Commercial Agreements in Bangladesh — The 2025 In-House Counsel Playbook by TRW Law Firm

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Featured snippet (quick answer)

Commercial agreements are legally binding contracts that govern how businesses buy, sell, build, license, distribute, finance, or collaborate. In Bangladesh, they sit on the pillars of the Contract Act, 1872, Sale of Goods Act, 1930, Specific Relief, Evidence, Stamp & Registration, Arbitration Act, 2001, VAT/income-tax rules, and evolving cyber/data standards. A robust agreement clarifies scope, deliverables, price/taxes, quality/acceptance, IP, confidentiality, indemnities, liability caps, compliance, governing law, and dispute resolution, with stamping/registration done where required.

Why this guide — and why TRW

As Bangladesh’s largest cross-border law firm, TRW acts on the country’s most complex contracts: multi-year supply programs, EPC/EPCM packages, SaaS & data-heavy stacks, franchising and distribution networks, licensing and brand deals, joint ventures, and public-sector procurements. Our integrated Dhaka–Dubai–London–USA teams align Bangladesh law with group policy, lender covenants, global compliance (sanctions/export controls/AML), and arbitration enforceability—so your agreements are not just signed; they’re bankable and defensible.

Explore related governance touchpoints in our guide to Corporate Governance in Bangladesh on tahmidurrahman.com.

1) The legal backbone of commercial contracting in Bangladesh

• Contract Act, 1872 — formation (offer, acceptance, consideration), capacity, consent, lawful object, privity, remedies, damages.
• Sale of Goods Act, 1930 — title/risk, conditions & warranties, delivery, rejection/acceptance.
• Specific Relief — specific performance, injunctions, declaratory relief.
• Evidence Act, 1872 — proof, admissibility (including electronic records).
• Stamp Act, 1899; Registration Act, 1908 — stamping & compulsory registration for certain instruments (e.g., immovable property, long leases, security).
• Arbitration Act, 2001 — New York Convention recognition; seat/rules/venue architecture.
• Tax & FX — VAT mechanics (invoices, returns), withholding tax on services/supplies, transfer pricing for related-party cross-border arrangements, Bangladesh Bank FE compliance for remittances.
• Cyber/Data — electronic contracting, security expectations, breach notification practices; align your data and cybersecurity clauses with local rules and your global standards.

2) Core templates you’ll use (and where they break)

2.1 Sale/Supply Agreements (goods)

Use when: raw materials, finished goods, components.
Key levers: specifications, quality regime, AQL/inspection, acceptance tests, Incoterms, delivery windows, shortage/surplus rules, title/risk transfer, packaging/labeling, recalls, warranty, LDs for delay, price adjustment (index/fuel/FX).
Bangladesh pitfalls: documentary errors for customs/VAT; mismatched Incoterms vs. banking documents; missing recall and product-liability allocation.

2.2 Master Services Agreements (MSA) + SOWs

Use when: technology, outsourcing, consulting, logistics, facilities, marketing.
Key levers: SLAs & service credits; change control; milestones & acceptance; staffing and key-person protections; data/cyber annex; subcontracting; audit rights.
Pitfalls: soft SLAs; no security baseline; vague IP ownership.

2.3 SaaS / Software & Data Agreements

Use when: hosted software, platforms, APIs, data feeds.
Levers: uptime/response SLAs; security & privacy schedule; DPA with cross-border transfer mechanics; support/patch windows; roadmap and deprecation; exit/data portability; IP escrow (on-prem).
Pitfalls: no incident timelines; unclear processing locations; unlimited indemnities without controls.

2.4 Distribution & Agency

Use when: appointing market channels.
Levers: territory/exclusivity; performance quotas; marketing compliance; price communication (avoid resale price maintenance); IP & brand use; returns/recalls; anti-bribery & competition compliance; audit of sell-out data.
Pitfalls: indefinite exclusivity; non-compliant pricing controls; weak termination/transition.

2.5 Franchise & Licensing

Use when: brand rollouts, format replication, content/IP.
Levers: territory, format specs, training, supply standards, royalties/reporting/audit, advertising funds, brand manuals, QA/brand protection, step-in rights, de-branding and handover.
Pitfalls: royalty reporting too loose; trademark use not policed; supply chain not locked.

2.6 Manufacturing/Contract Manufacturing (CMO)

Use when: tolling and third-party production.
Levers: GMP/quality system, change controls, raw-material approval, batch records, recalls, IP in formulations/tooling, audits, capacity reservations, yield/overage, scrap rules.
Pitfalls: missing quality annex; weak confidentiality around formulations and tooling ownership.

2.7 Joint Ventures & Shareholders’ Agreements (commercial layers)

Levers: capital contributions; reserved matters; board composition; transfer restrictions/ROFR/drag/tag; non-compete; dividend policy; deadlock resolution; exit waterfall.
Pitfalls: ambiguous reserved matters; no deadlock logic; regulatory approvals ignored.

2.8 Real Estate/Lease & Fit-Out Contracts

Levers: title diligence; possession/hand-over; rent escalations; fit-out approvals; force majeure and access; utilities and building ops; restoration; stamping/registration calendar.
Pitfalls: under-stamping; no reinstatement rules; landlord consent gaps for sub-licensing or assignment.

2.9 Procurement Frameworks (public/private)

Levers: evaluation criteria; deviations from standard bidding docs; post-award securities; fraud & corruption provisions; audit rights.
Pitfalls: bid/performances securities not diarised; change orders outside approval paths.

3) Must-have clauses that win (or lose) disputes

• Scope & deliverables: Move ambiguity out of the contract and into annexed specifications/SOWs with measurable acceptance tests.
• Price & taxes: Currency, net/gross, VAT treatment, withholding tax, and permitted deductions; rules for price revisions (indices, FX bands).
• Payment & set-off: Milestones, retention, escrow, payment methods; consequences of late payment; lawful set-off mechanics.
• Quality & inspection: Sampling levels, factory QA, third-party inspection rights, rejection/re-work procedures.
• Warranties: Fit for purpose/merchantability; compliance with laws; no malware/backdoor (software); conformance to samples; survival periods.
• Indemnities: Third-party IP, death/personal injury, property damage, data breach, regulatory fines (as negotiated).
• Liability caps: Overall aggregate caps (e.g., 12–24 months’ fees) with carve-outs (fraud, gross negligence, IP infringement).
• Force majeure & BCP: Epidemic, export restrictions, cyber incidents; notification and mitigation; DR/BCP tests for SaaS/critical vendors.
• IP & data: Background vs. foreground IP; licence terms; data ownership; minimum security controls; cross-border transfer safeguards.
• Compliance: Anti-bribery, AML/CFT, sanctions/export controls, competition law; audit and training undertakings; termination-for-cause triggers.
• Change control: Structured forms and approval paths; cost/time adjustment rules.
• Term & termination: Convenience vs. cause; wind-down and transition assistance; step-in rights; assignment & novation (including lender security).
• Governing law & disputes: Bangladesh or neutral law; arbitration-first with clear seat/rules/venue/language; interim relief carve-outs.
• Notices: Valid channels (courier + named emails), deemed receipt timing; bilingual notices where relevant.

4) Stamping, registration, and formalities (don’t skip these)

• Stamp duty: Many commercial instruments require stamping; under-stamped documents risk inadmissibility until duty/penalty is cured.
• Registration: Transfers/leases of immovable property and charge/security documents are commonly registrable—calendar the statutory windows.
• Authorisations: Board resolutions, PoAs, specimen signatures; for cross-border parties, legalization/apostille and certified translations.
• E-signatures: Recognised for most private instruments; plan hybrid (digital + wet-ink) where stamping/registration is required.

5) Tax, VAT & FX overlays you must model in

• VAT: Define the tax point, invoice requirements, credit notes, and refunds; ensure SOWs and acceptance protocols align with VAT timing.
• Withholding tax: Code payments correctly; issue certificates; ensure contracts state gross-up/price-is-inclusive positions clearly.
• Transfer pricing: For related-party cross-border services/supplies, contemporaneous documentation and intercompany agreements are essential.
• Foreign exchange: AD bank documentation packs (invoices/contracts/SOWs, proof of service, TP support) accelerate remittances and reduce queries.
• Customs: For supply contracts, bake HS-code alignment and documentary compliance into responsibilities.

6) Cross-border mechanics (make your agreement travel well)

• Incoterms + banking documents: Align shipping terms with LC/TT realities; diarise discrepancy management.
• Sanctions & export controls: Add representations and termination rights for sanctions breaches; screen counterparties and logistics.
• Data transfers: Map data flows; adopt transfer tools (standard clauses) and security annexes fit for your stack.
• Arbitration: Choose an institution (e.g., SIAC/ICC), seat (e.g., Singapore/Dhaka), venue, and number of arbitrators; allow court relief for urgent injunctions.
• Sovereign parties: Secure waiver of immunity where applicable; ensure approvals for arbitration and enforcement.

7) Digital contracting & evidence

• Clickwrap over browsewrap: Explicit assent with timestamp, IP, and text hash.
• System of record: Central contract repository, versioning, redline history, approval logs, and obligations tracker.
• E-evidence: Preserve emails, change orders, QA/inspection certificates, and acceptance records; maintain cyber-incident logs.

8) Negotiation playbook that works in Bangladesh

• Issues list & choreography: Triage “red lines” early (liability cap, indemnity, IP, data, governing law).
• Authority mapping: Confirm who can sign and whose approvals (board/regulator/lender) are needed.
• Commercial-to-legal alignment: Ensure the financial model (prices, FX bands, LDs, earn-outs) and contract text say the same thing.
• Cultural nuance: Be crisp on compliance; make SLAs measurable; agree escalation and senior-meeting timelines.

9) Sector-specific checklists

9.1 TMT / SaaS

• Security baseline (encryption, backups, DR drills), uptime/response SLAs, vulnerability disclosure; data localization questions from counterparties.
• IP: open-source compliance, licence scope, derivative works, API rate limits.
• Exit: data return, deletion certification, and migration support.

9.2 FMCG / Distribution

• Territory, channels (offline/online/marketplaces), performance thresholds, sell-out data access, marketing approvals.
• Competition law hygiene (no resale price fixation); promotions/chargebacks; defect/recall cost allocation.

9.3 Manufacturing / Supply

• Quality regime; capacity reservation; dual-sourcing; tool & die ownership; EHS (environment, health, safety) compliance; audit cadence.
• LDs for delay and quality; carve-outs for force majeure with mitigation.

9.4 Energy / Infrastructure / EPC

• Interface risk matrices; geotech & utilities; performance testing; liquidated damages (delay/performance); parent guarantees; insurance program; dispute boards.
• Change-order discipline; claims timing and documentary standards.

9.5 Healthcare / Pharma

• GMP & pharmacovigilance; change control; batch records; temperature-controlled logistics; recall protocols; IP (formulations, data exclusivity).
• Anti-bribery/ethical marketing clauses; sample controls.

9.6 Real Estate / Hospitality

• Title warranties; operation standards; FF\&E and reserve funds; brand QA; termination and de-branding; property taxes and utilities responsibility.

10) Dispute resolution & remedies (practical outcomes)

• Escalation ladder: operational → senior executives → mediation → arbitration/court.
• Damages: expectation damages limited by foreseeability and mitigation; LDs should be genuine pre-estimates tied to KPIs.
• Specific performance: strong in property, one-of-a-kind goods, and IP/tech when damages are inadequate.
• Interim relief: injunctions for confidentiality/IP/data misuse or to prevent asset dissipation.
• Evidence readiness: Keep a live contract file: SOWs, change orders, meeting minutes, acceptance certificates, inspection reports, notices.

11) A 90-Day TRW Commercial-Contracts Upgrade Plan

Days 1–15 — Diagnose & Prioritise
🟩 Inventory critical agreements; identify renewals/expiries; rank risk (uncapped liability, missing indemnity, weak IP/data).
🟩 Map signing authority; collect board resolutions/PoAs.
🟩 Build stamping/registration matrix and VAT/WHT quick-reference.

Days 16–45 — Re-template & Systemise
🟩 Roll out TRW-vetted MSA/SOW, Supply, Distribution/Franchise, SaaS, NDA, DPA, and PO Ts\&Cs.
🟩 Install change-control, QA/acceptance, incident-response, and audit annexes.
🟩 Configure e-signature with evidence capture; central repository with clause bank and playbooks.

Days 46–75 — Train & Renegotiate
🟩 Train sales/procurement/tech on fallbacks and redlines.
🟩 Re-negotiate top 10 counterparties on renewal: caps, indemnities, SLAs, data/security.
🟩 Align finance on VAT/WHT coding and certificate issuance.

Days 76–90 — Assure & Monitor
🟩 Quarterly board dashboard (claims, LDs, expiries, sanctions checks, data incidents).
🟩 Table-top exercise on breach/recall/cyber; review arbitration readiness and outside-counsel playbooks.

12) FAQs — fast answers for founders, COOs, and GCs

Q1. Are e-signatures acceptable?
Yes for most private agreements. For documents needing stamping/registration, keep a wet-ink original per the registration workflow.

Q2. Can we choose foreign law and arbitrate abroad?
Yes, subject to mandatory local laws/public policy. Bangladesh is a New York Convention state; foreign awards are generally enforceable.

Q3. How do we avoid VAT/WHT surprises?
State tax positions clearly; coordinate with finance; build VAT timing into acceptance and invoice rules; maintain WHT certificates and reconciliations.

Q4. What size should our liability cap be?
Tie it to economics (e.g., 12–24 months’ fees) with carve-outs for fraud/gross negligence/IP infringement; calibrate by risk and insurance.

Q5. What makes a distribution arrangement durable?
Performance targets, compliance hygiene, brand/IP control, clean termination/transition, and auditable sell-out data.

13) TRW’s cross-border edge (why clients choose us)

• Scale & scope: The largest international law firm in Bangladesh, spanning corporate, projects, disputes, IP/tech, tax, competition, employment, and finance.
• Deal-tested templates: Sector-specific packs built on Bangladesh law and global best practice.
• Regulator fluency: Daily interaction with RJSC, NBR, Bangladesh Bank, BSEC, DoE and sector agencies.
• Delivery that sticks: Playbooks, clause banks, training, and dashboards your teams can run with—plus arbitration-ready drafting from day one.

14) Commercial Agreements — TRW Summary Table

Speak with TRW’s Commercial & Technology Team

Phones: +8801708000660 • +8801847220062 • +8801708080817
Emails: info@trfirm.com • info@trwbd.com • info@tahmidur.com
Global Law Firm Locations: Dhaka — House 410, Road 29, Mohakhali DOHS • Dubai — Rolex Building, L-12 Sheikh Zayed Road.

Want this turned into a turn-key contracting playbook for your business—with template packs, clause banks, training, and a contract-repository schema? We can ship a tailored version for your sector in short order.