How Long Is the Statute of Limitations for International Sale of Goods Disputes?

The statute of limitations for international sale of goods disputes is an issue that makes many import–export businesses deeply concerned. Will filing a claim just a few months late result in losing the right to sue? Should Vietnamese law or international conventions apply? What should a business do if a foreign partner deliberately delays the matter?
The article below will help you clearly understand the legal nature of this issue, potential risks, and effective solutions to ensure your rights are not lost.

What Is the Statute of Limitations in International Sale of Goods Disputes and Why Do Businesses Often Miss It?

In international sale of goods disputes, the statute of limitations is not merely a matter of time—it is the boundary that determines whether a business retains or loses its right to initiate legal proceedings. In practice, many businesses focus on handling goods, payments, and commercial complaints, forgetting that the “legal clock” is silently running.

Definition of the Statute of Limitations under Law and International Practice

The statute of limitations for international sale of goods disputes is understood as the period during which the aggrieved party has the right to file a claim with a dispute resolution authority (court or arbitration) to protect its lawful rights and interests.

Unlike domestic disputes, international sale of goods disputes are often governed by:

• The national law chosen in the contract;

• International treaties to which the parties are members; or

• International commercial customs and practices.

This multi-layered legal framework makes the statute of limitations more complex and easily misunderstood.

Common Misconceptions That Cause Businesses to Lose Their Right to Sue

Many businesses believe that:

• “The statute of limitations does not run until the contract is liquidated”;

• “As long as negotiations are ongoing, there is no need to file a claim”;

• “If the counterparty is overseas, the limitation period must be long.”

These are all dangerous misconceptions. In reality, the statute of limitations may begin from the moment a breach occurs, even while negotiations are ongoing. Once the limitation period expires, a court or arbitral tribunal may refuse to hear the case, even if the business is substantively in the right.

Statute of Limitations for International Sale of Goods Disputes under Current Regulations

There is no single limitation period applicable to all international sale of goods disputes. The statute of limitations depends largely on the governing law of the contract and the dispute resolution body.

Limitation Period under Vietnamese Law and International Conventions

Under Vietnamese law, if an international sale of goods dispute is resolved by a Vietnamese court and governed by Vietnamese law, the statute of limitations is generally three (03) years from the date on which the claimant knew or should have known that its lawful rights and interests were infringed.

However, many international sale of goods contracts are governed by the United Nations Convention on Contracts for the International Sale of Goods (CISG). While the CISG does not directly regulate limitation periods, the 1974 New York Convention (as amended in 1980) on the Limitation Period in the International Sale of Goods provides a commonly applied limitation period of four (04) years.

It should be noted that not all countries are parties to this Convention, and not all contracts automatically apply it.

How Is the Applicable Law Determined If the Contract Does Not Specify It?

This is a very common situation in practice. Where an international sale of goods contract does not specify the governing law, the dispute resolution authority will determine it based on:

• Conflict-of-law rules;

• The place of performance of the principal obligation; or

• The law with the closest connection to the contract.

Each method may lead to a completely different statute of limitations. In some cases, a business may believe it still has time, while in fact the limitation period has long expired under foreign law.

Solutions to Help Businesses Preserve Their Right to Sue in International Sale of Goods Disputes

Correctly identifying the statute of limitations is only the first step. Proactive legal risk management is the key to long-term protection of business interests.

How to Accurately Determine the Starting Point of the Limitation Period

The statute of limitations for international sale of goods disputes usually begins from:

• The date the other party breaches its obligations (failure to deliver goods, delivery of non-conforming goods, non-payment); or

• The expiration date of the contractual performance period.

In many cases, contract amendments, extensions of delivery time, or written acknowledgments of obligations may interrupt or restart the limitation period. However, such effects must be assessed very carefully, as not all actions carry the legal effect expected by businesses.

The Role of Lawyers in “Preserving” the Limitation Period for Businesses

In practice, many businesses only seek legal assistance when a dispute has become critical. At that point, lawyers may discover that the statute of limitations is about to expire or has already expired, significantly narrowing available legal options.

With the support of corporate lawyers, businesses can:

• Receive early warnings about critical limitation deadlines;

• Develop negotiation strategies while preserving the right to initiate legal proceedings;

• Prepare legal dossiers at the right time and before the proper authority.

DEDICA Law Firm, a professional law firm based in Ho Chi Minh City, regularly assists Vietnamese businesses in international sale of goods disputes—from contract review and determination of applicable law to representation in court and arbitration proceedings.

In international sale of goods disputes, losing the statute of limitations means losing the opportunity to claim rights, even when the merits are clearly in your favor. Proper understanding and management of the statute of limitations not only help businesses avoid legal risks but also strengthen their position when negotiating with foreign partners.

Are you facing a similar issue?
Has an international sale of goods contract given rise to a dispute, but you are unsure whether the limitation period still applies?

Contact DEDICA Law Firm for in-depth legal advice.
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