Force Majeure and Hardship in Contracts 2026

Force Majeure and Hardship in Contracts: Distinctions and 2026 Clause Guidance

Pandemics, supply-chain ruptures, FX volatility, natural disasters — the past decade taught businesses an expensive lesson: a contract without force majeure and hardship clauses is like sailing without a life jacket.

This article distinguishes the two doctrines under the Civil Code 2015 and suggests what contract clauses should cover in 2026.

Contents

• 1. Force majeure: Article 156
• 2. Hardship: Article 420
• 3. Comparison table
• 4. Common misconceptions
• 5. What contract clauses should say
• FAQ
• When to engage counsel
• Legal references

1. Force majeure: Article 156

Article 156 of the Civil Code 2015 defines a force majeure event as one occurring objectively, unforeseeably, and insurmountably despite all necessary measures within one's capacity.

Legal effect: a party breaching obligations due to force majeure bears no civil liability — unless agreed otherwise or otherwise provided by law.

All three elements must coexist, and the invoking party must prove:

1. Objectivity: beyond the breaching party's will and control;
2. Unforeseeability: a prudent party could not have predicted it at signing;
3. Insurmountability: all necessary measures taken, performance still impossible.

2. Hardship: Article 420

Fundamental change of circumstances (hardship) under Article 420 applies when circumstances change materially after signing, making performance extremely difficult or seriously imbalanced — but still possible (unlike force majeure).

Statutory process:

1. The affected party notifies and requests renegotiation within a reasonable time;
2. During negotiation, parties must keep performing (unless agreed otherwise);
3. Failed renegotiation → the affected party may petition the court to adjust or terminate the contract.

A tool to "rescue" contracts rather than let them collapse — especially valuable in long-term contracts (factory leases, raw-material supply, EPC).

3. Comparison table

Confusing the two is a common error: invoking "force majeure" for what is really hardship (e.g., 30% raw-material price rise) fails the "impossibility" test.

4. Common misconceptions

• "Pandemics/disasters are automatically force majeure": wrong. All three elements plus causation must be proven. A factory in an unlocked region struggles to invoke a pandemic to excuse delivery;
• "Financial difficulty is force majeure": as a rule, no. Cash shortage or losses rarely meet the objective/insurmountable test;
• "Having a clause is enough": a clause works only if drafted clearly — generic wording ("force majeure per law") pushes dispute risk downstream.

5. What contract clauses should say

A good 2026 FM/hardship clause should include:

1. Definitions + event list (natural disasters, pandemics, war, sanctions, state acts…);
2. Notice duties: deadline (e.g., 7–14 days), form (written/email), with evidence;
3. Mitigation duties: the affected party must limit damage;
4. Hardship mechanism: renegotiation window when circumstances fundamentally change; if failed — suspension, price/volume adjustment, or termination;
5. Termination consequences: payment for performed part, inventory, handover;
6. Dispute resolution to match (negotiation → mediation → arbitration/court).

Note for Vietnam–China deals: parties often understand "force majeure" differently — define it bilingually and expressly in the contract rather than each invoking home law.

FAQ

Full 5 Q&As (definition, distinction, pandemics, hardship process, clause content) in frontmatter `faq_items`.

When to engage counsel

When you need: drafting/reviewing FM and hardship clauses; assessing whether an event qualifies; renegotiating contracts amid changed circumstances; or litigating exemptions. Contact FLAT Law Firm — hotline 0988424851.

Legal references

• Civil Code 2015 (91/2015/QH13), effective 01/01/2017 — Article 156 (force majeure), Article 420 (fundamental change of circumstances).