Your Guide to Breach of Contract & Contract Law in Bangladesh
This comprehensive guide provides a clear overview of Bangladeshi contract law, focusing on breach of contract claims for foreign and local entities. Understanding the legal process for contract enforcement is vital. We break down the key stages, from pre-litigation and contract drafting principles to enforcing a final court judgment in Bangladesh.
Jurisdiction & Foreign Claimants in Contract Law
Under the Code of Civil Procedure, 1908, foreign nationals and companies have the same right to sue for breach of contract in Bangladeshi courts as local citizens. Jurisdiction is typically established if the defendant resides or conducts business in Bangladesh, or if the cause of action (the contract violation) occurred within the country's borders.
Pre-Litigation Steps in Bangladesh Contract Law
Before filing a lawsuit for breach of contract, several critical preliminary actions can significantly impact the outcome and are often legally required under Bangladeshi law.
1. Legal Notice (Pre-Action Protocol)
An essential first step in any contract dispute is sending a formal "Legal Notice." This document outlines the claim, details the breach, and specifies the relief sought. A well-drafted legal notice can facilitate an early resolution and is a crucial procedural requirement before initiating contract enforcement through the courts.
Legal Reference: Code of Civil Procedure, 1908.
2. Alternative Dispute Resolution (ADR)
Bangladeshi courts strongly encourage ADR to resolve contract disputes. The main methods are:
- Mediation: A neutral third party helps negotiate a settlement.
- Arbitration: A binding decision made by an arbitrator, applicable if your contract includes an arbitration clause. This is a common feature in robust contract drafting.
Legal Reference: Arbitration Act, 2001; Code of Civil Procedure, 1908 (Section 89A).
3. Limitation Period for Contract Claims
The Limitation Act, 1908, sets the statutory deadline for filing a lawsuit. Suing for breach of contract after this period will result in the case being dismissed. Understanding these time limits is a critical aspect of contract law in Bangladesh.
| Type of Contract Claim | Limitation Period | Governing Article (The Limitation Act, 1908) |
|---|---|---|
| Compensation for breach of an unwritten or unregistered contract. | 3 Years from the date of the breach. | Article 115 |
| Specific performance of a contract. | 3 Years from the performance date, or when performance is refused. | Article 113 |
| Recovery on a bill of exchange or promissory note. | 3 Years from the due date. | Article 78 |
| Price of goods sold and delivered (no fixed credit). | 3 Years from the delivery date. | Article 52 |
| Recovery of a loan. | 3 Years from when the loan was made. | Article 57 |
The Lawsuit Process for Breach of Contract
This interactive timeline outlines the civil litigation process for a breach of contract lawsuit in Bangladesh. Click each stage to understand the legal steps involved in contract enforcement through the courts.
Filing of Plaint
The lawsuit officially begins when the plaintiff files a "plaint" with the court. This legal document details the facts of the contract breach, the relief sought, and establishes jurisdiction. Solid contract drafting is reflected in the clarity of the plaint.
Legal Reference: Code of Civil Procedure, 1908 (Order VII).
Summons Issued
The court issues a "summons" to the defendant, formally notifying them of the breach of contract lawsuit and requiring their appearance in court.
Legal Reference: Code of Civil Procedure, 1908 (Order V).
Written Statement
The defendant responds with a "Written Statement," admitting or denying the allegations of the contract breach. This document is their primary defense in the contract dispute.
Legal Reference: Code of Civil Procedure, 1908 (Order VIII).
Framing of Issues
The court identifies the key legal and factual questions in the contract dispute. The trial will focus on resolving these "issues" to determine if a breach occurred.
Legal Reference: Code of Civil Procedure, 1908 (Order XIV).
Trial & Evidence
Both parties present evidence to prove their case. This stage of contract litigation involves examining witnesses and submitting documents (like the original contract) to the court.
Legal Reference: Evidence Act, 1872; Code of Civil Procedure, 1908 (Order XVIII).
Final Arguments
Lawyers summarize the evidence and apply principles of Bangladesh contract law to argue their client's position on the alleged breach of contract.
Legal Reference: Code of Civil Procedure, 1908 (Order XVIII).
Judgment & Decree
The court delivers its "Judgment" (the decision) and issues a "Decree" (the official, enforceable order). This decree is the key to contract enforcement if the other party does not comply voluntarily.
Legal Reference: Code of Civil Procedure, 1908 (Order XX).
Evidence & Remedies in Bangladesh Contract Law
Understanding admissible evidence and available remedies is crucial for successful breach of contract litigation and enforcement in Bangladesh.
Admissible Evidence for Contract Claims
According to the Evidence Act, 1872, the following are key types of evidence in a contract dispute:
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Documentary Evidence: The written contract is paramount. Good contract drafting is your first line of defense. Emails, invoices, and correspondence are also critical.
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Oral Evidence (Testimony): Sworn testimony from witnesses with direct knowledge of the contractual relationship and subsequent breach.
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Electronic Records: Digital evidence is admissible but may require certification to prove authenticity, a key consideration in modern contract law.
Legal Reference: The Evidence Act, 1872.
Court Remedies for Breach of Contract
If a breach is proven, the court can grant several remedies to enforce the contract's terms or compensate the injured party:
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Damages: Monetary compensation for losses caused by the breach of contract.
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Specific Performance: An order forcing the breaching party to fulfill their contractual obligations, a powerful tool for contract enforcement.
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Injunction: A court order to prevent a party from continuing to breach the contract.
Legal Reference: The Contract Act, 1872; The Specific Relief Act, 1877.
Contract Enforcement: Executing a Court Decree in Bangladesh
Obtaining a favorable judgment is a major victory, but effective contract enforcement may require further legal action. If the judgment-debtor does not comply, you must file an "Execution Suit" to compel payment or performance.
Attachment and Sale of Property
A primary method of contract enforcement where the court seizes and sells the debtor's assets to satisfy the judgment amount.
Garnishee Order
The court orders a third party (like a bank) holding money for the debtor to pay the creditor directly. This is a swift contract enforcement tool.
Arrest and Detention
As a last resort for enforcing a monetary decree, the court can order the civil imprisonment of the judgment-debtor to compel payment.
Appointment of a Receiver
A court-appointed receiver manages the debtor's property, using any income to pay off the debt, ensuring the contract judgment is satisfied.
Legal Reference for all Enforcement Methods: The Code of Civil Procedure, 1908 (Section 51 and Order XXI).
Contract Enforcement for Foreigners in Bangladesh
Foreign individuals and companies have robust mechanisms for enforcing contracts under Bangladesh contract law, though some specific considerations apply.
Filing a Breach of Contract Lawsuit
Foreign entities can sue for breach of contract just like local citizens. The key is establishing jurisdiction and appointing a local lawyer. A court may require a foreign plaintiff to provide a security deposit for the defendant's legal costs, a procedural step in international contract litigation.
Legal Reference: Code of Civil Procedure, 1908 (Order XXV).
Enforcing a Bangladeshi Judgment Abroad
After a successful contract enforcement case, repatriating recovered funds is a key step. This is permissible but must comply with Bangladesh's foreign exchange regulations, often requiring approval from the Bangladesh Bank. Our experts guide you through this process.
Enforcing a Foreign Judgment in Bangladesh
If you hold a judgment from a court in a 'reciprocating territory' (e.g., UK, Singapore), you can file for direct contract enforcement in Bangladesh. For judgments from 'non-reciprocating' territories (e.g., USA), a new suit is filed in Bangladesh, where the foreign judgment serves as powerful evidence.
Legal Reference: Code of Civil Procedure, 1908 (Section 44A).
Expert Legal Services for Contract Law & Drafting
LegaSeba LLP offers comprehensive legal support for all aspects of contract law in Bangladesh, from proactive contract drafting to aggressive contract enforcement.
1. Proactive Contract Drafting
To prevent future disputes, we offer expert contract drafting services. We create clear, robust, and legally enforceable contracts tailored to your specific needs, forming the bedrock of your legal protection.
2. Pre-Litigation & Negotiation
We handle all pre-litigation steps, including drafting powerful Legal Notices. Our skilled negotiators represent you in ADR to achieve a favorable out-of-court settlement for your contract dispute.
3. Breach of Contract Litigation
When a lawsuit is unavoidable, we manage the entire breach of contract litigation process, from filing the plaint to presenting compelling arguments in court to protect your rights.
4. Judgment & Contract Enforcement
Winning is not enough. We are relentless in contract enforcement, initiating execution proceedings to attach property, seize funds, and take all necessary legal action to ensure you recover what you are owed.
Contact Us for Contract Law Expertise
Whether you need help with contract drafting, are facing a breach of contract, or require contract enforcement, contact us for a confidential consultation.
Disclaimer: This information is for educational purposes only and does not constitute legal advice. You should consult with a qualified lawyer in Bangladesh for advice on your specific situation.