Bangladesh’s Contract Act does not use “force majeure” as a general statutory label. The effect of an extraordinary event depends first on the wording of the contract and, where performance has become objectively impossible or unlawful, on sections 32, 56, and 65 of the Contract Act, 1872. Increased cost, inconvenience, or reduced profitability does not automatically discharge a contract.
Governing law
Section 32 governs contingent contracts. A contract dependent on an uncertain future event cannot be enforced unless and until that event happens. If the event becomes impossible, the contingent contract becomes void.
Section 56 provides that an agreement to perform an act impossible in itself is void. It also provides that a contract to perform an act that later becomes impossible or unlawful, because of an event the promisor could not prevent, becomes void when the act becomes impossible or unlawful. The section additionally addresses compensation where a promisor knew, or with reasonable diligence might have known, that the promised act was impossible or unlawful.
Section 65 requires a person who received an advantage under an agreement later discovered void, or under a contract that becomes void, to restore the advantage or compensate the person from whom it was received.
Section 63 permits a promisee to dispense with or remit performance, extend time, or accept another satisfaction. This may allow parties to restructure performance instead of treating the contract as discharged.
Contractual force majeure and statutory frustration
A force majeure clause is a contractual allocation of risk. It commonly identifies events such as natural disasters, war, government prohibition, epidemic, fire, port closure, interruption of transport, or disruption of essential utilities. The clause may excuse delay, suspend performance, extend time, require mitigation, allow price adjustment, or permit termination after a stated period.
Section 32 is particularly relevant where the parties have expressly made performance or contractual consequences dependent on the occurrence or non-occurrence of a specified event. The clause itself determines the covered events, required causal connection, notice process, and remedy.
Section 56 applies by operation of law where subsequent performance becomes impossible or unlawful. It is not necessary for the contract to use the words “force majeure,” although a detailed contractual clause may determine whether and how the parties allocated the risk.
What counts as impossibility?
Physical destruction of the subject matter is a clear example. Other possibilities include a change in law that prohibits the agreed act, cancellation of a legally indispensable licence without fault of the party relying on the event, or disappearance of a necessary state of affairs forming the foundation of the contract.
The statutory test is not simply whether performance has become more difficult or expensive. A rise in raw-material prices, foreign-exchange loss, labour shortage, supply delay, reduced demand, or loss of expected profit does not by itself establish impossibility under section 56. The result may differ if the force majeure clause expressly covers the event and provides contractual relief.
A party cannot ordinarily create the obstacle through its own act and then rely on that obstacle as an uncontrollable event. The event must also have the required causal connection with the obligation that could not be performed.
Temporary and permanent impediments
A contractual clause may distinguish delay from permanent impossibility. For example, a port closure lasting ten days may justify an extension, while a permanent export ban may trigger termination.
Section 56 states that a contract becomes void when performance becomes impossible or unlawful. Whether a temporary event crosses that threshold depends on the contract’s purpose, timing, and surrounding facts. If the commercial purpose can still substantially be achieved after a reasonable delay, suspension or extension may be more appropriate than discharge.
Relevant Bangladesh case law
In Azizur Rahman v Abdus Sakur, reported at 36 DLR (AD) 195, the Appellate Division is reported to have held that where the subject matter of a lease was completely destroyed and the relevant Transfer of Property Act provision did not apply, the doctrine embodied in section 56 could apply.
In Md Mokbul Hossain Khandker v Mst Jaheda Khatun, reported at 15 BLD (AD) 185, the Court is reported to have considered frustration in relation to the destruction of leased premises. The decision also demonstrates the importance of properly pleading the defence. A party cannot safely rely on frustration for the first time after conducting the case on contradictory factual positions.
In Sooraya Rahman v Hajee Md Elias, reported at 8 BLC (AD) 7, the Appellate Division is reported to have found that the contract had become frustrated through the plaintiff’s action and that the claimed decree could not be granted.
These authorities arose in fact-specific settings and should not be treated as creating an automatic rule for every fire, disaster, government measure, or commercial interruption.
Notice and contractual procedure
Read the clause before sending a general notice. It may require notice within a specified number of days, identification of the affected obligation, evidence of the event, estimated duration, mitigation measures, periodic updates, and a termination notice after prolonged suspension.
The notice should explain precisely how the event prevented or delayed performance. Merely announcing that a pandemic, strike, flood, war, or government decision occurred is insufficient if performance could have continued through reasonable alternatives.
A party should avoid describing an event as force majeure before checking whether the contract includes that event, whether exclusions apply, and whether the event existed or was foreseeable when the contract was made.
Evidence and documents
Preserve the contract, force majeure clause, amendments, government orders, gazettes, import or export restrictions, licence records, weather or disaster notices issued by competent authorities, port notices, transport cancellations, supplier communications, inventory records, mitigation efforts, alternative quotations, and all notices exchanged.
Internal records should show when the event began, which obligations were affected, what alternatives were considered, why those alternatives were unavailable or unreasonable, and when performance became possible again.
Financial consequences
The consequences are controlled first by the clause. It may preserve payment for completed work, allocate storage costs, extend deadlines, release both parties from future obligations, or permit termination without damages.
Where the contract becomes void under section 56, section 65 may require restoration of benefits already received. For example, an advance paid for performance that can no longer lawfully occur may have to be returned, subject to contractual allocation, completed performance, expenses, set-off, and other applicable legal rules.
Frustration is not the same as breach. If performance is legally discharged without fault, ordinary breach damages may not follow. If the event was covered by the party’s assumed risk, caused by that party, or did not actually prevent performance, failure to perform may remain a breach.
Courts, arbitration, and relief
Disputes ordinarily go to the contractually chosen arbitration forum or a competent civil court. The deciding body will interpret the clause, determine causation, assess whether notice requirements were fulfilled, and decide whether the event suspended, extended, excused, or discharged performance.
Applications for urgent interim relief may arise where a party threatens to call security, terminate a project, dispose of goods, or interfere with property. The correct forum and relief depend on the arbitration agreement, contract, and procedural law.
Exceptions and unsettled questions
There is no universal list of force majeure events applicable to every Bangladeshi contract. Terms such as “act of God,” “government action,” “epidemic,” “supply-chain interruption,” and “events beyond reasonable control” require interpretation in context.
Whether an event was foreseeable does not alone decide the issue. The decisive questions usually include whether the risk was allocated, whether the event caused the non-performance, whether alternatives existed, and what remedy the clause provides.
The application of section 56 to particular long-term leases and property arrangements may interact with the Transfer of Property Act, 1882. The older reported cases should be read in their precise factual and statutory context.
Common mistakes
Common mistakes include treating any difficulty as force majeure, ignoring the clause’s notice deadline, failing to prove causation, stopping all work when only part was affected, overlooking alternative suppliers, assuming the clause automatically allows termination, and retaining advances after the contract has become void without considering section 65.
Another mistake is copying a force majeure clause from a foreign contract without adapting it to Bangladeshi law, the relevant industry, payment structure, import process, licences, and dispute forum.
For related Ain.bd guidance, see Breach of Contract: Available Remedies and Compensation, Penalty and Liquidated Damages: What Is the Legal Difference?, and What Makes a Contract Legally Valid in Bangladesh?
Law updated as of 13 July 2026.
Primary-source references
The Contract Act, 1872, sections 32, 56, 63 and 65; Azizur Rahman v Abdus Sakur, 36 DLR (AD) 195; Md Mokbul Hossain Khandker v Mst Jaheda Khatun, 15 BLD (AD) 185; and Sooraya Rahman v Hajee Md Elias, 8 BLC (AD) 7.
Disclaimer
This article is general legal information and is not legal advice. Force majeure and frustration are highly dependent on contractual wording, causation, evidence, and the nature of the event. Consult a licensed advocate in Bangladesh before suspending, terminating, or refusing contractual performance.