These days understanding the implications of an agreement is critical for any business operations. There are various features and parameters in an agreement which makes it a viable and tenable document to avoid lengthy and cumbersome court battles later on in the event of a breach. We are equipped with the skills both for drafting simple agreements as well to interpret the likely legal effect of various provisions mentioned in an agreement drafted by the other party.
An agreement can be verbal or in written form. However, most of the business understandings are always noted down in black and white in the form of an agreement. This helps in minimizing the possibilities of disagreement on what exactly the parties’ intention was at the time of entering into the business relationship. From this perspective, the objectives of drafting an agreement are:
- To precisely reflect the “meeting of the minds” in a way that will be understood exactly in the same meaning as was intended to be communicated by all readers and stake-holders
- To create legally enforceable rights and obligations
- To act as a roadmap for business relationships
OUR APPROACH TOWARDS DRAFTING THE AGREEMENTS FOR OUR CLIENTS
- Understand the type and the commercial intent of the transaction – e.g. whether it is a licensing agreement (where some intellectual property is licensed) or simply a marketing agreement, whether an agreement is a joint venture agreement or a private equity investment agreement.
- Locate a template which resembles the transaction as closely as possible – If you are doing an investment document which has a foreign investor, try and get a precedent (template of another transaction) which had a foreign investor. Don’t use a template which has a domestic investor. If you have a strategic investor who is interested in integrating a start-up with his own company, do not use a template for a financial investor who is simply interested in making a financial return.
- If possible, speak to the client about various commercial possibilities that could arise
- Check any changes in law (substantive and procedural) from time to time – e.g. guidelines and procedure for valuation of shares may change, which may alter the way you arrive at the price for subscription to the shares of a company.