Overview

The Indian Contract Act 1872 has defined an agreement as a “promise between two entities creating mutual obligations by law”. Further, every promise as well as every set of promises which forms the consideration for each other is an agreement. Therefore, for an agreement to be formed, there must be two parties capable of contracting with each other. There must be an offer or proposal by one party and acceptance which is the willingness of the other party to perform the agreement. When the offer is accepted by the other party a promise is created which further creates consideration in exchange for performing the agreed actions. In this article, various types of agreements essential under Corporate Law have been discussed. Further, the article describes the essential components of the legal notice which is sent to the party who defaults in performing the agreement.

Types Of Agreement Under Corporate Law

There are various types of agreements that are drafted under Corporate law. The following agreements have been briefly discussed below.

1. Employment Agreement- For operating any business drafting an employment agreement is a must. The employment agreement serves as proof of employment for any employee who is boarding a company. An employment agreement outlines the terms and conditions agreed upon by the employee and employer. This ensures the employer that the employee is working for the employer’s organisation. The agreement also outlines the roles and responsibilities, remuneration, working hours, and other covenants such as confidentiality clause, governing laws, non-compete clause.
2. Joint-Venture Agreements- This type of agreement include collaborative agreements that involve a party’s mutual agreement with respect to sharing of costs, management as well as profits. Joint ventures are those that financially and technically take the form of projects, acquisitions, or alliances with the previously existing business. The transferring or selling of shares by the owner of the venture organisation is majorly governed under the joint venture agreement. Therefore, it can be said that in a joint venture agreement two or more organisations combine to work jointly or engage themselves in economic activity.
3. Shareholders’ Agreement- This agreement legally binds the parties for executing transactions and is commonly dealt with in real estate deals relating to sale and purchase. A sale and purchase agreement is a result of negotiations between the buyer and seller. The terms and conditions are finalised in this agreement. These agreements are drafted for ensuring the seller and purchaser’s promise to execute the transaction. If the one party fails to perform or execute his part, then the other party can sue for nonperforming of the promise.
4. Franchise Agreement- As the name suggests, a franchise agreement ensures franchising by establishing a legal franchise relationship between the franchisor and a franchisee. Under the franchise agreement. A legal right is granted to the franchisee for opening franchised outlets where the franchisee shall operate business in accordance to the terms of franchise agreement. Basically, a franchise agreement consists of a licence, right for using the franchisor’s trademark, goodwill, logo, business protocols, and the procedure guide. The prospective franchisee must obtain a franchise disclosure agreement from the franchisor before selling any franchises. The mode of the business as well as the branding of the franchise to be adopted by the franchisee is well described in the franchise agreement. 
5. Partnership Agreement- A partnership agreement is where individuals enter into an agreement for operating a business in which the profits are shared among the partners. Such an agreement is legally binding on the partner to the agreement. Partnership agreements can be of different forms such as equal liability or limited liability. Three types of partnership are general partnership, limited partnership, and limited liability partnership. Generally, partnership implies equal sharing of legal as well as economic responsibilities. This agreement includes information of both the parties, representation as well as warranties, decision making, dissolution, dispute resolution mechanism.
6. Such other Agreements- Such other agreements include share-purchase agreement, rent and lease agreement, and term & conditions and loan agreement.

Essential Components Of The Legal Notice

Following are the essential components of legal notice for non-performance of an Agreement. 
 

• An advocate must draft the legal notice on his letterhead in a specific and proper manner.
• All the details, as well as the address and contact details of the advocate, must be mentioned in the legal notice.
• The legal notice must also specify the name, address, contact details of such individuals to whom the legal notice is issued.
• The name of the party which suffered the loss for non-performance of the other party, along with his details must be specified in the legal notice.
• The notice must state the reason where the right of the party has been infringed due to non-performance of the agreement by the other party. The notice must also state what the aggrieved party wants the defaulting party to correct the non-performance by directing the mode as well as specifying the time limit. Generally, the monetary relief to be claimed by the sender of the legal notice must be specified.
• The notice must contain the signature of the advocate along with the party sending the notice.

FAQs On Drafting Of Agreements On Corporate Law And Legal Notice