Contracts & Legal Confidence Check of a Farm Manager. Parameters For Evaluation 11/14

Farm Management Companies. Strong MoUs, clear exits, and legal clarity save partnerships from messy disputes.

Step 1 of 4

Contractual & Legal Readiness

Q1: Ability to Draft Comprehensive MoUs with Clauses; When you sign agreements, are they detailed roadmaps or just 2-page formalities?👉 Example 1: House rental—do you write “rent ₹10k” only, or full terms (deposit, repairs, lock-in, notice)?

👉 Example 2: Farm MoU—do you include clauses for responsibilities, profit share, timelines, and exit?

Only verbal agreements, no written MoUs. Like renting house by handshake.

Written MoUs, but very basic (2–3 clauses only). Like house rent agreement without mention of notice period.

Comprehensive MoUs: responsibilities, payments, timelines, profit-sharing included. Like registered rental agreement covering all standard terms.

Legally vetted MoUs with all critical clauses + arbitration mechanisms. Like builder-buyer agreement with full RERA compliance.

Contractual & Legal Readiness

Q2: Margin Money Deposits; Do you ask for investor margin money upfront, and how is it secured?👉 Example 1: Buying a car on loan—buyer pays down payment first.

👉 Example 2: Contract farming—investor deposits margin to confirm seriousness.

No margin money system, everything ad-hoc. Like buying car fully on EMI without down payment—bank won’t agree.

Collect margin informally, not documented. Like giving token cash for flat booking but no receipt.

Collect structured margin (10–20%), documented in MoU. Like proper car down payment invoice.

Margin kept in escrow/joint account, used only as per milestones. Like builder using RERA escrow account for flat booking.

Contractual & Legal Readiness

Q3: Matching Investments; If manager and investor are both contributing, how is “skin in the game” balanced?👉 Example 1: Joint business—one brings land, other brings money.

👉 Example 2: Partnership—both contribute proportionately.

No matching; only investor funds at stake. Like partnership where one works, other pays, but no balance.

Matching done occasionally, informally. Like splitting dinner bill sometimes, but not always.

Formal matching investments (e.g., 70:30 or 50:50), documented in MoU. Like joint venture with clear capital ratios.

Matching + safeguards (joint account, milestone-linked release, audit). Like corporate JV with equity + board oversight.

Contractual & Legal Readiness

Q4: Premature Withdrawal (by Company or Investor); If either side wants to walk away early, what’s the rulebook?👉 Example 1: FD—break before maturity, penalty applies.

👉 Example 2: Job contract—notice period and exit terms defined.

No rules; withdrawal causes sudden collapse. Like tenant leaving flat overnight without notice.

Some verbal understanding of penalties, not written. Like tenant promising “2 month notice” but no contract.

Written clause: penalties, notice period defined. Like registered rent agreement with clear exit rules.

Structured exit: compensation formula, alternate arrangement for continuity. Like FD rules + option to transfer FD to another investor.

Contractual & Legal Readiness

Q5: Residual/Salvage Value Distribution after Contract Expiry; After contract ends (say 7 years), what happens to remaining assets—polyhouse frames, irrigation kits, plantations?👉 Example 1: Leasing a car—after 5 years, either return, buy, or scrap value deducted.

👉 Example 2: Farm polyhouse—steel frames, drip lines still have value.

No clarity; fight starts when contract ends. Like arguing whether tenant keeps furniture at end of lease.

Some verbal idea of salvage split, not documented. Like landlord saying “half furniture value yours” without receipt.

Written clause for salvage distribution (e.g., 60:40 split). Like lease contract mentioning scrap value clearly.

Detailed formula + independent valuation at expiry. Like car lease contracts where buyback value is pre-fixed or independently assessed.

Review

Contractual & Legal Readiness

Question :
Q1: Ability to Draft Comprehensive MoUs with Clauses; When you sign agreements, are they detailed roadmaps or just 2-page formalities?👉 Example 1: House rental—do you write “rent ₹10k” only, or full terms (deposit, repairs, lock-in, notice)?
👉 Example 2: Farm MoU—do you include clauses for responsibilities, profit share, timelines, and exit?

Only verbal agreements, no written MoUs. Like renting house by handshake.

Written MoUs, but very basic (2–3 clauses only). Like house rent agreement without mention of notice period.

Comprehensive MoUs: responsibilities, payments, timelines, profit-sharing included. Like registered rental agreement covering all standard terms.

Legally vetted MoUs with all critical clauses + arbitration mechanisms. Like builder-buyer agreement with full RERA compliance.

Your Answer:

Contractual & Legal Readiness

Question :
Q2: Margin Money Deposits; Do you ask for investor margin money upfront, and how is it secured?👉 Example 1: Buying a car on loan—buyer pays down payment first.
👉 Example 2: Contract farming—investor deposits margin to confirm seriousness.

No margin money system, everything ad-hoc. Like buying car fully on EMI without down payment—bank won’t agree.

Collect margin informally, not documented. Like giving token cash for flat booking but no receipt.

Collect structured margin (10–20%), documented in MoU. Like proper car down payment invoice.

Margin kept in escrow/joint account, used only as per milestones. Like builder using RERA escrow account for flat booking.

Your Answer:

Contractual & Legal Readiness

Question :
Q3: Matching Investments; If manager and investor are both contributing, how is “skin in the game” balanced?👉 Example 1: Joint business—one brings land, other brings money.
👉 Example 2: Partnership—both contribute proportionately.

No matching; only investor funds at stake. Like partnership where one works, other pays, but no balance.

Matching done occasionally, informally. Like splitting dinner bill sometimes, but not always.

Formal matching investments (e.g., 70:30 or 50:50), documented in MoU. Like joint venture with clear capital ratios.

Matching + safeguards (joint account, milestone-linked release, audit). Like corporate JV with equity + board oversight.

Your Answer:

Contractual & Legal Readiness

Question :
Q4: Premature Withdrawal (by Company or Investor); If either side wants to walk away early, what’s the rulebook?👉 Example 1: FD—break before maturity, penalty applies.
👉 Example 2: Job contract—notice period and exit terms defined.

No rules; withdrawal causes sudden collapse. Like tenant leaving flat overnight without notice.

Some verbal understanding of penalties, not written. Like tenant promising “2 month notice” but no contract.

Written clause: penalties, notice period defined. Like registered rent agreement with clear exit rules.

Structured exit: compensation formula, alternate arrangement for continuity. Like FD rules + option to transfer FD to another investor.

Your Answer:

Contractual & Legal Readiness

Question :
Q5: Residual/Salvage Value Distribution after Contract Expiry; After contract ends (say 7 years), what happens to remaining assets—polyhouse frames, irrigation kits, plantations?👉 Example 1: Leasing a car—after 5 years, either return, buy, or scrap value deducted.
👉 Example 2: Farm polyhouse—steel frames, drip lines still have value.

No clarity; fight starts when contract ends. Like arguing whether tenant keeps furniture at end of lease.

Some verbal idea of salvage split, not documented. Like landlord saying “half furniture value yours” without receipt.

Written clause for salvage distribution (e.g., 60:40 split). Like lease contract mentioning scrap value clearly.

Detailed formula + independent valuation at expiry. Like car lease contracts where buyback value is pre-fixed or independently assessed.

Your Answer:

A lion’s roar settles disputes because he is honest 🦁. Share this to find out who’s legally fearless!