Mahesh Vaidya- Legal Advisor

  Formal Documentation – A generic listing of Minimum requirements/ parameters. As seen in the previous Article VII, a specific set of legal terms and conditions need to be added to support commercial terms and conditions in any deal. The nature of the deal itself determines the legal terms and conditions that would be included in the contract. Though the majority of business activities carried out by the entrepreneur are in the area of either providing pure services or trading  (buying ready-made products in bulk and selling them in retail), some of the entrepreneurs may also be involved in manufacturing or development activities. Depending upon the nature of the activity, the legal terms and conditions to be added to the commercial and technical part of any documentation differ. The provisions to be added to cover the following areas:   Scope-related provisions. Any specific special terms & conditions about the scope- if agreed between the parties. Commercial p...

  Formal Documentation – Minimum requirements/ parameters- areas to be covered. As seen in previous Article VI, when the entrepreneur moves from individual to society-based customers, the documents to be exchanged between the parties for any deal should have, in addition to commercial terms and conditions, legal terms and conditions as well to protect the interests of both the parties. The nature and type of these legal terms and conditions, form a part of legal documentation, depending upon the nature of the business for which they are to be prepared. The Indian Contract Act 1872 per se does not enlist or prescribe any “minimum legal terms and conditions” to be part of such documentation.   Nowadays the majority of small-scale and upcoming entrepreneurs are in the “service sector industry” or are involved in “trading activities ” ( buying goods in bulk and selling them in retail units)  where the operational and commercial terms and conditions in their documentation are ...

  Formal Documentation – Minimum requirements/ parameters- Missing links. As seen above when the entrepreneur is moving from individual-based to society-based customers, we need to have “formal documentation” – but as articulated in the previous Article VI, they cover more or less all areas which are related to the “commercial “part of the transaction. When we scrutinize the formal documentation done by various upcoming business entrepreneurs, we find that, while they cover commercial details as given in the previous Article, there are still some gaps in the commercial terms which expose the entrepreneur to certain risks.   As seen in all previous Articles the journey of business moves from Individual-based customers to society-based customers, still many times the customer base is always associated with some individual and not any “Business Entity”. This makes a lot of difference in dealings with these parties. As observed, although there is a transition from individual-based...

  Formal Documentation – Minimum requirements/ parameters Various types of “formal documentation” such as an entrepreneur’s Business Proposal & customer response thereto or a customer purchase order /letter of appointment or customer purchase order or an entrepreneur’s invoices for products/services …………etc.,  normally covers areas such as: Name of the Customer and address Products/services to be provided and the place where they are to be provided.   Prices of the products/ services to be provided. Taxes as applicable Payment Terms Any other products/ services related to terms & conditions. These parameters certainly cover the transaction from the commercial angle. However, when the entrepreneur is moving from individual-based to society-based customers these terms and conditions are not sufficient to protect the interest of both parties. In a strict sense and in terms of requirements of the law also any commercial proposal when accepted becomes a valid cont...

  Formal Documentation – General understanding and requirements Thus when we move in the journey of business entrepreneur’s growth from doing business through friends and relatives based customers to doing business with social/society-based customers, we are entering into a phase where many times we do not know/ have in front of us the face of “our customer” to whom we are providing products/ services. This is because now we are going to provide the products/ services to the “Society” based customers rather than an “individual” based customers. We always find that every person in his /her life tries to adopt the easiest way /path to achieve his needs/ requirements may be even goals……and certainly business entrepreneur is not an exception to this general rule of life. We may times find that such so-called “formal documentation” is not governed by any specific rules/regulations or laws but rather results from the requirements of the business or a particular deal. This documentation m...