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Understanding Diabetic Peripheral Neuropathy

Mar 14, 2024 | General

Diabetes is rapidly becoming a major global health crisis in the 21st century. There are currently 537 million persons between the ages of 20 and 79 who are living with diabetes, which is equal to 10% of the world’s population [1]. It is predicted that the number of individuals with diabetes will increase to 643 million by 2030, and further to 783 million by 2045 [2]. Diabetes is responsible for the majority of neuronal damage, visual impairment, and kidney failure in the non-elderly population. Approximately half of diabetic peripheral neuropathies (DPNs) may not exhibit symptoms, underscoring the importance of comprehensive screening, as neglecting foot care measures heightens the likelihood of harm.

Diabetic neuropathy, a condition characterized by high prevalence and disability, poses significant challenges in terms of management. These challenges include various complications, which not only burden individuals but also incur substantial financial costs. Diabetic foot is a significant factor in the global burden of disability and decreased quality of life. 14 -24% of diabetic foot patients require major or minor lower limb amputations [3]. There are 70 million diabetics in India out of which 50% have diabetic peripheral neuropathy and nearly 25-34% of them develop diabetic foot ulcer (DFU) and 1.2 million need special care for DFU [4]. The 5-year survival rate of diabetic foot patients with major amputations is 30%. There are 100000 registered amputations per year due to diabetes in India [5].

Additionally, individuals with a prediabetic status are more likely to develop DN at an earlier stage. The main complication associated with peripheral sensory neuropathy is the development of DFUs and subsequent minor or major amputations. Research has indicated that having underlying peripheral neuropathy raises the risk of any amputation by 1.7 times [6]. The risk increases by a factor of 12 if there is a deformity (caused by motor neuropathy) and increases significantly to 36 times if there is a previous history of ulcers.

Classifications of DPN

The primary categories of neurologic disorders in DM encompass:

  • Subclinical neuropathy is determined by abnormalities in electrodiagnostic and quantitative sensory testing
  • Diffuse clinical neuropathy with distal symmetric sensorimotor and autonomic syndromes.
    • Sensory or sensorimotor polyneuropathy
    • Selective small-fibre polyneuropathy
    • Autonomic neuropathy
  • Focal syndromes:
    • Truncal mononeuropathy
    • Mononeuritis multiplex
    • Asymmetric lower limb motor neuropathy (amyotrophy)
    • Cranial neuropathy
  • Mixed forms

Subclinical neuropathy is identified when there are no clinical indications of neuropathy, but abnormal electrodiagnostic tests show reduced nerve conduction velocity (NCV) or amplitude; quantitative sensory tests (QSTS) reveal altered perception of vibration, touch, and temperature; and autonomic function tests (AFTs) indicate dysfunction in sympathetic and parasympathetic nerves.

Risk factors for peripheral neuropathy

Flat infographics showing symptoms risk factors prevention steps and complication of diabetes vector illustration

The risk factors for the development of diabetes-related peripheral neuropathy are as follows:

The risk factors with a major impact are:

  1. Poor control of blood sugar levels
  2. Long-standing diabetes
  3. Damage to blood vessels
  4. Alcohol consumption
  5. Metformin use

The risk factors with a minor impact are:

  1. Autoimmune factors
  2. Genetic susceptibility
  3. Smoking
  4. Low levels of high-density lipoprotein (HDL)
  5. Cardiovascular disease

A study found that the duration of diabetes mellitus (DM) is a major risk factor for neuropathy. Patients with DM for more than 15 years have an odds ratio of 8.03 (95% confidence interval 5.96-10.8, p<0.001) for developing neuropathy compared to those with a duration of less than 5 years [7]. The study also found that increasing age, the presence of dyslipidemia, and the presence of other microvascular complications are significantly associated with peripheral neuropathy (Fig.1).

Pathogenesis of peripheral neuropathy

The pathophysiology of diabetic peripheral neuropathy is multifactorial and is thought to result from vascular disease occluding the vasa nervorum; endothelial and myelin synthesis dysfunction and diminishing sodium-potassium adenine triphosphatase (ATPase) activity; chronic hyperosmolarity, causing oedema of nerve trunks; and effects of increased sorbitol and fructose. 

Nonenzymatic glycation predisposes ligaments to stiffness. Neuropathy causes loss of protective sensation and loss of coordination of muscle groups in the foot and leg, both of which increase mechanical stresses during ambulation.

Motor dysfunction of peripheral nerves in diabetic neuropathy leads to muscular imbalances in the diabetic foot. Muscle wasting of the intrinsic pedal muscles leads to overpowering of the spared extrinsic muscles, which results in significant forefoot deformities such as claw toes or hammer toes.  Autonomic dysfunction of the peripheral nervous system may lead to sudomotor dysfunction. This will result in dry, cracked skin, and intrinsic minus foot, which is more prone to injury and breakdown. 

The result of loss of sensation in the foot is repetitive stress; unnoticed injuries and fractures; structural foot deformity, such as hammertoes, bunions, metatarsal deformities, or Charcot foot; further stress; and eventual tissue breakdown.

Unnoticed excessive heat or cold, pressure from a poorly fitting shoe, or damage from a blunt or sharp object inadvertently left in the shoe may cause blistering and ulceration. These factors, combined with poor arterial inflow, confer a high risk of limb loss on the patient with diabetes.

Metabolic Hypothesis

Chronic hyperglycemia cause damage to peripheral nerves through various pathways, one of which involves an increase in the entry of polyol that is regulated by aldose reductase, also known as the polyol pathway. Another theory suggests that injury to the endoneurium of peripheral nerves is caused by an excessive build-up of advanced glycation end-products (AGES). Additionally, hyperglycemia contributes to peripheral neuropathy by generating oxidative stress-induced free radicals during the glycolytic process ( Fig.2 and 3).

Immune Hypothesis

In patients with DN, the presence of antiphospholipid antibodies and autoantibodies to gangliosides indicates a potential role of these factors in the development of DN.

Microvascular Hypothesis

Nerve ischemia is caused by microvascular insufficiency resulting from inadequate blood supply to the vasa vasorum. This insufficiency is contributed by an increase in the thickness of the vessel walls, hyalinization of the basal lamina, and impaired vasoconstriction and vasodilation.

Neurotrophic Hypothesis

Patients with DN exhibit a deficiency in neurotrophic factors such as nerve growth factor (NGF), neurotrophin-3/4/5, and insulin-like growth factor (IGF)-1

Clinical evaluation

The neuropathic symptoms are divided into focal and diffuse forms, of which the latter is far more common .

Diffuse Neuropathies

One should look for specific motor and sensory symptoms in patients as it helps in understanding the underlying nerves at fault. This can be understood from the following:

Acute Painful Neuropathy

Some patients with diabetes mellitus (DM) present with acute symptoms that persist for less than six months and are accompanied by moderate-to-severe pain. The pain caused by sensory neuropathy worsens at night and is often more pronounced in the feet than in the hands. As a result of the nocturnal pain, patients frequently complain of sleep disturbances and insomnia. The nature of the pain can be described as burning, stabbing, tingling, pins and needles, paresthesia, or a prick sensation.

In this scenario, the following possibilities should be considered:

– Insulin neuritis – Rapid correction of blood glucose levels – Chronic alcohol consumption – Associated amyloidosis and multiple myeloma – Human immunodeficiency virus (HIV) infection – Heavy metal poisoning (e.g., arsenic) – Fabry’s disease

Chronic Painful Neuropathy

Chronic painful neuropathy is a separate condition that typically develops later in individuals who have been diagnosed with DM for several years. In this case, the debilitating pain persists for more than six months.

Over time, many patients may experience a lack of pain, which is not necessarily indicative of symptom improvement, but rather due to neuronal loss. Hyperalgesia, on the other hand, refers to an increased perception of pain even in response to normal stimuli. Allodynia is the sensation of pain caused by a stimulus that is not typically painful.

The sensation of burning and pricking is attributed to C and Ao fibers, while Aẞ fibers are responsible for dysesthesias, paresthesias, and allodynia.

Large-fiber neuropathies

Large-fiber neuropathies affect the sensory or motor nerves. These neuropathies display more signs than symptoms. Fiber neuropathies cause changes in vibration perception, position sense, and cold thermal perception. These myelinated, rapidly conducting fibers primarily affect the toes rather than the fingers, as they are length-dependent fibres that are more noticeable in electromyography (EMG). The alteration of these fibres leads to a sensation of walking on cotton in the feet and, in severe cases, difficulty in distinguishing shapes and turning pages in books.

The clinical presentation of large-fiber neuropathies includes:

  • Impaired vibration perception (often the first objective evidence) and position sense
  • Decreased tendon reflexes.
  • A deep-seated gnawing pain similar to a toothache in the bones of the feet, or even a crushing or cramp-like pain
  • Wasting of the small muscles in the feet, resulting in hammer toes.
  • Shortening of the Achilles tendon, leading to pes equinus.
  • Increased blood flow, causing warm foot

Proximal motor neuropathies

Proximal motor neuropathies, also known as femoral neuropathy, diabetic amyotrophy, and diabetic neuropathic cachexia, have distinct symptoms and signs. This condition primarily affects the elderly, typically occurring after the age of fifty. The onset of symptoms can be gradual or abrupt, beginning in one leg and progressing to the other. The initial symptom is often pain in the thighs, hips, or buttocks, followed by proximal myopathy. Interestingly, heel or toe standing is usually unaffected despite weakness in the proximal muscles. Patients may experience spontaneous or provoked fasciculations, and electromyography (EMG) often reveals features of lumbosacral plexopathy. While proximal motor neuropathy is commonly associated with diabetes mellitus, it is important to consider other potential causes such as chronic inflammatory demyelinating polyneuropathy (CIDP), monoclonal gammopathy of unknown significance (MGUS), circulating GMI antibodies, and antibodies to neuronal cells and inflammatory vasculitis. If demyelination is the predominant finding on EMG, further investigation into causes other than diabetes mellitus is warranted, as the treatment options may differ in cases of femoral neuropathy.

Asymmetric neuropathies

Mononeuropathy

  • Generally acute with pain.
  • Usually in older population.
  • It can involve truncal and cranial nerves (III and VI).
  • Self-limiting and resolving in 6-8 weeks.
  • Usually due to vessel occlusion.
  • Treatment: Symptomatic for pain and physiotherapy.

Entrapment neuropathy

  • Starts slowly and progresses slowly.
  • Commonly involves the median (carpal tunnel), ulnar, radial, femoral, and lateral cutaneous nerve of the thigh.
  • Treated with splints, nonsteroidal anti-inflammatory drugs (NSAIDs), and local injection.
  • In some cases, surgery to decompress.

Mononeuropathies must be distinguished from entrapment syndromes, which start slowly, progress, and persist without intervention.

Nerve conduction studies

Electromyography-nerve conduction velocity (EMG-NCV) has become a crucial technique for tracking the early development and progression of peripheral neuropathy. These measures are objective, quantitative, noninvasive, and highly sensitive. The primary purpose of EMG is to distinguish between diabetic neuropathy and neuropathy of non-diabetic origin. Studies have rep that patients with an average HbA1c level >10% over an 8-year period exhibited a significant decrease in NCV.

Newer techniques

Newer techniques for evaluating small-fibre function include the use of:

  • Corneal confocal microscopy, which allows the identification of unmyelinated axons in the cornea.
  • Sudomotor function devices.

Treatment

Small fiber neuropathy

In order to manage the condition, it is important to engage in certain practices. For example, daily inspection of the feet is necessary, and using a handheld mirror to examine the soles of the feet can be helpful. It is also crucial to wear well-fitting Microcellular rubber (MCR) shoes to ensure comfort and prevent further complications. Additionally, it is advised to avoid exposing the feet to extreme temperatures. To combat skin drying and cracking, the use of moisturizing creams is recommended. After bathing, it is essential to thoroughly dry the feet. When it comes to nail care, cutting them transversely is the recommended approach.

Large Fiber Neuropathy

 In patients with DM and large fiber neuropathy, it is important to focus on gait and strength training. This is because individuals with this condition have an increased risk of falls due to sensory ataxia, weakness, incoordination, muscle wasting, and the possibility of fractures following falls. This is particularly true for post-menopausal women. Therefore, enhancing muscle strength is crucial in order to prevent complications related to DM and small fiber neuropathy. Microcellular rubber (MCR) footwear is the most commonly used material for patients with DM and peripheral neuropathy. It is recommended to use footwear with a shore value between 8 and 15 for those with DM. MCR footwear has proven to be effective in preventing the development and recurrence of ulcers.

Pharmacological treatment

Many prescription medications are available for diabetes-related nerve pain. Pain-relieving prescription treatments may include:

Anti-seizure drugs. Some medications used to treat seizure disorders (epilepsy) are also used to ease nerve pain. The ADA recommends starting with pregabalin (Lyrica). Gabapentin (Gralise, Neurontin) also is an option. Side effects may include drowsiness, dizziness, and swelling in the hands and feet [8].

Antidepressants. Some antidepressants ease nerve pain [8]. Tricyclic antidepressants may help with mild to moderate nerve pain. Drugs in this class include amitriptyline, nortriptyline (Pamelor) and desipramine (Norpramin). Side effects can be bothersome and include dry mouth, constipation, drowsiness and difficulty concentrating. These medications may also cause dizziness when changing position, such as from lying down to standing (orthostatic hypotension). Serotonin and norepinephrine reuptake inhibitors (SNRIs) are another type of antidepressant that may help with nerve pain and have fewer side effects. The ADA recommends duloxetine (Cymbalta, Drizalma Sprinkle) as a first treatment. Another drug that may be used is venlafaxine (Effexor XR). Possible side effects include nausea, sleepiness, dizziness, decreased appetite and constipation. Sometimes, an antidepressant may be combined with an anti-seizure drug. These drugs can also be used with pain-relieving medication, such as medication available without a prescription. For example, one may find relief from acetaminophen (Tylenol, others) or ibuprofen (Advil, Motrin IB, others) or a skin patch with lidocaine (a numbing substance).

Conclusion

Diabetic peripheral neuropathy is a multifaceted complication of diabetes that involves intricate pathological processes and interactions between various cellular and molecular factors. An in-depth understanding of the underlying pathophysiology is crucial for physicians, enabling them to adopt a targeted approach in diagnosing, treating, and managing DPN effectively. By addressing the pathogenic mechanisms discussed above, healthcare professionals can work towards developing novel therapeutic interventions and significantly improve patient outcomes in DPN management.

Author: Dr. Sanjay Sharma, MS, Diabetic Foot Surgeon

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Agreements which a Start-up Needs for Legal Protection

Mar 3, 2024 | Contracts

Starting a new business venture can be an exciting and challenging journey. As a budding start-up, it is crucial to lay a strong foundation by putting in place the necessary agreements to protect your interests legally. These agreements not only provide clarity between parties involved but also minimize potential risks, conflicts, and misunderstandings. In this article, we will explore some of the essential agreements that a start-up needs and discuss the key legal points associated with each.

Starting a new start-up can be an exciting and challenging endeavor. It requires determination, creativity, and a passion for your business idea. As you embark on this journey, it is crucial to recognize the importance of legal agreements in safeguarding your venture and ensuring its long-term success.

Legal agreements serve as the foundation of any business. They are a set of rules and guidelines that outline the rights, responsibilities, and obligations of the parties involved. Whether you are partnering with co-founders, seeking funding from investors, or collaborating with suppliers and vendors, having proper legal agreements in place is essential to protect your interests and mitigate potential risks.

  1. Co-Founder Agreement

When launching a start-up with multiple founders, it is essential to establish a co-founder agreement. This agreement clarifies roles, responsibilities, ownership percentages, and outlines the process for dispute resolution. Key legal points to consider in this agreement include vesting schedules, intellectual property rights, confidentiality clauses, and non-compete clauses. It is crucial to involve legal professionals to ensure all aspects of co-founder relationships are adequately addressed. This agreement solidifies the relationship between the founding members and outlines each party’s roles, responsibilities, and ownership stakes. It addresses key issues such as equity distribution, decision-making processes, and mechanisms for resolving disputes. A well-drafted co-founder agreement can prevent conflicts and ensure everyone is aligned on the company’s vision, values, and objectives.

  1. Non-Disclosure Agreement (NDA)

An NDA is necessary to protect your start-up’s confidential information when discussing business ideas, strategies, or any trade secrets with external parties. This agreement ensures that the recipient cannot disclose or misuse the confidential information shared. Legal points to consider when drafting an NDA include specifying the scope of information covered, the duration of the agreement, and the consequences of breaching the NDA. In the early stages, start-ups often rely on confidential information, trade secrets, and intellectual property to gain a competitive advantage. An NDA is a legally binding agreement that protects sensitive information by ensuring it remains confidential. It prevents partners, employees, and contractors from sharing or using proprietary information without proper authorization. An NDA helps establish trust, fosters innovation, and safeguards your startup’s most valuable assets.

  1. Employee/Independent Contractor Agreements

When hiring employees or engaging with independent contractors, it is crucial to have written agreements in place. These agreements protect your start-up’s interests and clearly define the employment relationship. Legal points to consider in these agreements include job responsibilities, compensation, intellectual property assignment, confidentiality provisions, termination clauses, and non-compete obligations.

Employee agreements are essential for businesses that hire workers on a regular basis to perform specific tasks within the organization. These agreements establish the terms and conditions of employment, including job responsibilities, working hours, compensation, benefits, and termination procedures. By clearly outlining these details, employers can avoid misunderstandings and potential disputes that may arise down the line.

One of the primary reasons why employee agreements are crucial is that they establish the employer-employee relationship, ensuring that all parties are aware of their roles and responsibilities. This clarity reduces the likelihood of confusion and helps maintain a harmonious working environment. Furthermore, employee agreements provide employers with the legal framework to address issues related to intellectual property, confidentiality, and non-compete clauses. By including these provisions in the agreement, employers can protect their proprietary information and prevent employees from engaging in activities that may harm the company’s interests.

Additionally, employee agreements contribute to the overall compliance of the business with labour laws and regulations. These agreements typically cover important legal requirements, such as minimum wage, working hours, overtime pay, and benefits, ensuring that the company adheres to these standards. Failing to comply with labor laws can result in costly penalties and legal repercussions, which could be detrimental to the stability and reputation of the organization.

  1. Terms of Service/End User License Agreement (EULA)

If your start-up provides software, applications, or any online services, having a Terms of Service or EULA is vital. This agreement outlines the terms and conditions which users must abide by when utilizing your product or service. Legal points to consider in this agreement include disclaimers, limitations of liability, intellectual property rights, data protection, and dispute resolution provisions.

TOS and EULAs explicitly outline the terms under which users can access and use the service. They cover a wide range of aspects, including user privacy, intellectual property rights, payment terms, and limitations of liability. By clearly defining these parameters, TOS and EULAs protect both parties from misunderstandings and help prevent legal issues.

Furthermore, these legal agreements help ensure the security and privacy of users’ personal information. With cyber threats and data breaches becoming increasingly common, it is crucial for service providers to establish robust privacy policies. TOS and EULAs disclose the types of personal information collected, the purposes for which it is used, and any third parties with whom it may be shared. This transparency enables users to make informed decisions about their privacy and helps build trust between the user and the service provider.

An often-overlooked aspect of TOS and EULAs is the protection they offer to the intellectual property rights of service providers. Whether it’s software code, copyrighted content, or trademarks, these legal agreements enforce the protection of these assets. By agreeing to the terms, users acknowledge that they do not have the right to copy, distribute, or modify the service provider’s intellectual property without explicit permission. This protection incentivizes innovations and creativity while discouraging unauthorized use and infringement.

  1. Vendor/Supplier Agreements

As a start-up, you may rely on various vendors or suppliers for materials, resources, or services. Having written agreements with these parties ensures clarity and legal protection. Key legal points to consider in vendor/supplier agreements include the specifications of goods or services, payment terms, delivery schedules, warranties, indemnification clauses, and dispute resolution mechanisms.

One of the key reasons why vendor agreements are important is that they provide a solid legal foundation for your business relationships. By outlining the terms and conditions that govern the provision of goods or services, these agreements protect the interests of both parties involved. They ensure that there is clarity on issues such as payment terms, delivery schedules, quality standards, and intellectual property rights.

A well-drafted vendor agreement also helps to prevent disputes and disagreements. By clearly defining the expectations and obligations of each party, potential areas of conflict can be identified and addressed upfront. This helps to mitigate the risk of disagreements arising in the future, saving both time and resources.

  1. Investor Agreements

Start-ups must also consider the importance of shareholder agreements. As your start-up grows and attracts investment, shareholders agreements become vital in protecting the rights of shareholders and dictating the governance of the company. These agreements establish rules for share transfers, dividend distribution, and the appointment of directors. They provide clarity and transparency, which helps maintain trust and harmony among shareholders. When seeking external funding for your start-up, investor agreements are crucial. These agreements outline the terms and conditions associated with the investment, including the ownership stake, voting rights, exit strategies, and other provisions to protect both the investor and the start-up. Legal points to consider in investor agreements include anti-dilution clauses, vesting schedules, and representations and warranties made by both parties.

  1. Intellectual Property Assignment Agreement

Start-ups heavily rely on innovative ideas, designs, trademarks, and other intellectual property. An intellectual property assignment agreement ensures that any intellectual property developed by employees or contractors is transferred to the start-up. Legal points to consider in this agreement include specifically identifying the intellectual property being assigned, warranty provisions, and indemnification against any infringement claims.

By having these essential agreements in place, start-ups can protect themselves legally, mitigate risks, and ensure a smooth operation. It is crucial to consult with legal professionals experienced in start-up law to ensure all the necessary legal points are addressed adequately. Remember, investing time and effort into these agreements today will save you from potential legal headaches in the future.

In conclusion, starting a start-up is an exhilarating journey that requires careful planning and attention to legal matters. By implementing the necessary agreements mentioned above, start-ups can establish a solid legal foundation, protecting their interests, and fostering growth and success. Agreements are the backbone of a start-up’s legal framework and play a crucial role in protecting the interests of the company and its stakeholders. Co-founder agreements, employment agreements, intellectual property agreements, technology-related agreements, supplier and vendor contracts, investment agreements, and customer agreements are all essential for a start-up’s success. By having these agreements in place, start-ups can mitigate legal risks, establish clear expectations, and pave the way for growth and success in their industry.

Author: Jyoti Jain

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Blance – A “Goal Centric” recurring deposit marketplace App by Ashutosh Prakash Singh, Neeraj Gupta and Pankaj Gupta

Feb 26, 2024 | IPR & Business

Founded in January 2023, today our company ‘Blance’ is India’s one & only goal-centric recurring deposit marketplace. A unique solution that combines traditional RDs with the goal-based needs of retail investors, RDs on Blance provide 5x better maturity outcomes than a regular RD. While users save systematically they will unlock brand discounts, credit cards, loans, and insurance options on maturity.

In our journey forward, we aim to forge partnerships with NBFCs, Banks, and other deposit-taking entities. This collaborative effort will provide our investors with a comprehensive retail investment perspective. Additionally, we are committed to assisting new-to-credit users in initiating their credit journey. Through secured credit cards and loans offered by us, we empower users to build their credit scores, subsequently opening doors to further credit opportunities.

Although our app is currently in the Beta version, it is fully operational. We are gearing up for a complete launch in the coming months, marking the next milestone in our mission to revolutionize the landscape of recurring retail investments in India.

  • What is your growth and expansion Plan?

We plan to do a full launch in the coming months and also bring more NBFCs & Banks where users can save & get better maturity outcomes.

  • What is the story of your Trademark?

Choosing the name ‘Blance’ was a balancing act in itself! Derived from ‘Balance,’ it embodies the company’s mission. When it came to naming our company, two things were clear: 1st, the domain should be cost-effective, and 2nd, that it should reflect our company’s vision. ‘Blance’ stayed because it perfectly encapsulates our vision – striking a perfect balance of Savings, Credits, & Rewards in our users’ lives.

  • What are the core challenges you faced?

During the product development phase, we recognized that the fundamental challenge lies in the dynamics of demand and supply. While the demand is clearly evident, the supply side is fragmented and lacks unity. Integrating various entities such as Banks, NBFCs, and others onto a cohesive platform is pivotal but inherently challenging. Moreover, comprehending the demand side involves understanding the intricacies of the Indian/Bharat user’s psyche, which is no straightforward task. Simultaneously, delivering the right product that instills a sense of trust and safety adds another layer of complexity to the equation.

  • What is your success, Mantra?

Be consistent, be persistent, have patience, & relentless execution.

  • How do you keep yourself motivated to overcome the challenges you face?

We see the bright side of solving this problem can help millions of Indians: this keeps us motivated.

  • What would be one tip which you wish to give to budding entrepreneurs?

Build fast & test with real customers it will automatically show your right path to success.

  • Your hobbies

Listening to podcasts & music, going on cycling rides on weekends.

Know more about Blance:

  1. Legal Name: Vwelly Technologies Private Limited
  2. Location: Bengaluru
  3. Operational Cities: Bengaluru
  4. URL: https://www.blance.in/
  5. Founding members: Ashutosh Prakash Singh, Neeraj Gupta and Pankaj Gupta
  6. Core Services: Financial services; Recurring Deposits, Secured Credit
  7. The most successful Service: Recurring Deposits
  8. Core Innovations: India’s first goal centric recurring deposit (RDs) marketplace with returns up to 15% p.a.
  9. Products Available in: Google PlayStore & Apple Appstore
  10. Awards and Recognition: None
  11. Vision & Mission: To be a full-stack solution for people in India to manage their finances and achieve their dreams
  12. Contact details:

WeWork Prestige Atlanta, 80 Feet Main Road, Koramangala, 1A Block, Bangalore, KA –560034

Email id: contact@blance.in

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Contract Management

Feb 25, 2024 | Contracts

In today’s interconnected world, contracts govern business and personal interactions, making contract management vital. From simple agreements to complex corporate deals, contracts underpin transactions and relationships. With increasing contract frequency and complexity, effective management is crucial. It ensures compliance, mitigates risks and enhances operational efficiency. Proficient contract management is indispensable for navigating modern business complexities.

In this article, we delve into the realm of contract management, exploring its significance, key components, challenges, and best practices.

What is Contract Management?

Contract management is the systematic process of handling all aspects of a contract, from its creation to its execution and eventual closure. It involves various activities such as drafting contracts, negotiating terms, obtaining approvals, tracking obligations, managing changes, ensuring compliance, and evaluating performance. Essentially, it’s about effectively overseeing the entire lifecycle of contracts to maximize value, minimize risks, and maintain positive relationships with all parties involved.

Importance of Contract Management 

Contract management is crucial for ensuring clarity and compliance in business transactions. It minimizes legal risks by outlining rights and obligations clearly. Efficient contract management enhances operational efficiency, streamlining processes from initiation to closure. It fosters trust and accountability among parties, facilitating smoother business relationships. Effective contract management maximizes value and minimizes risks, enabling organizations to achieve their goals efficiently and securely.

Key Stages of Contract Management

  1. Contract Initiation: It begins by identifying the need for a contract, setting clear goals, and identifying the involved parties. This stage is crucial for outlining initial terms and conditions that will guide the contract’s development.
  1. Contract Creation and Negotiation: This stage involves drafting the contract document, reviewing it thoroughly, and engaging in negotiations to ensure alignment with all parties’ interests. Redlining and discussions help refine terms, aiming for a consensus that benefits all stakeholders.
  2. Contract Approval: After negotiations, the contract undergoes legal review to ensure compliance with laws and regulations. Stakeholder approval is then sought, and once obtained, the contract is formalized through authorized signatures, signaling readiness for execution.
  3. Contract Execution: With all approvals secured, the contract enters the execution phase, where parties fulfill agreed-upon terms, deliver goods or services, and meet contractual obligations. This stage marks the implementation of the contract’s terms and conditions.
  1. Contract Monitoring and Management: Beyond execution, ongoing monitoring is essential to ensure contract performance and compliance. This involves scrutinizing performance metrics, safeguarding compliance with terms, and promptly addressing any deviations or issues that arise.
  2. Contract Renewal or Termination: Contracts have finite durations, leading to the evaluation of renewal, modification, or termination options. This stage involves assessing performance, renegotiating terms if necessary, and deciding on the appropriate course of action for the contract’s future.

Benefits of Contract Management

  1. Efficiency: Contract management streamlines processes by leveraging software and automation, freeing up time for evaluating contract effectiveness and meeting expectations efficiently.
  2. Business Improvement: Successful contract management provides valuable insights into negotiation strategies and cost-saving measures, driving overall business improvement and competitiveness in the market.
  3. Risk Reduction: Clearly defined contractual terms mitigate legal and financial risks, empowering businesses to navigate uncertainties confidently and prudently.
  4. Vendor Tracking: Contract management facilitates better communication and understanding between companies and vendors, fostering stronger relationships and enabling informed decision-making based on vendor performance evaluations.
  5. Compliance Enforcement: Contracts serve as enforceable agreements, ensuring all parties fulfill their obligations, maintain transparency, and adhere to regulatory requirements, promoting trust and accountability in business dealings.

Challenges in Contract Management

  1. Complexity: Contracts can be intricate, involving multiple parties, legal requirements, and technical specifications, making them challenging to manage effectively.
  2. Compliance: Ensuring compliance with legal and regulatory standards across different jurisdictions adds complexity to contract management, requiring careful monitoring and documentation.
  3. Communication: Effective communication among stakeholders, including legal teams, procurement, and vendors, is crucial for successful contract management but can be hindered by siloed information and inefficient processes.
  4. Contract Renewals: Tracking contract expiration dates and negotiating renewals in a timely manner can be challenging, leading to potential disruptions in business operations or missed opportunities for cost savings.
  5. Technology Adoption: Leveraging contract management software and automation tools can enhance efficiency, but implementing and integrating these technologies into existing workflows may present technical and organizational challenges.

Best Practices in Contract Management

  1. Centralize and standardize agreements: Streamline contract creation by using standardized templates and pre-approved language. Centralize contracts in a searchable repository for easy access and secure storage, enhancing efficiency and legal compliance.
  2. Set sensible key performance indicators (KPIs): Define KPIs aligned with organizational goals, such as contract creation and approval times. Utilize contract management solutions to track performance metrics and identify areas for improvement.
  3. Track obligations: Ensure fulfillment of contractual obligations by implementing systems to track and monitor obligations throughout the contract lifecycle. Utilize contract management software to send timely reminders and prevent oversight of critical obligations.
  4. Automate communications: Replace email-based communication with centralized contract management software to ensure real-time notifications and streamline stakeholder communication. Automate communication processes to enhance efficiency and reduce errors.
  1. Utilize clickwrap and electronic signatures: Expedite contract signing processes by offering clickwrap and electronic signature options. Incorporate these options into contract management solutions to provide a seamless signing experience and reduce friction in high-volume contract transactions.

Conclusion

In conclusion, effective contract management is essential for navigating the intricacies of modern business relationships. By implementing best practices, addressing challenges, and leveraging technology, organizations can streamline processes, minimize risks, and maximize value throughout the contract lifecycle. From initiation to renewal or termination, meticulous attention to detail and strategic planning are crucial for ensuring successful outcomes. Mastering contract management drives efficiency and fosters positive relationships with stakeholders, enabling businesses to thrive in today’s dynamic landscape.

Author: Gayatri Singh, UPES Dehradun

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Competency of Parties to a contract under Indian Contract Act, 1872

Jan 20, 2024 | Contracts

For an agreement to be valid, the first requirement is that an agreement must be made by parties who are competent to contract. This is laid down in sections 11 and 12 of the Act[1]. Section 11 states that the person who is competent to enter the contract. It provides that every person is competent to contract who is

 (i) Age of majority;

(ii) Sound mind and

(iii) Not disqualified from contracting by any law to which he is subject.

  1. Agreement by minors

 Minor is a person who has not attained the age of majority. In other words, a minor is a person who has not completed 18 years of his or her age except –

 (i) When the guardian of a minor’s property or person is appointed by court.

(ii) When the minor’s property is taken over by the court of the ward for management. In both cases, the age of the majority is 21 years. Following are the laws relating to an agreement by a minor: An agreement by a minor is void.

 A minor cannot bind himself by a contract, but he can make the other party contract to be bound to him under this contract. A minor can become a promisee or a payee or endorsee of the property. A minor’s contract cannot be ratified.  A minor is not personally liable for the supply of necessaries, but the minor’s property is liable for necessaries.

  • Liability of minor is tort i.e. civil wrong.
  • There can be no estoppel against a minor.
  • A minor can be admitted to benefits of partnership and appointed as an agent.
  • A minor can hold property.
  1. Agreement by persons of unsound mind

Section 12 of the Act states what sound mind is for the purposes of the contracting.

 A person is said to be of sound mind to make a contract if, when he makes it, he can understand it and form a rational judgment as to its effect on his interest. When a person is of unsound mind but occasionally of sound mind can make a contract when he is of sound mind and vice versa. The unsoundness of mind may be due to idiocy, lunacy, insanity, drunkenness, contract by lunatic, contract by drunkard etc.

Impact of Incompetency

The foundation of a contract’s legality in India is established by the Indian Contract Act (ICA), 1872. The parties’ competency is one of the essential components of a legitimate contract. According to Section 11 of the Act, incompetence is the lack of one or more characteristics that a person needs in order to be able to make a legally enforceable agreement. For people and companies involved in contractual transactions, it is essential to comprehend how incompetency affects contracts under the ICA.

Key Categories of Incompetent Parties:

  1. Minors: Individuals below the age of 18 (with exceptions) are considered minors. Generally, contracts entered into by minors are void, meaning they have no legal effect (Section 11). However, exceptions exist for:

Necessaries: Contracts for essential goods and services like food, clothing, and shelter are enforceable (Section 68).

Personal benefit contracts: Agreements like marriage or apprenticeship that directly benefit the minor can be valid.

Ratification: Minors can ratify contracts upon attaining majority, making them binding.

  1. Persons of unsound mind: Individuals lacking the mental capacity to comprehend the contract’s nature and consequences are deemed incompetent. Contracts made during such periods are void (Section 12). However, exceptions include:

Lucid intervals: Agreements made during periods of sound mental state are valid.

Necessaries: Similar to minors, contracts for necessaries can be enforceable.

Ratification: Similar to minors, ratification upon regaining sound mind can validate the contract.

Impact of incompetency of contract

Void contracts: Contracts entered into by incompetent parties are generally void (except for mentioned exceptions). This means:

No legal obligations: Neither party is bound to fulfill the contract’s terms.

No enforcement: Courts cannot enforce void contracts.

Restitution: In some cases, courts may order restitution of property or benefits unjustly obtained due to incompetency.

In case of Mohiri Bibi v. Dharmodas Ghosh (1906)[2], A minor entered into a mortgage agreement for her deceased husband’s debt. The Privy Council held the contract void, emphasizing that contracts by minors are generally unenforceable, even for debts, unless they fall under the necessaries exception.

In another case of Amar Singh v. State of Rajasthan (1957)[3], A contract for necessaries with a person of unsound mind was held enforceable, reiterating the exception for essential goods and services.

Conclusion

Understanding the impact of incompetency on contracts under the ICA is crucial for safeguarding legal interests. Parties entering agreements should exercise due diligence to ascertain the other party’s competency. If faced with situations involving incompetency, seeking legal advice promptly is highly recommended to navigate the complexities and protect your rights.

Landmark cases like Mohiri Bibi and the Amar Singh case illustrate the practical application of the ICA and highlight the exceptions and nuances associated with each category.

Author: Chandan Jhinkwan, Rajiv Gandhi School of Intellectual Property Law, IIT Karagpur

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