In today's business world, it's common for companies to enter into agreements that transfer payment obligations. This offers a flexible financial tool to manage tight cash flow or restructure debts among parties. However, many businesses find themselves in tricky situations when the receiving party fails to fulfill their commitment, resulting in prolonged disputes, wasted time, increased costs, and reputational damage.

So how does the law regulate the transfer of civil obligations in commercial transactions? What should a business prepare if the receiving partner delays payment?

Is Payment Obligation Transfer Legally Recognized in Commerce?
Under the Civil Code of 2015 (Articles 365–378), civil obligations, including payment obligations, can be transferred to another party—with the consent of the entitled party. In commercial practice, such transfers are documented through tripartite contracts, debt-settlement memoranda, or independent agreements. The Commercial Law of 2005 does not prohibit this, as long as the transfer is legal, ethical, and clearly agreed upon.

Clear Agreements and Solid Evidence
Although no specific form is required, it’s best to document the transfer in writing with signatures and seals of all parties. Details should include:

The transferor, transferee, and entitled party;
The amount, schedule, and payment method;
Consequences for non-performance.

Keep original contracts, delivery notes, invoices, debt confirmations, and demand letters—these are vital in case of disputes.

Re-establishing the Statute of Limitation After Debt Settlement
A key issue in disputes over transferred obligations is the limitation period. Businesses might assume old debt is unclaimable, but a new settlement agreement resets the limitation period from that date. This was confirmed by the People's Court of Bình Sơn (Quảng Ngãi) in a recent case, recognizing the new limitation period from 2013 and subsequent confirmations.

Non-Performance After Agreement—Potential Lawsuit and Enforcement
Once obligations are clearly documented, the entitled party may sue the defaulting party for payment. Courts will rely on the agreement and debt confirmations to enforce repayment, possibly adding late interest if claimed. Reasons like “business closure” or “financial hardship” don’t exempt payment. If voluntary payment doesn’t occur, the entitled party can request forced enforcement under the Civil Judgment Enforcement Law.

Risk Mitigation Strategies When Transferring Obligations
Transferring debt obligations isn’t inherently risky—but requires careful handling and strategic planning. Practical tips include:

Draft binding agreements that specify payment schedule, legal consequences for breach, and any guarantor involvement. Include dispute resolution clauses (mediation, arbitration, court).
Verify the transferee’s financial capacity before transfer. Check legal status, financial health, and credit history to avoid transfers to insolvent entities.
Regularly reconcile and get confirmation in writing. Periodic debt reviews with legal representative signatures strengthen legal standing during disputes.
Be ready to file a lawsuit promptly. Timely action preserves the limitation period, protects cash flow, and upholds credibility.

In commercial transactions, transferring payment obligations must be handled diligently. When disputes arise, businesses can defend their rights effectively by gathering solid evidence, keeping up with debt reconciliation, and being prepared to litigate. Proper understanding and application of the law not only ensures debt recovery but also strengthens market standing.

Facing difficulties in recovering transferred payment obligations?
Let the DEDICA team support you—from consulting and negotiation to dispute resolution in court or arbitration. With extensive experience and comprehensive legal strategies, we’re here to safeguard your rights efficiently and promptly.

Contact DEDICA Law Firm for expert legal advice!
📞 Hotline: (+84) 39 969 0012 (WhatsApp, WeChat, Zalo support)
🏢 Head Office: 144 Võ Văn Tần St, Võ Thị Sáu Ward, District 3, HCMC
🕒 Working Hours: Mon–Fri, 8:30 AM–6:00 PM
Reach out now for a free initial consultation from our professional legal team!