Commercial contract disputes in Vietnam What should businesses prepare for

In today's dynamic business environment, disputes over contracts for the sale of goods are among the most common legal risks that businesses may face. From delayed payments and denial of contractual obligations to transactions without proper invoices, these issues can all become the "spark" that leads to litigation.

So what should businesses keep in mind to protect their legal interests in case of a dispute? Let’s explore key legal considerations and court practices with DEDICA.

Legal foundations businesses must understand in goods sale disputes

Disputes between businesses often revolve around contract formation, obligations for delivery and payment, invoice management, and debt confirmation. When one party breaches the agreement, the other has the right to file a lawsuit for compensation, payment, or contract cancellation.

Unclear contracts are the root of many disputes

Many businesses, due to trust, familiarity, or internal simplicity, conduct transactions via email, fax, or oral agreements. While convenient, such methods pose high legal risks due to the lack of formal documentation.

Under Vietnam’s Civil Code and Commercial Law, a sale contract can be concluded verbally, in writing, or by conduct. However, without a written agreement, proving details like price, delivery time, or payment terms becomes extremely challenging in court.

Invoices and delivery documents are mandatory evidence

Key evidence in commercial disputes includes value-added tax (VAT) invoices and delivery notes. These documents prove the transaction occurred and establish the buyer’s payment obligation.

In a recent case at Di An Town People's Court, the plaintiff provided dozens of VAT invoices and delivery notes as proof that the defendant received goods but failed to pay. The fact that the defendant used these invoices for financial reporting further supported the court’s decision in favor of the plaintiff.

Trade debts should be confirmed in writing

Many businesses reconcile debts over phone or email without properly signed documents. This is a critical mistake, as courts prioritize signed and stamped documents when resolving disputes.

In practice, even a debt confirmation signed by a deputy general director without the company seal was accepted by the court, provided it reflected internal approval. This highlights the vital importance of proper documentation in protecting a business's rights.

Steps to take when a partner fails to pay

If a partner refuses to pay or denies contractual obligations, businesses should:

Send a written payment request

This document should clearly state the amount owed, payment deadline, and legal basis (contract, invoices, delivery notes). It demonstrates goodwill and helps establish the statute of limitations.

Prepare a complete litigation file

An effective case file should include: the contract (if any), VAT invoices, delivery notes, debt confirmation, email correspondence, and the payment request. The court will rely on these materials to determine obligations.

Understand the statute of limitations

According to Vietnam’s Commercial Law, the statute of limitations for commercial disputes is two years from the date of rights violation. However, if there’s proof of debt confirmation or ongoing transactions, the deadline may be extended.

Calculate late interest appropriately

In a recent ruling, the court accepted a 9% annual late interest rate—lower than the market average of 11.35%. This suggests proposing a reasonable rate that favors the defendant can increase chances of court approval.

Optimize dispute resolution with DEDICA

With years of experience in commercial dispute resolution, DEDICA knows how to build compelling cases and craft optimal strategies. Beyond legal arguments, we support clients through negotiation, mediation, and enforcement to ensure their rights are protected to the fullest.

We also help businesses design systems for debt management, invoice issuance, and contract signing to prevent disputes from the outset.

If your business is facing challenges in debt recovery or needs legal infrastructure support, let DEDICA be your trusted legal partner.

Contact DEDICA Law Firm for expert legal support in commercial disputes

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