A contract can be perfectly valid in law and still not suit the business. The way we pay may have changed. The vendor may now be doing more than the contract says. The business may have grown, but the agreement is still the same. A regular review helps us find these gaps before they turn into disputes.
My view is simple. Look at how the contracts are actually working, and then decide what to change. This article is about reviewing commercial contracts in India.
Start with problems the teams can show you: late payments, vendors raising the same objection again and again, refunds nobody claimed, or duties nobody can perform. Keep the same basic drafting across templates, but leave room for each deal. Know the difference between what the law requires and what we would like the other side to agree to. Follow every change into practice. Someone must own each obligation, know the deadline and act when it is missed.
The question every GC should ask
Does this contract still describe the business we run today? Asking whether we have updated the templates is only part of the answer.
Take a payment clause written for manual reconciliation. If the team now uses an automated process, does the clause still work? Take a lease with a remedy for late handover. Who records the delay and raises the claim? The wording may be clear, but if no one is responsible, the remedy may never be used. The same goes for a logistics vendor who starts subcontracting, or a technology supplier who gets access to more data.
This is where legal review should meet the work of the business. A clause should protect the company in a way the teams can actually use. Making it harsher does not make it more useful.
I see a negotiation as the first formal meeting between two parties. The lawyer is the company’s ambassador. How we negotiate shows the other side what we think about fairness, risk and governance. We should set both sides up for success while protecting our own company.
1. Map your contracts first
Before you edit any template, find out what is really in use. Compare the standard forms with a sample of signed agreements, chosen by risk. Look at the changes accepted during negotiation. The template may say one thing, and the contracts the business signs may say something quite different.
Group the agreements by the work they cover: supply, manufacturing, logistics, real estate, manpower, technology, marketing, confidentiality and other important ones. For each group, note who the contracting entity is, and who the legal and business owners are. Note how often the template is used, the rough exposure and the major changes made to it. Use the same names for obligations, due dates and approvals, so they can be compared.
Do not decide the order of review by value alone. A supply template used every day, with the same payment dispute coming up each time, may need attention before a big contract, signed once. Data access, consumer safety, dependence on one vendor and difficulty in exiting can also change the priority.
The map should tell each owner what to review and what evidence to bring. Otherwise everyone fixes their own template and the problems common to the business stay as they are.
2. Listen to the teams who perform the contract
The people who work with the contract should have a say in the review. Ask procurement what vendors keep objecting to. Ask finance where invoices get disputed and where overpayments are not recovered. Operations can tell you why a service standard is hard to measure. Technology and security teams can show what access a supplier really has. Bring in tax, HR, supply chain and real estate wherever they are affected.
Ask for the clause and an example. What caused the delay? What happened when the team tried to use the remedy? If the same concession is given in every negotiation, bring those agreements to the review. Just saying “the template is difficult” does not tell us what to fix.
Some problems need a change in process, not a stronger clause. If an invoice never reaches the right team, a shorter dispute window may make things worse. If a delivery failure is not recorded, raising the amount claimed will not give you the missing evidence. Look at the drafting and the process together.
Keep a record of each issue, how it affects the business and the change proposed. Give it an owner. The record should show whether the fix is an amendment to the contract or a change in the team’s own process.
3. Be consistent, but not identical
A familiar structure helps people find what they need. Use common headings for scope, payment, term, termination, liability, confidentiality, data protection, intellectual property and compliance, wherever they fit. It then becomes easier to see what changed during negotiation.
But a common structure does not mean the same clause numbers in every contract. A lease does not work like a supply agreement, and a software contract has its own needs. Keep the drafting consistent without forcing every document into one format.
Put commercial details in approved schedules. Be clear about which document wins if a purchase order, statement of work or amendment conflicts with the main agreement.
Every template also needs a negotiation playbook. Say what position we prefer, what alternatives the team can accept, and what needs approval. Record why an exception was given and who approved it. If the same exception keeps coming up, ask whether we misjudged the risk or the template no longer fits the business.
When I was a young lawyer representing a small organisation, good business opportunities often came with one-sided templates and a take-it-or-leave-it attitude. There was little room to negotiate hard, and I did not want to lose a client over a contract for the sake of better terms for the Company.
I would remind myself that the client had chosen us from all the options in the market. That put us in a good position. I could ask for fair terms for us and still accommodate the client’s needs.
Sometimes the answer was, “This is our standard template, we don’t make changes.” I would then list my comments with reasons in an email and leave it to the client to decide. I was not forcing anything. I was only putting across what was fair for us, without risking the business. Most of the time, the client’s counsel made an honest effort to accept most of the suggestions. That was a win without a fight or fear.
Later, when the company grew and I could dictate terms to vendors, I chose to keep the agreement fair for both sides. I wanted the vendor to have similar rights, while covering our risk on terms that were reasonable for the vendor too.
This leaves the vendor with a good first impression and reduces negotiation turnaround time. If we are not making the vendor a partner in our success, what is the point? We cannot expect loyalty or extra effort from a vendor if our terms do not show that intention.
The playbook should carry this thinking into everyday negotiations. Be fair on ordinary commercial terms. Be firm, with reasons, on terms that carry real risk. Do not call every preference non-negotiable. Draft key risk areas in detail, such as tax compliance, fraud prevention, anti-bribery and statutory duties, and keep liability for these uncapped. Record and approve the departures you are willing to accept.
4. Check how the money clauses work
Read the financial clauses with the team that handles the money. When is an invoice complete? When is payment due? Who raises a dispute, and with what proof? How will deductions and overpayments be settled? The team should be able to answer these from the contract and from its own process.
A seven-business-day dispute window, or 12% interest on a late refund, may be a negotiated commercial term. Neither is a legal requirement. If silence is to mean the invoice is accepted, think about what happens with fraud, duplicate billing or an error that could not reasonably be found at that time.
Take a clause that says INR 20,000 per day for late handover of a property. Writing the amount in the contract does not mean you will automatically recover it, whether you call it a penalty or liquidated damages. The law allows reasonable compensation, not more than the amount named in the contract. So explain the commercial reason for the remedy, and say when it applies, what is excluded and what evidence is needed.
Check mandatory payment law separately. For qualifying micro and small enterprise suppliers, late payment carries compound interest at three times the prevailing bank rate, whatever the contract says. An agreed lower rate cannot replace this. Check the supplier’s classification during the review instead of leaving it in the onboarding file.
5. Update the legal position, not just the names of the laws
Changing the name of an Act in a template is not a legal review. Find out what the obligation is, whether it applies to this entity or activity, when it comes into force, and what the agreement needs to say about it.
Do this for tax, labour, food safety and data protection. Keep apart the duties already in force, the duties coming later, and the safeguards the business chooses to adopt in advance. New data protection rules are being brought in phases, so do not draft as if every obligation started on the same day.
Keep terms in line with current law
A regular review is a good time to check whether old terms have become void or cannot be enforced because of new laws or court decisions. Clauses that try to give up rights the law does not allow us to waive, that impose unreasonable penalties, or that rely on outdated rules, give a false sense of safety. Updating them keeps the protection real.
Data protection and incident response
Start with the data the supplier actually receives and what it does with it. Identify each party’s role, what uses are allowed and who has access. Check subcontracting and what happens when the service ends. Then turn these facts into obligations on security, assistance, retention, return or deletion, cooperation during incidents and audit evidence.
A clause asking the vendor to inform us of an incident within 24 hours is a negotiated term. It is not a legal deadline. Check it against the reporting duties that apply to us. Those duties can run on a much shorter timeline, counted from when the incident is noticed or brought to our notice. Our own duty to report cannot wait just because the vendor’s contract allows more time.
Match security testing to the systems and data involved. Before calling a particular auditor certification or test mandatory under data protection law, check the legal or sector requirement. Do not present a preferred safeguard as a rule that applies to everyone.
Intellectual property and data rights
A claim to “all derivative IP and user data” may sound protective, but it leaves many questions open. What was created for this engagement? What does the supplier already own, and what belongs to a third party? Keep these separate from confidential information and permitted uses of data. Secure the rights you need to run, maintain, change and transition the service. Do not ask for rights the supplier does not have.
For a copyright assignment, the law needs a signed written assignment that identifies the work, the rights, the duration and the territory. A general line on ownership does not do the job. Also, owning the IP does not decide whether processing personal data is lawful. Deal with privacy obligations separately.
6. Make the protections workable on the ground
In food and consumer supply chains, the specifications must link to the receiving process. Check batch records, traceability, complaint escalation and help with recalls. Food safety law places the duty to withdraw food and inform the authorities on the food business operator when there is reason to believe it does not comply. Divide responsibilities in the agreement so both parties can meet these duties. Do not suggest that the operator can simply pass them on to the supplier.
A requirement of 70% or 80% remaining shelf life may suit a particular product. It is a commercial specification, not a general legal rule. Decide it based on the product, storage conditions and time taken to distribute. Then check that the receiving team can actually verify it.
For manpower and logistics contracts, review employment duties, safety, subcontracting and proof of compliance. Keep background checks in proportion to the work. If police verification is required, check the activity and the location. Do not assume the same rule applies to every worker or delivery partner.
Read force majeure with actual performance in mind. A labour dispute, a supply disruption and financial hardship are different problems. Say which events are covered and how they connect to the failure to perform. Set out notice and mitigation duties, any obligations that continue, and the right to exit after a long disruption. Relief that is too wide removes accountability. Relief that is too narrow ignores the risks the parties really face.
7. Match approvals to the risk
Who approves the commercial commitment? Who can accept a legal departure? Who can sign for the company? These are three different questions. Make the answers clear in the approval matrix.
Value is only one part of the decision. Uncapped liability, data access, exclusivity, guarantees and long lock-ins may need a higher level of approval. Read the schedules too. A standard template can carry unusual risk through the details filled into it.
Follow the company’s approved governance arrangements and check the authority of the contracting entity. Using a standard template should not give anyone unlimited signing power. Keep reserved approvals separate, and decide the route when the usual approver is away or the matter is urgent.
The matrix should help people reach the right decision without delay. Too many approvals slow down routine work. Too few can let a serious risk pass unnoticed. Keep a record of the commitment and the exceptions approved.
8. Rolling out is a change in behaviour
Approving the revised documents is not the end. Give each template an owner, a version and an effective date. Keep one controlled source and archive the old forms. Tell teams when, if at all, an older version can still be used.
A new template does not change an agreement already signed. Identify which existing contracts need an amendment, a renegotiation or a look at renewal. Deal with the serious gaps first and record the risk accepted in the meantime. Teams should not assume they have a new protection in every contract just because it is in the latest template.
Explain the changes to the people who will use them. Finance needs to know how to dispute an invoice or recover a refund. Procurement needs the negotiation positions it can accept. Operations must know what evidence to keep and when to escalate. Signatories need the approval route. A short note on the changes, with a checklist for each team, often works better than a long email announcing new templates.
Measure the result, not the number of documents
Counting revised templates only tells us how much drafting was done. It does not tell us whether the review helped. Set a starting point for negotiation turnaround time, repeated deviations and approval delays. Track old disputes, overpayment recovery and performance failures. These numbers show where the contract or the process still needs work.
Faster signing matters, but ask what made it faster. Were the fairer terms easier to accept? Or were serious exceptions simply not recorded? The same applies to financial protection. A refund clause is useful only when someone finds the overpayment and follows through to recover it.
The Bottom Line
For me, reviewing our contracts is a chance to ask whether our commitments still make sense for the business and for the people who perform them. Fairness is part of that. Our bargaining position may change as the company grows. The intention to set both parties up for success should not.
The legal team should help the business understand the risk it is taking and put that decision into clear, usable terms. That needs more than good drafting. It needs someone to own the obligation and follow it through. Review contracts regularly, but do not wait for the next review to find out whether they work.
(Views are personal)
