Sample report · India
Real, unedited output from a 34-page Master Services Agreement. This is exactly what you get for your own contract.
What a ClauseAudit India report looks like
A freelance software company was sent this Master Services Agreement by a larger client. It reads as standard. Below is what the review found, with the provision behind each finding, followed by the negotiation email generated from it.
Executive summary
The most significant findings are the payment provisions: a 90-day payment term, a pay-when-paid trigger with no backstop date, a 20% retention held until warranty expiry, a blanket waiver of statutory interest and an express clause stating the payment period applies regardless of the Service Provider's MSME status — all in a document that discloses the Service Provider's Udyam registration on its face. The agreement also contains a six-month claim cut-off, arbitration by an arbitrator appointed solely by the Client with costs on the Service Provider regardless of outcome, a 24-month all-India post-termination non-compete with an advance waiver of any right to challenge it, and a very broad retrospective IP assignment. On data, the Service Provider may retain Client Data indefinitely after termination for AI/ML training and may transfer it worldwide and add sub-processors without reference to the Client. Risk allocation is heavily asymmetric throughout: unlimited Service Provider liability against a three-month cap on the Client, an uncapped perpetual indemnity extending to the Client's own negligence, unilateral variation of terms, downward-only benchmarking and fixed liquidated damages for personnel attrition.
Flagged clauses (23 shown)
Tap any clause to see the original wording, what it means in plain English, why it matters, and what to raise.
Original clause text
“Subject to Clauses 9.5 and 9.6, the Client shall pay undisputed amounts properly invoiced within ninety (90) days from the date of receipt of a valid invoice, or within ninety (90) days from the date of Acceptance of the relevant Deliverable, whichever is later.”
What this means
The Client pays within 90 days of a valid invoice or of acceptance of the deliverable, whichever falls later.
Why it matters
The MSMED Act, 2006, ss.15-16 requires a buyer to pay a registered micro or small supplier by the agreed date and in any case within 45 days of acceptance, and states that a longer payment term is unenforceable against such a supplier; delay attracts compound interest at three times the RBI bank rate, with the Facilitation Council route under s.18. The cover page records a Udyam registration for the Service Provider, so this clause sits in the category that provision addresses. Whether the registration is current and in the micro/small category is a fact outside this document.
Compared to typical
Aggressive vs typical: A 90-day term is longer than the 30-60 days typical in Indian IT services contracts and sits outside the 45-day MSMED default for registered suppliers.
Negotiation tip
A payment term aligned with the 45-day statutory maximum, or wording confirming that MSMED timelines prevail over any longer contractual period, is a point worth discussing.
Original clause text
“the payment period specified in Clause 9.4 shall apply notwithstanding the status of the Service Provider under any statute relating to micro, small or medium enterprises, and the Service Provider has agreed to such terms with full knowledge of its rights and waives the same to the fullest extent permissible.”
What this means
The contract says the 90-day payment period applies whatever the Service Provider's MSME registration status, and that the Service Provider waives that statutory protection.
Why it matters
The MSMED Act, 2006, ss.15-16 sets a statutory payment discipline for registered micro and small suppliers and describes longer terms as unenforceable against them. A clause that expressly seeks to contract out of that scheme also engages Indian Contract Act, 1872, s.23, which makes an agreement void where its object or consideration defeats the provisions of any law or is opposed to public policy. This clause appears to be in that category.
Compared to typical
Aggressive vs typical: Most MSAs are silent on MSME status; an express attempt to override it is markedly more aggressive than market practice.
Negotiation tip
Wording confirming that payment terms will follow the statutory requirement where Udyam registration is held, rather than a blanket override, is worth raising.
Original clause text
“the Client's obligation to pay any invoice in respect of Services rendered in connection with a project undertaken by the Client for a third party customer shall be contingent upon, and shall arise only after, the Client having received the corresponding payment from such third party customer.”
What this means
Where the work relates to a project for the Client's own customer, the Client's duty to pay only arises once that customer has paid the Client — with no outer date.
Why it matters
This 'pay-when-paid' structure places the Client's customer credit risk on the Service Provider and has no defined backstop. The MSMED Act, 2006, ss.15-16 timeline for registered micro and small suppliers runs from acceptance rather than from the buyer's own collections, so an open-ended deferral is the kind of arrangement that provision addresses.
Compared to typical
Aggressive vs typical: Pay-when-paid with no backstop is a one-sided allocation of credit risk and unusual where the vendor has no relationship with the end customer.
Negotiation tip
A backstop payment date that applies irrespective of receipt from the third-party customer is a common drafting point to raise.
Original clause text
“The Service Provider waives any and all rights to claim interest, compensation, late payment charges or any other amount whatsoever in respect of any delay in payment of the Charges, howsoever arising and under any statute, rule or regulation.”
What this means
The Service Provider gives up all rights to interest or compensation for late payment, under any law.
Why it matters
The MSMED Act, 2006, ss.15-16 provides for compound interest on delayed payments to registered micro and small suppliers. A waiver framed as covering rights 'under any statute' engages Indian Contract Act, 1872, s.23, which makes an agreement void where its object defeats the provisions of any law or is opposed to public policy.
Compared to typical
Aggressive vs typical: Blanket waivers of statutory MSME interest are highly unusual and go well beyond standard limitation-of-remedy drafting.
Negotiation tip
Removing the blanket waiver, or confining it to non-statutory remedies, is a point worth discussing.
Original clause text
“No claim of any nature whatsoever arising out of or in connection with this Agreement may be brought by the Service Provider after the expiry of six (6) months from the date on which the cause of action accrued, and the Service Provider agrees that any such claim shall thereafter stand absolutely barred and extinguished notwithstanding any provision of law to the contrary.”
What this means
The Service Provider must bring any claim within six months of it arising, otherwise the claim is treated as extinguished.
Why it matters
The Limitation Act, 1963 (Arts. 55 and 113) generally allows three years for contract claims, and Indian Contract Act, 1872, s.28 provides that a clause shortening the limitation period for enforcing rights through ordinary legal proceedings is void to that extent. This clause appears to be in the category that provision addresses.
Compared to typical
Aggressive vs typical: A six-month bar is far shorter than the ordinary three-year period and shorter than what is seen even in buyer-favourable contracts.
Negotiation tip
Aligning the claim period with the statutory limitation period, or deleting the shortened window, is worth raising.
Original clause text
“Any dispute not resolved under Clause 30.1 shall be referred to and finally resolved by arbitration by a sole arbitrator to be nominated and appointed by the Client.”
What this means
Only the Client selects the arbitrator who decides disputes between the two parties.
Why it matters
The Arbitration and Conciliation Act, 1996, s.12 and the Fifth and Seventh Schedules set out independence and impartiality requirements for arbitrators. Unilateral appointment by one party to the dispute is vulnerable to challenge under those requirements.
Compared to typical
Aggressive vs typical: Unilateral appointment is a well-known defect in Indian contract drafting and departs from standard neutral-appointment mechanisms.
Negotiation tip
A jointly agreed arbitrator, or appointment through a neutral arbitral institution, is a common alternative worth discussing.
Original clause text
“For a period of twenty-four (24) months following the expiry or termination of this Agreement for any reason, the Service Provider shall not, directly or indirectly, provide services of a similar nature to the Services to any person or entity which competes with the Client anywhere in India.”
What this means
For two years after the contract ends, the Service Provider cannot provide similar services to any competitor of the Client anywhere in India.
Why it matters
Indian Contract Act, 1872, s.27 provides that an agreement restraining a person from exercising a lawful profession, trade or business is void to that extent, with a narrow exception for sale of goodwill. A post-termination restriction on the Service Provider's own business, unconnected to any goodwill sale, is the category that provision addresses. Exclusivity during the engagement is a separate question.
Compared to typical
Aggressive vs typical: A 24-month nationwide non-compete on a corporate service provider is unusually broad even by exclusivity-heavy vendor agreement standards.
Negotiation tip
Confining the protection to confidentiality and defined non-use obligations, rather than a post-term trade restraint, is a common alternative worth discussing.
Original clause text
“The assignment in Clause 13.1 shall extend to all such Intellectual Property Rights whether created before, during or after the Term, and whether or not created in the course of performing the Services, where the same relate in any manner to the business, products or services of the Client or any of its Affiliates.”
What this means
The Service Provider assigns IP created before, during or after the contract, and even work not done under this contract, so long as it relates in any way to the Client's business.
Why it matters
Under the Copyright Act, 1957, an independent contractor retains copyright unless it is assigned in writing, and s.19(3) requires an assignment to specify the rights, term and territory. An assignment framed to capture pre-existing and future work outside the scope of the Services raises questions about specificity and supporting consideration, which is what those formalities address.
Compared to typical
Aggressive vs typical: Capturing IP created before the engagement or unrelated to the Services is far broader than standard work-product assignment clauses.
Negotiation tip
Confining the assignment to IP created in the course of performing the Services during the Term is a common alternative worth discussing.
Original clause text
“The Service Provider may retain Client Data following expiry or termination of this Agreement for such period as it considers necessary for its internal business purposes, including for the purposes of service improvement, benchmarking, analytics, and the training and development of machine learning and artificial intelligence models. ... Duration of processing: The Term, and thereafter for such period as the Service Provider considers necessary in accordance with Clause 16.5.”
What this means
After the contract ends, the Service Provider may keep the Client's data for as long as it decides is necessary and use it for its own analytics and for training AI/ML models.
Why it matters
Under the Digital Personal Data Protection Act, 2023 and the DPDP Rules, 2025, a data fiduciary needs specific, informed consent supported by a clear notice, must limit use to the stated purpose, and must bind processors by contract; the Rules were notified on 13 November 2025 and phase in with full compliance from 13 May 2027. Retention at one party's discretion for AI training and analytics after termination appears to extend beyond the purpose for which the data was originally collected, which is the purpose-limitation and deletion area that framework addresses.
Compared to typical
Aggressive vs typical: Indefinite post-termination retention for AI training is far more permissive than standard data processing terms, which require deletion or return within a defined window.
Negotiation tip
A defined retention period tied to providing the Services, with return or certified deletion on termination and no AI/ML training use absent a separate agreed basis, is a common alternative worth discussing.
Original clause text
“The Service Provider may transfer, store and process Client Data at any location worldwide, and may engage such sub-processors as it considers appropriate, without further reference to the Client. ... Transfers outside India: Permitted without restriction in accordance with Clause 16.3.”
What this means
The Service Provider can store or process the data anywhere in the world and bring in any sub-processor, without informing or asking the Client.
Why it matters
The Digital Personal Data Protection Act, 2023 framework contemplates that a data fiduciary binds its processors by contract, maintains oversight of the processing chain and addresses cross-border transfer. Unrestricted transfer and sub-processor rights with no notice to the Client, who appears to be the fiduciary here, do not reflect the allocation of roles and controls that framework generally contemplates. Note that the operative terms sit in Clause 16.3, and the schedule's India-only default delivery locations appear to sit awkwardly alongside this.
Compared to typical
Aggressive vs typical: Standard data processing addenda require an approved sub-processor list or advance notice; a blanket no-reference clause is well below market practice.
Negotiation tip
Naming permitted transfer jurisdictions, an approved sub-processor list with advance notice and an objection right, and contractual flow-down obligations, are common alternatives to discuss.
Original clause text
“any negligence of the Client or its Personnel... The indemnities in Clause 19.1 shall be uncapped, shall survive expiry or termination of this Agreement without limit in time, and shall not be subject to any limitation or exclusion of liability contained in this Agreement.”
What this means
The Service Provider must indemnify the Client even for losses caused by the Client's own negligence, with no financial cap and no time limit.
Why it matters
Indian Contract Act, 1872, ss.73-74 direct that compensation is assessed by reference to actual loss and that a stipulated sum operates as a ceiling rather than an automatic entitlement, with disproportionate amounts read down. An indemnity extending to the indemnified party's own negligence, uncapped and unlimited in time, is a markedly one-sided risk allocation worth close scrutiny alongside the liability cap below.
Compared to typical
Aggressive vs typical: Uncapped, perpetual indemnities covering the indemnified party's own negligence are far more one-sided than standard capped or mutual indemnities.
Negotiation tip
Excluding the Client's own negligence from the indemnity, and applying a cap and a defined survival period, are points worth discussing.
Original clause text
“the aggregate liability of the Client to the Service Provider... shall not in any circumstances exceed an amount equal to the Charges actually paid by the Client to the Service Provider in the three (3) months immediately preceding the event giving rise to the claim... the liability of the Service Provider arising out of or in connection with this Agreement shall be unlimited.”
What this means
The Client's liability is capped at three months' fees, while the Service Provider's liability has no cap at all.
Why it matters
Parties are generally free to negotiate caps, but Indian Contract Act, 1872, ss.73-74 frame recovery around reasonable compensation for actual loss. An unlimited exposure on one side against a narrow three-month cap on the other, measured against real exposures such as a data incident or an IP claim, is a significant imbalance worth examining together with the indemnity above.
Compared to typical
Aggressive vs typical: Fully unlimited vendor liability against a heavily capped client-side liability is more extreme than even client-favourable MSAs.
Negotiation tip
A symmetrical cap, with separately negotiated higher or uncapped heads for data breach, confidentiality and IP indemnity, is a common alternative worth discussing.
Original clause text
“The Client may amend, vary or supplement the terms of this Agreement at any time by giving written notice to the Service Provider, and the Service Provider's continued performance of the Services following such notice shall constitute its acceptance of such amendment.”
What this means
The Client can change the contract terms at any time by notice, and simply continuing to work is treated as agreement to the change.
Why it matters
Unilateral variation with deemed acceptance is the category of term that the Consumer Protection Act, 2019, s.2(46) addresses as an unfair contract term in consumer-facing dealings; that Act would not ordinarily apply to a business-to-business MSA, but courts have generally treated variation-by-silence clauses as one-sided and open to scrutiny in commercial contracts too.
Compared to typical
Aggressive vs typical: Nearly all MSAs require bilateral written amendment; a unilateral variation right is markedly outside market norms.
Negotiation tip
A bilateral written amendment requirement, or a right to decline a proposed variation and exit without penalty, is a common alternative to discuss.
Original clause text
“Where a Benchmarking Exercise determines that the Charges exceed the median of the comparator set, the Charges shall be reduced with effect from the commencement of the Benchmarking Exercise so as to be equal to the lowest quartile of the comparator set, and the Service Provider shall refund any excess already paid.”
What this means
If a benchmarking study run by the Client finds the rates are above median, rates drop retroactively to the lowest quartile and past amounts must be refunded; if rates are below median, nothing changes in the Service Provider's favour.
Why it matters
The mechanism, comparator set and benchmarker are all controlled by one party and can only move price in one direction, with retrospective effect. This does not map to a specific provision in the permitted list, but it is flagged as a one-sided pricing mechanism, especially alongside the fixed rate card below.
Compared to typical
Aggressive vs typical: Standard benchmarking clauses in outsourcing deals are prospective and bilateral; downward-only retrospective adjustment controlled by the buyer goes beyond that.
Negotiation tip
A jointly appointed benchmarker, agreed methodology, prospective effect only, and symmetric adjustment in both directions, are points worth raising.
Original clause text
“Where any Key Personnel ceases to be engaged in the provision of the Services prior to the expiry of the minimum tenure for any reason, including resignation, the Service Provider shall pay to the Client liquidated damages of ₹15,00,000 (Rupees Fifteen Lakh only) per individual, which the Parties agree is a genuine pre-estimate of the loss likely to be suffered by the Client.”
What this means
If a named key employee leaves before the committed minimum tenure — including by resigning of their own accord — a fixed sum per person becomes payable, described in the contract as a genuine pre-estimate of loss.
Why it matters
Indian Contract Act, 1872, ss.73-74 provide that courts award reasonable compensation for loss actually proved and treat a stipulated sum as a ceiling rather than an automatic entitlement, reading down disproportionate penalty and forfeiture amounts regardless of the label the parties use. A flat per-head figure triggered even by an employee's own resignation is the kind of stipulation those sections address.
Compared to typical
Aggressive vs typical: Market practice is a backfill/replacement obligation; fixed per-head damages for attrition including voluntary resignation is more aggressive.
Negotiation tip
A mechanism tied to demonstrable transition or backfill costs actually incurred, rather than a flat sum applying irrespective of cause, is worth discussing.
Original clause text
“The Client shall be entitled to retain twenty per cent (20%) of the Charges payable in respect of each Statement of Work as a retention amount, which shall be released to the Service Provider upon final acceptance of all Deliverables under such Statement of Work and expiry of the applicable warranty period. ... The retention amount shall not carry interest.”
What this means
A fifth of every invoice is held back until all deliverables under that Statement of Work are accepted and the 12-month warranty period has run out, and no interest is paid on the held-back money.
Why it matters
Read with the 90-day term, this defers a substantial portion of the Charges well beyond the 45-day expectation the MSMED Act, 2006, ss.15-16 sets for registered micro and small suppliers. Whether retention counts as an amount 'due' in a given fact pattern is exactly the kind of question that turns on facts and drafting.
Compared to typical
Aggressive vs typical: 20% retention tied to a full 12-month warranty period, without interest, is higher and longer than the 5-10% released at acceptance seen in standard MSAs.
Negotiation tip
A lower retention percentage, release at acceptance rather than at warranty expiry, or defined release milestones, are alternatives worth discussing.
Original clause text
“The Service Provider shall notify the Client in writing of any claim, dispute or difference in relation to any invoice, payment, deduction, set-off or Service Credit within thirty (30) days of the date on which the circumstances giving rise to such claim first arose, failing which such claim shall be deemed to have been irrevocably waived and abandoned.”
What this means
If the Service Provider does not raise a billing or service-credit dispute within 30 days, the right to raise it is treated as abandoned.
Why it matters
Indian Contract Act, 1872, s.28 addresses terms that bar enforcement of rights through ordinary legal proceedings or shorten the period for doing so. A short forfeiture window applying to one party only, stacked on the six-month bar above, is the type of provision that section addresses.
Compared to typical
Aggressive vs typical: A one-way 30-day forfeiture window is considerably more restrictive than typical mutual dispute-notice clauses.
Negotiation tip
A longer and mutual dispute-notice period, without automatic forfeiture, is worth discussing.
Original clause text
“The costs of the arbitration, including the fees and expenses of the arbitrator, shall be borne by the Service Provider irrespective of the outcome of the arbitration, save where the arbitrator otherwise directs.”
What this means
The Service Provider pays all arbitration costs whether it wins or loses, unless the arbitrator directs otherwise.
Why it matters
This allocation is unrelated to outcome and, alongside the Client-appointed arbitrator, affects the practical cost of using the dispute mechanism. It is not tied to a specific provision in the permitted list, but it is flagged as a one-sided term worth a closer look.
Compared to typical
Somewhat unusual: Fixed cost-shifting irrespective of outcome is unusual compared with costs following the award.
Negotiation tip
Costs following the award, or shared pending the arbitrator's direction, is the more usual structure and is worth raising.
Original clause text
“During the Term and for a period of thirty-six (36) months thereafter, the Service Provider shall not directly or indirectly solicit, approach, employ or engage any person who is or was an employee, consultant or contractor of the Client or any of its Affiliates.”
What this means
For three years after the engagement ends, the Service Provider cannot hire or engage anyone who works or previously worked for the Client or its affiliates.
Why it matters
Non-solicitation terms are generally treated differently from non-competes, but a restriction extending to any past or present person across the Client and all its Affiliates limits how the Service Provider staffs its own business, which is the concern Indian Contract Act, 1872, s.27 addresses to the extent it restrains trade.
Compared to typical
Aggressive vs typical: 36 months is longer than the 12-24 months typically seen in Indian services agreements.
Negotiation tip
A shorter period, limited to personnel who actually worked on this engagement, is a common alternative worth discussing.
Original clause text
“The Service Provider acknowledges that the restrictions in this Clause 25 are reasonable and necessary for the protection of the Client's legitimate business interests, and irrevocably waives any right to challenge the validity or enforceability of the same in any forum.”
What this means
The Service Provider agrees in advance never to question the non-compete, non-solicit or exclusivity clauses before any court or tribunal.
Why it matters
Indian Contract Act, 1872, s.28 addresses terms that restrain a party from enforcing rights through ordinary legal proceedings. A term purporting to foreclose in advance any challenge to the validity of contractual restrictions in any forum is the category that section addresses.
Compared to typical
Aggressive vs typical: Advance waivers of the right to challenge validity go well beyond standard severability or reasonableness acknowledgements.
Negotiation tip
Deleting the advance waiver, and relying on ordinary severability language, is worth discussing.
Original clause text
“As a condition of this Agreement, the Service Provider shall procure all of its cloud hosting, infrastructure and managed hosting requirements in connection with the Services exclusively from such vendor as the Client may nominate from time to time, on such commercial terms as such vendor may offer.”
What this means
The Service Provider must buy all its hosting from whichever vendor the Client names, on whatever terms that vendor offers, with no ability to shop around or negotiate.
Why it matters
Competition Act, 2002, s.3 deals with exclusive supply obligations and tie-in arrangements, which courts and the regulator have generally held can be void where they cause an appreciable adverse effect on competition. A mandated exclusive third-party vendor imposed as a condition of the agreement, on undefined terms, is the category of arrangement that provision addresses; whether there is any appreciable adverse effect depends on market facts not visible here.
Compared to typical
Aggressive vs typical: Mandating a client-nominated exclusive vendor on undefined third-party terms is unusual and removes the vendor's cost control.
Negotiation tip
Allowing the Service Provider to select or negotiate hosting, subject to Client-approved security and performance standards, is worth raising.
Original clause text
“The Service Provider shall procure irrevocable waivers of all moral rights and rights of a similar nature in respect of the Deliverables from each of its Personnel, in favour of the Client and its successors, assigns and licensees, in every jurisdiction worldwide and for the full term of such rights.”
What this means
The Service Provider must obtain permanent worldwide waivers of moral rights (such as attribution and objection to distortion) from every member of its staff who works on deliverables.
Why it matters
Copyright Act, 1957, s.57 provides that moral rights are not assignable. Whether a waiver of such rights is effective is a distinct and unsettled question, and this clause creates an obligation to procure something whose effect under Indian law is uncertain.
Negotiation tip
Clarifying the scope of any moral-rights undertaking so it is consistent with Indian copyright law is worth discussing.
Original clause text
“The Service Provider shall not use, reproduce, adapt or make available to any third party any Deliverable or any part thereof, and shall not reference the Client, the Services or any Deliverable in any proposal, case study, portfolio, marketing material, credentials document or client reference, at any time. ... The Client may refer to the Service Provider and to this Agreement in its investor communications, regulatory filings, and internal and external communications without restriction.”
What this means
The Service Provider can never mention this Client or the project in its own credentials or marketing, while the Client may refer to the Service Provider freely.
Why it matters
This is a one-sided and time-unlimited restriction rather than a statutory issue. It is flagged as an asymmetry within otherwise mutual-sounding confidentiality drafting, particularly since credentials matter commercially to a services vendor.
Compared to typical
Somewhat unusual: Mutual publicity restrictions are more typical than an indefinite one-way bar.
Negotiation tip
A time-limited restriction, or permission for generic non-confidential references with consent, is a common alternative worth discussing.
The negotiation email, written for you
Knowing what is wrong is only half of it. Every report comes with a ready-to-send email that raises the findings in order of importance, in a tone that keeps the deal alive. Copy it, fill in the two names, send it.
Generated email
Subject: A few points to work through before we sign — [Their Name] Hi [Their Name], Thank you for sending over the agreement, and for the time your team has put into it. I'm genuinely excited about this work and would like to get it signed soon. Before I do, there are a handful of points I'd like to talk through — most of them are about payment timing and the balance of risk between us. I've listed them roughly in order of importance. PAYMENT TERMS 1. Payment timing (currently 90 days). Could we move the payment period to 45 days from invoice or acceptance? As a registered MSME, that shorter timeline is what I'm set up to operate on, and I'd rather the agreement simply reflect it than include the clause asking me to waive that status. Could we remove the waiver language and add a short line confirming the 45-day timeline applies? 2. Payment tied to your customer paying you. Right now, my invoices aren't due until you've been paid by your end client. I don't have visibility into that relationship, so it's hard for me to plan around. Could we remove that condition — or, if it needs to stay in some form, cap it so it can never push payment past the 45-day mark? 3. Waiver of interest on late payments. The agreement asks me to give up any claim to interest or compensation if payment runs late. I'd feel more comfortable if that clause came out. My hope is it never becomes relevant, but I'd rather not sign it away up front. 4. 20% retention. Holding back a fifth of each SOW until the end of the warranty period is a lot of working capital for a business my size. Could we discuss a lower percentage, an earlier release trigger (for example, at final acceptance rather than the full warranty period), and interest on anything held for an extended time? BALANCE OF RISK 5. Liability caps. As drafted, your exposure is capped at three months' fees while mine is unlimited. Could we make the cap mutual — perhaps a multiple of the annual fees — with the usual carve-outs for confidentiality breaches and IP infringement? I'm happy to be accountable for my work; I'd just like the ceiling to apply to both of us. 6. Indemnities. The indemnity obligations sit outside every limit in the agreement, with no financial ceiling and no end date, including for claims arising from your own negligence. Could we cap the indemnities (to a multiple of fees, or to my insurance coverage), add a survival period, and carve out situations caused by the indemnified party's own negligence? 7. Six-month deadline on my claims. The agreement requires me to bring any claim within six months or lose it entirely. Could we take that out, or turn it into a notification step — I let you know promptly when an issue arises — rather than a hard bar? RESTRICTIVE COVENANTS AND DISPUTES 8. Agreeing not to challenge the covenants. There's a clause where I agree in advance never to question the non-compete, non-solicit and exclusivity terms anywhere. Could we drop that language and let those clauses stand or fall on their own wording? 9. Two-year, all-India non-compete. This one would effectively stop me working in my field across the country for two years after we finish. Could we replace it with strong confidentiality and non-solicitation protections instead? I'm entirely willing to commit to protecting your information and not approaching your clients or staff — I just need to be able to keep trading. 10. Choice of arbitrator. The agreement gives you sole say over who decides any dispute. Could we either appoint jointly or have a neutral arbitral institution appoint, and also name the seat of arbitration in the clause? None of these are dealbreakers in spirit — I'm confident we can find wording that works for both sides. If it's easier, I'm glad to jump on a call this week and go through them together, or to send suggested language for any of the points above if that would speed things up. Thanks again for working with me on this. I'm looking forward to getting started. Best regards, [Your Name]
What to check before signing
- 1Discuss with a qualified advocate how the MSMED Act payment provisions interact with the 90-day term, the pay-when-paid trigger, the 20% retention, the interest waiver and the express MSME override clause, and confirm the Service Provider's Udyam registration status and enterprise category, since these turn on facts not visible in the document.
- 2Ask an advocate to review the six-month claim cut-off and the 30-day invoice forfeiture window against the Limitation Act, 1963 and Indian Contract Act, 1872, s.28.
- 3Discuss the arbitration mechanism — a sole arbitrator appointed by one party, costs on the Service Provider regardless of outcome, and a Mumbai seat for a Karnataka-based provider — against the independence requirements in the Arbitration and Conciliation Act, 1996, s.12 and Schedules V and VII.
- 4Have an advocate consider the 24-month all-India non-compete, the 36-month non-solicit and the advance waiver of the right to challenge them in light of Indian Contract Act, 1872, ss.27 and 28.
- 5Confirm with an IP adviser what the retrospective and out-of-scope IP assignment and the outright background-IP assignment would cover, and whether the term and territory requirements in Copyright Act, 1957, s.19(3) and (5) and the position on moral rights under s.57 are addressed.
- 6Discuss with a data protection adviser how the roles of data fiduciary and processor are allocated, and how the post-termination retention for AI/ML training, the unrestricted worldwide transfers, the no-notice sub-processor right, the absence of a defined breach notification timeline and the lack of a data export or deletion window sit against the DPDP Act, 2023 and DPDP Rules, 2025, including the phased compliance dates.
- 7Review the combined effect of the unlimited Service Provider liability, the three-month Client cap, the uncapped perpetual indemnity covering the Client's own negligence, and the fixed per-head liquidated damages for Key Personnel attrition, with reference to Indian Contract Act, 1872, ss.73-74.
- 8Check the GST position with a tax adviser: whether Charges are inclusive or exclusive, how the tax-inclusive Charges clause reconciles with the separate GST discharge obligation, and how place of supply is determined under the CGST/IGST Acts.
- 9Confirm the current TDS provision under the Income-tax Act, 2025 with a tax adviser rather than relying on the reference to section 194J of the 1961 Act.
- 10Verify the stamping requirement and the current applicable rate for the state of execution with an advocate or the relevant state authority, since an unstamped or insufficiently stamped instrument faces admissibility problems under the Indian Stamp Act, 1899, s.35; rates are state-specific and should not be assumed. Note the possible Maharashtra execution against a Karnataka-based provider.
What this contract gets right
- The Service Provider's Udyam (MSME) registration is disclosed on the face of the Agreement, which is a useful factual anchor when assessing the MSMED Act payment provisions.
- The limitation of liability clause expressly carves out fraud and liabilities that cannot be excluded at law.
- The warranty clause provides a concrete remedy (repair, replace or refund) rather than leaving non-conformance unaddressed.
- The confidentiality clause includes conventional carve-outs for public domain information and legally compelled disclosure with notice.
- Governing law is India and there is a defined dispute resolution and jurisdiction clause, so there is no foreign-law ambiguity.
- Both seat and venue of arbitration are named as Mumbai, which avoids the seat-versus-venue ambiguity commonly seen in Indian contracts, though the Service Provider is Karnataka-based and travel/cost implications are worth noting.
- Force majeure includes a defined outer limit after which termination is available, rather than remaining open-ended.
- The Service Level framework (Schedule 3) sets objectively measurable targets across multiple dimensions.
Standard protections that are absent
- A clear GST clause reconciling the tax-inclusive Charges wording with the Service Provider's separate obligation to discharge GST, and addressing place of supply under the CGST/IGST Acts.
- A stamping and execution clause confirming the instrument will be stamped under the applicable State Stamp Act, which matters for admissibility under the Indian Stamp Act, 1899, s.35.
- A defined data breach notification timeline and procedure, beyond 'as soon as reasonably practicable'.
- A data export or return window for Client Data before deletion on termination, together with a certified deletion obligation.
- An approved sub-processor list or advance notification and objection mechanism, and defined cross-border transfer safeguards.
- A bilateral written amendment clause as the counterpart to the unilateral variation right.
- An escalation path or independent verification route for disputed service level measurements, beyond service credits and termination.
- A change-control and pricing mechanism for material new security or scope obligations.
You also get two downloads
- A PDF risk report — the whole analysis above, formatted to forward to a colleague or an advocate.
- A redline DOCX — suggested replacement wording for each flagged clause, in a Word file you can edit and send back to the other side.
Now do this with your own contract.
Employment, freelance, NDA, SaaS, founder, builder-buyer, property and rent agreements, checked against Indian law. One review, ₹1,178.82.
This is a real report on a real agreement, reproduced with the parties and every identifying detail removed. ClauseAudit provides information and analysis, not legal advice, and does not create an advocate–client relationship. Findings use calibrated language because enforceability depends on facts and forum. Consult a qualified advocate before acting on any finding.