Fixed-Term Contract Development

Business Contract Drafting
Exercise – 1
a) Parties to the Agreement - The two parties to the agreement are the
employer (the company) and the employee (the individual). They should be
defined at the beginning of the agreement as follows:
1. Party 1 (The Company/Employer): As TechFlow Solutions Private
Limited, a company incorporated under the Companies Act, 2013,
having its Corporate Identification Number (CIN) [………………..], with its
registered office at [Full Address], Bangalore, India (hereinafter referred
to as “the Company” or “the Employer”).
2. Party 2 (The Employee): Ms. Priya Sharma, daughter of [Her Father's
Name], residing at [Her Full Residential Address] (hereinafter referred to
as “the Employee” or “the Business Development Manager”).
b) Title of the Agreement
The title of an agreement should appear at the very top of the first page,
typically centred and in bold capital letters.
Given that the employment is for a specific duration of two years, the most
appropriate and accurate title would be:-
FIXED-TERM EMPLOYMENT AGREEMENT
This title is ideal because it immediately clarifies that the contract is not for
permanent employment but for a pre-defined, limited period (of 2 years),
which aligns with the company's intention. A simpler, but less specific,
alternative would be "Employment Agreement."
Here are the appropriate clauses for each scenario with their significance:
a) Giving Specific Meaning to Words;
 Clause: Definitions Clause
 Significance: This clause is crucial for avoiding ambiguity. It provides
precise meanings for key terms used throughout the agreement,
ensuring all parties share a common understanding.
b) Payment Details
 Clause: Consideration / Remuneration Clause
 Significance: This clause formally outlines the payment Ms. Sharma will
receive. It specifies the amount, frequency, and timing, which is a core
element of the contractual exchange, as Rs.75,000/- per month.
c) Ms. Sharma's Assurances
 Clause: Representations and Warranties Clause
 Significance: In this clause, Ms. Sharma provides formal assurances
about her qualifications and the truthfulness of her statements. A
breach of these warranties can give the company grounds for specific
legal remedies, including termination or damages.
d) Background Information
 Clause: Recitals / Background Clause
 Significance: This clause sets the stage for the agreement by providing
context and outlining the parties' intent for entering into the contract. It
can be useful for interpreting the main operative clauses if a dispute
arises.
e) Company's Training Responsibility
 Clause: Obligations of the Company Clause
 Significance: This clause clearly defines the company's specific duties
towards Ms. Sharma. It establishes a binding commitment for the
company to provide the necessary training (For a Period of One Month),
ensuring she is equipped for her role.