Use this practical Nepal contract review checklist to identify party, payment, liability, termination, confidentiality, dispute, authority and enforceability risks before signing.
छिटो जवाफ
Before signing a contract in Nepal, verify the parties and authority, lawful purpose, scope, acceptance, payment, warranties, confidentiality, intellectual property, indemnity, liability caps, termination, force majeure, compliance, governing law, dispute resolution, execution formalities and claim deadlines.
A contract review tests whether the draft accurately records the deal, allocates risk knowingly and can be performed and enforced under applicable law. It is different from proofreading: a clause can be grammatically correct but legally defective or commercially dangerous.
Use this checklist before signing a vendor, service, supply, lease, loan, employment, shareholder, technology or cross-border agreement. The risk and formalities differ by transaction, so the checklist does not replace tailored legal advice.
Confirm exact legal names, registration or identity numbers, legal form and addresses. Check whether the named entity owns the relevant asset, licence or intellectual property and whether a branch, brand or affiliate has been confused with the contracting party.
Review board resolutions, constitutional documents, delegation and powers of attorney. Section 519 of the National Civil Code identifies lack or excess of representative authority as an enforceability issue.
Check that the final draft reflects an agreed proposal and acceptance and creates definite obligations. Section 504 describes an enforceable agreement and acceptance of a proposal as the basis of a contract.
Check that every party is legally capable and that the object is lawful. Section 517 treats contracts involving illegality, prohibited purpose, incapacity, initial impossibility or incurable uncertainty as void.
Ask whether the agreement resulted from coercion, undue influence, fraud or misrepresentation. Section 518 treats affected contracts as voidable at the option of the harmed party through the court process.
Confirm exact goods, services, rights, territory, site, specifications, milestones, dependencies and exclusions. Replace aspirational wording with measurable obligations.
State who tests performance, the review period, deemed acceptance if any, rejection reasons and correction process. Payment should not depend on a subjective standard controlled entirely by one party.
Check currency, tax, invoice documents, due date, milestones, retention, expenses, bank process, late-payment consequence and disputed invoices. Recalculate every percentage and total.
Identify commencement, conditions precedent, initial term, automatic renewal, renewal notice and expiry. Ensure the dates and notice periods can work together.
State how scope, schedule, price and specifications can change and who can approve a variation. Informal requests should not silently expand obligations without time or price adjustment.
Identify which facts matter, who gives each statement, the knowledge standard, disclosure process, survival and remedy. Delete warranties unrelated to the transaction and add missing reliance facts.
Check definition, exclusions, permitted recipients, security, compelled disclosure, duration, return or destruction and remedies. Ensure compliance is operationally possible.
Identify personal or sensitive data, access, hosting, subprocessors, breach notice, retention and deletion. Contractual security promises should match actual systems and insurance.
Separate background IP from newly created work. Check ownership, licences, territory, duration, sublicensing, moral rights where relevant, third-party components and post-termination rights.
Identify triggers, covered losses, third-party and direct claims, defence control, notice, settlement, mitigation, exclusions and interaction with liability caps. Avoid vague unlimited indemnities.
Check aggregate cap, cap basis, excluded claims, indirect-loss wording, multiple contracts and whether the cap applies to indemnities and confidentiality. Compare exposure with contract value and insurance.
Confirm type, amount, duration, evidence and claims cooperation. Insurance should support the risk allocation rather than substitute for clear liability drafting.
Distinguish termination for breach, insolvency, illegality, convenience and prolonged force majeure. Check cure periods, payment, transition, return of property and survival clauses.
Test event definition, control and foreseeability standards, causation, notice, mitigation, suspension, partial performance and long-stop termination. Economic difficulty alone should not automatically excuse performance.
Identify permits, regulator approvals, labour, tax, anti-corruption, environment, consumer, foreign investment and sector rules. Allocate responsibility for obtaining and maintaining each approval.
Choose governing law deliberately. For cross-border contracts, section 709 of the Civil Code recognises the parties' choice, while mandatory Nepali rules and public policy may still apply.
Check whether the clause selects courts or arbitration consistently. For arbitration, define seat, institution or rules, tribunal, language, scope, interim relief and service. Avoid mixing incompatible court and arbitration clauses.
Verify notice addresses, delivery methods and deemed receipt. Review assignment, subcontracting, waiver, severability, entire agreement, amendment, counterparts, relationship and priority of documents.
Confirm writing, registration, notarisation, witnessing, translation, board approval, regulator consent and electronic-signature requirements. Under section 519, omission of a legally required formality can prevent court enforcement.
Record contractual notice, claim and cure deadlines. Section 520 generally provides a one-year period for a claim to set aside a voidable contract and two years from accrual of the cause of action for other contract claims, while a void contract can be challenged at any time under that provision. Obtain advice promptly because another law may apply.
Escalate blank schedules, unilateral price changes, one-sided acceptance, unlimited liability, broad indemnity, perpetual obligations, unrestricted data use, assignment without consent, immediate termination without cure and a dispute forum unrelated to the parties or assets.
Do not sign on the assumption that an unfair clause will never be enforced. Negotiate the allocation clearly and keep the approved revision history.
Prepare a issues list separating legal defects, high commercial risks, negotiation points and drafting corrections. Show the clause, consequence, proposed change and business decision owner.
After negotiation, compare the execution version against the agreed redline and confirm every schedule. Store the final signed contract, authority documents, approvals and attachments together.
This checklist was reviewed in July 2026 against the National Civil Code, Electronic Transactions Act and Arbitration Act. Contract type and sector can change the analysis, required formalities and limitation period.
सामान्य प्रश्नहरू
यो मार्गदर्शनको कानुनी समीक्षाका लागि प्रयोग गरिएका प्राथमिक सामग्री।
व्यावसायिक सहयोग
तपाईंको विषय, कागजात र अनुपालन आवश्यकता अनुसार अधिवक्ता-नेतृत्वको मार्गदर्शन प्राप्त गर्नुहोस्।
सम्बन्धित कानुनी सेवा हेर्नुहोस् →सम्पादकीय तथा कानुनी समीक्षा
समीक्षक: Wakil Nepal Legal Team
अन्तिम समीक्षा: २०२६ जुलाई २१
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