Iowa Renewable Energy Private Limited (Referred as 'Iowa'), a company engaged in solar power generation, entered into a Power Equipment Supply Agreement with Green Grid Engineering Limited (Referred as 'Green Grid') for

Important Clauses in large Infrastructure Supply Agreements Large infrastructure supply contracts demand comprehensive risk-allocation and performance-oriented drafting to ensure enforceability and commercial certainty under the Indian Contract Act, 1872. A well-drafted commercial agreement must clearly include a clause to define the scope of work and technical specifications, leaving no ambiguity regarding quality standards, design parameters, and installation obligations. Equally important is a time and liquidated damages clause, which imposes pre-estimated penalties for delay, thereby ensuring adherence to project timelines. The inclusion of a performance guarantee clause, typically backed by a bank guarantee, secures due performance by the supplier. Further, indemnity and warranty/defect liability clauses are crucial to protect the buyer against losses arising from defective equipment, substandard performance, or third-party claims. The agreement should also clearly specify the defect liability clause for defining the period during which the supplier remains responsible for defects, the obligation to repair or replace defective equipment at its own cost, service-level standards for installation, maintenance and performance, and liquidated damages payable in case of delay, defective performance or failure to achieve agreed performance benchmarks. Such provisions ensure accountability and provide an effective contractual remedy without requiring proof of actual loss. Further, the Intellectual Property Rights clauses are important as it defines ownership of background IP (pre-existing technology) and foreground IP (new innovations), ensuring party to use solar panels without infringement claims and Confidentiality Clause protects commercial and technical information shared between parties. The contract must also incorporate a force majeure clause to address unforeseen contingencies, along with a termination clause enabling exit in case of material breach. Additionally, a limitation of liability clause balances risk exposure, while an insurance clause safeguards against transit and operational risks. Lastly, an effective dispute resolution clause, preferably arbitration, ensures efficient resolution. Collectively, these clauses ensure risk mitigation, performance assurance, and dispute minimisation.