Expired Contract Still Being Performed: Legal Risks

Contents

• 1. A very common situation
• 2. How the law sees it
• 3. Five specific risks
• 4. The right fix
• 5. When a dispute has already arisen
• 6. Frequently asked questions
• 7. Language versions
• 8. References

1. A very common situation

A sale, service or lease contract expired months ago, but both sides keep delivering and paying as usual, nobody mentioning renewal. Then a dispute erupts (late delivery, defective goods, unpaid debts) and each side panics: the contract expired long ago — what governs our rights and obligations?

This is one of the most dispute-prone situations in Vietnamese commercial practice — and entirely preventable.

2. How the law sees it

General principle: a contract whose term has expired terminates per the agreement. But when both sides keep performing — seller still delivering, buyer still accepting and paying — that conduct may be treated as forming a new contractual relationship (contract by conduct), its terms inferred from:

• The old contract's terms the parties tacitly kept applying (price, delivery method…);
• Commercial practice and actual agreements via orders, emails, delivery records.

Key point: this "new contract" has no complete written instrument. Critical terms — penalties, damages, warranty, governing law, dispute resolution — are very hard to prove as agreed.

3. Five specific risks

1. Losing the penalty clause: the old contract had an 8% penalty — but does it bind the "new contract"? The breaching party will argue no.
2. No basis for damages: actual loss must be proved — and without contractual backing, proof is doubly hard.
3. Price disputes: does the old price still apply, or the new market price? Orders silent on price = dispute.
4. "Hanging" warranty: are goods delivered during the "contract-less" period covered by the old warranty terms?
5. Dispute forum: does the old arbitration clause still bind? If not, disputes go to court — a completely different litigation strategy.

4. The right fix

Best option — sign a new document:

• Extension appendix: short, confirming the old contract extended by X months, other terms unchanged.
• New contract: if price, volume or terms changed — sign fresh and clean.
• Just 1–2 pages covering the core: new term, price (or pricing mechanism), continued penalty/warranty terms, dispute resolution.

If signing must wait (negotiations ongoing):

• ☐ Preserve full performance evidence: orders, delivery records, invoices, payment vouchers.
• ☐ Confirm key items (price, timeline, quality) by email for each delivery batch.
• ☐ Set an internal deadline to complete signing — don't let "temporary" become "forever".

5. When a dispute has already arisen

1. Collect performance evidence: prove what the parties actually kept doing (orders, deliveries, payments, emails).
2. Reconstruct the "actual agreement": from evidence, rebuild the terms the parties tacitly applied.
3. Assess invoking old terms: which terms can be shown as continued (e.g. the arbitration clause — needs careful argument).
4. Negotiate before suing: with an "oral contract" file, negotiation often beats litigation — outcomes are hard to predict.

6. Frequently asked questions

If both sides keep delivering and paying after expiry, is there a valid contract? Continued performance may be treated as a new contractual relationship by conduct, terms inferred from practice and old terms. But specifics are highly disputable without a written instrument.

What is the biggest risk? Protective clauses (penalties, damages, warranty, dispute resolution) may no longer bind; each side interprets the "new agreement" in its own favour.

What is the right fix? Sign an extension appendix or new contract — even 1–2 pages confirming continued application of old terms for a new term. If signing must wait, preserve full performance evidence.

Your contract about to expire? Contact FLAT Law Firm for proper review and renewal.

7. Language versions

8. References

• 2015 Civil Code (Law No. 91/2015/QH13) — contract formation and performance (Vietnam).
• 2005 Commercial Law — commercial contracts (Vietnam).
• Content cross-checked at the time of writing (28/9/2026).