Handling Disputes in Deposit Contracts for Imported Goods
In international import transactions where deposits are often involved, risks frequently arise. The act of “placing a deposit for imported goods” has become a key point of tension between businesses. If you have paid a deposit for goods and your partner has gone silent, or the other party fails to deliver as promised, it is essential to understand Vietnam’s legal framework on deposit contract disputes and identify suitable legal remedies for your import business.
1. Issues, Concepts, and Risks in Deposit Contracts for Imported Goods
1.1. Definition and Characteristics of Deposit Contracts in Import Transactions
A deposit contract is an agreement in which one party (usually the buyer) delivers to the other party (the seller or supplier) a sum of money or a valuable asset to ensure the conclusion or performance of the principal contract. According to Article 328 of the Civil Code 2015:
“If the contract is concluded and performed, the deposit shall be returned to the depositor or deducted from the payment. If the depositor refuses to conclude or perform the contract, the deposit shall belong to the recipient. If the recipient refuses to conclude or perform the contract, they must return the deposit and pay an amount equivalent to its value, unless otherwise agreed.”
In an import purchase agreement, a Vietnamese enterprise may pay a deposit to a foreign or domestic partner to secure the import of goods. Key characteristics include: international elements (foreign currency, cross-border transportation, imported goods), long delivery periods, multiple intermediaries, and risks that extend beyond Vietnam’s jurisdiction.
1.2. Common Risks in Depositing for Imported Goods
The deposit recipient fails to deliver the goods on time or as agreed. The scenario of “paying a deposit for imports and then hearing nothing” is common among Vietnamese businesses.
The deposit contract is vague, lacking clear protective clauses such as delivery conditions, payment terms, foreign exchange risk allocation, and transportation responsibilities.
Violations of international trade, foreign exchange, or remittance laws; misuse of the deposit for other purposes — leading to difficulty recovering funds.
Short statute of limitations: if the depositor delays taking action, their rights may expire. For example, under the Civil Code 2015, the limitation period for filing a deposit contract dispute is three years from the date the violation becomes known.
The foreign partner or seller may lack legal capacity or intentionally breach the agreement, causing Vietnamese enterprises to have their deposit “frozen” without an effective remedy.
These risks put businesses under pressure in terms of cash flow, reputation, and lost business opportunities. Therefore, when disputes arise in deposit contracts for imported goods, a clear legal strategy is essential.
2. Solutions for Handling Disputes in Deposit Contracts for Imported Goods
2.1. Preparation and Initial Steps
When risks arise or the deposit recipient fails to fulfill their obligations, Vietnamese enterprises should promptly:
Review the deposit contract and the main sales contract: Check deposit terms, delivery deadlines, payment schedules, and payment methods (bank transfer, L/C, credit facilities, etc.).
Gather evidence: receipts for deposit transfer, invoices, letters, emails, violation notices, remittance records, shipping documents, etc. These pieces of evidence are crucial for any potential arbitration or litigation.
Consider negotiation or mediation: This is the most cost-effective approach. In practice, dispute resolution methods include negotiation, mediation, arbitration, and court proceedings.
Check the statute of limitations: Under Article 429 of the Civil Code 2015, the right to claim may be lost if not exercised within three years from the date the violation occurs.
2.2. When Negotiation Fails – Arbitration or Court Proceedings
a) Arbitration
If the deposit contract or the main contract includes an arbitration clause (for example, referring disputes to the Vietnam International Arbitration Center – VIAC or another institution), the enterprise may submit the dispute to arbitration.
Advantages: faster process, international adaptability, flexibility in language and venue.
In cases involving foreign currency or foreign law, arbitral tribunals often apply Vietnamese law when the parties have not agreed otherwise.
b) Court Proceedings
If there is no arbitration clause or the business prefers litigation, it may file a lawsuit before a competent People’s Court.
When litigating before a court, several issues should be noted:
Identify the type of dispute: whether it is a “deposit contract dispute” or a “sale of goods contract dispute” (involving imports). Proper classification ensures the correct application of legal provisions.
Legal basis for deposit handling: Under Resolution 01/2003/NQ-HĐTP, if the deposit recipient refuses to perform the contract, they must return the deposit and pay an amount equivalent to its value, unless otherwise agreed.
Trial preparation period: For deposit disputes, the preparation time should not exceed four months, or six months for complex cases.
c) Specific Considerations for Import Transactions
In disputes over deposits in import contracts, Vietnamese enterprises should pay attention to:
Proving that the deposit was made to secure performance of the import contract, and that the partner violated obligations (e.g., failure to deliver, delivery of non-conforming goods, refusal to acknowledge receipt of deposit, etc.).
If goods are not delivered or are delivered incorrectly, the depositor has the right to demand a refund or compensation (if a penalty clause exists).
Verifying foreign currency payments, cross-border transfers, and the identity of the recipient — as in practice, there have been cases where “shell companies” receive deposits and disappear.
3. Conclusion
In today’s dynamic global trade environment, deposit contracts for imported goods serve as vital instruments to ensure mutual commitment between parties. However, even minor mistakes in drafting, transferring funds, or fulfilling contractual obligations can lead Vietnamese enterprises into serious disputes, financial losses, and legal complications.
The key to mitigating risks lies in drafting well-structured contracts, conducting thorough due diligence on partners, and developing a clear legal strategy from the outset. When disputes arise, businesses should act promptly — collecting comprehensive evidence, seeking professional legal advice, and choosing the appropriate dispute resolution method (arbitration or court) to safeguard their interests.
By maintaining a proactive legal approach, importers in Vietnam can protect their rights, recover their deposits effectively, and ensure sustainable growth in international trade.
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