Can An Agreement Have Retrospective Effect


The consequence of the termination clause is that in the event of an infringement, the rent is both retroactive and prospective, i.e. payable. the tenant also had to compensate for the difference between the roof rent in the rental agreement and the lower rent paid in recent years under the conditions of the secondary letter. Another practical difficulty that may arise in such transactions is whether a business transfer contract can be assigned an “appointment” before the date of incorporation of the transferred company. With respect to an arrangement regime involving a merger or division, this principle is well regulated, as in Marshall Sons and bombay Gas Co. Pvt Limited [1997 89 Comp Cases 195 Bom], HCL Ltd [1994 80 Comp Cases 228 Delhi]. Those judgments expressly established that the creation of a company after the “date of appointment” would not be a ground for refusing or refusing a system. However, it may not be possible to include such principles in a bilateral agreement in which the judgments in the tea making case, in the City Mills case and in the Dalmia Cements case concluded that “it is not possible to proceed with a transaction with an agreed date between a living person and not between a person who is still to be born on such an agreed date”. A likely scenario, taken into account in these judgments, would be the exclusion of pre-creation contracts/agreements between the promoter of the purchasing undertaking and the selling undertaking. Essentially, contracts entered into by developers on behalf of the acquiring entity were also concluded prior to creation, with no objections from the courts or revenues.

Companies that negotiate termination clauses in contracts should avoid imposing financial penalties for retroactive infringements or risk the clause being found to be punishable following a recent ruling and therefore unenforceable. On the basis of the above-mentioned decisions, it is quite possible to say that private agreements or contracts for the sale of companies with a prospective or retroactive date are legally possible and feasible. These principles would complement transactions between the parties and give them a considerable boost to stop transactions that are stalled due to the pandemic or transactions that may take place due to tense economic conditions. These principles may also be used for private agreements that are not limited to a business transfer contract, but also to transactions such as slump sales contract, asset exchange, asset transfer agreement or other form of sale of a business or entity or part of an asset belonging to an entity. This would be an effective restructuring mechanism for companies to overcome significant obstacles and obstacles related to the pandemic. At this time, commercial establishments may prefer the option of a private arrangement route due to significant time challenges, administrative/stakeholder clearances that one may face due to traditional vanilla transactions under the Companies Act. .