By Advocate Puspita Pramanik | Corporate & Commercial Law
The assumption that a fair contract must impose identical obligations upon both parties is commercially simplistic. In sophisticated transactions, contractual balance depends less upon numerical symmetry than upon the deliberate distribution of responsibility, exposure and remedies. A provision may be reciprocal in wording yet inequitable in operation where the parties possess fundamentally different degrees of control over performance.
Risk follows function, not formal equality
The starting point is to identify who can reasonably prevent, influence or mitigate the event giving rise to loss. A contractor controlling execution may appropriately bear risks attributable to defective workmanship or its own delay; an employer retaining exclusive authority over access or approvals should not ordinarily transfer the resulting consequences without an express and commercially considered allocation. Similar distinctions arise in technology agreements, where design, infrastructure, access management and cybersecurity may be controlled by different participants. Control is important, but not conclusive: expertise, insurability, mandatory statutory duties and the price paid for assuming exposure also matter.
Indian law and the limits of judicial intervention
The Indian Contract Act, 1872 does not require parity of contractual obligations. Section 10 recognises agreements satisfying the statutory requirements, subject to legal restrictions. Sections 73 and 74 govern compensation for breach; they do not make every contractual allocation of damages automatically recoverable. In Nabha Power Ltd. v. Punjab State Power Corporation Ltd., (2018) 11 SCC 508, the Supreme Court discussed the limited role of implied terms and business efficacy in construing commercial contracts. The judgment does not establish a free-standing rule that courts may redistribute agreed commercial risks merely because a bargain appears uneven. Precise drafting therefore remains more dependable than an expectation of retrospective judicial correction.
Translating allocation into enforceable drafting
A considered risk framework should identify the triggering event, responsible party, procedural obligations, remedies and financial boundaries. Contracts should address employer-caused and concurrent delay; changes in scope or law; third-party dependencies; duty to mitigate; indemnity triggers; insurance; and the interaction between liability caps and specified exceptions. Where a party accepts an exposure outside its control, the assumption should be expressly reflected in pricing, insurance, a negotiated cap or a contractual relief mechanism. Ambiguity at the interface between multiple contractors or technology providers is particularly likely to generate disputes.
Conclusion
Good commercial drafting is not an exercise in allocating every burden equally. It is the construction of an intelligible and legally sustainable arrangement under which each party understands what it must perform, what it can control, and the consequences if performance fails. The defining measure of contractual balance is the coherence of that allocation—not the arithmetic of reciprocal clauses.
