Disputes arising from the sale of goods between foreign companies and Vietnamese companies are increasingly common. Vietnam’s role as a major manufacturing, trading, and distribution hub means cross-border transactions occur daily—often under tight timelines and commercial pressure.
When disputes arise over delivery, quality, payment, or contractual obligations, foreign companies often feel uncertain about the correct legal steps to take in Vietnam. Acting too slowly, or taking the wrong approach, can significantly reduce the chances of a successful outcome.
This article explains what foreign companies should do when a sales dispute arises with a Vietnamese counterparty, common mistakes to avoid, and why early legal involvement is critical.
Before taking any action, it is essential to identify what the dispute is actually about.
Common types of sales disputes include:
Non-payment or delayed payment
Disputes over quantity or quality of goods
Late delivery or failure to deliver
Disagreement over contract interpretation
Claims for damages or penalties
Many disputes escalate because parties focus on symptoms rather than the legal root cause. A clear legal classification of the dispute determines the correct strategy.
The contract is the primary legal reference in any sales dispute.
Key points to review include:
Governing law (Vietnamese law or foreign law)
Dispute resolution mechanism (court or arbitration)
Payment terms and conditions
Delivery and acceptance clauses
Remedies, penalties, and liability limitations
Foreign companies often assume that commercial logic will prevail. In reality, Vietnamese courts and arbitration bodies apply written contractual terms strictly.
Evidence is critical in Vietnamese dispute resolution.
Foreign companies should immediately collect and preserve:
Signed contracts and amendments
Purchase orders and invoices
Bills of lading, delivery notes, and acceptance records
Email correspondence and written confirmations
Proof of payment or acknowledgment of debt
Inconsistent or incomplete documentation is one of the most common reasons foreign companies lose otherwise legitimate claims.
Many companies attempt to resolve disputes informally before seeking legal advice. While negotiation is often appropriate, it carries legal risk if handled incorrectly.
Common mistakes include:
Admitting fault too early
Offering concessions without legal safeguards
Making statements that contradict contractual terms
Changing obligations informally via email or messaging apps
Once a dispute escalates, these communications may be used as evidence.
If informal communication fails, a formal legal demand letter is often the next strategic step.
A properly drafted demand letter:
Sets out the legal basis of the claim
Refers to specific contractual obligations
Fixes a clear deadline for compliance
Preserves the right to initiate legal proceedings
In many cases, a demand letter from a Vietnamese law firm prompts serious engagement or settlement.
Foreign companies must determine whether disputes should be resolved through:
Vietnamese courts, or
Arbitration (domestic or international), if agreed in the contract
Filing in the wrong forum can lead to delays, jurisdictional challenges, or dismissal.
This is a common pitfall when legal action is taken without local legal guidance.
Winning a case is only part of the process. Enforcement is often the real challenge.
Before proceeding, foreign companies should assess:
Whether the Vietnamese company has identifiable assets
Where those assets are located
Whether enforcement measures are likely to succeed
A judgment that cannot be enforced provides little commercial value.
Sales disputes involving Vietnamese companies often involve differences in:
Business culture and communication style
Expectations regarding negotiation and settlement
Legal procedures and timelines
Foreign companies that approach disputes using home-country assumptions may misinterpret signals or procedural requirements, weakening their position.
One of the biggest mistakes foreign companies make is waiting too long before involving lawyers.
Delays can result in:
Loss of evidence
Expired limitation periods
Reduced leverage in negotiation
Dissipation of assets
Early legal involvement preserves options and strengthens negotiating power.
Sales disputes are often emotionally charged, especially when large sums are involved.
However, decisions should be based on:
Legal strength of the claim
Cost-benefit analysis
Enforcement feasibility
Long-term business impact
Not every dispute should go to court—but when it should, the case must be built correctly from the start.
Many foreign companies consult lawyers only after disputes escalate.
At that point:
Contracts may already be poorly structured
Documentation may be inconsistent
Risk exposure may be difficult to reduce
Reactive legal support limits strategic options.
Ongoing legal consultancy allows businesses to manage legal risk continuously rather than reactively.
This approach helps by:
Structuring clear sales contracts from the outset
Aligning legal terms with actual trading practices
Monitoring payment and performance risks early
Advising on legally safe negotiation strategies
Escalating disputes before leverage is lost
Many sales disputes can be avoided entirely with proper legal oversight.
Foreign companies face additional challenges such as:
Language barriers
Unfamiliar legal procedures
Cross-border enforcement complexities
Without local legal support, these risks multiply quickly.
DEDICA provides ongoing legal consultancy services and dispute support for foreign companies engaged in sales transactions with Vietnamese partners.
DEDICA assists clients by:
Reviewing and drafting sales contracts
Advising on dispute prevention strategies
Issuing legal demand letters
Representing clients in court or arbitration
Advising on enforcement and recovery
DEDICA’s approach is practical, preventive, and commercially focused, helping foreign companies protect cash flow and business interests in Vietnam.
When a sales dispute arises between a foreign company and a Vietnamese company, how you respond matters as much as the dispute itself.
Successful outcomes depend on:
Early evidence preservation
Correct forum selection
Strategic negotiation
Proper legal procedure
Foreign companies that act early—and ideally with ongoing legal consultancy—are far better positioned to resolve disputes efficiently and avoid unnecessary losses.
📞 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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