Critical Red Flags
Unpaid w/ Full-Time Hours: Legally dubious and often exploitative. Check for 'educational credit' legitimacy.
Post-Internship Non-Compete: Preventing an intern from joining any competitor in the same field for years.
IP Handover (No Stipend): Demanding all IP rights while not paying any stipend or giving credit.
Vague Duration: 'Until completion of project'—this can lead to months of unpaid labor.
Must-Have Clauses
Stipend & Payment Date: Exact monthly amount and when it will be credited to the intern's account.
Defined Learning Outcomes: A list of tools/skills the company promises to train the intern on.
Termination with 24h Notice: High flexibility for both parties as it is an educational engagement.
Completion Certificate: Guaranteed issuance of a 'Letter of Recommendation' upon successful completion.
Analyze Your Internship Agreement Instantly
Upload your PDF and let our AI check for all these risks in 60 seconds.
What Is a Internship Agreement?
A Internship Agreement is a legally binding document used for clearly defining the terms of an internship engagement including duration, stipend, deliverables, confidentiality, and IP ownership while ensuring compliance with applicable labour laws. In India, this agreement is governed by the Indian Contract Act, 1872; Apprentices Act, 1961 (if applicable); state-specific internship policies and related sector-specific regulations.
Without a well-drafted Internship Agreement, both parties are exposed to significant legal and financial risk. Contract Shield provides a professionally reviewed Internship Agreement template that you can download and use immediately, or upload your existing agreement to our AI analyzer for a comprehensive risk report.
5 Critical Clauses in Every Internship Agreement
Before signing or issuing a Internship Agreement, these are the five clauses that require the closest attention:
Internship Duration and Schedule
Specifies the start date, end date, working hours, and any flexibility provisions. Internships in India typically run 1–6 months. Remote internship schedules should be explicitly defined.
Stipend and Benefits
Specifies the monthly stipend amount, payment date, and any additional benefits. Stipends below minimum wages may face legal challenges in some states.
Confidentiality
Interns often have access to sensitive business information. A clear NDA clause within the internship agreement protects the company's trade secrets and proprietary processes.
IP Ownership
Any work, code, designs, or research created during the internship belongs to the company. Without an explicit clause, interns retain copyright under the Copyright Act, 1957.
Certificate of Completion
The employer's obligation to issue a completion certificate is an important term for interns. Specify conditions under which it may be withheld (e.g., incomplete tasks or breach of confidentiality).
Legal Requirements Under Indian Law
Interns are generally not classified as employees under Indian labour law, meaning PF, ESI, and gratuity do not typically apply. However, if the internship substantially resembles employment (regular hours, ongoing work), labour courts may reclassify the relationship. Minimum wage laws may apply for paid internships in certain states.
⚡ Analyze Before You Sign
Contract Shield's AI reads your Internship Agreement line-by-line, identifies hidden liabilities, and explains every risk in plain English — in under 60 seconds. Run a free risk scan →
Frequently Asked Questions
Is an unpaid internship legal in India?
It is in a legal grey area. While not explicitly prohibited nationally, some state minimum wage laws may apply to internship stipends. The Apprentices Act, 1961 requires stipends for registered apprentices. Ethical best practices recommend paying at least minimum wage equivalent.
Does an intern own their work in India?
Without a written IP assignment clause, the intern retains copyright under the Copyright Act, 1957 for any creative works. Always include a clause assigning all work product to the company.
Can an employer terminate an internship early?
Yes, with proper notice as specified in the agreement. If no notice period is stated, Indian courts would apply a reasonable notice standard based on the length of the internship.
Frequently Asked Questions
Are employment bonds legally enforceable in India?
Yes. Under Section 74 of the Indian Contract Act 1872, an employment bond is enforceable only if the employer has incurred actual expenses on the employee's specialized training, and the bond amount represents a reasonable recovery cost, not a penalty.
Are post-employment non-compete clauses void in India?
Yes. Section 27 of the Indian Contract Act 1872 declares agreements in restraint of trade as void. Post-employment non-compete clauses are legally unenforceable in Indian courts, protecting the employee's fundamental right to livelihood.
Can a company withhold a relieving letter for notice period non-service?
While a company is contractually entitled to recover salary-in-lieu-of-notice (notice pay), various Indian High Courts have held that withholding relieving letters or experience certificates is an illegal practice that cannot be used as leverage.