Article VI - Legal Awareness Series

 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 contract between the parties and both parties are bound to fulfill the obligations agreed to in the contract.

However, when we are serving society at large and when many times the entrepreneur even does not know who would be the final consumer of his products/ services,  commercial terms solely will not be adequate for protecting either him or his customer in event of any differences/ issues during the execution of a particular contract.

To safeguard the interest of all parties to a contract, contract, the contract must contain, in addition to commercial terms, some basic legal terms and conditions as well. 

Cont...

For any query feel free to contact me.

Mahesh Vaidya
M.Com, LLM, ACS, DFM, CAIIB  
Legal Adviser
Cell Number 9769949701 / 9223173695
Email ID maheshvaidya2706@gmail.com