Table Of Content
Law of Business Contracts
in India
ii Law of Business Contracts in India
Law of Business Contracts
in India
Edited by
Sairam Bhat
Copyright © Sairam Bhat, 2009
All rights reserved. No part of this book may be reproduced or utilized in any form
or by any means, electronic or mechanical, including photocopying, recording or
by any information storage or retrieval system, without permission in writing from
the publisher.
First published in 2009 by
SAGE Publications India Pvt Ltd
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Mathura Road, New Delhi 110044, India
www.sagepub.in
SAGE Publications Inc
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Published by Vivek Mehra for SAGE Publications India Pvt Ltd, typeset in
10/12pt AGaramond by Star Compugraphics Private Limited, Delhi and printed at
Chaman Enterprises, New Delhi.
Library of Congress Cataloging-in-Publication Data
Law of business contracts in India/edited by Sairam Bhat.
p. cm.
Includes bibliographical references.
1. Contracts—India. I. Bhat, Sairam.
KNS810.L39 346.7302—dc22 2009 2009036704
ISBN: 978-81-321-0223-6 (HB)
The SAGE Team: Reema Singhal, Anupam Choudhury, Anju Saxena and
Trinankur Banerjee
Contents
Foreword by Prof. (Dr) N.R. Madhava Menon vii
Preface x
Acknowledgements xx
1. Student–Institution Relationship: Basis for Contract Law 1
Sairam Bhat
2. Infrastructure Contracts 30
Sairam Bhat
3. Consortium Loan Agreements 59
Sindhu Sivakumar and Raguvaran Gopalan
4. Licensing Intellectual Property Rights’ Use 92
Suchita Saigal, Parul Kumar, and Aditya Verma
5. Joint Venture Agreements 124
Ankur Narain Saxena and Debeleena Das
6. Shareholders’ Agreements 141
Raghvendra Kishore Singh
7. Escrow Agreements 153
Lakshmi Prakash, Kota Chandan, and Sandeep Uberoi
8. Law of Outsourcing Contracts 167
Uttara Gharpure and Aditya Bandyopadhyay
9. Standard Form of Contracts 182
Mallika Abidi and Shreya Aren
10. E-Contracts 196
Abhishek Krishnan and Rakshithaa
11. Hospital Contracts 216
Ganeev Kaur Dhillon, Shivani Singhal, and Srijoni Sen
12. Entertainment Contracts 228
Ananya Chandra, Cuddapah Nanda Gopal, and Poongkhulali B.
vi Law of Business Contracts in India
13. Sports Contracts: Standard Players Contract 244
Dhruv Nath, Krishna Hariani, and Rohini Kharkar
14. Restraint of Trade and Employment Contracts 263
Sairam Bhat
15. Insurance Contracts 284
Divya Anne Jeswant, Nirupama Pillai, and Karan Lahiri
16. Contract Farming 304
Abhas
About the Editor 313
Foreword
I feel honored to write a foreword to an unusual book edited by my young
colleague Dr Sairam Bhat on different aspects of contractual relationships
shaping economic development in a globalizing society. It gives me a lot of
vicarious satisfaction and a sense of fulfi llment when I realize that the dif-
ferent chapters of the book are products of student research done as part of
their legal education at the National Law School, Bangalore. I recall a similar
volume compiled and edited by a senior student of National Law School
published in early 1990s on the subject of cyber law, perhaps the fi rst book
of its kind on the subject. The students of the 5-year LL.B. course have
indeed redeemed the falling standards of legal research in India and made
research-based learning a part of legal education.
For the last few years I have been involved as a Member of the Jury in
the fi nal evaluation of the Manupatra All India Essay Competition for Law
students. Reading over 750 research essays submitted in 2008 by many
students from 130 colleges on fairly complex legal issues make one appre-
ciate the quiet revolution underway in legal research and writing and the
potential it offers for future legal practice. The 5-year integrated L.L.B.
program and the National Law School movement, which I had the good
fortune to pioneer from Bangalore in 1980s, have made a signifi cant dif-
ference in legal education and legal practice. The present volume edited by
Dr Sairam Bhat is another demonstration of this success story.
The book is unique for several reasons. It is not yet another conventional
book on contract law of which there are many in the market. Its content is
not about the making and breaking of contracts and its legal consequences.
He gives a foretaste of the volume with his two introductory essays, fi rst,
interrogating the relationship between students and their colleges from a
“contract” perspective and the second, exploring the prospects of “socialist”
governance under the public–private partnership model in managing util-
ities. The concern in the discussion is not merely on theory but on the practice
of living relationships fast changing into the commercial mould under the
impact of economic liberalization. Today we talk about trade in services
including legal services under the World Trade Organization (WTO) regime.
The elements of trade and commerce have invaded every aspect of life making
viii Law of Business Contracts in India
“contract” an organizing principle of every type of relationship in society.
Freedom of contract is the foundation of capitalist model of development
and socialist models are adjusting themselves to this universal truth in varied
forms and shades. His two essays illustrate this proposition. As he himself
writes in his Preface to the book, ideas arise from interactive learning and
out-of-the-box thinking. Students ask unconventional questions based on
what they understand from contemporary events and relationships. That,
in turn, compels strategic thinking on the part of teachers and students to
fi nd innovative solutions. The book in hand is an example of what happens
in such a scenario.
Most of the essays which follow are written by groups of students looking
at commercial contracts being negotiated by parties for different purposes,
innovating new terms and models to suit their ends. They analyze the
practices and draw principles which sustain them, thereby building new
theories and justifi cations. The attempt is to look at the new facets of
contractual jurisprudence hitherto unexplored at least at the level of stu-
dents in law colleges. The articles on “consortium loan agreements,” “joint
venture agreements,” “shareholders’ agreements,” and “escrow agreements”
are interesting pieces where the authors make comparative assessments
of the law and practice in different jurisdictions.
A variety of specialized contracts are now in vogue which may not
fi t in squarely with the existing forms and models. With the economy
growing in unprecedented ways, entrepreneurs have evolved new practices
based on expediency and convenience. Standard form contracts have thus
become a dominant form of commercial intercourse. Based on the rules of
interpretation adopted by courts, an essay in the book attempts to look at
the evolving regulatory jurisprudence in this sector.
With the adoption of the Information Technology Act, electronic con-
tracts have been legally recognized compelling modifi cation of traditional
rules of procedure and evidence. There is a piece analyzing the various dim-
ensions of electronic and software contracts.
A series of specialized sectors of the economy are attempted to be studied
from the “contract” perspective which the authors have grouped under
“hospital contracts,” “entertainment contracts,” “sports contracts,” “employ-
ment contracts,” “farming contracts,” and “insurance contracts,” each
forming a chapter of the book. They are introductory essays inviting the
readers to look at these relationships as innovations arising from simple
contract and accomplishing a lot of desirable goals in a free-market economy.
They also suggest the need to study contract law from new perspectives
Foreword ix
accommodating new demands of users and consumers within the frame-
work of the Constitution and the laws.
Unlike other laws which are made by the state, contracts are laws made
by individuals, corporations, and state entities. They need to react and
respond to changes in the economy, in technology, and in society. The role
of the state is only to regulate them with a view to ensure fair play, equity,
and common good. A new and growing fi eld of regulatory jurisprudence is
now a part of Contract Law. The book invites our attention to this emerging
fi eld and alerts the reader to its strengths and weaknesses. In this respect
it serves a social purpose apart from the dissemination of legal knowledge
in this vital sector of jurisprudence.
Dr Sairam Bhat and his students deserve congratulations for having put
together a set of informative and instructive articles on a theme of abid-
ing interest to those associated with economic development and its legal
regulation. Apart from serving as a teaching tool, the book will be of help
to lawyers and entrepreneurs involved in business transactions.
As a teacher who experimented for long with new ideas in improving
legal education, I welcome the initiative of Dr Bhat in making a difference
in the teaching of Contract Law. The idea of a teacher himself developing
study materials in each subject has been part of the National Law School trad-
ition and it is strengthened by this publication. Let this be an inspiration to
other teachers and students of every law school everywhere.
New Delhi Prof. (Dr) N.R. Madhava Menon
January 5, 2009 Former Director, National Law School, Bangalore
National University of Juridical Sciences, Kolkata
and National Judicial Academy, Bhopal
