The Myth of the “One-Page Work Order”: Why MSMEs in Infra Contracts Keep Bleeding

In infrastructure and commercial contracting, small vendors and subcontractors often rely on hastily executed work orders to start delivering serious services. Bizarrely, sometimes it is as little as just a one-page document. The problem? These documents lack enforceability, protection, and clarity. When disputes arise (and they do), these MSMEs are left scrambling.

Having advised a solar EPC vendor and a Tier 2 electrical subcontractor across two recent commercial arbitrations, I’ve noticed how:

1. Payment timelines are vague or entirely verbal.

2. Scope of work is referenced via annexures that were never shared.

3. Dispute resolution clauses are either missing or template fillers.

1. The Illusion of “Speed”

Founders of MSMEs in infra sectors often skip detailed contracts to avoid delays. They assume a work order will suffice: “Let’s start now, paperwork can follow.”

This speed-first culture backfires when disputes arise over payment holdbacks, scope creep, or non-completion allegations.

2. How It Shows Up in Arbitration

• The absence of milestone triggers creates confusion over default.

• MSMEs struggle to prove contractual expectations, even with clear work delivered.

• Larger parties use ambiguity as leverage to negotiate down the claim value.

3. Case Insight

In a 2024 case, a renewable energy subcontractor filed a claim of Rs 80 lakh. The principal contractor responded by denying liability due to lack of binding deliverables and absence of a dispute resolution mechanism. The arbitration dragged for months, and the claimant ended up settling at Rs 32 lakh primarily because the original “contract” was a one-page email with scope references that were never annexed.

4. Where the System Fails MSMEs

• Arbitration costs are disproportionate to claim value.

• Delays in award enforcement add further pressure.

• Opposing counsel often files for Section 34 challenge solely to delay payments.

5. How I Guide MSMEs Differently

When clients come to me at the start of a commercial relationship, I:

• Rework templates with defined milestones and payment security clauses.

• Add enforceable arbitration language that considers future venue, cost apportioning, and pre-litigation mediation.

• Highlight red flags before they sign. e.g., conditional performance benchmarks that aren’t aligned to scope.

If you’re a subcontractor or vendor in infrastructure, your contract is your currency. Don’t let “quick start” be the reason you bleed quietly later.