For many foreign companies doing business in Vietnam, few situations are more frustrating than this:
the Vietnamese partner has received payment, but the contract is not performed.
The goods are not delivered, the service is delayed indefinitely, or performance is only partial—while excuses continue to change. At this point, businesses often ask the same question: What should we do now?
The answer depends not only on the contract, but also on how quickly and strategically the situation is handled.
Payment-before-performance structures are common in Vietnam, especially in:
Sale of goods contracts
Manufacturing and sourcing arrangements
Service and project-based agreements
While many transactions are completed properly, disputes arise when the counterparty:
Delays performance without valid justification
Claims operational or financial difficulties
Uses quality or specification issues as excuses
Stops responding after receiving funds
If not handled correctly, these cases can lead to long delays, weak enforcement, or total loss of recovery.
The first instinct of many businesses is to send aggressive emails or threaten legal action immediately. While understandable, this often weakens the legal position.
Common early mistakes include:
Accusing the counterparty without legal assessment
Making informal settlement offers
Agreeing to extensions without documentation
Admitting fault to preserve the relationship
At this stage, every communication may later be used as evidence.
The priority is to pause and assess the situation legally, not emotionally.
Before taking any action, the contract must be reviewed in detail.
Key issues include:
Payment terms and proof of payment
Performance obligations and timelines
Conditions for delay or force majeure
Remedies for non-performance
Termination and penalty clauses
Dispute resolution mechanism
Many foreign companies assume the contract is clear—only to discover later that key provisions are vague or incomplete under Vietnamese law.
Understanding the actual enforceable rights is critical before escalation.
Not every delay automatically qualifies as a legal breach.
Under Vietnamese law, factors such as:
Contractual grace periods
Agreed extensions
Evidence of partial performance
may affect whether non-performance constitutes a breach.
A legal assessment helps determine:
Whether the counterparty is already in breach
Whether notice is required before enforcement
What remedies are legally available
This assessment shapes the entire strategy.
Evidence is often the weakest point in these disputes.
Foreign companies frequently lack:
Clear delivery or acceptance records
Formal confirmation of non-performance
Proper documentation of communications
Once disputes escalate, reconstructing evidence becomes extremely difficult.
Early legal guidance helps ensure that:
Payment records are properly documented
Requests and reminders are structured correctly
Non-performance is clearly recorded
This significantly strengthens enforcement prospects.
At some point, informal follow-ups must be replaced with a formal legal notice.
A properly drafted notice:
Asserts contractual rights clearly
Avoids damaging admissions
Sets a legal deadline for performance
Preserves the right to terminate or claim damages
Poorly drafted notices—or none at all—often weaken later claims.
This step is where many disputes either move toward resolution or escalate unnecessarily.
Vietnamese counterparties may propose:
Further delays
Partial performance
New terms after receiving payment
While negotiation is often appropriate, informal renegotiation can destroy enforceability.
Without legal structure, renegotiation may:
Waive original rights
Reset contractual timelines
Undermine breach claims
Legal guidance ensures negotiations protect—not sacrifice—your position.
Before initiating litigation or arbitration, businesses must assess enforcement feasibility.
Key questions include:
Does the counterparty have assets in Vietnam?
Are those assets traceable and enforceable?
Does the contract allow arbitration or court litigation?
A favorable decision that cannot be enforced offers little commercial value.
This assessment should happen before, not after, formal proceedings begin.
Foreign companies often make costly mistakes by:
Filing in the wrong court
Ignoring arbitration clauses
Choosing a forum with poor enforceability
Vietnam allows dispute resolution through:
Commercial arbitration
Vietnamese courts
Each option has different timelines, costs, and enforcement implications.
Legal advice is essential to avoid jurisdictional and procedural traps.
In practice, many foreign businesses lose leverage because:
Legal advice is sought too late
Early communication is uncontrolled
Evidence is incomplete
Contracts were not drafted for Vietnamese enforcement
By the time lawyers are involved, options are limited and costs increase.
Many companies engage lawyers only when disputes become serious.
This reactive approach fails because:
Contracts may already be flawed
Evidence gaps already exist
The same issues repeat across transactions
Non-performance after payment is rarely a one-off incident.
Ongoing legal consultancy helps businesses:
Structure payment and performance terms properly
Monitor contract performance in real time
Intervene early when warning signs appear
Preserve legal leverage from the beginning
Instead of reacting to crises, businesses manage risk proactively.
Companies that regularly pay Vietnamese partners in advance face cumulative risk.
Without continuous legal oversight:
Small delays become major disputes
Recovery becomes harder over time
Legal exposure grows unnoticed
Preventive legal management is essential for long-term operations.
DEDICA provides ongoing legal consultancy services and dispute support for foreign and FDI companies dealing with Vietnamese partners.
DEDICA assists clients by:
Reviewing and structuring contracts
Advising on early non-performance signals
Drafting legal notices and negotiation strategy
Representing clients in arbitration and court
Managing enforcement strategy in Vietnam
DEDICA’s approach focuses on early intervention, enforceability, and business-oriented solutions, not prolonged disputes.
When a Vietnamese partner fails to perform a contract after receiving payment, the situation is serious—but it is not hopeless.
What determines the outcome is:
How early legal strategy is applied
How communication and evidence are handled
Whether enforcement is planned from the start
By involving legal advisors early—ideally through ongoing legal consultancy—businesses can protect their rights, recover value, and reduce the risk of repeat disputes.
📞 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!
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