Build Strong Legal Foundations from Day One
For startups and MSMEs, contracts are not paperwork—they are protection. In the early stages, many businesses rely on verbal agreements or free online templates, unknowingly exposing themselves to payment delays, partnership disputes, IP loss, and compliance risks.
This contract drafting checklist helps Indian startups and MSMEs avoid common legal mistakes and build agreements that support growth, credibility, and investor confidence.
Why Startups & MSMEs Need Proper Contracts
As your business grows, contracts help you:
✔ Secure payments and cash flow
✔ Protect intellectual property and ideas
✔ Define clear roles and expectations
✔ Reduce disputes and legal costs
✔ Build trust with clients, partners, and investors
Weak or missing contracts often lead to avoidable business losses.
Contract Drafting Checklist Every Startup & MSME Should Follow
1. Correct Identification of Parties
Ensure the contract clearly mentions:
✔ Legal name of the business
✔ Entity type (Proprietorship, LLP, Pvt Ltd, etc.)
✔ Registered address and GST details
Why it matters: Prevents enforceability issues in India.
2. Clear Scope of Work or Services
Define:
✔ Deliverables and timelines
✔ Responsibilities of each party
✔ Inclusions and exclusions
Why it matters: Avoids scope creep and client disputes.
3. Commercial Terms & Payment Protection
Include:
✔ Pricing structure
✔ Payment timelines and milestones
✔ Late payment interest
✔ Tax responsibilities (GST, TDS)
Why it matters: Protects cash flow—critical for MSMEs.
4. Intellectual Property Ownership
Specify:
✔ Who owns work product, designs, or software
✔ Usage rights and restrictions
✔ Transfer or licensing terms
Why it matters: Prevents loss of IP and future valuation issues.
5. Confidentiality & Data Protection
Ensure clauses cover:
✔ Business secrets and customer data
✔ Data handling and storage obligations
✔ Non-disclosure terms
Why it matters: Protects sensitive business information.
6. Liability, Indemnity & Risk Allocation
Clearly define:
✔ Liability limits
✔ Indemnity obligations
✔ Exclusions and exceptions
Why it matters: Prevents unlimited financial exposure.
7. Term, Termination & Exit Clauses
Mention:
✔ Contract duration
✔ Termination for breach or convenience
✔ Post-termination obligations
Why it matters: Allows clean exits without legal battles.
8. Compliance with Indian Laws
Confirm compliance with:
✔ Indian Contract Act, 1872
✔ GST and tax laws
✔ Labour and sector-specific regulations
Why it matters: Ensures enforceability and regulatory safety.
9. Dispute Resolution Mechanism
Specify:
✔ Arbitration or mediation
✔ Jurisdiction and governing law
✔ Escalation process
Why it matters: Saves time and legal costs during disputes.
10. Proper Execution & Record-Keeping
Ensure:
✔ Correct signatures and dates
✔ Witnesses (if required)
✔ Stamp duty and registration (where applicable)
Why it matters: Makes contracts legally valid in India.
Common Mistakes Startups & MSMEs Make
🚫 Using copied templates
🚫 Skipping IP and payment protection
🚫 Accepting one-sided contracts
🚫 Not updating contracts as the business grows
How ClaimChase Helps Startups & MSMEs Get Contracts Right
At ClaimChase, we understand the realities of growing businesses in India. We provide practical, affordable, and business-focused contract drafting.
Our Services Include:
✔ Startup-friendly contract drafting
✔ MSME contract review & risk checks
✔ Vendor, client & employment agreements
✔ Contract updates as you scale
✔ Dispute-prevention support
Start Strong with the Right Contracts
Your contracts should help your business grow—not hold it back.
📞 Get expert contract drafting support today
📲 Call +91 9373267717