“In case of force majeure, the parties shall discuss and resolve together” — the force majeure clause in many Vietnamese commercial contracts is just one vague sentence. When a real dispute erupts (pandemic, floods, a state prohibition order), this generic wording does not exempt the breaching party, because courts apply statutory criteria, not the parties’ goodwill.
This article shows how to draft a force majeure clause that holds up in disputes — based on Article 156 of the Civil Code 2015 and Articles 294, 295, 296 of the Commercial Law 2005 — with a 6-point checklist and 4 common traps.
1. Statutory force majeure: 3 mandatory criteria (Article 156, Civil Code 2015)
Article 156.1 of the Civil Code 2015 defines: “A force majeure event is an event occurring objectively, which is unforeseeable and irremediable despite the application of all necessary measures and capabilities.”
These three criteria are statutory — parties cannot modify or remove them by agreement. An event meeting all three is force majeure as a matter of law, whether or not the contract lists it; conversely, a contract-listed event failing the criteria may still be rejected by courts.
2. Force majeure as a statutory exemption (Article 294, Commercial Law)
Article 294 of the Commercial Law 2005 exempts a breaching party in 4 cases: (a) agreed exemption; (b) force majeure; (c) breach wholly caused by the other party’s fault; (d) compliance with a competent state authority’s decision unforeseeable at contracting.
Force majeure is thus a statutory exemption in commerce — invocable with or without a clause. But a well-drafted clause makes proof and enforcement far easier.
3. Six-point drafting checklist
- (1) Definition + illustrative list: cite Article 156 of the Civil Code 2015, then list illustrative events (natural disasters, epidemics, fire, war, riots, strikes, embargoes, state authority decisions…) with “including but not limited to”. The list guides; it does not replace the three statutory criteria;
- (2) Notice procedure: a specific deadline (e.g. notice within 7–14 days of occurrence), written form, and each party’s designated recipient — because Article 295 mandates immediate written notice;
- (3) Mitigation duty: the affected party must take all reasonable measures to limit loss (matching Article 156’s “all necessary measures” criterion);
- (4) Legal consequences: suspension during the event; extension of time (citing Article 296 — see section 4); termination right if the event exceeds an agreed duration (e.g. 60–90 days);
- (5) Cost allocation: each party bears its own costs during force majeure, unless otherwise agreed;
- (6) Separate “hardship” clause: fundamentally changed circumstances (Article 420, Civil Code — performance still possible but excessively onerous) are a different doctrine; do not merge them into force majeure.
4. Consequence: how long is performance extended? (Article 296)
Article 296 of the Commercial Law 2005: on force majeure, parties may agree to extend performance time. Failing agreement, time is extended by the event’s duration + reasonable recovery time, capped at: 5 months (contracts with delivery/service terms of 12 months or less) or 8 months (terms over 12 months).
5. Four common traps
- Trap 1 — Overbroad listing: “any event beyond control” feels safe but courts still apply the three Article 156 criteria — breadth cannot rescue a non-qualifying event;
- Trap 2 — Forgetting notice: Article 295 requires immediate written notice plus proof of the exemption. Late or missing notice → exemption lost, and damages owed. This is why many businesses lose despite genuine force majeure;
- Trap 3 — Confusing force majeure with hardship: force majeure = performance is impossible; hardship (Article 420, Civil Code) = performance possible but excessively onerous, giving a right to renegotiate/adjust — different doctrines, different consequences;
- Trap 4 — Assuming pandemics always qualify: direct causation between the event and non-performance must be proved (a factory sealed by administrative order differs from revenue lost to a weak market — the latter is hard to qualify).
6. Frequently asked questions
Q: No force majeure clause — still exempt?
A: Yes — Article 294 allows statutory invocation. But without a clause, parties will fight over notice procedure, extension periods and consequences — so always include one.
Q: May we terminate immediately upon force majeure?
A: Not automatically. Check the agreed clause and Article 296 (extension first). Terminate only where the clause permits or the event outlasts the agreed period.
Q: What evidence proves force majeure?
A: Competent-authority documents (lockdown/prohibition decisions, local government disaster confirmations, chamber-of-commerce force majeure certificates…), plus proof of causation and mitigation measures taken.
Drafting a commercial contract and need a watertight force majeure clause? Contact us for advice.
Prepared by the FLAW AI Legal Council. This content is pending QA Council review before submission for approval; it is for reference only and does not replace legal advice for your specific case.
