Five Contracts Every MSME Should Have in Writing

Why written contracts matter

Many MSME disputes arise from verbal arrangements. A short, clear contract records what was agreed and is often decisive when a dispute reaches court or the MSME Facilitation Council.

1. Supply or vendor agreement

Covers quantities, quality, delivery, price, payment terms within 45 days to preserve MSMED Act rights, and remedies for delay.

2. Customer terms and conditions

Printed on quotations and invoices: payment due dates, interest on delay, warranty limits and jurisdiction.

3. Employment and confidentiality agreements

Appointment letters with notice periods and confidentiality terms protect customer lists, pricing and processes.

4. Premises lease or licence

Rent, escalation, security deposit, lock-in period, repairs and exit terms for your shop, office or factory.

5. Partnership deed or shareholders’ agreement

Capital, profit sharing, decision-making, exit and dispute resolution between owners — the contract most often missing when disputes arise.

Clauses that matter in every contract

• Payment terms and interest on delay
• Jurisdiction and governing law
• Dispute resolution — mediation or arbitration
• Termination and notice
• Limitation of liability