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Consulting and drafting contracts in Vietnam for foreign businesses from A to Z is not just about writing a legal document, but about building risk control tools throughout the transaction. Many foreign businesses enter the Vietnamese market with international experience, but encounter difficulties when contracts do not accurately reflect the legal realities and operating practices here.
According to the 2015 Civil Code, a contract is an agreement between parties to establish, modify, or terminate rights and obligations. However, in business practice, contracts also serve as a "handling scenario" in case of breach. If a contract only records the agreement without anticipating risks, the business will be at a disadvantage when disputes arise.
The law may clearly define rights and obligations, but enforcement in Vietnam depends on many factors such as the partner's capacity, the ability to enforce judgments, and the processing time. Therefore, contracts need to be designed with a practical perspective, not just based on legal regulations.
Step 1: Understanding the Nature of the Transaction
Before drafting, it is necessary to clearly define:
If this step is unclear, the contract will not accurately reflect reality.
Step 2: Identify Key Risks
Each transaction has a different risk factor. This could be payment, product quality, or delivery schedule. Accurately identifying risks helps focus on the important terms.
Step 3: Design the Contract Structure
The contract needs to be structured logically, including:
It is important that the terms are applicable in practice.
Step 4: Adjustment to Vietnamese Law
According to the 2005 Commercial Law, the parties can agree on penalties for breach of contract and compensation for damages, but this must be consistent with the limits and application of Vietnamese law.
This adjustment helps ensure the contract is valid and usable when needed.
Step 5: Pre-signing Review
Before signing, the contract needs to be thoroughly reviewed to ensure:
This step significantly reduces the risk of problems arising.
Using only pre-made contract templates
Many businesses use international templates without making adjustments. This leads to contracts that are not compliant with Vietnamese law and practices.
Not controlling payment terms
Payment is the biggest risk factor. If the contract does not link obligations to cash flow, the business will lose its advantage when the partner violates the agreement.
Skipping the contract implementation phase
Many businesses focus on signing the contract without establishing a control mechanism during implementation. This is the main cause of disputes.
In supporting foreign businesses, DEDICA has found that most problems arise not from a lack of contracts, but from contracts that are not sufficiently rigorous or do not suit practical implementation. Businesses that proactively seek advice and draft contracts from the beginning tend to have better control and significantly reduce risks. Conversely, when only dealing with disputes when they arise, options are often limited.
DEDICA Law provides comprehensive contract consulting and drafting services, helping foreign businesses not only sign contracts securely but also control the entire cooperation process.
📞 Hotline: (+84) 39 969 0012 (Support available via WhatsApp, WeChat, and Zalo)
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Contact us today for a free initial consultation with our team of professional lawyers!
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