Under the Contract Act 1872, an agreement is a contract if it is made by the free consent of parties competent to contract, for a lawful consideration and a lawful object, and is not expressly declared void. In practice, enforceability also depends on clear terms, proper authority to sign, correct stamping, registration where required and evidence of performance. Oral agreements can be binding, but they are hard to prove. We review each commercial contract for these points, and for clauses that a Bangladesh court may refuse to enforce, such as some penalty and restraint of trade provisions.

Parties to an international agreement are generally free to choose the governing law, and English or Singapore law is common. However, Bangladesh law may still apply to matters such as land, stamp duty, foreign exchange, employment, competition and data protection, whatever law is chosen. A foreign law clause also means that any dispute may require evidence of that law. For a purely domestic agreement, Bangladesh law is usually the sensible choice. We advise on the trade-offs and coordinate with counsel in other jurisdictions where a foreign governing law is agreed. Clarity at the outset avoids costly arguments.

It depends on the counterparty, the value, the location of assets and how quickly a decision is needed. Arbitration offers a neutral forum, confidentiality and, for foreign awards, enforcement in Bangladesh under the New York Convention through the Arbitration Act 2001. Court litigation can be cheaper for smaller domestic claims, and the Commercial Courts Act 2026 aims to make it faster. We draft dispute resolution clauses that name the institution, seat, language and number of arbitrators clearly, and avoid ambiguous wording that leads to preliminary fights. A good clause also allows urgent interim relief.

Many agreements attract stamp duty under the Stamp Act 1899, and the amount depends on the type of instrument. An unstamped or under-stamped document may not be admitted in evidence until the duty and a penalty are paid, which can delay a claim. Registration under the Registration Act 1908 is required for certain documents, particularly those affecting land, such as some leases and transfers. Agreements signed abroad may need stamping when brought into Bangladesh. We confirm the requirements before signing and build them into the closing checklist so they are not overlooked.

The Contract Act does not enforce penalties as such. Where a contract names a sum payable on breach, or contains a penalty, the injured party can recover reasonable compensation not exceeding the amount stated, whether or not actual loss is proved in every detail. Courts will look at what is reasonable in the circumstances. This differs in some respects from the modern English approach. We draft delay and performance damages that are linked to a genuine assessment of likely loss, and explain how they may operate if a claim is brought in Bangladesh.

That depends first on the termination provisions in the agreement, which may allow termination for material breach, after a cure period, for insolvency, or for convenience on notice. Without an express right, termination is possible only if the breach is serious enough under general contract law, and getting this wrong can make the terminating party liable instead. Notice requirements should be followed exactly. Before you act, we review the contract, the evidence and the correspondence, and help you send notices that protect your position if the matter later reaches arbitration or court.

Confirm the counterparty's legal existence and authority to sign, any regulatory licences it needs to perform, and whether payments in or out of Bangladesh will need foreign exchange documentation. Consider withholding tax and VAT deduction at source on payments, the governing law and dispute resolution clause, and where the counterparty's assets are if you need to enforce. Bangla translations may be needed in court. We carry out a proportionate review of the counterparty and the terms, and explain which risks can be managed through drafting and which need security such as guarantees or letters of credit.

The Personal Data Protection Act 2026 introduces a general framework for processing personal data in Bangladesh. Where a commercial contract involves customer, employee or supplier data, for example in outsourcing, technology, marketing or distribution arrangements, the parties should define their roles, the purposes of processing, security measures, breach notification and any cross-border transfers. Implementing rules and guidance will continue to develop. We add proportionate data protection terms to new agreements and review existing contracts that may need updating, working with the firm's technology lawyers where a project involves significant data processing.