar] On the issue of when a contract is formed in the case of “subject to contract” agreements, the leading Indian contract law textbook notes that what needs to be determined is, “… whether the formal document is of such a nature that it was the very condition of the contract or…
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Confidentiality = Non-compete?
[Posted by Umakanth Varottil] In India, there is a fair amount of debate regarding the enforceability of non-compete agreements given Section 27 of the Contract Act that invalidates contracts in restraint of trade. Recent developments in California may throw some further light on the issue. Oracle’s appointment of former HP-CEO Mark Hurd has given rise…
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“Subject to” Contracts and Agreements “Not Completed”
[Posted by V. Niranjan] “The moral of the story is to agree first and start work later.” So observed Lord Clarke recently, in delivering the unanimous judgment of the United Kingdom Supreme Court in RTS Flexible Systems [“RTS”] v. Molkerei Alois Muller Gmbh [“Muller”]. The judgment considers several questions of law that are of significance…
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The “right” of retention
[Posted by V. Niranjan] It is generally accepted that a defendant in an action for damages cannot exercise the right of “set-off” on the basis of a mere “claim”, which has not crystallised. For example, while the law permits a defendant to set off debts owed to him by the plaintiff against a successful claim…
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Ostensible Authority and Indoor Management: Possible Implications of MRF v. Parrikar
[Posted by Mihir Naniwadekar] In MRF Ltd. v. Manohar Parrikar (Civil Appeals No. 4219 and 4220 of 2010, decided on May 3, 2010), the Supreme Court of India highlighted some aspects of the operation of the indoor management rule (or the rule in Turquand’s case). While the issue before the Court was a matter of…
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The Supreme Court’s Judgment in the Reliance Dispute – Part II
[Posted by V. Niranjan] A previous post outlined the issues that arose in the Reliance judgment and summarised the Court’s conclusions. In this post, I discuss two of these in more detail – the doctrine of identification, and the binding nature of an MoU under the Companies Act, 1956. As to the first issue, it…