Contract Drafting Essentials for Law Students

Good contract drafting in India starts with the Indian Contract Act, 1872: every clause you write must produce an agreement that is enforceable by law under Section 2(h), made by competent parties with free consent, lawful consideration and a lawful object under Section 10. Beyond that, a drafter has to watch the clauses the Act strikes down (restraint of trade, ouster of courts, uncertainty), price breach sensibly under Sections 73 and 74, and get the paperwork right, including stamp duty and electronic execution.

This piece is for B.A. LL.B. and LL.B. students taking contracts or drafting, pleading and conveyancing papers, and for anyone in Kanyakumari District who is about to sign a lease, a loan agreement or a work contract. A clause that looks harmless on paper can decide who wins in court years later, so it pays to know why each one is there.

Which law governs a contract you draft?

The base statute is the Indian Contract Act, 1872 (Act 9 of 1872), in force since 1 September 1872. It is still the governing law in 2026. A few provisions every drafter should know by number:

• Section 2(d), (e) and (h): consideration, agreement and contract. An agreement becomes a contract only when the law will enforce it.
• Section 10: free consent, competent parties, lawful consideration and object, and not expressly declared void.
• Section 11: a party must be of the age of majority, of sound mind and not otherwise disqualified.
• Section 23: an agreement with an unlawful object or consideration (forbidden by law, fraudulent, immoral or opposed to public policy) is void.
• Sections 27, 28 and 29: restraint of trade, restraint of legal proceedings and uncertainty.
• Sections 73 and 74: compensation for breach and stipulated sums.

Two other statutes matter in practice. Section 10A of the Information Technology Act, 2000 says a contract is not unenforceable merely because the proposal, acceptance or revocation was made in electronic form. And stamp duty, which in Tamil Nadu depends on the type of instrument, affects whether your document can be used as evidence.

How do you build a contract clause by clause?

Think of a simple example. A student in Nagercoil is helping her uncle draft a rental agreement for a shop. A sound structure looks like this:

1. Title and date: name the document by what it does, such as "Lease Agreement", and state the date and place of execution.
2. Parties: full names, ages, addresses and capacity (individual, partnership firm, company through an authorised signatory). Check age and authority here, because Section 11 problems surface later.
3. Recitals: a short background explaining why the parties are contracting. Recitals help any later reader, a judge included, see what the deal was meant to achieve.
4. Definitions: define terms once and use them the same way throughout.
5. Operative clauses: the promises themselves: rent, period, use, maintenance, deliverables, payment dates.
6. Breach and remedies: notice periods, cure periods, termination, and any agreed sum for breach.
7. Dispute resolution: jurisdiction clause or arbitration clause.
8. Boilerplate: notices, entire agreement, amendment in writing, severability.
9. Execution: signatures, witnesses and the stamp.

Which clauses will a court refuse to enforce?

Students lose marks, and clients lose cases, on the same few traps.

• Uncertain terms: Section 29 makes an agreement void if its meaning is not certain or capable of being made certain. "A reasonable rent to be decided later" invites trouble. Give a figure or a formula.
• Non-compete after employment: Section 27 voids agreements that restrain anyone from a lawful profession, trade or business. The only statutory exception covers a seller of goodwill who agrees, within reasonable local limits, not to carry on a similar business.
• Clauses that shut the courts: Section 28 voids terms that absolutely restrict a party from enforcing contract rights or that extinguish rights after a specified period. Arbitration agreements are saved by its exceptions, and so are bank or financial institution guarantees that expire after a period of not less than one year.
• Agreements with a minor: in Mohori Bibee v. Dharmodas Ghose (Privy Council, 1903) a minor's agreement was held void. The Madras High Court applied it in J. Sukumar v. K.S.P. Pandian (S.A. No. 862 of 2017, decided 7 December 2023), holding a sale agreement void as to the share of a co-owner who was a minor when he signed.

How should you draft a clause on damages?

Section 73 allows compensation for loss that naturally arises from the breach or that the parties knew was likely when they contracted. Remote and indirect loss is excluded. Section 74 deals with a sum named in the contract for breach. The aggrieved party gets reasonable compensation not exceeding that sum.

The leading modern case is Kailash Nath Associates v. Delhi Development Authority, decided by the Supreme Court on 9 January 2015 in Civil Appeal No. 193 of 2015 (Justices R.F. Nariman and Ranjan Gogoi). The Court held that the named sum is awarded in full only where it is a genuine pre-estimate of damages, that Section 74 applies only where loss or damage has actually been caused, and that where actual loss can be proved, it must be proved. Liquidated damages without proof are allowed only where loss is difficult or impossible to prove. The drafting lesson is simple: write down in the clause how you arrived at the figure, so it reads as a pre-estimate and not a threat.

What about force majeure and frustration?

Section 56 says a contract becomes void when performance becomes impossible or unlawful because of an event the promisor could not prevent. In Satyabrata Ghose v. Mugneeram Bangur and Co. (Supreme Court, decided 16 November 1953), the Court read "impossible" in a practical, not literal, sense, covering performance that becomes impracticable and useless for the object the parties had in mind. On the facts, though, the Court found no frustration, partly because the parties could foresee wartime requisitions. For a drafter, that is the reason to write an express force majeure clause: list the events, the notice to be given, and what happens to payments while the event lasts.

Do stamping and e-signatures affect validity?

Stamping and validity are separate questions. Whether a contract exists is decided under the Contract Act; stamp law decides whether the document can be relied on as evidence and what duty and penalty must be paid first. So a tenant in Madurai with an unstamped lease is not left without an agreement, but may face a fight over admissibility and a bill for duty before the lease can be used in court. Check the current Tamil Nadu stamp duty for your instrument with the Registration Department before execution, because rates are revised. For contracts concluded by email or online, cite Section 10A of the IT Act.

How do you write about this in an exam?

• Open with the rule and the section number, then the leading case with its year and court.
• Apply it to the facts in short steps: is there an agreement, is it enforceable, is any clause void, what remedy follows.
• In a drafting paper, show structure: headings, numbered clauses, defined terms, and a proper execution block.
• Close with the practical advice you would give the client in one or two lines.

Students who want hands-on practice can volunteer with the college legal aid clinic, where reviewing simple agreements for local residents is common work.

Sources

• India Code: The Indian Contract Act, 1872: official record of the Act, its enactment and commencement dates.
• Indian Contract Act, 1872 (Indian Kanoon): text of Sections 2, 10, 11, 23, 27, 28, 29, 56, 73 and 74.
• Section 10A, Information Technology Act, 2000: validity of contracts formed through electronic means.
• Kailash Nath Associates v. Delhi Development Authority (2015): Supreme Court on Section 74.
• Satyabrata Ghose v. Mugneeram Bangur and Co. (1953): Supreme Court on frustration under Section 56.
• J. Sukumar v. K.S.P. Pandian (Madras High Court, 2023): minors and sale agreements.