What to Check Before Signing an Employment Contract in India

Got a new job offer? Congratulations! But before you sign that employment contract, here are the key clauses to review carefully.

Non-Compete Clauses

Under Section 27 of the Indian Contract Act 1872, agreements in restraint of trade are void. This means most non-compete clauses that restrict you from joining a competitor after leaving are generally unenforceable in India. However, non-compete clauses during employment are valid.

Notice Period

Check both your notice period and the employer's. Asymmetric notice periods (e.g., 3 months from you but only 1 month from them) are a yellow flag. Standard is 1-3 months for both sides.

IP Assignment Clauses

Many contracts include broad IP assignment clauses claiming ownership over everything you create, including personal projects. Look for language like "all inventions during the term of employment" — this could cover your weekend side project.

Variable Pay and Bonuses

If a significant portion of your compensation is variable, ensure the conditions for earning it are clearly defined. Vague phrases like "at management's discretion" give the employer full control.

Termination Clauses

Under Indian employment law, the employer must provide written notice or pay in lieu of notice. Check for "termination for cause" definitions — overly broad definitions could be used against you.

Scan Your Contract

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