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CISG in Vietnam: Application and Reservations

7 min readFLAT LAW FIRM
Container xanh dương in nổi biểu tượng cán cân công lý trong vòng nguyệt quế, phía sau là cảng container và cần cẩu.

What the CISG is, and why Vietnam-China businesses must know it

The CISG (UN Convention on Contracts for the International Sale of Goods, Vienna 1980) unifies rules on contract formation, rights and obligations of sellers and buyers in international sales. It is among the most widely adopted uniform commercial-law treaties in the world, covering most of Vietnam's major trading partners. Given massive Vietnam–China trade — and the key differences between Vietnamese and Chinese contract law businesses on both sides often overlook — the CISG is the potential "common law" of thousands of contracts yearly, though many businesses have never heard of it.

Key point: the CISG can apply automatically to your contract even unmentioned — unless parties agree to exclude it. Many businesses first hear of the CISG only when a dispute erupts — often after key notice or limitation windows have already closed.

This is a complete guide to CISG Vietnam application reservations: when the Convention applies, the Article 95 reservations of Vietnam and China, and practical notes for drafting international sale contracts.

Table of contents

When does the CISG apply?

Under Article 1, the Convention applies when:

  • (a) Parties have places of business in different Contracting States; or
  • (b) Conflicts rules lead to the law of a Contracting State.

Vietnam has been a member since 01/01/2017; China much longer. A sale contract between Vietnamese and Chinese enterprises (places of business in the two countries) therefore falls within the CISG under limb (a) — unless excluded. Example: a Hanoi buyer and a Guangzhou seller sign a sale contract without choosing governing law — the CISG applies automatically. Where conflicts rules point to the law of a Contracting State (limb (b)), the analysis is more delicate: Vietnam's Article 95 reservation removes this route for Vietnamese law, so parties should never assume the CISG applies merely because Vietnamese law was chosen.

Opt-out (Article 6): parties may agree not to apply the CISG. But exclusion must be clear — merely stating "Vietnamese law applies" without mentioning the CISG may not suffice before some dispute-resolution bodies in Vietnam–China commercial litigation.

Vietnam's reservation: Article 95

Upon accession, Vietnam declared an Article 95 reservation: Vietnam is not bound by Article 1(1)(b). Practical effect:

  • The CISG does not apply merely because conflicts rules point to Vietnamese law (limb (b) cases).
  • The CISG still applies normally under limb (a) — parties in two different Contracting States.

For Vietnam–China contracts this matters little (limb (a) applies), but it matters where one party sits in a non-Contracting State and conflicts point to Vietnamese law.

China's reservations: Articles 95 and 96

China declared an Article 95 reservation (like Vietnam) — still in force. Its Article 96 reservation on written form was withdrawn on 16/01/2013, effective 01/8/2013 (CISG Art. 97(4); current reservation list on UNCITRAL).

Practical meaning for Vietnam–China contracts:

  • Since 01/8/2013 the Chinese side can no longer invoke an Article 96 reservation against non-written contracts.
  • Put every amendment in writing — a mandatory discipline, not just advice (emails and WeChat exchanges can bind — archive them fully).
  • When checking any country's reservations, always consult the current reservation list on UNCITRAL — reservations may be withdrawn at any time.

CISG points differing from Vietnamese law that businesses trip on

  1. Offer and acceptance: the CISG's own rules on offer effectiveness, late acceptance, and counter-offers (Arts. 14–24) differ in detail from the Civil Code. Example: under the CISG, a reply purporting to accept but adding non-material modifications still counts as acceptance (unless the offeror objects promptly) — while the Civil Code usually treats it as a new offer.
  2. Fundamental breach: the central concept for avoidance (Arts. 25, 49, 64) — a higher threshold than ordinary "breach". Only when the breach "substantially deprives" the other party of what it was entitled to expect under the contract may the contract be avoided — a few days' delay in delivery is usually not enough (see termination clauses and their consequences when drafting the corresponding clause).
  3. Inspection and notice of non-conformity: buyers must inspect and notify within a reasonable time, max 2 years (Arts. 38–44) — late notice forfeits claims. In practice, Vietnamese businesses often sit on claims for months before complaining — under the CISG, that forfeits the right. Quality-inspection clauses in sale contracts should therefore fix short notice periods suited to the nature of the goods.
  4. Damages: foreseeability principle (Art. 74) — similar but not identical to the Civil Code. Recoverable loss may not exceed the loss the breaching party foresaw or ought to have foreseen at conclusion — so for high-value contracts, anticipate and record special loss items expressly.
  5. Mitigation of loss: the aggrieved party must take reasonable measures to mitigate loss (Art. 77) — failure reduces the claim by the avoidable portion. Example: a buyer receiving defective goods who makes no reasonable effort to find substitute supply cannot claim the full loss from a production stoppage.
  6. Interest on late payment: the CISG requires interest on sums in arrears (Art. 78) but fixes no rate — the applicable rate follows the referred law. State the default interest rate for commercial contracts expressly to avoid disputes.

Drafting checklist for Vietnam-China contracts under the CISG's "shadow"

  1. [ ] Strategic call: keep the CISG (uniform framework) or opt out under Article 6 (expressly, in writing). Note: excluding the CISG does not mean Vietnamese law applies — state the substitute governing law expressly.
  2. [ ] Every amendment in writing — mandatory evidential discipline in practice (note: China's Article 96 reservation was withdrawn effective 01/8/2013, but written form remains the safe standard).
  3. [ ] Fix clear inspection and notice deadlines (don't default to 2 years) — shorten to fit the goods (perishables: days; machinery: weeks).
  4. [ ] Clear governing law and dispute resolution clauses, consistent with the CISG choice — see dispute-resolution clauses in bilingual contracts.
  5. [ ] Train sales/logistics: emails and WeChat exchanges can bind — archive everything. Set internal rules: who may commit to counterparties, and commitment limits.
  6. [ ] Force majeure and hardship clauses suited to international trade — don't copy domestic templates.
  7. [ ] Risk-of-loss passage aligned with Incoterms: the CISG allocates risk by the time of handover (Arts. 66–70); state the Incoterms 2020 delivery term to avoid disputes over when risk passes from seller to buyer — especially for long sea shipments.
  8. [ ] Notice-and-cure mechanism: fix how long the buyer has to notify non-conformity (shorter than the CISG's default 2 years), and give the seller a right to cure before the buyer may avoid the contract — reducing needless escalation.

FAQ

1. What is the CISG? The UN Convention on Contracts for the International Sale of Goods (Vienna 1980), unifying formation, rights and obligations.

2. When does it apply in Vietnam? Parties in different Contracting States (Art. 1); Vietnam a member since 01/01/2017. Opt-out available under Art. 6.

3. What did Vietnam reserve? Article 95: not bound by Article 1(1)(b).

4. Did China make CISG reservations? Yes, with an update: an Article 95 reservation (like Vietnam, still in force); its Article 96 written-form reservation was withdrawn on 16/01/2013, effective 01/8/2013.

5. Exclude the CISG in Vietnam–China contracts? Strategic: keep for uniformity, or opt out under Art. 6 (expressly, in writing) for one country's law.

When to work with a lawyer

Work with a lawyer from the contract-drafting stage — not after a dispute has arisen. A lawyer helps you: decide whether to keep or exclude the CISG under Article 6; check the counterparty's country reservations on the current UNCITRAL list; draft governing-law, dispute-resolution, inspection and damages clauses compatible with the CISG.

FLAT Law Firm advises on drafting and resolving commercial disputes over international sale contracts, especially Vietnam–China transactions. Contact hotline 0988424851 for advice on your specific contract.

  • CISG, Vienna 1980: Art. 1 (scope), Art. 6 (exclusion), Arts. 95–96 (reservations) — effective for Vietnam 01/01/2017.
  • Vietnam's reservation declaration upon accession — Article 95 reservation.

Verification notes

Check UNCITRAL for the updated Contracting States list at application. China's reservations per its accession declaration; check originals when invoking in disputes. Vietnamese court/arbitral CISG practice is developing — framework only.