A supplier perpetually late with deliveries, a tenant owing months of rent, a contractor abandoning a site — many businesses and individuals in such situations ask the same question: can I walk away without breaking the law? This article directly answers the 10 most frequently asked questions about unilateral contract termination Vietnam — conditions, notice procedures and consequences under the Civil Code 2015, Commercial Law 2005 and Housing Law 2023.
Table of contents
- Can a contract be unilaterally terminated?
- What breach counts as a "serious breach"?
- In commercial contracts, how does unilateral termination differ from rescission?
- How much advance notice is required for unilateral termination?
- What happens if a contract is terminated without grounds?
- After unilateral termination, can damages still be claimed?
- Can a landlord unilaterally terminate a house lease?
- Can a tenant unilaterally terminate a house lease?
- If the contract has no termination clause, can it still be terminated unilaterally?
- Is unilateral termination of a labour contract the same as a commercial contract?
1. Can a contract be unilaterally terminated? {#q1}
Short answer: Yes, but not always. The law only allows a party to terminate on its own when one of three grounds applies: the other party's serious breach of contractual obligations, a prior agreement on termination rights, or a sector-specific law provision.
Explanation: A contract is an agreement, so the general principle is that the parties must perform what they promised. Allowing one party to "unilaterally" exit is an exception the law creates to protect the aggrieved party — for example when the counterparty fails to deliver goods, fails to pay, or abandons work so that the contract's purpose can no longer be achieved. Terminating without valid grounds makes you the breaching party instead.
Legal basis: Article 428(1) of the Civil Code 2015: "A party may unilaterally terminate performance of a contract and shall not compensate damages when the other party seriously breaches contractual obligations, or the parties have so agreed, or the law so provides." For commercial contracts, the corresponding remedies sit in Articles 312–314 of the Commercial Law 2005.
Next step: Read your contract for any clause permitting unilateral termination; if none, you must prove the other party's serious breach. In complex cases, consult a lawyer before sending the termination notice.
2. What breach counts as a "serious breach"? {#q2}
Short answer: A serious breach is conduct that deprives the aggrieved party of what they were entitled to expect when entering the contract — e.g. delivering entirely the wrong type of goods, missing many consecutive payments, abandoning construction without reason.
Explanation: The Civil Code 2015 gives no rigid definition of "serious breach"; courts assess it case by case, based on the contract's purpose and the actual damage. In commerce, the Commercial Law 2005 uses the equivalent concept of "fundamental breach" (Article 3(13)): a breach causing the other party to lose, to a substantial degree, what they were entitled to expect under the contract. In practice, factors such as: repeated breaches despite written reminders, breach of core obligations (delivery, payment, quality), or total refusal to perform — are all strong indicators of a serious breach.
Legal basis: Article 428(1) of the Civil Code 2015; Article 3(13) and Articles 312, 313 of the Commercial Law 2005 on grounds for suspension, termination and rescission in case of fundamental breach or agreed grounds.
Next step: Collect and preserve complete evidence of the breach (acceptance records, reminder emails, payment statements) before deciding. This is the most contentious point in court, so having a lawyer assess the breach level from the start reduces the risk of a counter-attack.
3. In commercial contracts, how does unilateral termination differ from rescission? {#q3}
Short answer: These are two entirely different remedies. Unilateral termination keeps the contract effective until the other party receives the termination notice; performed obligations are recognized and must be settled. Rescission makes the contract lose effect from the time of signing; the parties return what they received.
Explanation: Confusing these two is very common and has major practical consequences. Example: you have received 60% of the goods and paid accordingly — with unilateral termination, that 60% stands and the parties only settle what was performed. With rescission, the parties must in principle return what they received (minus reasonable costs). Both remedies release the parties from continuing performance, but the agreements on penalties, damages and dispute resolution remain effective after termination or rescission.
Legal basis: Articles 312 (suspension), 313 (rescission in whole or in part) and 314 (legal consequences of rescission) of the Commercial Law 2005; Article 427 of the Civil Code 2015 on the consequences of rescission and unilateral termination.
Next step: When drafting the notice to the counterparty, use the correct term matching your intent — writing "rescind" when you mean "unilaterally terminate" can create unnecessary disputes over legal consequences. When drafting new contracts, specify which remedy applies in each situation.
4. How much advance notice is required for unilateral termination? {#q4}
Short answer: The law requires immediate notice to the other party of the termination; the specific notice period is set by the contract. If the contract is silent, indefinite-term contracts require a reasonable advance period.
Explanation: The termination notice is not a mere formality but a condition for effectiveness: under Article 428 of the Civil Code 2015, the contract terminates from the time the other party receives the termination notice. If you fail to notify and cause damage to the other party, you must compensate that damage — even if you had valid grounds to terminate. In commerce, Article 315 of the Commercial Law 2005 likewise requires the party applying a remedy to notify the other party immediately; failure to do so causing damage triggers compensation.
Legal basis: Article 428(2) and (3) of the Civil Code 2015; Article 315 of the Commercial Law 2005.
Next step: Send the notice in writing (registered mail, acknowledged email, or personal delivery with a record) stating: the termination ground (contract clause or specific breach), the effective time, and settlement/handover demands. Keep proof of sending and receipt — mandatory documents if a dispute arises.
5. What happens if a contract is terminated without grounds? {#q5}
Short answer: The party terminating without grounds is identified as the breaching party and bears full civil liability: damages, contractual penalties, and possible lawsuits demanding continued performance.
Explanation: This is widely misunderstood: "I don't want to continue, so I stop" is not an automatic right. Article 428(5) of the Civil Code 2015 provides clearly: where unilateral termination lacks grounds, the terminating party is identified as the breaching party and must bear civil liability under the Civil Code and other relevant laws. The practical result: you lose the right to claim damages, must compensate the counterparty instead, and may face contractual penalties.
Legal basis: Article 428(5) of the Civil Code 2015; Articles 418–419 of the Civil Code 2015 on penalties and damages for contract breach; Articles 302 and 307 of the Commercial Law 2005 on damages and penalties in commerce.
Next step: Before sending any termination notice, ask yourself three questions: (1) does the contract permit it, (2) has the other party seriously breached and is there evidence, (3) does sector-specific law provide separately. If the answers are all "no", do not terminate unilaterally — negotiate an agreed termination or find another route.
6. After unilateral termination, can damages still be claimed? {#q6}
Short answer: Yes. Article 428(4) of the Civil Code 2015 provides clearly: the party suffering loss from the other party's non-performance is entitled to damages, even if they were the one who lawfully terminated the contract.
Explanation: Termination only releases the parties from continuing performance; it does not erase liability for damage already caused. You may claim the benefit you would have enjoyed had the contract been properly performed, plus costs arising from the counterparty's non-performance (Article 419 of the Civil Code 2015). Agreements on penalties and dispute resolution also remain effective after termination. In commerce, the aggrieved party may also claim damages under Article 302 of the Commercial Law 2005.
Legal basis: Articles 428(3), 428(4) and 419 of the Civil Code 2015; Article 302 of the Commercial Law 2005.
Next step: Immediately after termination, fix the damage figures: prepare debt reconciliation records, total the incurred costs (replacement contractors, loan interest, storage costs…), keep invoices and vouchers. Damages must be proven with specific evidence — generic claims without figures are almost certainly rejected by courts.
7. Can a landlord unilaterally terminate a house lease? {#q7}
Short answer: Yes, but only in the cases listed in Article 172(2) of the Housing Law 2023. The most prominent: the tenant fails to pay full rent for 03 months or more without an agreed reason; uses the house for the wrong purpose; damages or alters the house without permission; subleases without consent; causes public disorder recorded up to the third time without remedy.
Explanation: The Housing Law 2023 strongly protects tenants: Article 172(1) provides that during the lease term, the landlord may not unilaterally terminate and repossess the house, except in the Article 172(2) cases. In other words, outside this list, a landlord cannot invoke "I urgently need the house" to evict a tenant mid-term — unless the contract provides otherwise in accordance with law. Where a permitted case applies, the landlord may terminate and repossess the leased house.
Legal basis: Article 172 of the Housing Law 2023 (27/2023/QH15, effective 01/8/2024); general lease termination cases in Article 171(2) of the Housing Law 2023.
Next step: Landlords should record violations in minutes as they arise (especially disorderly conduct requiring three records by the residential group), and send written reminders before issuing the termination notice. Note: the "03 months" benchmark applies only to house leases under the Housing Law 2023, not automatically to office or factory leases — those follow the general Civil Code rules.
8. Can a tenant unilaterally terminate a house lease? {#q8}
Short answer: Yes. Article 172(3) of the Housing Law 2023 permits the tenant to terminate unilaterally when: the landlord fails to repair serious damage; the landlord unreasonably raises rent or raises rent without prior notice as agreed; the tenant's right to use the house is restricted due to a third party's interest.
Explanation: This rebalances the lease relationship: tenants are not "locked in" when the house seriously deteriorates and the landlord neglects it, or when the landlord raises rent at will. However, "serious damage" and "unreasonable rent increase" are concepts that must be proven in fact — so tenants should keep photos, condition records and copies of repair requests sent to the landlord before terminating.
Legal basis: Article 172(3) of the Housing Law 2023.
Next step: Before terminating, send a written request for the landlord to remedy (repair, keep the rent) with a reasonable deadline, and keep proof of sending. If the landlord does not respond, send the termination notice in writing and agree on the handover time and deposit refund to avoid later disputes.
9. If the contract has no termination clause, can it still be terminated unilaterally? {#q9}
Short answer: Yes. The absence of a termination clause does not remove the right the law grants: if the other party seriously breaches an obligation, or sector-specific law allows, you may still terminate unilaterally under Article 428 of the Civil Code 2015.
Explanation: Many people mistakenly believe "if the contract doesn't say it, you can't do it", but the order is: the parties' agreement first, the law second — and the law is always the safety net when the contract is silent. This matters especially for hastily signed contracts using online templates without termination clauses. Conversely, if the contract already specifies termination conditions and procedures, those agreed terms must be followed.
Legal basis: Article 428(1) of the Civil Code 2015; for commercial contracts, Articles 312–314 of the Commercial Law 2005.
Next step: Review the whole contract to make sure no clause restricts termination rights (e.g. "neither party may unilaterally terminate during the contract term"). If the contract is under negotiation, insert a unilateral termination clause from the start: list the termination cases, the notice period, and how performed parts are handled — the cheapest way to avoid disputes.
10. Is unilateral termination of a labour contract the same as a commercial contract? {#q10}
Short answer: Not the same. Labour contracts are governed separately by the Labour Code 2019: both employees and employers may terminate unilaterally but must follow statutory notice periods and listed cases; unlawful termination is handled under labour sanctions (compensation, reinstatement), not the Civil Code or Commercial Law mechanisms.
Explanation: The core difference is that labour law protects the weaker party more strongly. For example: employers may terminate unilaterally only in the statutory cases (regular failure to complete work, long-term illness, force majeure disasters…), must give 30–45 days' notice depending on contract type, and unlawful dismissal requires reinstating the employee plus wage compensation. Commercial contracts, by contrast, permit termination upon serious breach without such long notice.
Legal basis: Articles 35, 36, 40 and 41 of the Labour Code 2019 (10/2019/QH14, effective 01/01/2021).
Next step: If your issue concerns dismissal or resignation, research labour law separately — do not apply this article's principles. FDI enterprises should pay special attention to correct disciplinary and termination procedures to avoid unlawful-dismissal findings.
Your question is not here?
Every contract has its own context — clauses, breach levels and applicable sector-specific laws may differ. If you are considering sending a termination notice or have just received one from a counterparty, contact FLAT Law Firm at hotline 0988424851 for a lawyer's assessment of the legal grounds and properly drafted documents before acting.
Further reading: Scenario: wanting to unilaterally terminate because the counterparty breached · FAQ: maximum contractual penalty (T-377, link wiring pending at publish) · Civil and commercial judgment enforcement: process and handling non-compliant losers
References
- Civil Code 2015 (No. 91/2015/QH13), effective 01/01/2017 — Articles 423, 424, 427, 428.
- Commercial Law 2005 (No. 36/2005/QH11), effective 01/01/2006 — Article 3(13), Articles 312, 313, 314, 315.
- Housing Law 2023 (No. 27/2023/QH15), effective 01/08/2024 — Articles 171, 172.
- Labour Code 2019 (No. 10/2019/QH14), effective 01/01/2021 — Articles 35, 36, 40, 41.
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