Contract on Company Letter head or Non Judicial Stamp Paper


Hi Friends,

We are a placement service provider and while getting into contract with a company for thier recruitment needs, should we execute the contract on non judicial stamp paper or our company letterhead? What is the difference between the two from legal perspective?

If we use company letterhead, and if the other party breaches the contract, can we take legal action against them? Will the validity be more when we have used non judicial stamp paper to execute the contract?

 

Please let me know your views and if you can point to any relevant literature available for the same, that would be very helpful

Thanks

Raj

 

 

 

 

 
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Advocate

Execution on Letter head does not bar for institution of suit in case of breach by either parties to the contract. You can also execute it on a Rs.100 Stamp paper, there is no bar on it also.

 
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Law Officer in a CPSU

Hi Mr. Raj,

Legally , as per Sec33 of Indian Stamp Act,1899, you have to pay stamp duty on a legal instrument and we cannot and should not evade it specially to be on the safer side of law. The moment you pay stamp duty on a legal instrument, the same immediately gets legal sanctity and weightage in the eye of law and the court of law will treat it a primary evidence whenever a dispute arises between the two parties concerned. Suppose we don't pay sufficent stamp duty, we will be compelled by court to pay a hefty amount as stamp duty including 10 times penalty whenever the document is presented before any court.

 
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Advocate/ Senior Partner

Dear Mr. Raj,

Mr. Elamaran has summed it up beautifully. The issue is only when you need to legally enforce it in the nature of a contract.

Thanks,

Ramakrishnan, ADV

 
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In your case you want to execute a Placement Service contract for which legally there is no need to execute it on a Stamp paper. An agreemenet on a simple piece of paper is equally good. Execution of certain type of contracts is necessary on stamp paper (which is infact 'stamp duty' required to be paid to the government for that perticular transaction).  It is perfectly valid and enforceable contract in law.

 
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advocate

All contracs should on valid stamp duty, Otherwise they are not enforceable by law.

If you you execute contract on companies letter head that is illegal & said in not enforceable by law.

 
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Practising Lawyer

hi

for claiming any relief from the courts the person should come with clean hands and should be law abiding citizen who shall do acts and deeds in accordance with the law of land and coming to subject that dispute in business and contracts are always suspected if you need that law should be helpful to you than you should abide it as per the Indian Stamp act for any transaction the stamp duty is to be paid and i advise you that you shall enter into agreement on non-judicial stamp paper only but not on yours letter head

 
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Hi,

Is it necessary to have employment contracts, between the employer and employee, on stamp paper......... or the company letterhead will do?

 
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Hi,

In many companies, big and small, employment contracts are not on stamp paper but on company letterheads. Are these contracts unenforceable and invalid?

 
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Lawyer

They are valid. Sec. 10 of Contract Act does not say that only a contract exceutd on a stamp paper is valid. However, in the event of any dispute it is better to get it exceuted on a stamp paer. Even, when you excecute a contract on a letter head paper, if u are able to establish the validity of the contract then that is  fine to sign it on that paper.

 
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