No table of contents available
Late delivery is one of the most common problems foreign businesses encounter when working with Vietnamese partners. In many cases, goods are eventually delivered—but not according to the agreed schedule. In others, delays continue indefinitely, causing financial losses, supply chain disruption, and reputational damage.
This leads to a critical legal question:
If a Vietnamese company fails to deliver goods on time, can the other party legally terminate the contract?
The short answer is: yes, in many cases—but only if termination is handled correctly under Vietnamese law and the contract terms. Improper termination can expose the terminating party to legal risk instead of protecting them.
Delivery delays frequently occur in:
Sale of goods contracts
Manufacturing and OEM agreements
Long-term supply and sourcing arrangements
Export–import transactions
Delays may result from production issues, subcontractor failure, cash-flow problems, or capacity overcommitment. While some delays are manageable, others fundamentally undermine the commercial purpose of the contract.
The key issue is determining when a delay becomes a legal breach serious enough to justify termination.
A common misconception is that any missed deadline allows immediate termination. Under Vietnamese law, this is not always the case.
Whether a contract can be terminated depends on:
The wording of the delivery obligation
Whether the delivery deadline is essential or flexible
Whether grace periods apply
Whether the delay constitutes a material breach
Whether proper notice requirements are followed
Terminating too early—or without legal basis—may itself be considered a breach.
Vietnamese law allows contract termination when one party seriously breaches contractual obligations, including delivery obligations.
A serious breach is generally understood as a breach that:
Prevents the contract’s purpose from being achieved, or
Causes significant damage to the non-breaching party
However, the seriousness of a breach is assessed case by case, based on contract terms and actual impact.
Whether late delivery justifies termination often depends on how the contract was drafted.
Key drafting issues include:
Is the delivery deadline clearly defined?
Is “time of delivery” stated as essential?
Are penalties or damages for late delivery specified?
Does the contract allow termination for delay beyond a certain period?
Poorly drafted contracts often create ambiguity, making termination riskier and disputes more complex.
In most cases, termination cannot be done silently or informally.
Vietnamese law and standard practice often require:
Formal notice of breach
A reasonable period for the breaching party to cure the breach
Clear warning that termination will follow if non-performance continues
Failing to provide proper notice may invalidate the termination or expose the terminating party to counterclaims.
Late delivery may justify termination when:
Delivery deadlines are essential to business operations
Goods are seasonal, perishable, or time-sensitive
Delays cause significant financial loss
The supplier repeatedly fails to meet deadlines
In such cases, termination may be lawful—but only if handled carefully and documented properly.
Vietnamese companies often invoke force majeure to justify late delivery.
However, force majeure only applies when:
Events are unforeseeable and beyond control
Performance is objectively impossible
Proper notice is given
Economic hardship or internal mismanagement usually does not qualify as force majeure. Legal review is essential before accepting such arguments.
Terminating a contract without legal basis or procedure may lead to:
Claims for wrongful termination
Damage compensation claims
Loss of advance payments
Weak position in later disputes
Many foreign companies lose leverage not because termination was unjustified—but because it was handled incorrectly.
Termination is not always the best first option.
Depending on the situation, other remedies may be more effective, such as:
Demanding specific performance
Claiming damages or penalties
Renegotiating delivery terms with legal safeguards
Applying legal pressure short of termination
Legal strategy should focus on commercial outcome, not just legal rights.
In practice, mistakes often happen because:
Legal advice is sought too late
Contracts were not drafted for Vietnamese enforcement
Termination decisions are made emotionally
Notice and evidence requirements are overlooked
These issues are preventable with early legal involvement.
Many businesses consult lawyers only at the moment of termination.
This reactive approach limits options and increases risk because:
Evidence may already be weak
Communications may have damaged legal position
Termination windows may be missed
Delivery issues are rarely isolated events—they often recur across suppliers.
With ongoing legal consultancy, businesses can:
Draft delivery clauses that allow clear termination rights
Monitor supplier performance and detect early risks
Take legally safe steps before termination
Preserve leverage throughout the contract lifecycle
This proactive approach reduces disputes and strengthens enforcement outcomes.
Companies relying on Vietnamese suppliers face cumulative delivery risk.
Without continuous legal oversight:
Minor delays escalate into major disputes
Termination decisions become legally risky
Recovery becomes harder over time
Preventive legal management is essential for long-term operations in Vietnam.
DEDICA provides ongoing legal consultancy services and dispute support for foreign and FDI companies dealing with late delivery and contract termination issues in Vietnam.
DEDICA assists clients by:
Reviewing delivery and termination clauses
Assessing whether late delivery constitutes a legal breach
Drafting legally compliant termination notices
Advising on alternative remedies and negotiation strategy
Representing clients in arbitration and Vietnamese courts
DEDICA’s approach focuses on risk control, enforceability, and business-oriented outcomes, not unnecessary litigation.
A Vietnamese company’s failure to deliver goods on time can justify contract termination—but only if legal requirements and contract terms are respected.
The key factors are:
How the delivery obligation is defined
Whether the breach is serious
Whether proper notice and procedure are followed
By engaging ongoing legal consultancy, businesses can make termination decisions confidently, protect their rights, and avoid turning supplier delays into costly legal mistakes.
📞 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!
Select a platform to view details
