Yes. The absence of a signed agreement does not automatically prevent a supplier from recovering unpaid dues.
Businesses often start supplying goods or services based on purchase orders, emails, WhatsApp messages, quotations, invoices or an established course of dealing. If the communications and conduct show agreement on the essential terms, a binding contract may still exist.
No signed contract does not mean no evidence
The key question is not whether there is a document called “Contract.” It is whether the available material proves:
- What was ordered or supplied
- The agreed price or basis for calculating it
- Delivery or performance
- Acceptance by the buyer
- When payment became due
- The amount still unpaid
Useful evidence may include purchase orders, accepted quotations, invoices, delivery challans, goods-receipt notes, transport records, emails, WhatsApp messages, ledger confirmations, bank entries and GST-related documents.
Each document is assessed in context. For example, an invoice alone may not prove liability where supply or acceptance is disputed. But an invoice supported by a purchase order, delivery proof and part-payment can form a strong record.
Can a contract exist without a signed agreement?
Yes. Under Indian law, a contract may be formed through offer, acceptance and conduct. Acceptance need not always be contained in a single signed document.
For instance, if a buyer issues a purchase order, the supplier delivers goods, the buyer accepts delivery and makes part-payment, those facts may establish a concluded commercial arrangement.
The Supreme Court has recognised that a binding contract may arise through correspondence where the parties agree on essential terms, even if a formal agreement was expected later. See Trimex International FZE Ltd. Dubai v. Vedanta Aluminium Ltd., (2010) 3 SCC 1.
What should an unpaid supplier preserve?
A supplier should keep a clear transaction file containing:
- Purchase order or work order
- Quotation or proposal
- Invoice
- Delivery challan, lorry receipt or transport document
- Goods-receipt note or delivery acknowledgment
- Emails and WhatsApp conversations
- Ledger statement and bank records
- GST and e-way bill records
- Demand notice and the buyer’s reply, if any
Electronic records should be preserved in their original form wherever possible. Keep complete email chains, exported chats, screenshots showing dates and sender details, and backup copies. Their admissibility and proof requirements may depend on the forum and the manner in which they are produced.
What if the buyer says there was “no contract”?
That defence is not decisive merely because no formal agreement was signed.
A buyer’s purchase order, acceptance of goods or services, part-payment, acknowledgment of dues, or correspondence about payment may help show that a commercial arrangement existed. The result will depend on the complete record, including any genuine dispute about quantity, quality or performance.
Is there a special MSME remedy?
Possibly—but an important distinction applies.
The delayed-payment remedy under Sections 15 to 18 of the MSMED Act is for qualifying Micro and Small Enterprises, not Medium Enterprises. The supplier must also satisfy the statutory requirements, including registration-related requirements applicable to the transaction.
For an eligible supplier, payment must be made by the agreed date, which cannot exceed 45 days from acceptance or deemed acceptance. On delay, the Act provides for compound interest with monthly rests at three times the RBI bank rate. The supplier may refer the dispute to the Micro and Small Enterprises Facilitation Council, which may conduct conciliation and, if needed, arbitration.
A business should assess its Udyam registration status, nature of activity, date of registration, documents and transaction history before pursuing this route.
Conclusion
A missing signed contract does not erase a genuine payment claim. In commercial disputes, the strength of the case often depends on the documentary and electronic trail showing the order, supply, acceptance, price and unpaid balance.
For qualifying Micro and Small Enterprises, the MSMED Act may offer an additional remedy. Before taking action, however, the facts, registration status and evidence should be reviewed carefully.