Indian Contract Templates

Why Indian-law templates need to be Indian-law-specific

A surprising number of Indian commercial contracts are still drafted from templates copied from US or UK precedents. The contract structure looks reasonable, the clause language is fluent, but the legal framework underneath is wrong in ways that don't surface until enforcement.

Three categories of Indian-specific rules consistently break foreign templates:

1. Indian Contract Act, 1872

Section 10 sets the foundational test — agreement, lawful consideration, lawful object, free consent, parties competent to contract. Foreign templates assume this is the same as US/UK contract formation. It mostly is, but the divergences matter:

• Section 27: "Every agreement by which any one is restrained from exercising a lawful profession, trade or business of any kind, is to that extent void." This voids post-termination non-compete clauses that are routine in US employment contracts. Indian employment templates that mirror US non-competes are unenforceable on the most important provision.
• Section 23: agreements opposed to public policy are void. Indian courts apply this to exclusions of gross negligence, wilful misconduct, and fraud — making mirror "no liability for our own misconduct" clauses (common in US SaaS terms) unenforceable.
• Section 73: damages for breach are limited to "loss or damage caused thereby which naturally arose in the usual course of things from such breach." Foreseeable-loss only. Foreign templates that don't account for this overestimate recoverable damages.
• Section 74: liquidated damages are capped at "reasonable compensation" regardless of the contractually named amount. Indian courts apply the genuine pre-estimate test, limiting the named amount when it's a penalty rather than compensation.
• Section 124: codifies the indemnity contract. See our Section 124 deep-dive.

2. Digital Personal Data Protection Act, 2023

The DPDP Act imposes obligations distinct from GDPR, particularly:

• Section 5 notice in plain language.
• Section 6 consent — free, specific, informed, unconditional, unambiguous.
• Section 8(5) written processor contracts with eight specific obligations.
• Section 9 verifiable parental consent for children's data.
• Section 16 cross-border transfer subject to government notification.
• Section 33 penalties up to ₹250 crore.

Foreign templates either omit DPDP-specific clauses (because they don't know to include them) or insert GDPR-style language (close but not equivalent). See our DPDP compliance guide for the full DPDP framework.

3. State stamp duty + IT Act e-signature

Stamp duty in India is state-specific, contract-type-specific, and ad valorem in most commercial categories. The Indian Stamp Act, 1899 governs the central framework; each state has its own Schedule overlaying state-specific rates. Foreign templates assume "stamp duty is a small flat fee" and break when applied to multi-crore contracts.

E-signature under the IT Act, 2000 is legally equivalent to wet signature for contract purposes (Section 5). DocuSign, Adobe Sign, and eMudhra Aadhaar eSign all qualify. But e-signing doesn't pay stamp duty — that must be completed separately on SHCIL or the relevant state e-stamping system.

The template directory

We maintain three flagship Indian-law-compliant templates today, with more being added quarterly:

NDA Template

Free NDA template for India →

Mutual NDA suitable for two-way information exchange. Drafted to comply with Section 27 ICA (no post-termination non-compete), DPDP-ready data handling (Section 8(5) Schedule B), liquidated damages under Section 74, and arbitration under the Arbitration Act 1996.

Use when: pre-deal discussions involve genuinely confidential information (technical specs, source code, financial data, customer lists).

Don't use when: generic introductory pitches with no real proprietary content — an NDA there slows the deal without protection.

Vendor Agreement Template

Free vendor agreement template for India →

Master vendor agreement with Statement of Work framework. Covers SLAs and service credits, MSME 45-day payment fallback under Section 15 MSME Act, indemnification capped at 12 months of fees with super-cap exceptions, DPDP processor schedule, and institutional arbitration (MCIA/DIAC default).

Use when: onboarding goods or services suppliers under multi-year arrangements with changing scope.

Don't use when: government procurement (use GFR-mandated GeM templates), construction/EPC (use FIDIC-style or PWD frameworks).

SaaS Agreement Template

Free SaaS agreement template for India →

Master subscription agreement with Order Form per subscription. Treats SaaS as a Copyright Act Section 14 licence (not Sale of Goods), 99.9% uptime SLA, DPDP processor obligations, GST and OIDAR classifications, and India-seated arbitration. Supports auto-renewal with CPI-capped escalation.

Use when: Indian SaaS vendors selling B2B or Indian buyers procuring SaaS.

Don't use when: B2C click-through terms (use a separate consumer-side framework), payment aggregator / BFSI-regulated SaaS (overlay RBI Master Directions).

Choosing the right template

The decision tree is straightforward:

When in doubt, the Vendor Agreement Template is the most adaptable — it handles services-led engagements broadly and can be customised down for narrower use cases.

How to customise a template

Every template has the same four customisation points:

1. Statement of Work / Order Form

This is where deal-specific commercial terms live: parties, fees, deliverables, term, payment schedule. Templates leave placeholders — fill them specifically. Avoid "to be agreed" language; it invites disputes.

2. Indemnification

The default indemnification structure has three tiers — general (capped at 12 months of fees), super-cap exceptions (IP uncapped, confidentiality 24 months, DPDP uncapped), and mandatory carve-outs (gross negligence, wilful misconduct, fraud — all uncapped). Adjust the caps for your firm's playbook positions but keep the structure. See the indemnification deep-dive.

3. Limitation of liability

Default cap is 12 months of fees aggregate annual. Excluded damages: indirect, incidental, consequential. Super-cap exceptions carved out. See the limitation of liability deep-dive.

4. DPDP Schedule

If the contract involves processing personal data, retain Schedule [B/C] with Section 8(5) processor obligations. If not, delete it explicitly — don't leave it as "applicable if relevant" which invites disputes. See the DPDP compliance guide.

Stamp duty: a state-by-state primer

Stamp duty on commercial contracts varies by state and contract type. Key high-volume jurisdictions:

Stamp duty applies in the state of execution. For digital execution, e-stamping is completed on the SHCIL portal (Stock Holding Corporation of India) or the state's own e-stamping system. The standard market practice is for the buyer to bear stamp duty unless otherwise agreed.

A typical stamping covenant in our templates: "The Buyer shall pay applicable stamp duty in the state of execution within 7 days of execution. Each party shall bear its own counterpart stamping costs."

E-signing: the IT Act, 2000 framework

Section 5 of the IT Act, 2000 validates electronic signatures for contract purposes:

"Where any law provides that information or any other matter shall be authenticated by affixing the signature of any person, then... such requirement shall be deemed to have been satisfied, if such information or matter is authenticated by means of digital signature affixed in such manner as may be prescribed by the Central Government."

Three practical e-signing categories:

• DocuSign / Adobe Sign / PandaDoc: third-party platforms with eIDAS-compliant signatures. Indian courts accept these.
• Aadhaar eSign (eMudhra): Aadhaar-OTP-based signing. The most jurisdictionally robust option for Indian-only deals.
• Wet signature + scan: still valid but less defensible than verifiable e-signature options.

E-signing does NOT pay stamp duty. The standard workflow is: prepare draft → e-stamp via SHCIL → e-sign via DocuSign or eMudhra → archive the stamped + signed version.

Common drafting mistakes in Indian commercial contracts

Five patterns we see repeatedly:

1. Post-termination non-competes in employment contracts — void under Section 27 ICA. Use non-solicitation + confidentiality instead.
2. Liquidated damages drafted as penalties — Indian courts apply the Section 74 reasonable compensation test. Frame as pre-estimate of loss.
3. Generic data-protection language instead of DPDP-specific Section 8(5) obligations. Use the Schedule B/C pattern from our templates.
4. Foreign governing law for India-India deals — usually because the template was copied from a US deal. Default to Indian law and India-seated arbitration.
5. Missing MSME payment fallback — Section 15 MSME Act mandates 45-day payment terms. Override longer Net-60 terms when the counterparty is MSME-registered.

The templates we publish address all five by design. Foreign templates adapted superficially usually miss at least three.

How Clauseium accelerates template-based contracting

Once you've downloaded and customised a template, paste it into Clauseium for a clause-by-clause check against your playbook + current Indian law + DPDP requirements. Clauseium flags any deviation from market-standard positions, suggests redlines for clauses the counterparty typically resists, and verifies every citation against the live Indian Kanoon corpus.

For most counsel, that turns a 90-minute self-review into a 15-minute exception triage. Try Clauseium free →

Where to go next

Continue with the templates and clause deep-dives below. Most counsel start by downloading the template relevant to their immediate deal, then refer back to the clause guides as questions come up in negotiation.