Law relating to drafting an agreement-It should be is clear, simple and straight forward #indianlaws

These days with the use of computers and user friendly editing procedures like cut and paste facilities, the text is sourced and added hoping the same to be appropriate to the work to avoid redundancy, confusion, vagueness and inconsistency and to increase efficiency, expedition, reduction of disputes and saving of funds.

How a good contract should be? The Supreme Court gave its observation in the matter titled as M.K. Abraham & Company vs. State of Kerala and Anr., decided on 07.07.2009 ((2009) 7 SCC 636 = AIR 2010 SC 1265) that the agreement should be clear, simple and straight forward. The court further went on to observe that these days with the use of computers and user friendly editing procedures like cut and paste facilities, the text is sourced and added hoping the same to be appropriate to the work to avoid redundancy, confusion, vagueness and inconsistency and to increase efficiency, expedition, reduction of disputes and saving of funds.

The Court further clarified that if a contract consists of a printed form with cyclostyled amendments, typed additions and deletions and handwritten corrections, an endeavour shall be made to give effect to all the provisions. However, in the event of apparent or irreconcilable inconsistency, the following rules of construction, As evolved from the well known maxim of construction that “written, stamped or typed additions, when inconsistent with the printed terms, would normally prevail over the printed terms” and proceeds on the assumption that the printed form contained the original terms, and changes thereto were incorporated by the cyclostyled amendments, followed by changes by type-written additions and lastly the hand written additions, would normally apply:
(i) The cyclostyled amendments will prevail over the printed terms;
(ii) The type-written additions will prevail over the printed terms and cyclostyled amendments;
(iii) Hand written corrections will prevail over the printed terms, cyclostyled amendments and typed written additions.”

The printed form contains standardized terms to suit all contracts and situations. It is not drafted with reference to the special features of a specific contract. When such a standard form is used with reference to a specific contract, it becomes necessary to modify the standard/general terms by making additions/alterations/deletions, to provide for the special features of that contract. This is done either by way of an attachment or an annexure to the standard printed form, incorporating the changes, or by carrying out the required additions/alterations/deletions in the standard form itself. Such additions/alterations/deletions are done by typing/stamping/hand. Where the contract has several annexures/attachments, prepared at different points of time, unless a contrary
intention is apparent, the latter in point of time would normally prevail over the earlier in point of time.

The use of multi-layered agreements, with several printed annexures, each with cyclostyled amendments, typed and hand written additions and deletions lead to confusion, uncertainty, delays in execution apart from giving rise to avoidable disputes. Having a contract with different annexures dealing with the same issues with various attachments, in construction contracts (and sometimes insurance contracts) is a nightmare for anyone wanting to understand, implement or enforce them. Complicating contracts with several annexures and attachments with inconsistent, irrelevant, superseded or redundant provisions resulting in creating a lush dispute generating field. It helps greedy and unscrupulous contractors to make bloated imaginary claims.

It enables Rule-Minded or corrupt officers to play havoc with honest and bonafide contractors. The best form of agreement is where all the relevant clauses/terms are incorporated in a single document with several sections dealing with different aspects/subjects, avoiding any overlapping. The difficulty arises if the same subject is dealt with in more than one section or in more than one document. Confusion and difficulties also arise in using certain forms with conditions which were finalized and printed at an earlier point of time and using other sets of conditions which are finalized and printed at different subsequent points of time, without taking care to specify which of the earlier terms were deleted or modified.