A great deal of Pakistani business is done on WhatsApp, a purchase order, and trust. It works far more often than lawyers like to admit — until a deal is large, a relationship sours, or one side needs to prove what was agreed.

You do not need a hundred-page contract. You need the right short document, and a few clauses in it that actually work.

Non-disclosure agreement (NDA)

Signed before you show someone your numbers, customer list, formula, code or plans.

What matters:

  • Define confidential information by category, not by requiring everything to be stamped "confidential" — nobody stamps anything
  • Permitted purpose: the recipient may use it only to evaluate the specific transaction
  • Carve-outs: information already public, already known, independently developed, or required to be disclosed by law
  • Duration — obligations should outlast the discussions, and trade secrets should not have a fixed expiry
  • Return or destruction on request
  • Remedies: acknowledge that damages may be inadequate and injunctive relief appropriate

Be realistic: an NDA does not stop a determined person from using your idea. What it does is create a documented obligation, deter casual disclosure, and give you a cause of action. Where the real asset is registrable, register it — see trade mark registration and copyright.

Memorandum of understanding (MOU)

The most misunderstood document in Pakistani commerce. People sign MOUs believing they are binding, or believing they are not — and both errors are expensive.

An MOU is binding to the extent it is intended to be and is sufficiently certain. The label does not decide it; the content does.

So decide deliberately and say so:

  • State clearly which clauses are binding — typically confidentiality, exclusivity, costs, governing law — and that the commercial terms are subject to contract
  • Include a long-stop date after which it lapses
  • Avoid language of obligation ("shall supply", "will pay") for terms you do not intend to be bound by

An MOU that reads like a contract will be treated like one.

Service agreement

For anyone providing or receiving services — agencies, IT, consultants, contractors, facilities.

  • Scope of work, in a schedule specific enough to argue about
  • Deliverables, timelines and acceptance — who signs off, and what happens if they do not
  • Fees, milestones, expenses, and payment terms with interest on late payment
  • Change control — the single most useful clause in any services contract, because scope always changes and disputes are almost always about unpaid extras
  • Intellectual property: who owns what is created. Default positions are not what most clients assume
  • Confidentiality and data, particularly where customer data is handled — see data protection
  • Limitation of liability, and exclusion of indirect loss
  • Termination, for convenience and for breach, and what is payable on exit
  • Whether the provider is an independent contractor and not an employee — a distinction that matters greatly in practice. See employment contracts

Supply and purchase terms

For goods, the essentials: specification, quantity, price and price adjustment, delivery and Incoterm, transfer of title and risk (which do not always move together), inspection and rejection windows, warranty, remedies for defective goods, and retention of title until payment — which is worth far more than it costs to include.

Add credit limits and security where you supply on credit. See dealership and distribution agreements and recovering money owed.

Letter of intent and term sheet

Useful for framing a transaction. Same discipline as the MOU: say what binds and what does not, and put a date on it.

The clauses people leave out, and regret

Notices — where a formal notice goes, and how. Disputes are lost because termination was sent to an email nobody read.

Force majeure — defined events, notice requirements, and what happens on prolonged interruption. Post-2020 nobody should be drafting this loosely.

Assignment and change of control — you contracted with them, not with whoever buys them.

Entire agreement, so the deal is the document and not the WhatsApp thread.

Governing law and dispute resolution. For domestic contracts, Pakistani law and a named forum. For cross-border contracts, arbitration with a properly specified seat — this determines whether any eventual award is enforceable against local assets, and it is the most consequential clause in the contract. See drafting an arbitration clause and enforcing foreign judgments and awards in Pakistan.

Execution: the boring points that void agreements

  • Signed by someone with authority — for a company, a director or a person under a board resolution or power of attorney
  • Correct legal names of the parties, not trading names
  • Stamp duty where applicable, at the provincial rate. Unstamped or insufficiently stamped instruments create real problems in evidence, and the penalty is far more than the duty
  • Registration where the law requires it, particularly for interests in immovable property
  • Every page initialled, schedules attached, and each party holding an executed original

Electronic signatures and electronically concluded contracts are recognised in Pakistan, but keep the audit trail — who signed, when, and from where.

When there is no contract at all

Not fatal. Purchase orders, invoices, delivery challans, acknowledged statements of account, and consistent WhatsApp exchanges have all been used to establish terms. Keep them, in order, and get balances acknowledged in writing periodically — an acknowledgement also protects you against limitation running out.

How the firm can help

We draft and review the full commercial suite — NDAs, MOUs, services, supply, distribution, licensing and shareholder documents — in a form proportionate to the deal rather than padded, and we advise on execution, stamping and enforceability before signature.

Where a dispute has already started, we work with what exists and build the case from it.

See corporate and commercial, or contact the firm.