ARE WITNESSES TO CONTRACTS MANDATORY?

In drafting commercial contracts [TL1] or agreements, it is common practice to include a section for 2 (two) witnesses to attest the document below the signature block containing signatures of the parties to the document, which brings to light the question – is it a legal requirement to have witnesses attest all contracts or agreements?

To answer the same, it is important to analyze provisions under relevant statutes governing contracts and commercial agreements in India, and the decisions passed by the courts, in this regard.

While the Indian Contract Act, 1872 (“Contract Act”) provides the essentials of a valid contract, it does not mandate the attestation of contracts by witnesses[1]. Section 3 of the Transfer of Property Act, 1882 (“ToP Act”), defines the term ‘attested’ “in relation to an instrument, means and shall be deemed always to have meant attested by two or more witnesses each of whom has seen the executant sign or affix his mark to the instrument…”

Moreover, the Indian Evidence Act, 1872 (“Evidence Act”) provides that for proof of execution of documents which are required by law to be attested[2], at least 1 (one) attesting witness is to be called upon to prove the execution of the concerned document. However, this stipulation is restricted only to documents which are “required by law to be attested”. Clarity in this regard was afforded by the 69th Report of the Fifth Law Commission of India published in May, 1977 (“Report”), which stated that only few documents are required to be attested mandatorily by law, such as[3]:

wills, as provided under Sections 57, 58 and 63 of the Indian Succession Act 1925 (“Succession Act”);

mortgages for Rs. 100 (Rupees One Hundred only) or more, as provided under Sections 58 and 59 of ToP Act; and

gifts of immovable property, as provided under Sections 123 and 124 of the ToP Act.

Tatva Legal, Hyderabad has an experienced team of corporate lawyers who, amongst other services, advise on a wide range of issues in relation to general corporate advisory including drafting, reviewing and advising on transaction documents.

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Created on Aug 4th 2021 05:26. Viewed 251 times.

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