Short answer: Yes. A non-disclosure agreement signed during M&A negotiations is an independent contract — the collapse of the deal does not terminate the NDA (Articles 385, 400 and 401 of the Civil Code 2015, No. 91/2015/QH13). You may claim penalty for breach under Article 418 (if the NDA contains a penalty clause — no proof of actual loss required) and damages under Articles 360 and 419. The hardest practical hurdle is proving and quantifying the loss: Vietnamese courts generally accept only documented actual losses.
1. Does a failed deal terminate the NDA?
No. An NDA signed during M&A negotiations satisfies all conditions of a contract under Articles 385 and 400 of the Civil Code 2015 and takes effect under Article 401 — independently of the outcome of the transaction. The failure of the deal is not a ground for terminating confidentiality obligations, unless the NDA itself provides otherwise (which careful drafting never allows).
Standard practice is a survival clause: confidentiality obligations last 3–5 years from signing or from the end of negotiations, and some obligations (such as the ban on using trade secrets) may survive indefinitely. When reviewing an NDA, the seller should check this clause first before arguing breach.
2. No written NDA: the statutory safety net
Even without a signed NDA, Article 387 of the Civil Code 2015 imposes statutory duties:
- Article 387.2: a party receiving information during contract negotiation must keep it confidential and must not use it for its own purposes.
- Article 387.3: a party breaching this duty and causing loss must pay damages.
This safety net is narrower than a well-drafted NDA: the scope of “confidential information” under statute is harder to prove, there is no penalty clause for a quick claim, and the definition of trade secrets must be checked against the Law on Intellectual Property (as amended by Law 131/2025/QH15, effective 01/4/2026, consolidated text 67/VBHN-VPQH). A written NDA is always the stronger instrument.
3. Grounds for claiming
(a) Penalty for breach — Article 418 of the Civil Code. If the NDA contains a penalty clause, the aggrieved party can claim the penalty without proving actual loss. This is the fastest and most effective remedy in practice, because it sidesteps the loss-proof bottleneck.
(b) Damages — Articles 360 and 419. Recoverable loss covers documented actual material loss (property loss, costs of prevention and remediation, actually lost or reduced income) and profits that would have been earned absent the breach (Article 419.2). Note: legal entities cannot claim moral damages.
Both remedies may be claimed concurrently, unless the NDA agrees that the penalty is the sole remedy — so NDAs should be drafted carefully to avoid unintentionally limiting the aggrieved party.
4. The 8% penalty cap trap
Article 301 of the Commercial Law 2005 caps penalties at 8% of the value of the breached contractual obligation — but only where the NDA qualifies as a commercial contract governed by the Commercial Law. A standalone NDA signed during M&A negotiations may well not be treated as a commercial contract; the Civil Code then applies and the penalty level is freely agreed by the parties, with no 8% cap.
Both possibilities must be presented; neither should be stated as absolute. When drafting an NDA, specify the legal basis for the penalty clause to avoid later disputes.
5. Remedies beyond money
- Interim urgent measures: ask the court or arbitral tribunal to prohibit the breaching party from further disclosing or using the information (under the Civil Procedure Code 2015 and the Law on Commercial Arbitration 2010) — critical while loss is ongoing.
- Unfair competition: disclosing or using undisclosed business information without permission is prohibited by Article 45.1 of the Competition Law 2018.
- Trade secret infringement: handled under the Law on Intellectual Property (check the exact article numbers against consolidated text 67/VBHN-VPQH before citing).
- Criminal liability: only in special cases under the Penal Code, not a routine tool.
- Where the NDA covers personal data, the Law on Personal Data Protection 91/2025/QH15 (effective 01/01/2026) also applies.
6. The proof bottleneck and a seller checklist
To recover, the aggrieved party must prove five elements: (i) the information was confidential; (ii) there was unauthorized disclosure or use; (iii) actual loss; (iv) causation; (v) fault. Quantifying loss is the hardest: “lost M&A opportunity” or “diminished deal value” is very difficult to get a court to accept absent clear published precedent — this article makes no claim about that possibility.
Seller checklist before opening the data room: define confidential information broadly and precisely (including oral information, analyses and notes); a 3–5 year survival clause; a penalty clause with a real deterrent level; a ban on using the information for competitive purposes; return-or-destroy obligations when talks end; and a clause choosing arbitration or the courts for disputes. The classic scenario to guard against: the buyer walks away after due diligence, then launches a competing product built on data-room data.
7. Limitation period and forum
The limitation period for damages claims is 3 years (Article 429 of the Civil Code 2015). The dispute forum follows the NDA: an arbitration clause sends the dispute to arbitration; otherwise, sue in the competent court.
Frequently asked questions
Only an oral confidentiality understanding, no signed NDA — can I still claim? There is still a basis under Articles 387.2–387.3 of the Civil Code, but proving the scope of confidential information is harder and there is no penalty clause for a quick claim.
Is the NDA penalty capped at 8%? Only if the NDA qualifies as a commercial contract under the Commercial Law (Article 301). A standalone NDA in M&A negotiations may be governed by the Civil Code with a freely agreed penalty.
How long do confidentiality duties survive a collapsed deal? As provided in the NDA survival clause — standard practice is 3–5 years; if the NDA is silent, disputes become far more complex.
Do you suspect the other side breached the NDA after M&A talks collapsed, or need your confidentiality terms reviewed before opening the data room? Reach us via the Contact page of FLAT Law Firm.
The information in this article is for reference only and does not constitute legal advice.
The legal content of this article is reviewed by the AI Legal Council of FLAT and submitted to the owner for approval before publication; it is not an opinion of a licensed lawyer and does not replace legal advice for specific cases.