Every age has a
buzzword that sells to the masses, since 2023, this buzzword has been
Artificial Intelligence. What started off as a consumer grade chatbot which
answered questions, has evolved and developed to a level of running basic to
even mid-tier business tasks autonomously via consumer grade Agentic AI.
Agentic AI are highly autonomous systems which can independently plan, reason,
decide, and execute multi-step reasoning tasks to execute tasks with minimal
human input: Somewhat like Jarvis from Iron Man. Unlike consumer grade AI such
as Chatgpt or Gemini, these agentic AI mirrors the concept of human agency by
handling real life tasks delegated to it autonomously.
So, with more and
more businesses facing the choice of adopting emerging AI technologies into
their workflow, who becomes liable for the actions of these “Agentic AI”? This
question becomes all the more important if we consider the fact that more and
more entry level tasks to basic mid-tier tasks are being delegated to these
agentic ai models? Furthermore, in our legal jurisdiction of Bangladesh, it is
even more vague as there is a huge gap between technologies emerging vs
laws/regulations being adopted to regulate them.
Bangladesh does
not have any law/regulations specifically addressing AI liability.
Unfortunately, the National AI Policy Bangladesh 2026 which aims for regulating
AI by 2030 does not address this issue.
For now, AI liability
in Bangladesh's contract law remains pinned on the human operating it, treating
AI tools as extensions of the user. If the user uses the content produced by an
AI tool and subsequently uses it, the user shall be liable. This essentially
absolves AI companies of any form of legal liability regardless of their
output.
Automation via agentic
AI may not cause irremediable losses when used internally at organisations, however,
may result in major problems when deployed on a large scale to handle external
tasks on behalf of an organization.
Under Bangladeshi
Contract Law, organizations cannot delegate core tasks requiring personal
judgment, legal capacity or authority to AI tools due to delegation and
capacity factors under Section 190 of the Contract Act,1872, which bars agents
from delegating acts they must perform themselves unless business or trade
customs/necessity allows sub agency. AI cannot qualify neither as a human or
sub agent, neither a human sub-agent or a recognized entity with any mandates.
It can be argued that
The Companies Act 1994 permits boards to delegate to directors, managers, or
human agents board resolutions, however AI lacks legal capacity as they are not
“persons” who have been defined as “shall include any company or association
or body of individuals, whether incorporated or not” in s.3(39) of the
General Clauses Act, 1897 resulting in any decision related act by agentic AI
tools invalid.
As per the draft
AI Policy 2026-2030, court shall be inclined to view AI as a non-delegable
tool, holding the delegating human or organisation liable while holding AI
decisions void and unenforceable.
Another important
aspect under Bangladeshi law is, the Contract Act demands that the parties to a
contract have the legal capacity which includes a majority age of 18, sound
mind and no disqualifications under Section 11 of the act. This essentially
flags AI as non-persons and not holding legal capacity. This requirement is to
be read in line with s.10 of the act which requires free consent from competent
parties to the contract, in this regard, AI tools lack intent rendering it’s
output void. Furthermore, AI tools only execute what the user instructs it to
conduct thereby the liability of it falling on the operator.
For a wide
interpretation of Chapter X (Sections 182-238) of the Contract Act 1872
outlining the agency principles, it casts the AI tool operator as the principal
and the AI tool as the agent. Essentially, this makes the operator fully liable
for any errors. Can the AI company which developed the AI tool be held
accountable for such errors? Unfortunately, no if we apply S.73 of the Contract
Act which outlines the suffering party shall can receive compensation from the
breaching party, as discussed above, the operator in this scenario shall be
held liable, not the AI developer.
As of now, no
precedent setting case laws exist, however, Bangladesh being a common law
system will draw and use precedents from other common law jurisdictions. In
this space, the most common case law precedents drawn by lawyers abroad are crypto/stock
market trades executed by AI bots following the instructions of the users
(operators).
Recent U.S. case
law reinforces the idea that AI‑generated
records are treated as evidentiary admissible
material rather than privileged communications. In United States v.
Heppner, No. (2026), Judge Jed S. Rakoff held that a defendant’s AI‑generated documents and chat‑history with a consumer‑grade AI tool (Anthropic’s Claude) were not protected by attorney‑client privilege and were
admissible as evidence in the criminal proceeding. The court reasoned that the
AI platform is not an attorney, owes no fiduciary duties, and operates under a
privacy policy that explicitly allows data collection and disclosure in
litigation, so the user could have no reasonable expectation of
confidentiality. This decision signals that, in leading common‑law jurisdictions, AI‑tool conversations are likely to be
treated as discoverable and admissible where relevant, especially to show
knowledge, planning, or state of mind.
Due to the fast
pace adoption of this technology, its suffice to say such similar claims shall
emerge more in the future as cloud computing gets cheaper and more AI
developers enter the market offering their own unique products.
The Cyber Security
Act 2023 and draft National AI Policy 2026-2030 regulate data and ethics but
ignore contractual personhood for AI, leaving it to be determined by a
150-year-old Contract Act as the sole guidepost. Some may argue, for now it can be applied,
interpreted and used, however given the pace of these emerging technologies and
other ancillary developments, this can soon be deemed to be no fit for purpose
requiring a more updated, easy to use and modern approach to handling such
disputes.
First published by BD Opinion Jurists: Agentic AI and the Boundaries of Contractual Liability: A (Hypothetical) Bangladesh Perspective
Written by
Shafqat Aziz
Barrister (of Lincoln's
Inn)
LLM Corporate Law, NTU
Industry & Alumni
Fellow, NTU
PGDL, UWE Bristol
LLB, BPP University
Accredited
Civil-Commercial Mediator,
(ADR-ODR International)
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