In commercial disputes, businesses often focus on performance, payment, or intent. However, when a dispute reaches negotiation, arbitration, or court, one factor almost always becomes decisive: the language of the contract.
For many companies—especially foreign-invested enterprises (FDI)—contract language is treated as a technical detail or a formality. In reality, contract language can determine whether a business wins or loses a commercial dispute.
This article explains how contract language influences disputes, why language-related risks are frequently underestimated, and how businesses can protect themselves through proper legal oversight.
Many companies assume that “contract language” simply means translating a contract into another language. This is a critical misunderstanding.
Contract language affects:
How obligations are interpreted
Which version prevails in case of inconsistency
How courts or arbitrators understand intent
How evidence is evaluated
Even a perfectly translated contract can still create serious legal risk if the legal meaning does not align with the applicable law.
In Vietnam, it is common for contracts to be bilingual, typically in English and Vietnamese.
Disputes often arise when:
The two language versions are not fully consistent
Key terms are translated inaccurately
Legal concepts do not exist in the same form in both languages
The contract does not clearly state which language prevails
When disputes occur, Vietnamese courts and authorities generally rely on the Vietnamese version, especially if Vietnamese law governs the contract.
If inconsistencies exist, foreign parties may find that the interpretation differs significantly from their original understanding.
Commercial disputes frequently arise not because a contract is breached, but because the contract can be interpreted in multiple ways.
Ambiguity may result from:
Vague descriptions of obligations
Undefined technical or commercial terms
Broad or generic language borrowed from templates
Poorly drafted exceptions or limitations
In a dispute, ambiguity rarely benefits both parties equally. Courts and arbitral tribunals will interpret unclear provisions based on statutory rules—often in ways businesses did not anticipate.
Contract language cannot be separated from governing law.
Problems arise when:
Contracts use foreign legal terminology under Vietnamese law
Common law concepts are applied in civil law systems without adaptation
Translations preserve wording but not legal effect
For example, certain terms commonly used in English-language contracts may have no direct legal equivalent under Vietnamese law. When disputes arise, these terms may be ignored or interpreted differently than intended.
During dispute resolution, contracts are not read in isolation. They are analyzed together with:
Emails and correspondence
Internal records
Performance documents
If contract language is unclear, external evidence may be used to interpret intent—often to the disadvantage of the party that drafted the contract.
Clear, precise language reduces reliance on external interpretation and shortens dispute timelines.
Many businesses rely on standard contract templates developed by headquarters or downloaded from online sources.
These templates often:
Are not adapted to Vietnamese law
Contain legal concepts that do not translate well
Create inconsistencies between language versions
In disputes, these templates frequently fail to protect the business, even if they are commonly used internally.
Language problems do not end with dispute resolution—they continue into enforcement.
Foreign companies often face difficulties such as:
Needing certified translations for enforcement
Discovering inconsistencies between versions during enforcement proceedings
Facing delays due to language disputes
In enforcement, precision matters. Any ambiguity may be used to challenge validity or scope.
Language-related risk is often underestimated because:
Contracts appear “professionally written”
Translation is outsourced without legal review
No issues arise during normal performance
However, disputes reveal weaknesses that remain hidden during cooperation. By then, it is too late to fix contract language.
Once a dispute begins:
Contracts cannot be rewritten
Language inconsistencies become fixed evidence
Courts and tribunals rely on existing wording
This is why language risk must be managed before disputes occur, not during litigation.
Clear contract language does not only affect litigation—it affects negotiation.
When contract terms are:
Clear and consistent
Legally aligned with governing law
Properly translated
Businesses negotiate from a position of strength.
When language is unclear, the other party gains leverage, often pushing for unfavorable settlements.
Many businesses only ask lawyers to review contracts occasionally.
This approach fails because:
Templates evolve without legal oversight
Operational teams reuse outdated clauses
Language inconsistencies accumulate across contracts
Language risk is systemic. It requires continuous management, not one-time review.
Ongoing legal consultancy helps businesses:
Standardize bilingual contract language
Align terminology with Vietnamese law
Review translations for legal accuracy
Update templates as laws change
Ensure consistency across contracts and operations
Instead of reacting to disputes, businesses prevent them at the drafting stage.
FDI companies face higher language-related risk because:
Contracts involve multiple languages
Legal concepts differ across jurisdictions
Enforcement often occurs locally
Without local legal oversight, language errors multiply quickly.
DEDICA provides ongoing legal consultancy services that help businesses manage contract language risk proactively.
DEDICA supports clients by:
Drafting and reviewing bilingual contracts
Ensuring consistency between language versions
Aligning contract language with Vietnamese law
Advising on governing language and dispute clauses
Preventing disputes caused by language ambiguity
DEDICA’s approach focuses on clarity, enforceability, and long-term risk prevention, not just dispute handling.
Contract language plays a decisive role in commercial disputes. In many cases, disputes are not lost because a business acted wrongly, but because the contract language failed to protect its position.
Ambiguous wording, inconsistent translations, and misaligned legal concepts create risks that only surface when disputes arise—often with costly consequences.
By investing in ongoing legal consultancy, businesses can control language risk, strengthen enforceability, and reduce the likelihood of commercial disputes long before they reach arbitration or court.
📞 Hotline: (+84) 39 969 0012 (Available via WhatsApp, WeChat, Zalo)
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Contact us today for a free initial consultation with our experienced lawyers!
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