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Disputes with Vietnamese companies arising from a counterparty’s change of legal representative are increasingly placing businesses—especially foreign investors—at a disadvantage. When the former legal representative disappears and a new one appears but refuses responsibility, who is actually obligated to perform the contract? Are businesses unknowingly facing the risk of losing their legitimate rights?
In practice, many Vietnamese companies use the change of legal representative as a way to delay or evade contractual obligations when disputes arise. This is often a situation that counterparties only realize when matters have already become complicated.
Changing the legal representative is a lawful right of a company. However, when such a change occurs precisely at the time obligations arise or immediately after signs of contractual breach appear, the risks for the other party are significant. In particular, foreign counterparties who are unfamiliar with Vietnamese law may mistakenly believe that previous obligations “ended with the former representative.”
Behind the decision to change a legal representative are often complex calculations. Many companies believe that “changing the signatory” will help them avoid liability, or at least slow down the dispute resolution process.
Common scenarios include the former representative resigning, becoming unreachable, the new representative claiming ignorance of the case file, or deliberately denying previous agreements. As a result, the other party may not know whom to deal with, receive no response to formal notices, and face significant obstacles in initiating legal proceedings.
This is the most dangerous misunderstanding in disputes with Vietnamese companies. In reality, legal obligations belong to the legal entity (the company), not the individual legal representative. A change of legal representative does not invalidate contracts nor erase obligations that have already arisen.
However, without an appropriate legal strategy, the aggrieved party can easily be drawn into an endless cycle of ineffective negotiations, prolonged litigation, and difficulties in enforcement.
When a counterparty lacks the intention to perform its obligations, changing the legal representative is often just the beginning of a series of legal risks that businesses must anticipate.
At the early stage, risks may not be obvious. But over time, the aggrieved party loses its advantage: evidence may be lost, assets may be dissipated, the counterparty may change its registered address, or even cease operations entirely.
This question arises in almost every dispute. The answer is yes: the contract remains valid if, at the time of signing, the signatory had lawful authority.
The real issue lies not in the validity of the contract, but in the ability to compel performance. When the new representative refuses to cooperate, accessing documents, initiating dialogue, or negotiating becomes extremely difficult without proper legal intervention.
One of the greatest risks is the expiration of the statute of limitations or missing the opportunity to apply interim urgent measures. Many businesses delay action because they rely on promises from the new representative that the matter “will be reconsidered.”
Meanwhile, the counterparty may quietly transfer assets, change shareholders, or dissolve the company. When the case finally reaches court, the chances of recovery may be close to zero.
To effectively protect their rights, businesses must view the dispute not merely as a contractual issue, but as a comprehensive legal strategy challenge.
Acting early and correctly can create sufficient legal pressure, forcing the counterparty back to the negotiation table or holding them accountable before the law.
The first step is to accurately verify the counterparty’s legal status: current legal representative, operational status, and history of changes in business registration. This forms the basis for identifying the correct liable party.
Next, all contracts, appendices, emails, and meeting minutes should be reviewed to build a solid evidentiary file. In many cases, sending a formal demand for performance in the proper legal form is sufficient to create initial pressure.
More importantly, businesses should carefully consider the timing of litigation, choose the appropriate court or arbitration forum, and assess the feasibility of applying preventive measures such as asset freezing.
When the counterparty deliberately avoids responsibility, the lawyer’s role goes far beyond drafting a lawsuit. Lawyers must assess the entire legal structure of the counterparty, including its legal representative, shareholders, cash flow, and assets.
At DEDICA, lawyers often take a proactive approach: applying legal pressure while simultaneously opening pathways for favorable negotiation. In many cases, timely intervention has enabled clients to recover obligations without prolonged court proceedings.
Disputes with Vietnamese companies when a counterparty changes its legal representative are not uncommon, but how they are handled determines whether a business loses its rights or maintains its legal position.
DEDICA Law is a professional law firm based in Ho Chi Minh City, with a team of experienced lawyers specializing in corporate advisory, contract dispute resolution, and disputes involving foreign elements. DEDICA not only helps clients address existing disputes but also designs preventive legal strategies for future transactions.
Do not let a counterparty’s silence or internal personnel changes undermine your legitimate rights. Timely professional intervention is the key to maintaining leverage at the negotiating table.
Are you facing a similar issue?
Has your counterparty changed its legal representative and failed to perform its obligations?
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