To be clear from the outset: the law sets no minimum or maximum term for ongoing legal advisory (retainer) agreements in commercial relationships. Article 513 of the Civil Code 2015 states the general principle: the term of a service contract is as agreed by the parties. Every figure you hear — “12 months”, “6 months” — is market practice; the parties decide the duration themselves. This article examines the common term frameworks and the companion clauses a retainer needs to run smoothly.
1. Legal framework: as agreed by the parties (Civil Code Art. 513)
A retainer is a legal-services contract between a business and a law practice. Civil Code Article 513 provides that the term of a service contract is agreed by the parties — no floor, no ceiling generally applicable to commercial retainers. Practical consequences:
- Parties may sign for 3 months, 6 months, 12 months or multiple years — all valid if voluntarily agreed.
- There is no “legal advisory contracts capped at 3 years” rule for businesses — a common misconception, see section 4.
- Because the term is entirely contractual, renewal and termination clauses matter as much as the initial term.
2. Market practice: 12-month framework with auto-renewal
In the Vietnamese market, the most common structure is:
- 12-month framework: long enough for the adviser to deeply understand the business, short enough for periodic performance and fee reviews.
- Auto-renewal clause: on expiry the agreement renews for another 12 months unless a party objects in writing by a set deadline — avoiding an advisory “gap” between contracts.
- 30-day termination notice: the common practice that a party wishing to exit must give 30 days’ notice, allowing file handover and completion of pending work.
- 6-month packages: typically used by businesses wanting to “trial” a new adviser, or for short-term project-based needs.
- Trial period: some Vietnamese templates include an initial trial phase (e.g. the first 1–3 months) before the full year is confirmed.
All figures above are practice, not binding legal standards.
3. Four companion clauses needed alongside the term
- Renewal mechanics: automatic or by addendum? If automatic, how and by when must an objection be raised?
- Early termination: grounds for unilateral termination, notice period, payment and handover duties on termination.
- Fee adjustment on renewal: whether next-year fees stay flat or follow an index — to avoid disputes each renewal.
- Scope per phase: especially for packages with a trial period, define the scope during the trial clearly.
4. Serious trap: do not apply the state legal-aid “3-year cap”
A dangerous research error: the “maximum 3 years” rule in Circular 08/2017/TT-BTP applies only to legal-aid performance contracts (free legal services organized by the State for policy beneficiaries) — it does not apply at all to commercial retainer agreements between businesses and law firms. Citing it to cap a corporate retainer’s term is wrong. This article does not rely on that instrument for any recommendation.
Frequently asked questions
Does the law cap retainer agreements at a number of years?
No. For commercial retainers, the term is as agreed under Civil Code Art. 513. The “maximum 3 years” rule of Circular 08/2017/TT-BTP applies only to state legal aid.
Should we sign for 6 or 12 months?
Twelve months is the common practice — enough time for the adviser to learn the business. Six months suits trialing a new firm or short-term needs.
If we do nothing at expiry, does the agreement just end?
It depends on the renewal clause: with auto-renewal and no timely objection, the agreement continues. Always check this clause before letting a contract “lapse”.
What is the typical response SLA under a retainer?
That is a different question — about advisory response times (market practice: 24–48 business hours), not the agreement’s term. See our separate analysis on retainer response SLAs.
Sources
- Civil Code 91/2015/QH13, Art. 513: the term of a service contract is as agreed by the parties (no general minimum/maximum).
- The 12-month, 6-month, auto-renewal, 30-day notice and trial-period figures in this article are market practice, not legal requirements.
- Circular 08/2017/TT-BTP (the “maximum 3 years” rule) applies only to state legal-aid performance contracts — not to commercial retainers; this article does not rely on it.
About to sign an ongoing legal advisory agreement and need the term, renewal and termination clauses reviewed before you commit? Reach us via the Contact page of FLAT Law Firm.
The legal content of this article is reviewed by FLAT’s AI Legal Council and submitted to the owner for approval; it is not an opinion of a licensed lawyer and does not replace legal advice for specific cases.
For reference only, not legal advice.