Key Clauses in Commercial Contracts in Vietnam

A well-drafted contract is the cheapest form of dispute prevention. For Vietnam-related deals, a few clauses do most of the work in allocating risk.

The clauses that matter most

• Governing law and dispute resolution — choose the law and forum (court or arbitration) deliberately; this shapes every later dispute.
• Payment and currency — terms, timing and foreign-exchange compliance for cross-border payments.
• Penalty and damages — note that Vietnamese law caps the contractual penalty for breach (generally up to 8% of the breached obligation's value) for contracts under the Commercial Law; damages for actual loss are separate.
• Force majeure — define events and consequences clearly.
• Term and termination — grounds, notice and post-termination obligations.

Practical drafting

Use precise, consistent definitions; align the language versions if bilingual; and make sure the signatory has authority. Small drafting gaps become expensive in disputes.

Frequently asked questions

Is the contractual penalty capped in Vietnam?

For contracts under the Commercial Law, the penalty for breach is generally capped at 8% of the breached obligation's value; damages for actual loss are separate.

Which clause matters most?

Governing law and dispute resolution — they shape how any dispute is handled.

Should bilingual contracts match?

Yes — align the versions and state which prevails to avoid interpretation disputes.

How LTV Law helps

LTV Law drafts and reviews commercial contracts for Vietnam-related transactions. Contact our team.

This article is for general information only and does not constitute legal advice.