In business practice, service contracts are increasingly widely used — from maintenance service contracts, marketing services, legal services, small construction services... When there are conflicts in contract implementation, service contract disputes also appear. Understanding common types of disputes, as well as appropriate handling, will help businesses be more proactive, reduce risks and protect rights effectively.
This is the most "classic" form of dispute: the service provider has performed (in whole or in part) the contract, but the service hirer is late, underpaid or refuses to pay. On the contrary, there are also cases where the service hirer believes that the service is not satisfactory, so he requests the provider to refund or reduce the fee.
Services that do not meet committed standards (poor quality, incorrect technical requirements, ineffective), performed behind schedule, or do not achieve agreed results — are very common sources of dispute.
During the implementation process, one party wants to supplement or modify the terms (for example, adding work items, adjusting costs, extending the deadline) but the other party does not agree, leading to conflicts.
There are cases where a contract is requested to be declared invalid (in whole or in part) due to violation of legal conditions such as illegal content, violation of prohibitions, one party's inability to sign, lack of mandatory form...
For legal service contracts (lawyers, law-practicing organizations), disputes often revolve around remuneration levels, professional responsibilities, performance of duties or disclosure of information, conflicts of interest...
Below are suggested approaches in order from soft measures (internal resolution) to strong legal measures (litigation). You should combine them flexibly depending on the context of the case.
This is the first and optimal step if the parties still have the ability to communicate. Businesses or individuals can invite partners to sit down and review the contract, the steps taken, the difference and make suggestions for adjustments. This method is low cost and can maintain cooperative relationships if the partners are still willing.
If negotiations fail, a mediator or intermediary organization can be used to lead a resolution. In litigation, the court also often encourages mediation at trial. If mediation is successful, the agreement is recognized and valid.
If the contract contains an agreement to resolve disputes by arbitration, whichever party sues in court, the court will refuse to accept the case (unless the arbitration agreement is invalid). Arbitration decisions are judicial and binding, but the cost and time may be higher than mediation.
When the above measures fail or in cases where urgent rights need to be protected, the injured party can sue in a competent court. The court will review the contract, evidence, engagement, and performance to make a decision. With service contracts, the statute of limitations for filing a lawsuit is usually 3 years from the date of knowing that rights have been infringed (unless otherwise agreed or otherwise prescribed by law).
For example, in judgment No. 104/2022/DS‑ST, the defendant was absent without reason, the court still tried the case in absentia according to civil procedure regulations.
If the situation requires immediate protection (for example, to prevent further damage), the court may apply interim emergency measures according to the procedural rules to protect temporary interests. (Need to evaluate specific cases)
A "bad" service contract - which does not clearly state quality, acceptance criteria, violations, deadlines, penalties, payment conditions, change mechanisms - is fertile ground for disputes. When signing a contract, you should describe the work in detail, quality criteria, responsibilities, progress, acceptance method, change conditions, etc.
As soon as you sign the contract, agree on a method of dispute resolution (negotiation, mediation, arbitration, court) and choose an arbitration center or court with good efficiency and reasonable costs.
All emails, minutes, acceptance records, handover records, photos, construction logs, payment documents... need to be fully archived as evidence when a dispute occurs.
Before filing a lawsuit, it is usually a good idea to send a written request for performance of obligations (warning, final letter) to force the other party to perform or correct mistakes — and also serve as evidence if going to court.
When choosing mediation, arbitration or litigation, you need to consider costs (lawyer fees, arbitration/court costs, time), risks and the probability of winning the case. Sometimes the lawsuit only costs more than the value of the dispute, if it is small.
Avoid using terms that are too general, vague, or unclear. Limit provisions that pose great risks (for example, fines for violations are too high, transfer of rights, mutual obligations are too complicated).
For service contracts in general, the statute of limitations for filing a lawsuit is usually 3 years from the date of knowing or should have known that the right was infringed (unless otherwise provided by law). Missing the statute of limitations may result in the loss of the right to sue.
Service contract disputes - if unforeseen - can cause financial loss, affect reputation, and waste time. However, if you understand clearlycommon types of disputesandKnow how to choose flexible processing solutions, you can proactively control situations and minimize risks.
Start by building a thorough and clear contract.
When disagreements occur, priority is given to negotiation and reconciliation.
If there is an arbitration clause, follow it, otherwise sue in court.
Always prepare evidence, documents confirming violations, notify and keep transaction history.
Evaluate costs - benefits before choosing a legal option.
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