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When a seller delays delivery after receiving payment, many foreign businesses become immediately concerned: Is this considered a fundamental breach of contract? Can the contract be terminated? Can the buyer claim a refund or damages? If litigation is initiated in Vietnam, will the procedure be complicated?
This article clarifies the legal framework under Vietnamese law and provides a practical roadmap for resolving commercial disputes effectively and strategically.
In our practice advising on commercial contract disputes, we frequently receive questions from FDI companies and foreign investors:
“We have already paid 70–100% of the contract value, but our Vietnamese partner has delayed delivery for weeks, even months. Is that sufficient to terminate the contract?”
The answer is not simply “yes” or “no.”
Vietnamese law does not automatically treat every late delivery as a serious or fundamental breach. The determination depends on the nature, severity, and consequences of the delay.
Under the Vietnam Commercial Law 2005, the seller is obligated to deliver goods in accordance with the agreed time, place, and method (Articles 35 and 37).
Article 312 of the Commercial Law provides that a party may cancel the contract if a “fundamental breach” occurs. A fundamental breach is defined as a violation that causes the aggrieved party to fail to achieve the purpose of entering into the contract.
In parallel, the Civil Code 2015 (Articles 351, 360, and 428) regulates liability for breach of obligations and the right to unilaterally terminate or cancel a contract where the breach is serious.
Therefore, the key issue is not merely whether delivery was delayed, but whether:
If the goods are critical input materials for an export production line and the delay causes the buyer to miss delivery deadlines with overseas customers, resulting in contractual penalties, there is a strong argument that the delay constitutes a fundamental breach.
Conversely, if the contract does not clearly state that delivery time is of the essence, and the delay is only a few days without significant damage, it may be difficult to qualify it as a serious breach.
In commercial disputes in Vietnam, the contract is the most decisive factor.
You should immediately review:
Many foreign companies use international contract templates without adapting them to Vietnamese law. When a contract dispute arises, unclear or inconsistent clauses can significantly weaken their legal position.
In practice, the biggest fear is not merely delayed goods, but:
These concerns are understandable. However, with the right legal strategy, risks can often be managed effectively.
In handling disputes between foreign companies and Vietnamese partners, we often observe the following mistakes:
Businesses sometimes rely only on informal emails instead of issuing a clear “Notice of Breach.” This can negatively affect the right to claim damages or terminate the contract.
If the delay does not meet the legal threshold of a fundamental breach, but the buyer unilaterally declares termination, the buyer may be deemed the breaching party.
Under Article 302 of the Commercial Law, a party claiming damages must prove actual loss and a direct causal link. Without documentation, recovery may be limited.
The statute of limitations for commercial disputes under the Commercial Law is generally two years from the date the lawful rights and interests are infringed. Delay may result in loss of legal remedies.
Under the Law on Commercial Arbitration 2010, if the contract includes an arbitration clause (for example, referring disputes to VIAC), the process is often faster and more confidential than court proceedings.
If the dispute is resolved through Vietnamese courts under the Civil Procedure Code 2015, proceedings may take longer, especially when foreign elements are involved.
However, foreign businesses do not need to navigate the system alone. With experienced bilingual dispute resolution lawyers, case preparation, strategy development, and representation in Vietnam can be handled professionally and transparently.
Important note: No legal case can guarantee a 100% outcome. Each dispute depends on the specific contract, evidence, and factual developments.
If you are facing this situation, the most important principle is not to react emotionally. A structured approach is critical.
Below is a strategic roadmap we commonly advise for FDI clients:
This stage determines whether you should continue performance or prepare for termination and damages claims.
A carefully drafted legal notice citing contractual provisions and relevant provisions of the Commercial Law can create significant pressure.
In many cases, disputes are resolved at this stage without formal proceedings.
In the Vietnamese business environment, negotiation can be highly effective when properly structured.
Having legal counsel involved from the beginning helps:
If settlement fails, you may consider:
At this stage, strategy should extend beyond “recovering money” and consider:
Over more than a decade of advising and representing clients in contract disputes, commercial disputes, and corporate disputes, we have observed that most losses do not arise from the breach itself, but from improper handling at an early stage.
A timely and well-designed legal strategy can help:
If you are a foreign investor, FDI company, or international business facing a delayed delivery dispute in Vietnam, avoid assuming that you will “certainly win” or “certainly lose.”
Each case must be evaluated individually based on the contract, evidence, and applicable law.
If you are facing a similar issue, DEDICA Law is ready to support you with bilingual, confidential, and strategy-driven legal advice — from negotiation and mediation to arbitration and court proceedings in Vietnam.
📞 Hotline: (+84) 39 969 0012 (Available via WhatsApp, WeChat, Zalo)
🕒 Working Hours: Monday – Friday (8:30 – 18:00)
Contact us today for a free initial consultation with our experienced lawyers!
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