Legal Question in Investment Law in India

Does Indian law allow to create notarized contracts of guaranteed income on an investment?

One person I met last week offered me a business proposition. He is involved in FX trading, property buying/selling etc. He offered me monthly guaranteed returns on an investment of 1 Lakh. He sent me the below draft. can you please guide me to write a legal draft to atleast protect my capital investment and ask for the capital amount anytime with a notice period of 90 days? Thanks

Investment Management Agreement

I. Parties

The parties to this investment management agreement are A and B

II. Purpose

Client hereby contracts with A for A to manage and supervise clients assets.

III. Clients responsibility

Client shall co-operate with A In providing information requested by A to assist A in determining clients

investment goals and financial objectives and/or otherwise in carrying out the purpose of the agreement

IV. Fees

In exchange of As services, client shall pay A on a monthly basis.

V. Terms

On an investment of ____ by Party B, Party A assures ______ as monthly profit. As a demonstration of good faith, if

for any reason Party B wishes to receive a refund of fees paid during the immediately preceding , Party B shall be

entitled to such refund upon written request sent to Party A. Party A shall be entitled to 90 days to pay the refund

requested. This offer to refund does not constitute a guarantee of performance of any investment.

Executed this ____________ day of _________________, 2013

Asked on 10/23/13, 8:18 pm

2 Answers from Attorneys

Rajiv Chandhok Ph: +919810050896

The contract covers your interest, however it is advised that such contract should not be entered as the said party A is offering a return on the basis of his return which is contingent and speculative as the return is not guaranteed and hence think twice before you enter such agreement. You may drop in a detailed query at [email protected]

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Answered on 10/23/13, 9:49 pm
Rajiv Gupta +91 9811284735 KarVai Legal Solutions

Its advisable to consult a lawyer in person .

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Answered on 10/23/13, 11:37 pm

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