A contract normally begins with a legally recognisable offer, an absolute and properly communicated acceptance, and lawful consideration exchanged between the parties. Negotiation, expressions of interest, advertisements, quotations, and conditional replies do not necessarily create a contract.
Governing law
Sections 2 to 9 of the Contract Act, 1872 govern proposals, acceptance, communication, revocation, and express or implied promises. Section 10 sets out the wider conditions of enforceability. Sections 23 and 25 address lawful consideration and agreements made without consideration.
What is an offer?
Under section 2(a), a person makes a proposal when that person signifies willingness to do or abstain from doing something with a view to obtaining another person’s assent. The proposal must therefore be more than a statement of intention or an invitation to negotiate.
A message saying, “I may sell my apartment for around Tk 1.5 crore” is usually preliminary. A message stating, “I offer to sell Apartment 5B, identified in the attached schedule, for Tk 1.5 crore, subject to written acceptance by 5 p.m. on 20 July,” is much closer to a definite offer. A land transaction would still have to comply with the applicable writing and registration requirements.
Advertisements, catalogues, menus, and price lists often invite customers to make offers rather than themselves constituting final offers. The answer depends on the language, certainty, stock limitations, required approvals, and surrounding circumstances. A public promise may operate differently where it clearly states definite conditions and shows an intention to be bound when those conditions are performed.
Communication of an offer
Section 3 provides that communication of proposals, acceptance, and revocation may be made by an act or omission intended to communicate them or having the effect of communicating them.
An offer generally cannot be accepted by someone who does not know it exists. The offer should therefore reach the intended recipient in an intelligible form. For commercial transactions, retain proof of the email, courier delivery, electronic message, tender submission, or meeting record through which it was communicated.
What is acceptance?
Section 2(b) provides that when the person to whom the proposal is made signifies assent, the proposal is accepted. A proposal, when accepted, becomes a promise.
Under section 7, acceptance must be absolute and unqualified. It must also be expressed in a usual and reasonable manner unless the offer prescribes a particular method. If the offeror requires acceptance through a signed letter by a stated date, a telephone reply or late email may not satisfy the prescribed process.
Example: A offers to supply 1,000 chairs at Tk 2,500 each, with delivery by 30 September. B replies, “We accept 1,000 chairs at Tk 2,300 each.” B has not accepted A’s price. B has made a counter-proposal.
If B replies, “We accept your offer exactly as stated,” a contract may be formed, subject to capacity, authority, lawful consideration, required formalities, and any stated condition such as board approval or execution of a formal agreement.
Acceptance through conduct
Section 8 recognises acceptance through performance of the conditions of a proposal or acceptance of consideration offered with it. Section 9 recognises promises made expressly in words or implied through conduct.
For example, a transport company sends a rate schedule to a regular customer. The customer places an order under that schedule, and the company collects and transports the goods without objection. Their conduct may establish an agreement even if no single document contains every term.
In United Commercial Bank Ltd v Rahimafrooz Batteries Ltd, reported at 7 BLC (AD) 73, the Appellate Division is reported to have treated acceptance and delivery of possession in the factual circumstances as producing a concluded contract.
Silence is not normally acceptance
An offeror cannot ordinarily impose a contract by stating, “If you do not reply within three days, you will be treated as having accepted.” There must be an act, communication, or legally relevant course of dealing showing assent.
Silence may nevertheless form part of the factual context where the parties have an established course of dealing, one party performs with the other’s knowledge, and the recipient accepts the benefit. The conclusion depends on the full evidence rather than silence alone.
Revocation and timing
Section 5 permits revocation of a proposal before the communication of its acceptance is complete against the proposer. Acceptance may likewise be revoked before its communication is complete against the acceptor. The detailed statutory communication rules must be applied to the method used.
In modern commercial practice, disputes often arise over whether an email, electronic platform notification, or message was sent, received, opened, or subject to an automated approval process. The contract should state when electronic communications are deemed received and which persons or accounts are authorised.
What is consideration?
Under section 2(d), consideration may consist of an act, abstinence, or promise undertaken at the desire of the promisor by the promisee or another person. Consideration is the legal value exchanged for a promise.
If A promises to deliver equipment and B promises to pay Tk 500,000, A’s promise to deliver is consideration for B’s promise to pay, and B’s promise to pay is consideration for A’s promise to deliver.
Consideration does not have to consist only of money. It may include transferring property, supplying services, refraining from exercising a legal right, providing a guarantee, settling a disputed claim, or promising future performance.
Consideration must be lawful
Section 23 makes consideration or the object of an agreement unlawful where it is forbidden by law, defeats the provisions of law, is fraudulent, involves injury to another person or property, or is considered immoral or opposed to public policy.
For example, payment for lawful representation in obtaining a licence may be valid. Payment made on the condition that an official be bribed is unlawful. The fact that a lawful service is mixed with an unlawful purpose may affect enforceability of the entire arrangement or the unlawful part, depending on severability and the statutory rule involved.
Is consideration always required?
Section 25 states that an agreement without consideration is void unless it falls within a statutory exception. Important exceptions include certain written and registered promises based on natural love and affection between near relatives, promises to compensate a person who has voluntarily done something for the promisor, and signed written promises to pay a debt barred by limitation.
A gift already completed may remain valid even though the recipient gave no consideration. A mere promise to make a future gift, however, is not necessarily enforceable.
Tenders and conditional approvals
A tender submission is usually an offer by the bidder. The invitation to tender generally invites offers, although the tender conditions may create separate procedural obligations.
In Sahana Chowdhury v Md Ibrahim Khan, reported at 21 BLD (AD) 79 and 6 BLC (AD) 67, no concluded contract was reported to have arisen because acceptance had not been communicated. In Bangladesh Muktijoddah Kalyan Trust v Kamal Trading Agency, 50 DLR (AD) 171, the Appellate Division is reported to have stressed compliance with the prescribed or reasonable mode of acceptance.
Practical procedure and documents
A commercial offer should identify the parties, goods or services, quantity, specifications, price, taxes, payment terms, place and date of performance, duration of validity, acceptance method, and required approvals. It should state whether it is binding or only a quotation.
Acceptance should reproduce or clearly identify the offer and state unconditional assent. Any change should be documented as a counter-offer or amendment. Keep tender documents, bid submissions, acceptance letters, work orders, purchase orders, delivery records, invoices, payment confirmations, and communications.
For related guidance, see Ain.bd topics What Makes a Contract Legally Valid in Bangladesh?, Oral Agreements in Bangladesh: Are They Legally Enforceable?, and Breach of Contract: Available Remedies and Compensation.
Courts and authorities
Disputes concerning formation are ordinarily determined by a competent civil court under the Code of Civil Procedure, 1908. Arbitration may apply where the parties made a valid arbitration agreement. Tender disputes involving statutory or public-law duties may raise additional questions, but an ordinary commercial disagreement does not automatically become a constitutional writ matter.
Exceptions and open questions
Whether a communication is an offer or an invitation to negotiate is determined objectively from its wording and context. Whether conduct amounts to acceptance is similarly fact-sensitive.
Electronic contracting may also engage statutory provisions governing electronic records and signatures. Because the formal requirements vary by transaction, regulated contracts and land-related agreements require separate verification.
Common mistakes
Common mistakes include accepting only part of an offer while assuming the original contract exists, failing to communicate acceptance, accepting after expiry, changing material terms without recognising the reply as a counter-offer, treating a quotation as guaranteed availability, and assuming payment alone cures uncertainty or illegality.
Another frequent error is confusing consideration with adequacy. Courts do not ordinarily rewrite a bargain merely because one party later considers it financially poor. However, gross inequality may become relevant where fraud, undue influence, incapacity, or another vitiating factor is proved
Law updated as of 13 July 2026.
Primary-source references
The Contract Act, 1872, sections 2 to 10, 23 and 25; the Code of Civil Procedure, 1908, section 9; Bangladesh Muktijoddah Kalyan Trust v Kamal Trading Agency, 50 DLR (AD) 171; Sahana Chowdhury v Md Ibrahim Khan, 21 BLD (AD) 79 and 6 BLC (AD) 67; and United Commercial Bank Ltd v Rahimafrooz Batteries Ltd, 7 BLC (AD) 73.
Disclaimer
This article is general legal information, not legal advice. Whether a contract was formed depends on the exact communications, conduct, authority, formalities, and surrounding facts. Obtain advice from a licensed advocate in Bangladesh for a specific transaction or dispute.