Company Secretary and Contract Management in legal is the legal language of the Company secretary. The draft makes the parties understand the terms and conditions. The knowledge about the different laws and the day to day changes help the Company secretaries to understand the application of the law. So, they are responsible for the contract drafting. The language and terms must convey the parties involved, duration, rectification, confidentiality, intellectual property, review, territorial restriction, payment details, warranties and termination details. This blog talks about the different types of contracts, rules for drafting contracts and advantages of contract management skills.
Different types of contracts:
The Company secretaries create contracts for collaboration agreements, arbitration, counter guarantees, guarantees, management agreements, franchise agreements, bank guarantee, hypothecation agreements, confidentiality agreements, service agreements, outsourcing agreements, license agreement, sale deed for the land, building, mortgage, lease deed, assignment, power of attorney, work contract, partnership, and trust, pre-incorporation contracts, and Memorandum of association, articles of association. In the draft of the contract simple and self-explanatory language is used. Therefore, a negative statement is avoided. Schedules must consist of relevant and essential information. Repetition should be avoided. Manager- contract management manufacturing firm job position look for experienced candidates with qualifications in the specialised area. The role of the Company Secretary is supportive and focused on the complex functions of the Company.
The rules of formal agreement:
• The deed is evidence of the terms of the contract. Section 91 and 92 of the Evidence Act states that disposition of property, grant, addition, subtraction and variation in the written terms with extrinsic evidence is allowed.
• The sixth and second provision of section 92 of the evidence act talks about the uncertainty. The court examines the language, facts and circumstances. The second provision of the act allows the court to see the separate oral agreement for evidence.
• The intention of the parties is explained in the contract.
• The prevailing business condition, social milieu and economic condition of the country are taken into account to understand the circumstances of the parties.
• If the contract consists of two phases such as primary and final, there is a difference in the terms. The terms of the latter phase must be followed.
• If there are two clauses in a contract, the earlier clause prevails.
• If the language used in the contract is different from the natural meaning, the court must interpret the words. The legal sense and the natural meaning is not the same in some cases.
• The hardship during the contract period is not taken as an element. It is considered if the degree of the problem is so great.
• Mercantile documents have liberal construction. The meaning differs as per the dealings of the two parties. The court will look at the technical aspect and the natural meaning of the subject matter.
• The words and paragraphs of the document should be meaningful.
• The location and other details of the business should be presented technically.
• The judicial interpretation of the words is accepted if it is identical. It is not accepted through partial language.
• The main clause and the provisions must be clear and contradictory.
• The clause in the deed is an integral part and it should not be an unauthorised one.
• The recitals examined if the operative part of the contract or the intention of the parties is not clear in the document.
• In the case of Government and big corporations’ contracts, the standard form is used.
• In some cases, the alteration ends with material evidence. And it happens with the intention of the parties involved. Then, it is void.
• The parties involved in the contract are explained in detail with a description.
• The sale and purchase process is the nature of the contract. The legal nature of the process is explained in detail.
• The export and import dealing must mention the details of the parties with licences.
• The price and tax details are dealt with by the party’s responsible for completing the process.
• The quality and quality of the goods create disputes. So, it has to be measured with standards in the domestic and international markets.
• The insurance details are allocated as per the responsible party.
• If a guarantee is essential for the sale or purchase process, it has to be included.
• The property and the risk transfer must be included with the appropriate date and time.
• After the mutual agreement of the parties, the arbitration clause is written. It must include the settlement of disputes and arbitration details.
Advantages of contract management skills:
Contract management is the management of relationships and conflicts between two parties. A good contract reduces the risk at different levels of the contract. Without proper training, the business ends with contract changes. The following points shed light on the contract lifecycle management skills.
Contract managers possess business knowledge through regulations, risks arising out of non-compliances, changes to the clauses, templates, and adaptability to the changes.
• Technical knowledge helps the contact managers to advance in administrative tasks.
• Contract managers should have a precise understanding of the terms and conditions of contracts.
• Contract managers need to have negotiation tactics.
• The innovation of the contract manager helps maintain the speed, accuracy, and workflows of the department.
• He needs to persuade and influence the parties involved.
• Contract managers need to do financial analysis to complete the sale or purchase.
• Contract managers manage the stakeholders of the Company.
• He understands the contract law.
• The contract manager handles the conflicts and understands the dispute resolution.
• He works as a middleman and improves the relationship.
• He implements the performance rules for the suppliers.
The Company secretaries have a wide range of opportunities by learning contract management. The contract management course is a part of the syllabus of higher education. The professional institutes and universities along with the accreditation standard provide contract management courses to the students. Contract managers can work as auditors, project managers, Government officials, purchase managers, human resource managers, procurement specialists, and project managers. As a part of the administration and legal obligation process, contract management overlaps with other departments. Contract management skills help the Company secretaries to excel in their profession. Certificate Course – ICSI on contract management benefit the members of ICSI.