Contract Law · 17.11.2024

Contract Lawyers in Vietnam

Contract lawyers in Vietnam earn their fee before the dispute, not after it. This page sets out the provisions that decide whether a Vietnamese contract holds — validity, form, penalty caps, remedies, force majeure, hardship, arbitration and limitation — with the article numbers,…

Lawyer UnilawReading time: 17 min

By Lawyer Le Phuong Thanh – UniLaw LLC

UniLaw’s contract lawyers in Vietnam advise Vietnamese and foreign parties on commercial contracts from offices in Hanoi, Ho Chi Minh City and Nha Trang. Most of the disputes we are asked to fix began with a clause that was lawful in the client’s home jurisdiction and unenforceable in Vietnam. The commonest of them costs the claimant the difference between what it thought it had agreed and eight per cent.

The translations below are UniLaw’s working translations of the Vietnamese text. They are given so you can locate the provision; the Vietnamese original governs.

A decided case contract lawyers in Vietnam point to

Judgment No. 11/2025/KDTM-PT of 6 September 2025 — Court of Appeal of the Supreme People’s Court, dispute over a sale of goods.

A Korean seller, Haesim Trading Co., Ltd, sued a Vietnamese buyer over a sale concluded on a proforma invoice. The Court of Appeal rejected the buyer’s appeal and upheld the first-instance judgment, cancelling the sale contract. It applied Articles 423, 424 and 427 of the Civil Code on cancellation and its consequences, together with Article 34 and Article 306 of the Commercial Law on delivery and on interest for late payment.

Two things contract lawyers in Vietnam take from it. A proforma invoice can be the contract — the court treated it as the instrument and worked from its terms. And cancellation is not the end of the money: Article 427 governs what each side must give back, and Article 306 runs interest on the sum withheld.

Decided contract cases, with the reasoning, are published on case.unilaw.vn.

The legal basis contract lawyers in Vietnam work from

Civil Code, Law No. 91/2015/QH13 — Article 117, Article 129, Article 398, Article 401, Article 418, Article 420, Articles 423-427.
Commercial Law, Law No. 36/2005/QH11, consolidated as No. 113/VBHN-VPQH of 27 August 2025 — Article 292, Article 294, Article 301 (the 8% penalty cap), Article 302, Article 306, Article 319.
Law on Commercial Arbitration, consolidated as No. 60/VBHN-VPQH of 15 August 2025 — Articles 16, 18, 19, 33.
Civil Procedure Code, consolidated as No. 21/VBHN-VPQH of 12 February 2026 — Article 470.
Law on Protection of Consumer Rights, Law No. 19/2023/QH15 — Articles 23 and 25.

What a contract lawyer in Vietnam actually does

Three things, in descending order of value. First, choosing the governing regime and drafting to it — a contract drafted to the Civil Code and one drafted to the Commercial Law produce different numbers on the same breach. Second, making the dispute clause work: an arbitration clause that fails the form test is not a weaker clause, it is no clause. Third, running the claim when it comes, within a limitation period that is shorter than most foreign parties expect.

What a contract lawyer in Vietnam cannot do is repair form after the event, except in the narrow case described below.

Which statute governs your contract in Vietnam

Two instruments do most of the work, and they do not say the same thing.

The Civil Code, Law No. 91/2015/QH13 — the general law of obligations. It applies to every contract unless a specialised law displaces it.
The Commercial Law, Law No. 36/2005/QH11, in the consolidated text No. 113/VBHN-VPQH of 27 August 2025 — applies to commercial activity between traders for profit.

The practical consequence is the penalty ceiling, and it is the reason this is the first question a contract lawyer in Vietnam asks about a draft.

Contract validity in Vietnam: the four conditions

Article 117 of the Civil Code sets the conditions for a civil transaction to be effective: the parties must have legal and civil act capacity appropriate to the transaction; participation must be entirely voluntary; the purpose and content must not breach a prohibition of law or offend social morality. Form is a condition of validity only where a law so provides (Article 117(2)).

That last limb matters. Form is not a general condition in Vietnam. It bites only where a statute says it does — and then it bites hard.

Form, notarisation, and the two-thirds rule

Article 129 of the Civil Code is the provision that saves badly executed deals, and it is narrower than it looks. A transaction that breaches a form requirement is void, with two exceptions:

Where the transaction had to be in writing and the writing does not comply with the law, but one or both parties have performed at least two-thirds of the obligation, the Court may, on application, recognise it.
Where the transaction was made in writing but breached a mandatory notarisation or authentication requirement, and one or both parties have performed at least two-thirds of the obligation, the Court may recognise it — and in that case the parties do not have to go back and notarise.

Two points for anyone relying on this. The threshold is two-thirds of the obligation, not two-thirds of the money, and it is measured against the obligation actually undertaken. And recognition is a court decision on application, not an automatic cure: you are litigating, not closing.

Notarisation itself is defined in Article 2(1) of the Notarisation Law, Law No. 46/2024/QH15, as a public service by which a notary certifies the authenticity and lawfulness of a transaction that the law requires to be notarised, that the Government is empowered to require to be notarised, or that the parties choose to notarise. Voluntary notarisation of a contract that does not require it is available and is sometimes worth the fee for evidential reasons alone.

What a Vietnam contract should contain

Article 398 of the Civil Code leaves content to the parties and then lists what a contract may contain: subject matter; quantity and quality; price and payment method; time limit, place and method of performance; the parties’ rights and obligations; liability for breach; and the dispute resolution method.

The list is permissive, not mandatory, which is why so many Vietnamese contracts are silent on the last two items — and why a contract lawyer in Vietnam spends most of the drafting time there.

When the contract takes effect

Under Article 401, a lawfully concluded contract takes effect from the time of conclusion unless the parties agree otherwise or a relevant law provides otherwise. From that moment the parties must perform, and the contract may only be amended or cancelled by agreement or under a provision of law.

If your deal depends on a condition precedent — a licence, a registration, a board approval — say so expressly. The default is immediate effect.

The eight per cent cap: the most expensive clause in Vietnam

Article 301 of the Commercial Law: the penalty for breach of a contractual obligation, or the total penalty for several breaches, is as agreed by the parties, but not more than 8% of the value of the breached part of the contractual obligation, save in the case under Article 266.

Note the base. It is not 8% of the contract value. It is 8% of the value of the breached portion of the obligation. A liquidated damages figure imported from an English-law precedent — 20%, 30%, a fixed sum — is reduced to that ceiling in a commercial contract, and the drafting party usually discovers this in the hearing.

Article 300 adds the precondition: a penalty is payable only if the contract provides for one. There is no implied penalty in Vietnamese law, which is why contract lawyers in Vietnam check the penalty clause before the price clause.

Why the Civil Code route gives contract lawyers in Vietnam more room

Article 418 of the Civil Code also allows a penalty agreement, but sets the amount as agreed by the parties, except where a relevant law provides otherwise. For a contract outside the scope of the Commercial Law, there is no 8% ceiling in the Civil Code itself.

This is the single most valuable piece of structuring advice a contract lawyer in Vietnam gives: whether your contract is a commercial activity between traders for profit is not a label you choose in a recital — it follows from the transaction — but the drafting, the parties and the subject matter are within your control.

Penalty and damages: the default that surprises people

Article 418(3) of the Civil Code: the parties may agree that the breaching party pays only the penalty and not damages, or both. Where the parties agreed a penalty but said nothing about whether damages are also payable, only the penalty is payable.

Read that again against your own template. A penalty clause with no express reservation of damages converts your unlimited damages claim into a capped penalty claim. One sentence fixes it.

Damages: what is actually recoverable

Article 302 of the Commercial Law defines the measure: the value of damages comprises the actual, direct loss suffered by the aggrieved party as a result of the breach, and the direct profit the aggrieved party would have enjoyed but for the breach.

“Actual, direct” is doing the work. Consequential and indirect loss is not within the statutory measure. If your commercial case depends on lost opportunity further down the chain, the claim needs to be built differently — and, in practice, evidenced far earlier than foreign claimants expect. This is where contract lawyers in Vietnam add the most value on the claimant side.

The six statutory remedies

Article 292 of the Commercial Law lists the remedies: specific performance; penalty; damages; suspension of performance; stoppage of performance; cancellation of the contract; and any other measure agreed by the parties that does not contravene the fundamental principles of Vietnamese law, the treaties to which Vietnam is a party, or international commercial custom.

The last limb is the drafting opportunity. Agreed remedies — price adjustment mechanisms, step-in rights, replacement at the defaulting party’s cost — are permitted, provided they stay inside that boundary.

Force majeure and exemption from liability

Article 294 of the Commercial Law exempts the breaching party where: an agreed exemption event occurs; a force majeure event occurs; the breach is entirely the fault of the other party; or the breach results from implementing a decision of a competent State management authority that the parties could not have known about at the time of conclusion. Article 294(2) puts the burden of proving the exemption on the party in breach.

Force majeure is defined in Article 156(1) of the Civil Code: an event occurring objectively, which could not be foreseen and could not be overcome although all necessary measures within the permitted capability were applied.

Three cumulative limbs — objective, unforeseeable, insurmountable despite all necessary measures. A pandemic clause that stops at “an event beyond the party’s reasonable control” does not track the Vietnamese test, and the party invoking it carries the proof.

Hardship: renegotiation under Article 420

Article 420 of the Civil Code is the provision most foreign counsel do not know exists. Circumstances have fundamentally changed where all of the following are met: the change is due to an objective cause arising after conclusion; the parties could not foresee it at conclusion; the change is so great that had the parties known, the contract would not have been concluded or would have been concluded on wholly different terms; continued performance without amendment would cause serious damage to one party; and the affected party has applied all necessary measures within its permitted capability, consistent with the nature of the contract, without being able to prevent or minimise the effect.

Where those conditions are met, the affected party may require the other to renegotiate within a reasonable time. If the parties cannot agree within a reasonable time, either may ask the Court to terminate the contract at a specified time, or to amend it.

Note what this is not. It is not self-help. It is a right to demand renegotiation, backed by a court application — and the five limbs are conjunctive.

Arbitration: getting the clause into valid form

Article 16 of the Law on Commercial Arbitration, Law No. 54/2010/QH12, consolidated as No. 60/VBHN-VPQH of 15 August 2025, allows the arbitration agreement to be a clause in the contract or a separate agreement, and requires it to be in writing. The following also count as writing: agreement established by exchange between the parties by telegram, fax, telex, email and other forms permitted by law; exchange of written information between the parties; a record made in writing by a lawyer, notary or competent organisation at the parties’ request; a reference in the parties’ dealings to a document containing an arbitration agreement, such as a contract, a document, a company charter or similar; and an exchange of statement of claim and defence in which one party asserts the agreement and the other does not deny it.

That is a generous list. It is also exhaustive, which is why a purely oral agreement to arbitrate is not saved by performance.

When the arbitration agreement is void

Article 18 lists six grounds: the dispute is outside the fields within arbitral jurisdiction under Article 2; the person making the agreement lacked authority; the person making it lacked civil act capacity under the Civil Code; the form does not comply with Article 16; a party was deceived, threatened or coerced in concluding it and applies to have it declared void; and the agreement breaches a prohibition of law.

The second ground is the one that catches groups. Whoever signs the contract must have authority to bind the company to arbitration specifically — a general power of attorney that says nothing about dispute resolution is where this argument starts.

Separability of the arbitration clause

Article 19 states it plainly: the arbitration agreement is entirely independent of the contract. Amendment, extension or cancellation of the contract, invalidity of the contract, or impossibility of performance do not invalidate the arbitration agreement.

So a respondent arguing the contract was void has not, by that argument, escaped the tribunal.

Two years — the limit contract lawyers in Vietnam watch first

Article 319 of the Commercial Law: the limitation period for commercial disputes is two years from the moment the lawful right and interest was infringed, save the case under Article 237(1)(e).

Article 33 of the Law on Commercial Arbitration: unless a specialised law provides otherwise, the limitation period for arbitration is two years from the same moment.

Two years is short. Foreign parties used to six-year or longer periods routinely lose good claims to it while the commercial team is still negotiating, which is why contract lawyers in Vietnam date the infringement at the first meeting. Article 156(1) of the Civil Code excludes from the running of time any period during which force majeure or an objective obstacle prevented the claim from being brought — but that is an exception to be proved, not a cushion to be relied on.

Where Vietnamese courts have exclusive jurisdiction

Article 470 of the Civil Procedure Code, Code No. 92/2015/QH13, consolidated as No. 21/VBHN-VPQH of 12 February 2026, reserves certain foreign-element civil cases exclusively to Vietnamese courts — among them any civil case concerning rights over immovable property situated in Vietnamese territory, and cases in which the parties have chosen a Vietnamese court under Vietnamese law or a treaty to which Vietnam is a party and agree on that choice.

The immovable property limb is the operative one for commercial drafting. A foreign arbitration clause in a contract whose subject matter is a right over Vietnamese land is a clause with a problem, and it is better identified at signature than at enforcement.

Consumer-facing contracts: standard forms

Where one side is a consumer, the Law on Protection of Consumer Rights, Law No. 19/2023/QH15, adds a layer. Article 23 requires standard form contracts and general trading conditions to be expressed clearly and comprehensibly, and to be in Vietnamese; the parties may add another Vietnamese ethnic language or a foreign language, and where the versions differ, the version more favourable to the consumer prevails.

Article 25 prohibits a list of clauses outright, including: limiting or excluding the trader’s legally prescribed liability to the consumer, unless a relevant law permits it; limiting or excluding the consumer’s right to complain or sue; permitting the trader to change the concluded contract unilaterally; and permitting the trader to change general trading conditions unilaterally without giving the consumer a right to terminate.

English-first terms of service, a unilateral amendment clause and a liability cap — the standard combination in a foreign SaaS agreement — hit three of those prohibitions at once. If your product reaches Vietnamese consumers, this is a redraft, not a translation, and one contract lawyers in Vietnam should carry out before launch rather than after the first complaint.

Cross-border sale of goods

Article 27 of the Commercial Law requires international sale of goods to be performed on the basis of a contract in writing or another form of equivalent legal validity. Article 24 keeps the general rule for domestic sales — oral, written or by specific conduct — but writing prevails where a law requires it.

Two further points belong in the drafting checklist rather than the statute book. Vietnam is a Contracting State to the United Nations Convention on Contracts for the International Sale of Goods, so the Convention may apply to your sale by default; if you do not want it, exclude it expressly and say what applies instead. And where you use an Incoterms rule, name the edition and the named place in full — “FOB Haiphong” without more is an invitation to argue about which edition and whose costs.

UniLaw’s work on shipping and carriage contracts sits with our maritime practice, where charterparties and bills of lading raise their own regime.

Contracts that carry another practice with them

A contract rarely stays inside contract law. Share purchase and joint venture documents run into company law, which our corporate team handles; project and capital documents into the investment regime covered by our investment lawyers; licence and technology transfer terms into the rules our intellectual property lawyers work with; policy wordings and broker agreements into the framework our insurance lawyers apply. Software and model terms — training data, output ownership, service levels — are covered by our AI practice. Land, lease and off-plan contracts go to our real estate lawyers, and sale and purchase agreements for a business to our M&A lawyers.

How UniLaw’s contract lawyers in Vietnam work on a draft

We start from the regime question and the dispute clause, because those two decide the value of everything else. Then the penalty and damages architecture, the exemption and hardship provisions, and the conditions to effectiveness. A review is delivered as a marked draft with the provision cited against each change, so your commercial team can see what is negotiable and what is a statutory ceiling.

Fees are quoted before the work starts, on a fixed basis for review and drafting and on an agreed basis for disputes. Contact UniLaw with the draft and the counterparty type and we will tell you which regime applies before quoting.

Questions clients ask contract lawyers in Vietnam

Is the 8% cap avoidable?

Not within the Commercial Law. It applies to commercial activity between traders for profit. Where the Commercial Law does not govern, Article 418 of the Civil Code leaves the amount to the parties unless a relevant law says otherwise. The question is which regime governs, not how to word around the ceiling.

Our contract was never notarised. Is it dead?

Only if a law required notarisation for that transaction. If it did, and one or both parties have performed at least two-thirds of the obligation, Article 129(2) of the Civil Code allows the Court to recognise it on application, and no later notarisation is needed. That is a court process, so build the performance evidence now.

Can we agree damages in addition to the penalty?

Yes, expressly. Article 418(3) of the Civil Code provides that where a penalty is agreed but nothing is said about damages, only the penalty is payable. Say both are payable, in terms.

Is an email chain enough for an arbitration agreement?

Article 16(2)(a) of the Law on Commercial Arbitration treats agreement established by exchange of email as being in writing. What still has to be shown is agreement on the substance and authority to bind.

How long do we have to bring a claim?

Two years from infringement, both for a commercial court claim under Article 319 of the Commercial Law and for arbitration under Article 33 of the Law on Commercial Arbitration, subject to any specialised law.

What do contract lawyers in Vietnam charge?

UniLaw quotes review and drafting on a fixed fee once the document and counterparty are known, and disputes on an agreed basis. We do not quote before seeing which regime governs, because that changes the scope.