TRW Knowledge / Commercial & contracts
How to Draft a Contract in Bangladesh — Complete Guide (2026)
This guide explains practical, cautious steps for drafting commercial and non-commercial contracts in Bangladesh in 2026. It provides drafting considerations, typical clauses, execution and registration issues to watch for, and pointers on managing risk. The material is general in nature and does not replace context-specific legal advice; readers should consult a qualified adviser for pa
TRW Knowledge / Legal guidance
Commercial contracts and business risk / Bangladesh
2026 reviewThis article retains its original publication date. It has been structurally and substantively refreshed for 2026; readers should verify current rules, court practice and primary materials before acting on a particular matter.
Why careful drafting matters
Clear, precise drafting allocates rights, duties, and risks; reduces ambiguity that can cause disputes; and supports enforceability if a disagreement reaches dispute resolution. In Bangladesh, as elsewhere, enforceability depends on the written text, the conduct of the parties, and any applicable statutory or procedural requirements. This guide focuses on commercial practice and common drafting priorities in 2026 without asserting statutory positions or case law beyond general principles.2026 update
Since 2024–2026 there have been continued developments in contract practice, commercial dispute resolution and the use of digital communication. Contracting parties increasingly use hybrid execution practices and electronic workflows. Whether a particular form of electronic signature, digital record or remote execution is legally effective in a given transaction depends on the governing legislation, the counterparty's internal policies, and the requirements of any registry, counterparty or regulator involved. Confirm the current position with the relevant government authority or a qualified adviser before relying on electronic execution for high-value or regulated contracts. Official sources such as the Ministry of Law, Justice and Parliamentary Affairs (https://mola.gov.bd/) can indicate whether particular statutory instruments or regulations are in force, but a lawyer can advise how those instruments affect a specific contract.Initial steps before drafting
Clarify commercial objectives
Start by documenting what each party wants to achieve: deliverables, payment profile, timelines, and any performance standards. A short commercial brief reduces iterations and helps identify provisions that require negotiation (for example, liability caps, exclusivity or long-term price adjustments).Identify parties and capacity
Use the parties' full legal names, registration numbers (for companies) and their principal addresses. For parties formed under Bangladesh law, confirm the entity type and registered office; for foreign entities, identify the jurisdiction of incorporation and the authorised signatory. If a party signs through an agent or a director, confirm that the signatory has the necessary authority and include a recital or warranty about authority where appropriate.Establish governing law and jurisdiction or dispute resolution method
Decide which law will govern the contract and how disputes will be resolved. Common choices include Bangladesh law or another neutral jurisdiction. Consider whether to adopt court litigation or an alternative such as arbitration. Where parties select arbitration, confirm the procedural rules, seat of arbitration, and language. These choices have practical consequences for enforcement and interim measures. Because the impact varies with context and the nature of the parties, seek advice when this choice could affect enforceability or regulatory approvals.Core contract structure and clauses
A coherent structure improves readability and reduces dispute risk. Typical sections are: recitals, definitions, obligations/scope of work, delivery and acceptance, price and payment, representations and warranties, indemnities, limitation of liability, confidentiality, IP, term and termination, force majeure, notices, assignment and change of control, applicable law and dispute resolution, and execution and schedules/annexes.Recitals and definitions
Recitals set commercial context but do not usually alter operative provisions. Keep definitions consistent and avoid circular or ambiguous definitions. Define technical terms and important dates (for example, "Effective Date"). Consider a clause specifying that the definitions control if there is a conflict with the body text.Scope of work / obligations
Describe obligations in measurable terms: deliverables, milestones, service levels and acceptance criteria. Where performance standards matter—such as delivery timeframes, quality standards, or testing procedures—attach technical specifications or service level schedules. Include responsibilities for obtaining licenses, approvals or permits, and specify who bears related costs and delays.Price, payment and taxes
Set out the total price or fee structure, invoicing procedures, payment deadlines and remedies for late payment. Address taxes and duties: state whether prices are inclusive or exclusive of applicable taxes and which party bears each tax. Because tax treatment can vary by transaction and change over time, consult tax specialists when tax consequences are material; see TRW tax practice at https://trw.org/tax-lawyers/ for guidance about engaging advisers.Representations and warranties
Include factual statements that the parties reasonably can make (for example, authority to enter the contract, ownership of IP being licensed). For material aspects, include survival periods for representations or conditions precedent for closing. Avoid overly broad or difficult-to-prove representations unless insured or commercially negotiated.Indemnities and limitation of liability
Indemnities allocate risk for third-party claims and certain losses. Limitation clauses commonly cap liability and exclude types of loss (for example, consequential loss), subject to local legal constraints. Under some legal systems, there are statutory limits on excluding liability for gross negligence or willful misconduct; confirm the position with local counsel for high-value exposures.Confidentiality, data protection and IP
Define confidential information and permitted disclosures (for example, disclosures required by law). For contracts involving personal data or cross-border transfer of data, include clauses addressing compliance with applicable data protection requirements and any required technical or organizational measures. For intellectual property, clarify ownership of pre-existing IP and any licenses granted; set terms for use, reservation of rights and return or destruction on termination.Termination, suspension and post-termination obligations
Provide for termination for cause and for convenience if required by the parties. Define cure periods, the consequences of termination (including payment for work-in-progress and return of confidential materials), and any transitional assistance obligations. Consider survival provisions for clauses that should remain effective after termination (for example, confidentiality, IP licenses, indemnities and limitation of liability).Force majeure
Describe the scope of force majeure events and specify notice and mitigation obligations. Consider whether extended force majeure triggers termination rights after a defined period and how payments and performance are treated during an event. Be careful not to rely on generic force majeure language without tailoring it to the transaction and relevant risks.Notices, assignment and change of control
Set clear notice addresses and methods (email, registered mail, in-person delivery) and specify when a notice is deemed received. Restrict assignments if the counterparty’s identity is commercially important, while allowing permitted assignments. Include change-of-control protections where the identity of the contracting party matters for regulatory or commercial reasons.Execution, formalities and registration
Execution formalities depend on the parties' structures and the transaction type. For companies incorporated in Bangladesh, check whether board or shareholder approvals are required under the constituent documents or corporate law. Confirm any notarisation, stamping or registration requirements for the contract or related security documents. Certain transactions may require registration with a government authority or regulatory approval before they take effect.Where stamp duty, registration or other procedural steps are relevant, refer to the applicable authority for current requirements and timelines; for official information consult the relevant government portals such as the Ministry of Law, Justice and Parliamentary Affairs at https://mola.gov.bd/. Because stamp duty rules and registration practice can change, consult a qualified adviser for transaction-specific obligations and timelines.Electronic contracts and signatures
Electronic communications and signatures are increasingly used. Whether an electronic signature or digital record is effective for a particular contract in Bangladesh in 2026 depends on statutory recognition, the nature of the contract (for example, whether the law requires non-electronic form for particular transactions), and any requirements of counterparty registries, banks or regulators. Confirm acceptance of electronic execution for deeds, mortgages, share transfers or other regulated instruments before proceeding. If you plan to rely on electronic records, document the method and the authentication steps in the contract.Risk allocation strategies
Common strategies include: limiting liability to a monetary cap, excluding certain categories of loss, using indemnities to transfer third-party risk, obtaining warranties from contracting parties and requiring insurance for identified risks. Allocate risk consistent with the parties' ability to control or insure it. For complex exposures—such as cross-border supply chains, project finance or regulated services—seek specialist advice, such as from regulatory or financial law teams; see https://trw.org/financial-services-regulatory-lawyers/ for guidance on connecting with advisers who can assist on regulatory risk.Drafting practicalities and style
Use plain language where possible and avoid unnecessary legalese. Prefer active voice and short sentences for operative obligations. Use defined terms consistently, place definitions in an early section or schedule, and use numbered paragraphs with cross-references that remain stable when sections are rearranged. Consider including a schedule of defined terms for quick reference. Review the contract from the perspective of an enforcing court or tribunal and a non-lawyer reader to spot ambiguous or impractical wording.Negotiation and version control
Maintain a clear version history and central document repository. Track changes carefully and agree key commercial points before finalising extensive legal drafting. Consider using a short-term interim agreement (such as a letter of intent or supply memorandum) to get material arrangements in place while final terms are negotiated, but be explicit about whether the interim document is intended to be legally binding.Schedules, annexes and exhibits
Use schedules for technical specifications, pricing tables, and detailed operational rules. Refer to schedules in the main body rather than repeating the same content multiple times. Where schedules contain critical performance standards, state clearly which provisions take priority in case of conflict with the main body.Managing cross-border issues
Cross-border contracts raise additional concerns: foreign exchange controls, tax withholding, import/export restrictions, and enforceability of foreign judgments or arbitral awards. Consider whether local counsel is required for registration or compliance with local regulations. Where payments cross borders, plan for currency risk and bank requirements early in negotiations.Practical checklist before signature
- Confirm parties’ legal names, registrations and signatory authority.
- Ensure primary obligations, deliverables and milestones are measurable and dated.
- Identify approvals, filings, or registrations required before or after signature.
- Confirm tax, stamp duty and payment mechanics with advisers.
- Agree on dispute resolution and governing law appropriate to enforcement needs.
- Set a document control process for final clean copies and originals.
When to involve specialised advisers
Consider specialist advice for matters that include significant regulatory oversight, financial structuring, complex IP rights, employment issues, or material tax consequences. For regulatory or financial matters, see TRW services and practice descriptions at https://trw.org/services/ and https://trw.org/our-practices/ to coordinate the appropriate advisory inputs. Engage local counsel where local formalities, registrations or sector-specific approvals are relevant.Common drafting pitfalls to avoid
Watch for:- Undefined terms that change meaning across clauses.
- Conflicting clauses (for example, differing notice provisions or inconsistent termination mechanics).
- Overbroad representations or warranties without reasonable limitations.
- Missing or impractical timelines for performance and remedies.
- Failure to specify which versions of schedules or specifications are controlling.
International enforcement and recognition
If enforcement outside Bangladesh may be necessary, consider the choice of forum and the prospects for recognition and enforcement of judgments or arbitral awards in the enforcement jurisdictions. The practical enforceability of remedies depends on both the governing law and the forum selected, as well as on local procedural and public policy constraints. Seek jurisdiction-specific enforcement advice where enforcement strategy is important to commercial risk allocation.Sample clause headings (for reference)
The following are common clause headings; adapt content to the transaction and seek advice where a clause allocates significant risk or requires local formalities:- Definitions
- Scope of Services / Supply
- Price and Payment
- Term and Termination
- Representations and Warranties
- Indemnity
- Limitation of Liability
- Confidentiality
- Data Protection
- Intellectual Property Rights
- Insurance
- Force Majeure
- Notices
- Governing Law and Dispute Resolution
Documentation and record-keeping
Keep executed originals and a clear audit trail of negotiations and approvals. For entities with compliance obligations, retain records of board approvals, internal signoff memos, and any government filings or registrations that relate to the contract. Good records reduce costs if disputes arise or regulators request documentation.Sample workflow for a typical commercial contract
- Commercial brief prepared by business teams.
- Legal team prepares draft or mark-up of precedent clauses.
- Negotiations focusing first on commercial points, then legal wording.
- Finalise schedules and obtain required internal approvals.
- Execute with agreed formalities and complete any required registrations or filings.
- Implement performance monitoring and ongoing compliance checks.
Practical examples of negotiation priorities
Different parties will prioritise different clauses. Sellers commonly seek payment certainty and liability limits; purchasers may prioritise warranties, remedies and performance guarantees. Service providers will focus on scope clarity and limitation of liability; customers will focus on service levels and remedies. Identify the three to five clauses that are most critical in each transaction and invest negotiation time there.Further reading and institutional contacts
For statutory instruments, official registers and updates to formal requirements, consult government portals such as the Ministry of Law, Justice and Parliamentary Affairs at https://mola.gov.bd/. For firm services, practice descriptions and contact points, see TRW practice pages: https://trw.org/our-practices/, https://trw.org/services/, https://trw.org/our-firm/ and specific teams such as https://trw.org/financial-services-regulatory-lawyers/.Five practical FAQs
Q1: Do contracts in Bangladesh have to be stamped or registered to be enforceable?
A1: Whether a contract requires stamp duty or registration depends on the nature of the agreement and the applicable stamp and registration laws; a lack of required stamping or registration can affect admissibility or remedy in some circumstances. Verify current procedural requirements with the relevant authority and obtain transaction-specific guidance before relying on informal execution.Q2: Are electronic signatures acceptable for commercial contracts in Bangladesh?
A2: Acceptance of electronic signatures depends on statutory recognition and the type of document; some instruments may require physical execution or notarisation. Confirm the current legal position and any counterparty or registry requirements before relying on electronic execution for material transactions.Q3: When should I include arbitration rather than court jurisdiction in a contract?
A3: Consider arbitration where parties want a neutral tribunal, confidentiality and a tailored procedure; consider courts where interim relief or specific local enforcement features are important. The choice affects enforceability and cost; discuss forum selection with counsel in light of the transaction and potential enforcement jurisdictions.Q4: What are the key points to check before signing a contract drafted by the other party?
A4: Confirm the identity and authority of the signatory, check payment terms, limitation of liability and indemnities, clarify performance obligations and timelines, and verify whether any regulatory approvals or filings are required. If material obligations or risks are present, seek legal review before signature.Q5: When should I seek tailored legal advice on a contract?
A5: Seek tailored advice when the contract involves significant financial exposure, regulatory compliance, cross-border enforcement, intellectual property transfer, employment obligations, or other complex legal or factual issues. A lawyer can assess local formalities, taxes and dispute resolution consequences for your specific transaction.Concluding remarks
Drafting an effective contract in Bangladesh in 2026 requires attention to precise obligations, measurable performance criteria, appropriate risk allocation and compliance with formality and registration requirements where applicable. This guide is explanatory and not a substitute for legal advice. For transaction-specific assistance involving regulatory, tax or enforcement concerns, consult qualified legal counsel. TRW can help coordinate specialist inputs across regulatory, tax and dispute resolution matters; see https://trw.org/our-practices/ and https://trw.org/our-firm/ for practice information.Contact and next steps: https://trw.org/contact/ — for enquiries about services and how to proceed with drafting or review, you may contact our team via info@trw.org.
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