How to Protect Your Intellectual Property Rights or Assets?

How to Protect your Intellectual Property Rights or Assets?

The good old handshake for deal days are far behind us for the times of contingencies have showed how crucial a role written agreements play for acquisition and protection of intellectual assets and intellectual property. These intellectual property agreements should be set in the first place from the nascent stage of development itself of your intellectual assets and every company should also have for every step, a licensing strategy for development of intellectual property. Being bound by law under these written contracts given the enforce-ability of these by law, giving us all the more reasons for intellectual property agreements. One can have intellectual property agreements for a number of scenarios like for protection of intellectual assets from third parties or agreements written by employees.

Intellectual property agreements for protection from third parties

Once companies have a profitable intellectual property in place, companies wish to sell it to third parties to make reap on their hard work for developing intellectual assets. However, for sharing this, they license their inventions to lay down basic agreement terms and conditions in the interest of protecting their intellectual property. To whip an intellectual property agreement, companies need to ascertain their standing and stage in the process with respect to the third party.

Protecting Intellectual Property Created by Employees

When you’re looking to sign an intellectual property agreement, your company may have sensitive intellectual assets or intellectual property which is not yet public.  Or there may be research and development on your intellectual property that may need to be safeguarded as they may have the potential to develop into various types of intellectual assets.

 

7 ways to ace protecting intellectual property

 

  1. Setting up strong Non-Disclosure Agreements in place

To avoid anything from going haywire, a non-disclosure agreement is a must for the protection of your intellectual assets. To be able to draft a well-written NDA, you should definitely take help from some expert on the matter. For the same reasons, other agreements like the confidentiality agreement, employment agreement, patents or licence, etc. should be heeded to safeguard your intellectual property. And one must get help for necessary. Get assistance with creating well-written non-disclosure agreements.

  1. Work in hushed tones undertones

When people come up with new, brilliant innovations, they often look to safeguard their hard work put into it by filing for patents or attempting to obtain copyrights over their intellectual assets and intellectual property. They may even wish to protect the techniques or the requirements that go into development of those proprietary important goods. If stolen, they don’t shy away from taking It to the court rooms and go to any extents to protect it. However, numerous new items have emerged recently to help companies, thanks to technological advancements and modern techniques. They involve the use of Digital Rights Management systems. These modern techniques of protecting intellectual property may be unpopular as of now, however, they greatly limit the exposure of proprietary information or goods to the world.

  1. Be swift, adjust quick

Invention and innovation due to the ever-growing learning technological in the IT sector has made the new ideas and innovations prone to plagiarism since ever. It is now become almost a second nature for the technological advancements to evolve to change the face of the industry in quick, huge leaps. This necessitates every participant into the industry and the market to delve into constant innovation and evolution to be able to rise to the top by catching up with the competitors. It can be metaphorically be said that you should keep up with the pace like an Olympic athlete to catch up with every cycle

  1. If possible, avoid joint ownership

Though it is not necessary, if possible, you should avoid joint ownership especially when it comes in terms of interests of safeguarding your intellectual property as all parties involved in the shared custody of an intellectual asset may want a piece of it and can take up even law to keep it intact. Thus, avoiding a joint ownership of sensitive intellectual property becomes all the more reason to keep at bay, all such possible contingencies for the future by hurting the interests of all the parties involved.

  1. Try getting exact-match domains

Getting an exact match domain may be expensive and tedious to get, causing trouble in the short-run, it has brilliant prospects to help gain a security of intellectual property for the company in the long run for trademark purposes as your name the name of the domain exactly match so there’s a reduced chance of it being copied or stolen in the future.

  1. Safeguard with strong control over access

Empirical evidence shows that about 81% of the breaches of safeguarding intellectual property and assets is a concoction of compromised credentials set in place for the protective purposes. It is for this reason that merely passwords are not enough and that the least a company should do is to get two factor authentication, beside making provisions to store the intellectual assets and sensitive documents in a safe place secured by identity and higher tech access management solutions.

  1. Publish your patent widely, being attributed to at mention

As we know, patents are the first things everyone does to safeguard their invention and innovations, people may still reverse engineer your process and devise alternate ways to it. Thus, when you apply for patent, make sure it is loud and out so that it ensures your intellectual property is recognized as yours and referred to as yours whenever mentioned.

 

Some other ways to safeguard your intellectual property are:

  • Confidentiality clause or the non-disclosure agreements to safeguard their interests before they disclose any sensitive proprietary intellectual asset, information or trade secrets to the third party.
  • Production agreements to allow the third party to enable them produce their intellectual assets into products for the market and the propagation agreements to enable the third party to propagate their products intellectual assets turned products in the market.
  • Material Testing Agreements that allow the third party to conduct controlled testing of the invention made by the third party.
  • Non-compete agreement is a way to safeguard a company’s interests by putting conditions on where the current employees can work in case they leave, the scope and time are constricted for new workplace
  • Employment agreements are set in place to state that all the intellectual property and/or assets developed by the employees while employed at the firm using the resources of the company shall be solely owned by the company itself.
  • Assignments are set in place as an additional protection to safeguard the possession of intellectual property by the company like while filing for a patent wherein the inventor should immediately conduct assignment of the intellectual property for which the patent is being filed, thus staying vigilant is the key.
  • Commercial Licensing Agreements are intellectual property agreements that are set in place for letting a third party make us of the company’s intellectual assets.

 

Why Contract Bazaar?

We at contract Bazaar can help you with our excellent client support servicing and corresponding expert guidance help you attain all these aspects to enable you guard your interests, the best and easiest way possible as we have experts and provisions for all the above-mentioned properties and agreements as per the need of every client and every company, irrespective of the size.

 

Franchise Agreement: The Definitive Guide (2021) – Contract Bazar

When a company lacks funds and employees that it needs to grow and develop into new arenas and geographic locations, its growth is impeded. However, franchising can come as a rescue wherein the parent company grow as the franchisee brings in both, giving a huge push with a lesser level of risk involved

At the employee front, having impeccable management performance involving highly dedicated and motivated individuals can enhance the competence and efficiency of the company manifolds. Franchising can help bring in such managers for every outlet who are largely responsible for the competence and success of their franchise, and thus, keeps a continuous check on the performance and overall success.

What Is a Franchise Agreement?

A legal written agreement outlining terms and conditions that the franchisor lays down for the franchisee, stating obligations for both the parties laid down to avoid any future contingencies which have to be signed by the party entering into the franchise agreement.

A franchise agreement is legally binding for both the franchiser and franchisee along with the corporate entities involved as it states the terms to be adhered to in case of any future contingencies or in case a termination of the connection is required as it lays do’s like how to run the business, actions and things to be prioritized over others for the successful running of the franchise and don’ts which are covered under non-compete and confidentiality clauses which seek to protect the franchisor who lays down the franchise agreement about production processes, product, and proprietary decisions.

With the existing franchises and the agreements in place, franchisors over the years realized and now follow a simple, synchronized approach for having any new franchisee coming on board. For this, they mostly use a single contract with the same terms and conditions for every franchise for the sake of uniformity In most cases, the new enterprises looking to be franchisees of any sturdy organizations like McDonald’s are looking to be happily on board to be able to lead stable and profitable ventures and thus, willingly accept the franchise agreements in place set in place once they’ve resolved all the doubts and queries by seeking clarifications and addressing the points they are doubtful about.

However, the franchise agreement usually comes from a vantage point of the corporation issuing the franchise, i.e., unilateral in nature they are looking to protect their name, quality, and safeguarding the enterprise as a whole. This, the corporations govern by their existing models as they forward to corroborate the same, and hence, the franchisees willing to work according to the models should only sign up for it. However, the franchisor needs to act with caution if a party seeking franchise agrees blindly to all the terms and conditions and is willing to negotiate everything by forgoing its own interests.

What under the franchise agreement?

A legal written agreement outlining terms and conditions that the franchisor lays down for the franchisee, stating obligations for both the parties laid down to avoid any future contingencies which have to be signed by the party entering into the franchise agreement.

A franchise agreement is legally binding for both the franchiser and franchisee along with the corporate entities involved as it states the terms to be adhered to in case of any future contingencies or in case a termination of the connection is required as it lays do’s like how to run the business, actions and things to be prioritized over others for the successful running of the franchise and don’ts which are covered under non-compete and confidentiality clauses which seek to protect the franchisor who lays down the franchise agreement about production processes, product, and proprietary decisions.

 

  • Franchise Disclosure Document (FDD)

The franchise disclosure document (FDD) is a legal document that entails the disclosure of essential information regarding things important for potential franchisees as due diligence before the sale prior to making any major investments. Thus, it paints for the franchisees a very lucid picture giving them a very comprehensive idea of business relations among the franchiser and the franchisees.

  • Master Franchise Agreement (MFA)

It is a legal document that gives the Master Franchisee the entitlement for ownership and operation of more franchises, sub-franchisees, franchises of other businesses during a given day and under a given location. It is suitable for the international development of business, further franchising, transfer of control of power, and enforcement of the same as per the standards in which the master franchisee holds expertise.

  • Retail franchise agreement (RFA)

In most cases, it bodes well for the retailers to take complete charge of sales for their products. However, when the product branding becomes indispensable for the sale of the products, covering several issues pertaining to franchising, a franchising agreement called a retail franchise agreement is set in place. It is said to be well-crafted to be ideal for all small businesses and even attract them to certain ventures to own a franchise and comprehensive for the big ones.

Why should businesses (especially small businesses) use franchise agreements?

For small businesses, the greatest impediment to their growth is lack of funds and understaffing than what is required. Without these problems, companies can grow at a very fast pace. Franchising can help small companies and MSMEs tackle these problems companies expand much more quickly than they could otherwise. Due to incoming branch managers for every franchise, better management will lead to better efficiency and hence, growth due to constant inputs. A franchise can also help businesses expand to an international level which may ultimately help them reap economies of scale reaping a higher level of profits with lesser risks involved.

Essential elements of a franchise agreement

There are essential elements to every agreement. Some of the essentials elements of the franchise agreement are as follows:

  • Understanding the relationship between the franchisor and franchisee: It is essential to get a hang of the relationship that exists amongst the participating parties in the agreement which sums up the obligations and ways of operations as the other party perceives.

 

  • Intellectual property safeguards: Under the franchise agreement the franchisor seeks to protect the intellectual property under the franchise system, as it is their most prized asset. It states guidelines for how franchises can use it over time.

 

  • Assigned territory: a franchise agreement does not necessarily grant franchisees exclusive territory to perform operations however, to deal with rights that they can practice in the territory specified, like distribution and sales network. Thus, obtaining territory assigned is imperative to lay clear territorial boundaries to avoid any conflicts. Also, the selection of sites and meeting designs and brand standards must be pre-stated.

 

  • The franchise agreement tenure: under this clause, the parties must take into consideration the length of the agreement and the clauses circling the franchisee’s rights to pursue new agreements, etc.

 

  • Initial and continuing fees: Franchisees generally pay an initial and continuing fee to the franchisor for entering into the system and to remain as a franchisee. Agreements also typically include a number of side fees. Most franchise systems provide for a payment to an advertising or brand fund that is used by the franchisor to market the brand to the public and for other contractually defined purposes.

 

  • The training and support programs: the franchise agreement usually underlines that what all the franchisor needs to provide as support before and after opening with training for employees, supply chains, and overall quality monitoring as per the standards.

 

  • Advertising for franchises: The party giving franchise has to reveal an advertising commitment and the fees franchisees are required to pay as a part of its total costs.

 

  • Overseeing records and monitoring the records of: Right at the beginning, the franchisor lays down guidelines that clearly state how it requires the franchisee is required to maintain the records and further rights like the software to be used and access to other such amenities

Why Contract Bazaar?

Besides all the above-mentioned essential elements, the franchise agreement must also take care of the rest of the major and trivial issues like personal guarantees, termination rights, dispute resolution, local governance, and law requirements. With our expertise and highly efficient round-the-clock technical and client support, we at Contract Bazaar strive to make your life easier and much simpler by designing custom franchise contracts to suit your personal needs.

Why Founder’s Agreement is a Must for Start-up?

There’s a famous story tale about the incubation of Facebook which inspired the movie ‘The Social Network’. It provides an eye-opening account of the importance of the founder’s agreement wherein Winklevoss twin brothers approached Zuckerberg with their brainchild ‘ConnectU’ for finishing coding with just a verbal contract in place stating the payment of fees for the job done along with stakeholder share.

They Zuckerberg stole their idea and built his Facebook Empire, from their idea for which despite the long-drawn lawsuit, they were compensated for a meager $65 million which is incomparable to what Facebook yields for Zuckerberg. Now here’s a catch. Had they signed a written founder’s agreement, they won’t have had to settle for pennies on dollars.

Thus, to avoid having to reach the realization of faltering on promises on the part of either partner for not holding up their end of the bargain be that through unethical ways of conducting business or their efforts towards the company, the direction and future course of the organization or the developing the greed on the go to suck more than the other partners and many more contingencies, right from the age of incubation should the founding partners sign the founder’s agreement.

In absence of a founder’s agreement, running just on the word of mouth entails a potential for the treacherous journey ahead, no matter how good the relation or kinship among the partners, there’s always a looming risk that can turn around the lives forever.

Imagine, how things would’ve been had the Winklevoss twins had been placed in a founder’s agreement, how different the face of social media could’ve been!

Who needs with founder’s agreement?

Every firm has a point where it takes off. The period of incubation is when the basic ideology in every aspect is laid down. In order to take charge and avoid any contingencies in the future, a founder’s agreement is almost essential for small firms and start-ups. Empirically, disputes among founders have been listed as a major source of the downfall of start-ups because almost all the incubations in start-ups, however big or small they may be, have scope for some degree of conflicts among the partners.

In some cases, one partner tries to extract more value than deemed for each of the co-partners. In other cases, it may be differences in the concocted direction they wish the firm to take. All these can be avoided by having a founder’s agreement in place.

What is a founder’s agreement?

A Founder Agreement is a legal contract between partners and founders of the firm defining definite duties, roles shareholdings, exit options that is set in place to protect the interests of all partners with the aim to prevent any conflicts in the future.

A founder’s agreement lays down guidelines that define how to deal with conflicts or any changes in the future like the addition of a new member, the exit of an older partner, resolution of conflicts of interest, how to go about expansion and undertaking new investments and ventures and also deals with stakeholders’ concerns.

Basic elements of a founders’ agreement

  • Personal details

 

Under this section of the founder’s agreement, we jot down all the personal details of the founders which are inclusive of their roles and responsibilities in the venture. Besides this, we have other details about the firms like company name and the registered office of the company which is required to be included.

  • Ownership structure and equity breakdown

 

Under this segment of the founder’s agreement, we determine the status and structure held in regard to the owner which determines the percentage owned by each partner or co-founders. And if the venture is an LLC, the percentage of interest of management-owned by each member.

For this, it is imperative to determine whether each member plays an active management role or whether they’re just owners in an economic sense. Besides, equity is one of the most expensive assets that should be distributed amongst partners on the basis of the proportion they’re bringing in for the company in terms of money, resources, time invested, investors, etc.

  • The non-compete and confidentiality clause

 

The founders always have access to confidential information and thus, trust among the core team is imperative. For example, in the future, if a member wishes to leave, they may use their leverage to share any critical ideas or confidential information with competitors for personal gains.

Thus, a founder’s agreement should lay down guidelines for a binding time in case any partner wishes to part. Also, a provision is also laid down for the parting members to not join the competition, engage in a similar business, or attempt to take away with them clients, vendors, or suppliers.

  • Powers for making decisions

 

For running any venture, very difficult decisions have to be dealt with. However, how do we decide how to make such calls or who governs the decision-making procedure while maintaining a balance? It is always important to not encounter decision paralysis by letting one entity hold unchecked power over all aspects of the company from equity-related decisions to staffing decisions and new investments.

A founder’s agreement can help to have a clear direction and guidelines for dealing in several aspects as a founder’s agreement and clearly states how the division of areas goes about for ownership decisions, marketing strategies, product and business development, etc. This may give a person clear sole jurisdiction of one or more areas but prevents autonomous decision making by an individual which may entail critical to the growth and development of the firm.

  • The vesting schedule for the long run

 

How to deal if a founder or partner underperforms after receiving the equity or wants to leave altogether in some time? The founder’s agreement helps to deal with issues like who gets to keep the shares or whether leaving party should surrender it, how to go about distribution in case of spare shares and what to do in case a new addition is made to the company.

By stating the vesting schedule in the founder’s agreement, besides dealing with the current issues, any future contingencies of nature can be avoided especially when funds are raised externally and need modification in that case.

  • Remuneration, compensation, disputes, and resolution

 

We need to compensate every member for the time and effort they invest into the venture. Similarly, we need to go about the remuneration and criteria descriptions for the same. A founder’s agreement is immensely helpful in laying down the criteria for these besides the resolution of any conflicts or disputes of any kind arising out of disagreements that are a part of the functioning of any company.

  • Exit and winding up

 

Any of the co-founders may have to leave the company at any point in time due to any reason. To deal with the same in the interest of the company, the founder’s agreement helps immensely in dealing with problems like how to share the profits and liabilities as of then, how to wind up, etc. This clause in the founder’s agreement also helps in tackling the efficiency problems for the underperforming individuals.

Final Words:

One key learning that the Founder Agreement has for sure made us understand is, no matter how small your company size is, how close your relationship with your partner is never confuse or mix your personal equation with the professional one.

Things you should know before signing NDA (Non-Disclosure Agreement)?

Background:

A Non-Disclosure Agreement (NDA), also known as a Confidentiality Agreement, is an agreement that is executed between two or more parties with the intention to protect the commercial interests of the parties involved. Each agreement includes certain confidential information that may be very crucial for the parties. This crucial information may include cost and pricing, projected capital investments, inventory, marketing strategies, customer lists, or any kind of trade secrets. The parties signing the NDA pledge not to further disclose confidential information to anyone.

 

Types of Non-Disclosure Agreement:

When two or more parties enter into a business relationship, it is common for them to exchange certain information with each other, which is confidential in nature. Naturally, the parties want to prevent this confidential information from becoming public, and this is why they sign an NDA.

 

There are 3 different types of Non-Disclosure Agreements, which depend on the number of parties sharing their confidential information. The three types of NDAs are given below:

  1. Unilateral NDA:    In this kind of agreement, only one party discloses confidential information to the other(s) party.
  2. Bilateral NDA: In this kind of agreement, both parties disclose certain confidential information to each other and both parties are prohibited from further disclosing any information to any third party.
  3. Multilateral NDA:   In this kind of agreement, all the parties involved in the agreement disclose confidential information to each other, and such information is prohibited from further disclosure to any other party.

 

Detailed Review of Confidential Information:

While there is no certain law or a fixed definition, which defines, what information can be considered, but the following pieces of information are generally classified as confidential information as per the Indian courts. This information may include:

  • Trade Secrets
  • Client lists
  • Industrial drawings
  • Intellectual Property
  • Prototype products
  • Proprietary documents
  • Information received from third-parties

Exclusions from Confidentiality:

While an NDA is a water-tight agreement and does not allow for any exceptions related to the disclosure of confidential information protected through the agreement. However, there are certain conditions where a person may be allowed to disclose confidential information. These conditions are:

  •  Where the disclosure is required under law or by a statutory authority;
  • Where the information has been disseminated into the public domain; or
  • Where such disclosure is permitted by the owner of the confidential information.

The term of the agreement:

The terms of the NDA are mentioned in the agreement itself. Post the expiry of that term, a person may disclose the information. During the duration of that term, an employee even after resigning or termination is bound by the clause of the NDA. This has been upheld by the Hon’ble Delhi High Court and the Hon’ble Bombay High court.

What happens when you breach a Non-Disclosure Agreement?

A Non-Disclosure Agreement not only prohibits the parties from disclosing the confidential information but also provides for a legal remedy, in case the agreement is breached by any of the parties. When someone breached a non-disclosure agreement, he/she can face alegal suit and may be required to pay financial damages and related costs to the aggrieved party.

Is NDA fair to both parties?

Most agreements are drafted in such a manner, that they tend to favour one party more than the other. The same holds true in the case of Non-Disclosure Agreements as well. But, if you want an NDA to be successful, then it needs to be ensured that the NDA is fair for both parties. To accomplish this, a good idea would be to utilize mutual NDAs because they are beneficial for all the parties involved. A mutual NDA is when both parties intend to share confidential information, and the agreement protects the interests of both parties.

Tenure of Non-Disclosure Agreement

As with all legal matters, there is no specific or fixed tenure of the Non-Disclosure Agreement. The duration of the agreement, whatever it is will actually be guided by the agreement itself. Most agreements mention the specific time frame for which the agreement is in force. In addition to this, tenure depends on the relation between the parties, their preferences, and some other factors.

In addition to the tenure of the agreement, most NDAs also contain an NDA Protection Period. The term ‘agreement tenure’ refers to the period the two parties maintain the disclosure of confidential information. Even after the tenure is over, the parties may protect themselves with an NDA protection clause. During this period, the parties are still under obligation to protect the confidential information received during the NDA contract tenure.

Final Words:

Contract Bazar can help you create a robust NDA within 5 minutes, without any need to consult a lawyer. A perfect amalgamation of business, law, and technology, you not only get to choose from over 1,000 templates but can reach us 24X7 for any legal help. Contract Bazar offers its endless resources, tools, and contents in a transparent and legal hel

What are the types of Rental Agreements and which one you need?

Background:

In certain cases, there can be a situation where a person has some additional flat or house, which he is willing to sublet to someone else, who is looking for such a facility. This kind of arrangement involves a person allowing another person to use his facility, without making him the owner. This kind of arrangement creates a situation of rent or lease and establishes a relationship between two parties, which is protected by the rental agreement or lease deed, as the case may be.

What is a rental agreement?

A rental agreement is a legal agreement between one person (landlord of a property) and the second person (tenant) who desires to have temporary possession of the property. In Rental Agreement the landlord rents out his property to the tenant for a given period of time against payment of a mutually agreed amount. To ensure that there are no disputes later, an agreement is made, which contains the basic details of the parties, the property, the term of the rental,the amount of rent for the term, andall other agreed terms and conditions. This agreement is executed on stamp paper along with the applicable stamp duty.

Types of Rent Agreement:

Often people get confused between the terms like rent agreement and lease agreement, and use them interchangeably. However, there are certain differences between these terms. In addition, there are some more different types of agreements, which are explained below:

 

  1. Lease Agreement:

    Before a tenant moves into the rental properties most landlords insist on signing a lease agreement. A lease agreement is actually a contract that creates a relationship of landlord and tenancy between two people, where the landlord gives the tenant a right to live in a property for a fixed period of time, which is usually 11 months. A contract between the landlord and tenant binds both the parties to follow the agreement.

The residential lease agreements define various terms, conditions, and even expectations between the landlord and tenant in terms of the rent, date of payment of rent, and duration of the agreement. Also, the landlord can mention rules regarding the use of pets, cooking non-veg food in the kitchen, or any other clause they feel important.

 

  1. License Agreement: 

    When a person wants to use a brand, patent, or trademark, which is owned by some other person, he/she cannot do so, without the written permission of the original owner. In case, you want to make regular use of such a brand of patent, then it is better to sign a license agreement.

The license agreement is actually a legal, written document agreed and signed between the two parties wherein the owner of the property (called the licensor) gives permission to another party (called the licensee) to make use of their brand, patent, or trademark. To ensure smooth conduct, both parties sign an agreement, which details the product in question, terms of usage, and how the licensor would be compensated in case of violating terms covered under the License Agreement. Depending upon what is being licensed, the contract types may vary. A license agreement helps in avoiding potential disputes related to sales, issues of quality, and royalties.

 

  1. Long Term Lease:

    As the name suggests, a long-term lease entitles the lessee the right to use the property for a longer period of time. However, the definition of ‘longer period’ varies with the specific asset being leased.

For example, in the case of commercial property, a long-term lease means a lease period from 10 years to 99 years, likewise in the case of residential property, a lease of more than a year is considered long. During the tenure of this lease period, the lease rental and other terms are fixed, and cannot be changed till the end of the lease period.

Long-term lease agreements are rigid and do not offer any flexibility to make any further amendments. And in case, if either of the parties cancels the long-term lease before the agreed period, they have to pay a significant amount as penalties.

 

  1. Short Term Lease: 

    Contrary to the long-term lease, a short-term lease is for a small duration, which is less than 6 months. A short-term lease maybe even as short as for a month, or even a week. So, when you are relocating to a city for a temporary period, or not sure about your length of stay, a short-term lease agreement is better.

 

  1. Commercial Lease:

    Renting a property with the intention of residing can be executed by way of a Residential lease agreement. However, if the property is taken with the intention of running a business, then the lease is called a Commercial Lease. ThisCommercial Lease agreement isslightly more complicated and detailed as compared to a Residential Lease.

 

  1. Tenancy Agreement: 

    The tenancy agreement is a contract between the landlord and the tenant, which details the expectations and deliverables of both parties during the time a house or flat is occupied. The Tenancy agreement guides the behavior of the landlord and the tenant during that specific period.

How can Contract Bazar Help?

Contract Bazar can assist you in drafting a well-thought-out, and well-written lease contract, without involving a lawyer. Such an agreement will help in preventing future squabbles and can protect the interest of both parties in the court of the law.

Contract Bazar makes it fast, easy, and affordable to reach an agreement. You can choose from several templates and make changes as per your requirements. You can mail, download or print instantly. If required, Contract Bazar can print the agreement on the requisite stamp paper, and deliver it to your home.

Conclusion:

These are the various types of rental agreements. So, depending upon your specific requirements, you may select the agreement that best fulfills your requirements.

How E-Signature Improves Flexibility in the Day to Day Life?

Background

If you ask someone, what has changed business the most in the last decade, the most likely answer is technology. It has altered people’s corporate practices. The business has moved from notebooks to note pads, and from paper to paperless offices. But one thing that has not changed at all is the importance of signature on a document. Though with changing times and technology, wet-ink signatures are being replaced with e-signatures.

How e-signature help you?

Things may have changed a lot, but still attaching your name to a piece of paper has a great value, both emotional and commercial. Nowadays, business happens very fast, and time is very crucial. Equally crucial is the convenience of doing business. On both these parameters, when we compare the traditional wet-ink signatures and modern e-signature, the latter comes out on top.

And after the passing of the Information Technology Act, 2000, e-signatures have got an official validity as well. With improvement in technology, e-signatures are becoming more reliable. As a result, they are being widely used in private affairs, legal dealings, business dealings, and even in government documents.

Benefits of e-signatures:

There are many benefits of using e-signatures as compared to the traditional way of signing with pen and ink. It gives an impression of being a tech-savvy organization and that you are up to date. In addition to this, some more specific benefits of e-signatures are listed below: 

  1. Saves Time:

    In today’s time, the business is going beyond geographical boundaries. So, quite often the parties involved are located in different cities or maybe in different countries. Now, traditionally signing agreements would involve taking a print, sending it through the mail, and then expecting the other person to sign and mail it back. This would hold up the things for several days and also have cost implications in taking print and sending through mail or courier. But using e-signatures, you can simply send the secured link to the other party, who can just open the link and sign it with a tick. It saves time as well as money for both parties.

 

  1. Helps you go paperless:

    Today due to environmental concerns and space constraints, people are moving towards a paperless office. If you make an agreement on the paper and sign it in wet-ink, it would require a lot of office space. However, in the case of an e-signature, there is no need to print the agreement. This way you can make your office paperless, and not only support the environment but also utilize office space for something more productive.

 

  1. Contactless Work in Pandemic:

    In the current situation, where the whole world is battling the Covid pandemic, people are avoiding meeting people physically. With most meetings happening online, people are looking for newer ways to conduct business online, without making any physical contact. Using conventional signatures now necessitates personally delivering documents or through the mail, all of which require human interaction, which is risky in these circumstances. However, with e-signatures, there is no need for physical contact, and the parties can sign the document in a contactless manner.

 

  1. Improves Document Traceability:

    This is another benefit of using e-signatures. Using e-signature saves a lot of your precious time. Whenever any document has to be traced, one does not need to search through a large number of files or heaps of papers. In the case of e-signature, since the document is available in digital form, one can use the document management feature, and with a single search can get the desired document on the screen. This also saves a lot of time and improves the overall productivity of the employees.

 

  1. Risk Reduction:

    Maintaining a document in physical form may be risky, as it may get lost or stolen, or even damaged due to various environmental and other factors. But with documents being in digital form, there is no such risk. Also, in the case of manual signatures, in case a person forgets to sign a particular page, things get delayed. But in the case of e-signatures, this risk can be detected and can be minimized.

  1. Reduce Operational Costs:

    Signing and maintaining an agreement in paper form involves various costs like taking a print, sending it through courier, and even storing it safely. But using e-signatures takes away all these expenses, and thereby reduces the overall operational cost of the organization.

  1. Enhanced security:

    A reliable e-signature platform like ContractBazar comes with a robust encryption algorithm and biometric security. So, when a person does an e-signature it captures various critical details about the real identity of the person who is signing it, as well as the time and place where it was signed. No one can shuffle the order of the agreement or make any changes to it. This ensures the integrity of the document and makes it highly reliable.

 

  1. Improve customer experience:

    In today’s time, every organization is looking to achieve increasingly higher levels of customer satisfaction. Happy and satisfied customers are the key to business success. With e-signatures, the business dealings are not just fast, and efficient, but are also more transparent and even convenient for them. They may sign documents using any device they prefer. This increases the confidence level of the customers in your organization, which provides a better customer experience and results in increased business.

 

Things you should know before choosing E-Signature?

The e-signatures are definitely the in-thing these days. However, before choosing an e-signature platform, one must take proper precautions, and choose the platform carefully. Use this 6-point check before you go ahead with any e-signature platform.

  1. The platform should have a robust authentication method to prevent fraud.
  2. The platform should provide complete details and an option to decline to sign if something is doubtful
  3. The platform should provide a detailed audit trail for every signature.
  4. The signature should comply with international cryptographic standards.
  5. The platform should capture details of the person signing the document and provide the details if required.
  6. The platform and the technology used should have a long-term standing.

 

How can ContractBazar help in creating your e-signatures?

ContractBazar can help you create a digital signature to sign a document. ContractBazar offers the facility of Aadhaar based E-Signature, which is validated by the Government of India. It’s very easy to use the facility. Any person can open a link, click a button,and can use an e-signature. Apart from being very easy, it is very affordable. ContractBazar offers you an e-signature service at a nominal cost of Rs. 65 per contract.

 

Conclusion:

In today’s fast-paced business environment, speed, as well as the ease of working,are the key to success. E-signature offers both along with an enhanced level of safety and security. And to top it all, it’s very easy and convenient.All this translates into saving costs and improving productivityfor a business.

 

 

 

Is a Hand Written Contract Legally Binding?

When it comes to MSMEs, several businesses opt for a handwritten contract rather than a typed contract. In a handwritten contract, the parties to the contract sign the document by their own hand – except in the event a law or regulation states it’s only necessary to obtain the signature of the obligated party.

The Indian Contract Act, 1872

The Indian Contract Act is one of the oldest mercantile laws of our country. It came into effect on the 1st of September 1872 and is applicable in India. The act contains a total of 266 sections, and details the laws relating to contracts in India It is the key act regulating Indian contract law. The Act has been largely influenced by the principles of English Common Law.

According to the act, any legal contract in order to be enforceable by law must contain certain key elements. First of all, it must have an offer (by one of the parties) and its acceptance (by the other party). Then, there has to be something of value exchanged, such as money or a promise, which in legal terms is called ‘consideration’.

Disadvantages of using handwritten contract:

Despite how convenient it can seem to have a handwritten contract, there are several disadvantages of using handwritten contracts. Some of the disadvantages of handwritten contracts are listed below:

  1. Handwritten contracts take time and create confusion:

When you write a proper legal contract, then there are many things that need to be included. A proper legal contract intended to cover the legal bases of one or both parties also leads to delays and possible confusion. A proper contract needs to talk about all possible situations and ways to handle them. This makes a legal contract very long. And writing such a contract by hand becomes very impractical.

2. Mistakes cannot be corrected easily: 

In a handwritten contract, if some mistake creeps in, then the mistake cannot be corrected easily. A legal contract with spelling mistakes and cutting would look very unprofessional to your client. The only option to avoid such mistakes is to rewrite the whole document again, which is very cumbersome.

3. Issues with handwriting:

Not everybody has good handwriting. A handwritten contract, if written by someone with handwriting, which is illegible, then it becomes very difficult to read that contract.

4. Professional look:

All said and done, a nicely typed document looks much more professional as compared to a handwritten contract.

The proper way to sign a contract so that it is valid and enforceable

When you agree on the final terms of any legal contract, it’s time to sign the dotted line. For many people, signing a contract is just a formality. But one should be very careful before signing a legal contract. Following are steps required to be followed when signing a contract:

  1. Ensure the contract you are signing is the contract you agreed to sign:

If a contract draft has gone through multiple rounds of modifications, then it becomes very imperative to read through the final draft carefully before signing it. Be sure that you fully know and understand each sentence of the agreement.

2. Ensure that a contract should be properly dated:

While it’s not a legal requirement to date a contract, it’s advisable to date it, as it may help at a later stage. Sometimes an agreement is valid for a particular period. In such cases, putting a date on agreement gives an idea about its expiry.

3. Ensure last-minute changes to the contract are initialed:

Though, the ideal way is to ensure that all changes are done before taking the final print. But sometimes there are some last-minute changes, and there is no time to take a fresh print. In such cases, the changes should be made by hand and both parties should approve the changes by putting initials against the changes.

4. Parties must sign a contract in their correct capacity:

When a person signs a contract, because of his designation in any organization, it’s important that he properly identifies his designation and that he is signing on the organization’s behalf. This later frees the person of any personal obligations.

5. Ensure both parties are authorized to sign the contract: 

While you get a contract signed by a client, ensure that the person signing the agreement is capable of signing the contract and has proper authority to do so. Naturally, you would want to land into a situation, where your client claims that the contract was signed by someone who was not authorized to do so. So, they need not abide by the contract.

6. Keep an original signed copy in your records:

After the agreement is signed by both parties, it’s important that both parties keep a signed copy of the agreement in their respective custody. If required, get two copies of the agreement signed, and both the parties should keep a copy to avoid issues later in case of any dispute.

What is considered to be a valid contract?

The basic elements required for a contract to be legally enforceable are – mutual assent, expressed by a valid offer and acceptance; adequate consideration; capacity; and legality.  In some states, the element of consideration can be satisfied by a valid substitute.  Possible remedies for breach of contract must include general damages, consequential damages, reliance damages, and specific performance.

Conclusion:

A handwritten contract is legally binding and enforceable in court as long as it spells out specific details and both parties have signed that they agree to the contract’s terms. If someone is trying to breach your handwritten contract or you are questioning the legitimacy of a handwritten contract you have signed, you can consult a legal practitioner. While handwritten contracts are generally enforceable, there may be instances under the law they are not. In reality, a handwritten contract has many practical challenges. Contract drafts are normally lengthy, may involve some editing or corrections, etc. Doing that in a handwritten contract is not possible. Finally, a well-typed legal contract looks legible and professional as compared to a handwritten contract.

How to draft a Legal Contract without a Lawyer

People enter into a contract in their day-to-day lives, while entering into a contract there are several questions in people’s minds as to how to make a contract? Can we make a contract without a lawyer? Can a contract be handwritten? Is it illegal to write a legal contract yourself?

This blog is an attempt to answer these questions.

What is a contract?

A contract is a promise or an agreement between two or more parties, which lists down the rights and duties of both parties clearly and unambiguously. The agreement may be verbal or written.

However, a legal contract is a bit different. The legal contract binds the parties legally and governs the obligations of the parties involved in the agreement. A legal contract becomes enforceable when it has the required elements and meets the mandatory requirements.

The Elements of a Legal Contract

In order to be a valid legal contract, enforceable by law, a contract must contain certain key elements. First of all, there must be an offer (by one of the parties) and its acceptance (by the other party). Then, there has to be something of value exchanged, such as money or a promise, which in legal terms is called ‘consideration’.

This contract must be entered between two parties that are competent and have willful consent. And finally, the contract must be for some object which should be lawful.

Is it illegal to write a contract without a lawyer?

If you want to have a contract done while saving money on legal costs for that, the only option in front of you is to draft the legal contract yourself. And, No, it’s not illegal to write a contract without a lawyer. As long as a contract is complete and has all the essential elements, it is treated as a valid contract and is enforceable by the law.

Can I write up a legal contract for someone?

Yes, indeed. Just the way, a lawyer writes an agreement for his or her client, you can also write a contract for someone. The only thing is that it should have all the required elements and meet all mandatory legal requirements.

A word of caution:

Though you may write a contract on your own or even ask a friend to do so. But, a word of caution here. Writing a water-tight contract requires complete knowledge of the law and various loopholes. There may be certain scenarios, which we as laymen may not be able to visualize, but which may arise later and put us in difficulty. So, it’s advisable to take help from experts while writing a contract.

Disadvantages of writing a legal contract for yourself

  1. It may not be a valid contract:

That’s the biggest risk of writing a legal contract on your own. As mentioned above, a contract has some essential elements, such as an offer, acceptance, and consideration, without which the contract may become null and void. In case, any of these elements is missing, the contract may not be valid.

If you write a contract yourself, there is a possibility that you may miss out on these essential elements. In such an instance, the contract may not be enforceable, and you may end up on the losing side.

2. Chances of mistake in parties involved in the legal contract:

Sometimes, while drafting a legal contract, you may miss out clearly mentioning the parties who are entering the contract. There are several variations and technicalities that should be kept in mind when the signing party is an individual, society, or a company.  When you draft a contract, you may miss out on the technicalities. A lawyer understands this very well and can draft a proper legal contract.

3. Words don’t mean what you think they mean:

The language written in a legal contract can be quite confusing and subject to interpretations. Many words often have multiple meanings. Many legal words have a meaning that is quite different from your general understanding. And that meaning may be very specific to legal language. Lawyers, who move in that circle, can understand its meaning and guide you properly.

4. The court needs to be clear about the agreement:

The whole idea of doing a contract is to clearly define the rights and responsibilities of both parties. If there are clauses, that are unclear or ambiguous, and if you go to the court of law, the court will apply the established convention of contract interpretation.

The established convention of courts is that “In case, there is any ambiguity in a legal contract, it will go against the party who has drafted the contract.” As per the convention, it is the responsibility of the person drafting the contract to ensure that there must be no ambiguity. So, if you draft a contract and there is some ambiguity, the court won’t consider that you are not a lawyer, but they will consider that it is you, who has drafted the contract.

5. What works at one place may not work at another:

One of the biggest mistakes, a non-lawyer can make while drafting a legal contract is that they fail to understand the difference in the interpretation of the contract in different locations. This is the biggest challenge while using template contracts. That’s why it’s always advisable to run past the template through a local lawyer, who understands the local lingo and its meaning.

6. There may be confusion in agreement:

If you talk to a lawyer, they may sound very pessimistic about all the things that can go wrong. While you may get depressed with his advice, but it’s good that they can foresee all possible scenarios that may affect the validation of a contract. While drafting a legal contract runs a risk of having a wrong idea about what you are agreeing to. People may think that they are agreeing to ‘A” but in reality. You may be agreeing to ‘B’. You may not realize that the contract unduly favors one party or allows only one party to cancel the contract, whenever they want. A lawyer understands these nuisances and guides you accordingly.

7. One contract does not fit all:

Each contract involves different conditions and transactions, and hence it needs to be drafted accordingly. As a non-lawyer, you may not be aware of various areas where you need to protect your business interests. But a lawyer, with experience in drafting different kinds of legal contracts and handling several situations, is in a better position to visualize that and draft the legal contracts.

8. You may not know how to handle a clause that is held by the court to be illegal or not enforceable:

As a non-lawyer, if you draft a legal contract, there are chances that you may include a clause, which is illegal or not enforceable by the law. A lawyer has complete know-how of the law and various clauses, which are legal.

How to get a valid legal contract to avoid mistakes?

The best way to make a valid legal contract and avoid any mistake is to consult a legal expert or a lawyer before you negotiate and finalize the terms of a contract. A lawyer can help you draft and review the legal contract so that you don’t make a mistake.

Conclusion:

To put it simply, while a self-written legal contract is not illegal, but to ensure that the contract is valid and enforceable under the law, without any issues later, it’s better to consult a lawyer. While it may involve some cost, but I will save you later on many legal hassles. So, it’s better to take advice from experts, while drafting a legal contract. In order to be legally correct, in the first attempt itself, you may take help from professionals like Contract Bazar, an expert in this domain. Working with Contract Bazar helps you ensure that you clearly understand the meaning of each and every word and do not have to get involved in any kind of legal battle later on.

 

 

10 Big Legal Mistakes made by Start-ups

 

When an entrepreneur is looking to start his own venture, he is naturally quite excited, because it is a step towards the fulfillment of a long-seen dream. And being the ‘one-man army’ the entrepreneur has to do everything on his own – from finalizing the workplace, to finding the right people, and from planning the production to planning for sales and marketing. With so much on the plate, a person may miss out on some things, which don’t appear to be urgent at that time.

What are Legal Mistakes?

Research has shown that most of the time, the failure of a startup is due to the mistakes committed, which are related to legal matters. However, the nature of these legal mistakes is such that they are visible only after few years, by which the damage is done. Hence, it’s critical that an entrepreneur takes out some time and ensure all compliances so that these legal mistakes do not shatter his dreams.

Some Common Legal Mistakes:

While working towards setting up a startup, many entrepreneurs just get engrossed in operating issues and often overlook the legal aspects of the business. Some of the common mistakes made by start-ups are:

Legal Mistake 1.  Wrong legal entity:

The biggest legal mistake that an entrepreneur does is not choosing the correct legal entity. While making his company, an entrepreneur has several options to choose from. Depending upon his situation, he needs to choose the structure, he deems the best. The right decision is very critical for the success of a start-up.

The correct form of a legal entity helps you in several ways in the future. For example, if you don’t want to take on the burden of the company’s losses/liability on your head, then it’s better to go for LLP or a limited company. This structure is preferred while dealing with foreign clients.

Legal Mistake 2.  Not getting the company’s name registered:

Whatever may be the entity structure, it’s important to ensure that you have a unique name and no one can make a claim on it. Don’t forget to verify the name before finalizing the logo design, Mobile App or, printing business cards. Else this legal mistake may prove very costly.

Legal Mistake 3.  Not tracking expenses:

Another common legal mistake that start-ups make is not keeping a proper check on their expenses. The employees are so engrossed in their work, that they don’t file all the expense slips, invoices, receipts, etc. And when the time comes to do the audit, they search here and there. Very often they miss out on expenses, for which they could have got tax benefits. This leads to start-up having to pay higher taxes. To take care of it, the startup should consider hiring an accountant.

Legal Mistake 4.  Not having a proper founder’s agreement:

In the optimism of becoming a successful entrepreneur, many people end up getting overconfident and commit a legal mistake. Just like any other business, your startup may also have up and downs. Hence, it’s important to decide in advance how they will face failure. This makes it critical to have a foolproof founder’s agreement containing all essential clauses, such as adjudication rights, liabilities, and responsibilities of each founder.

Legal Mistake 5.  Mixing revenue and capital expenses:

Another common legal mistake that most startups do is not being able to differentiate between revenue expenses and capital expenses. This is because both the expenses are treated separately in the balance sheet and have different tax implications.

Any expense wrongly booked, may give a wrong signal to the tax authorities. They may not approve some expenses and this mistake may prove fatal.

Legal Mistake 6.  Inadequate protection of intellectual property:

In today’s competitive times, all startups look to have some kind of competitive edge over others. For a startup, having some kind of Intellectual Property (IP) like copyright, patent, or trademark can be the most valuable asset. The startup should sign strict non-disclosure agreements to ensure that no one is able to make a claim on it. Startups, which make a legal mistake of overlooking this, end up repenting later.

Legal Mistake 7.  Missing regular tax payments:

Payment of taxes regularly and that too on time is mandatory. Startups must determine the tax for the year in advance, and provision for it in advance. Non-payment of taxes may prove to be a costly legal mistake, as it may put your startup on the blacklist of tax authorities and make it ineligible for various government benefits.

Legal Mistake 8.  Not taking professional help for tax matters:

For a startup, tax matters can be a big headache, especially when the entrepreneur is focused mainly on growth. Hence, it makes tremendous business sense to hire a tax advisor to ensure compliance with all tax regulations.

Legal Mistake 9.  Not having a proper Non-disclosure Agreement:

While planning a startup, an entrepreneur tends to speak to a lot of people about his idea. The person shares his idea, which may be copied by others, even before the entrepreneur can do it. Hence, it’s important to have a proper confidentiality or non-disclosure agreement in place, when talking to people while hiring, getting advice, or applying for finances. A proper agreement will ensure that the information you share with others remains private.

Legal Mistake 10.  Infringing a competitor’s Trademarks:

While starting a new business, one should ensure that your brand name or trademark is distinctive and clearly indicates your identity. Hence, the entrepreneur must conduct a search before deciding on a trademark of the firm in order to avoid using a trademark that is already owned by another.

After all, you wouldn’t want to commit a legal mistake, where you put in a lot of money and effort only to realize that you don’t have enough rights to do that. This would mean wasting all investment.

Conclusion:

A startup idea can be both exciting and challenging. While every new startup has growth potential, there is also a possibility of making legal mistakes. Most of these mistakes are legal in nature and may prove very costly to a startup.

Importance of Having an Employment Contract in Place

Importance of Having an Employment Contract in Place

A contract signed between an employee and their employer is referred to as employment contract. This contract is essential to safeguard both, the employee and their employer since it binds both of them to perform their jobs and responsibilities in a fair manner. Like, an employment contract lays down the role and jobs of an employee in the company and also binds the employer to renumerate the employee for the work that they are doing.

But an employment contract does more than just this. There are several other benefits of having an employment contract in place which are discussed at length here.

Employment contracts define the term

In most employment contracts, the term of employment is defined. This allows the employees to have a job guarantee with the employer unless they are found violating any terms mentioned in the contract. In case of a violation, the employment contract also allows the employers to terminate the services of an employee at the end of the term if the jurisdiction restricts the organization from firing of employees. The term length is negotiated and decided at the starting to which both parties agree.

Employment contract eliminates ambiguity

Among the main constituents of an employment contract are the duties and jobs of an employee which they are expected to perform for the employer. This reduces ambiguity and allows the employee to understand what they are expected to do everyday at work and what their ultimate goal should be. With the help of employment contract, employers can also have their expectations managed from the employees. They can expect a goal-oriented performance. In case an employee is not able to perform or do what is expected from them, the contract can be a strong basis on which an employer can take an action. Not just this. The employment contract also clearly states how the employer is going to renumerate the employee for their services. The salary, facilities, perks, and other bonuses are clearly mentioned in the contract which the employer has to abide by.

Employment contract is important for the protection of employee rights

An employment contract can help the employees ensure that there is no violation of their rights. The contract is drafted as per the Employment Act which a country follows. Like, in Singapore, the Employment Act entitles employees earning less than SGD 2000 a month to some additional benefits. Therefore, while drafting an employment contract in Singapore, it is important to put all these things into consideration. The contract clearly states the wage of the employee, how often they will be paid, how will they be renumerated for working overtime, and several other guidelines which all employees must stay aware of. This allows the employees to know their rights and make sure that their contract covers everything. Before an employee enters into a contract with an employer, it is also essential that they know about the Employment Act of their area. 

Since it might not be convenient for everyone to understand the legal jargons and technicalities of an Employment Act, you can consult an attorney before signing the contract.