Legistify

Cross Offer in Contract Management

Cross offer: Not Binding Contract

Contract Management • • December 4, 2025

A Contract is an agreement between two or more parties that is enforceable by law as a binding legal agreement. The Indian Contract Act, 1872 came in to effect on September 1, 1872 and is applicable in the whole country. It governs entering into a contract, execution of the contract, and the effects of breach of contract. So for a valid contract, there should be an agreement which should also be enforceable by law. Also, the agreement must create a legal obligation or duty. Essentials of a Valid Contract All contracts are agreements but all agreements are not contracts. In order to become a contract, an agreement must satisfy following essential requirements: 1. Offer and Acceptance: For any contract, there must be at least two parties, one of them making the offer and the other one accepting it. The acceptance must be unconditional and absolute. 2. Consideration: Consideration means “something in return”. It is a benefit moving from one party to another. Consideration need not always be in cash or in kind. It may be an act or promise to do or not to do something. It may be past, present or future. Consideration must be real and lawful. A documentation lawyer in India can be consulted for drafting a contract. 3. Capacity of the Parties to Contract: The parties to an agreement must have the capacity at law to enter into a valid contract. Section 11 states that every person is competent to contract if- a) he is of the age of majority b) he is of sound mind c) he is not disqualified from entering into a contract by any law, to which he is subject 4. Free Consent: The contract must have been made with the free consent of the parties. The parties must be ‘ad idem’ i.e. they must agree upon the same thing in the same sense at the same time.                           There is an absence of free consent if the agreement is induced by 5. The Agreement must not be Expressly Declared to be Void: The agreements must not have been expressly declared to be void by any law in force in the country. A void agreement is not enforceable by law & they have no legal existence. For example, a) Agreement in restraint of Trade  b) Agreement in restraint of Marriage c) Agreement in restraint of Legal Proceedings d) Agreement of Wager etc. 6. Writing and Registration: It is in the interest of the parties that the contract should be in writing. Sometimes it needs to be stamped and registered. 7. Legal Relationship: The parties entering into the contract must have the intention to create a legal relationship. If there is no such intention the agreement will not result into a contract. 8. Certainty: The terms of the contract should be very clear. They must not be vague (not clearly expressed) or ambiguous (having two or more possible meanings). 9. Possibility of Performance: The performance must not be impossible. The contracts must be capable of being performed. Example- ‘A’ agrees with ‘B’ to discover treasure by magic and sharing of the treasure. This agreement cannot be enforced. 10. Lawful Object: The object of the agreement must be lawful i.e. neither fraudulent or forbidden by law, nor opposed to any public policy. Offer A explicit proposal to contract which, if accepted, completes the contract and binds both the person that made the offer and the person accepting the offer to the terms of the contract. The best documentation lawyers can assist in drafting a valid contract in India. Illustration: A wants to sell own car at Rs 50 Lakh, he makes a written statement stating his own willingness and sends the same to B, the same thing will be considered as an offer for B. As earlier said that offer commence the process of contract so there are some ingredients for a valid offer (1) There must be two parties. (2) The offer must be communicated to the offeree. (3) The offer must show the willingness of offeror. Mere telling the plan is not offer. (4) The offer must be made with a view to obtaining the assent of the offeree. (5) A statement made jokingly does not amount to an offer. (6) An offer may involve a positive act or abstinence by the offeree. (7) The mere expression of willingness does not constitute an offer. If these requirements are present in the offer then only it will be considered as offer otherwise not. Cross Offer Where two parties make identical offers to each other, in ignorance of each other?s offer, the offers are known as cross-offers. Cross offer never initiate the process of contract because it does not fulfill the requirements of a valid offer. There are essentials of the cross offer which are as follows: 1. Same offer to one another: When offeror makes an offer to offeree and offeree without knowing the offer which was prior made by the offeror to him, makes the same offer to offeror means the object as well as party both remains same. So both party can never make the offer on the same object to each other because if it happens then who will accept the offer and if there is no acceptance of offer then no contract can be made. 2. Offer must be in ignorance of the offer made by another: Offer should be properly communicated and should not be made in the ignorance. 3. The terms and Condition: The terms or the object must be same when it is made by the other person to the first person then only it will be considered as a cross offer because if the second offer differs from the first offer then it can be considered as a counter offer. Illustration: Sai makes an offer to Chandu to sell him a pen at RS 200 and on the same time without knowing the offer, Chandu makes the offer on the same object to Sai. So here the parties are same, the object or the thing is also same and it was made by the Chandu to sai

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Sales Agreement

Understanding Sales Agreements: Types, Clauses, And Best Practices

Contract Management • • December 1, 2025

A Sales Agreement turns the verbal commitments of a sale into a formal contract that outlines what is being sold, its price, delivery conditions, and the rights of the buyer and the seller.
It creates legal certainty and commercial discipline, which help businesses close deals faster, maintain compliance, and reduce the chances of disputes.

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Service Agreements: Definition, Types, And Clauses

Litigation Management • • December 1, 2025

Service agreements are the most important part of building a successful relation between companies and service providers. It helps in bringing clarity, structure and protection. Whether it is outsourcing of the support function, hiring a consultant or engaging a logistics provider, there should be a written agreement that defines the level of service that must be provided. This is known as a Service Agreement, and it defines the ground rules that will keep the projects on track and prevent disputes from arising. In this guide, we will learn about service agreements and why they matter to a business. What Is A Service Agreement? A service agreement is a contract that binds the relationship between a service provider and the client. It records the work that must be done, the quality standards to be met and the rights and duties of the client and the vendor. In other words, it ensures that everyone is aware of what is expected from them and how the success will be measured. When the terms of the agreement are documented upfront, it can help in avoiding misunderstandings between the teams and make them focus on the outcomes. By outlining the scope of work, payments to be made, duration of the contract and dispute resolution mechanism, the service agreement reduces uncertainty and makes the parties accountable for the work. In India the service agreements draw their enforceability from the Indian Contract Act 1872, which provides that such agreements are legally binding when they are made with clear terms and genuine consent from the parties involved. A valid service agreement must include all the essential elements of a contract. These are: Service agreements can cover a one-time project or an ongoing arrangement for providing recurring services, such as maintenance, consulting or technical support. With the ever-increasing reliance of the enterprises on third-party vendors, digital partners and consultants, having well-drafted and legally valid service agreements has become absolutely necessary for improving their efficiency and compliance. When is a service agreement needed? A service agreement must be created whenever one party provides service to another in exchange for a fee or any other consideration. It brings clarity to what the deliverables are, delivery timelines, and the performance standards to be maintained. Without having a service agreement, these things can be interpreted by different people in various ways, resulting in unnecessary misunderstandings being created. Enterprises create service agreements when they outsource work to third-party vendors, marketing agencies, consultants, facility managers, and maintenance partners. Another major area where service agreements are executed is technology. Large enterprises commonly use them while hiring cloud service vendors and firms that help in technology integrations. Service agreements are also signed within an organisation. For example, the internal teams may offer service-level contracts regarding the usage of shared service units. These internal agreements help all the departments to define measurable outcomes and manage accountability. Without having a service agreement, even the smallest disputes can quickly snowball into larger and costlier conflicts. Having a written contract ensures that search possibility is eliminated and everyone is aware of their roles and limits and the delivery expected from them. Types of Service Agreement There is no uniform service agreement that covers all types of engagements. The format of the service agreement and the level of detail it covers will depend on the type of work being outsourced, the duration of the engagement and the complexity of the deliverables. While each service agreement is customised, here are the main types that businesses commonly use. These are used as standard service agreements in outsourcing, where the tasks, timelines, and payment milestones are clearly defined. These are ideal for short-term projects and one-time assignments. These are executed when long-term business relationships are being developed. These are the umbrella contracts that provide the overall legal and commercial frameworks that will govern these ongoing assignments. As the work progresses, more projects and work orders are added to the MSAs to save time and maintain consistency. These are commonly used for hiring professional and advisory services. like management consulting, HR, and technology advisory work. , where maintaining confidentiality and safeguarding the intellectual property rights of the client are critical. These are executed while hiring ongoing technical or operational support, such as IT infrastructure maintenance and equipment servicing. They are most commonly found in management consulting, HR, and technology advisory work, where maintaining confidentiality and safeguarding the client’s intellectual property rights are critical. IT companies that provide SaaS tools and software development services to clients execute these service agreements. These include clauses on the uptime guarantee, data security, access rights, and privacy safeguards that will be maintained in accordance with the privacy laws of the country. What Are Some Key Clauses To Consider? A well drafted service agreement strikes a balance between clarity and protection for both the client and the service provider. Every clause in a service agreement helps in setting clear expectations and reducing risks. Hence, they must be drafted very carefully to avoid ambiguity and minimise the risks. The following are some clauses that must be a part of every service agreement: 1. Scope of Work This clause defines what services will be provided along with their expected timelines, quality standards to be maintained, and the exact deliverables. Any work that is done outside this scope of work must be approved in writing by the client to avoid exceeding the brief. 2. Payment Terms All the information related to the project payment must be mentioned in this clause. Details of how the payment will be made, milestones, late payment penalties, etc. are some of the points to be included. 3. Confidentiality and Intellectual Property Rights This section outlines the third-party vendor’s obligation to protect the client’s sensitive business information. It is a binding clause that the vendor must always adhere to. 4. Liability and Indemnity This limits the amount of financial exposure of the parties in the event of a loss. It also defines who will bear the responsibility for losses that

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