This is our final post relating the force majeure event in Vietnam. In this post, we will cover the effect of a force majeure event after the existence of a force majeure event is confirmed (see our earlier post here). This post is written by Nguyen Quang Vu and Tran Thuy Tien.

In summary,

A party affected by a force majeure event will be exempted from contractual liabilities. It is not necessary for a contract to have a separate force majeure clause for the affected party to claim force majeure.
The Commercial Law 2005 is not clear whether the default of an affected party must be caused by the force majeure event.
The law does not clearly allow a contract to be terminated on the basis of a prolonged force majeure. However, in case of a prolonged force majeure event, the Commercial Law 2005 allows the parties to refuse to perform the contract.
The affected party must notify the other party of the occurrence of a force majeure event, the possible consequences of such an event, and the cessation of such an event. The Commercial Law 2005 is silent about the consequences of the affected party’s failure to notify the occurrence of a force majeure event or to prove the existence of a force majeure event.
Even if the coronavirus outbreak may not qualify as a force majeure event, a party to Vietnamese law commercial contracts may still refuse performance of the contract on the ground that such party must comply with the instructions which are given by the authorities under the Law on Prevention and Control of Infectious Diseases to deal with the outbreak.
The coronavirus outbreak could qualify as a “fundamental change” under Article 420 of the Civil Code 2015. This could allow the parties to a contract signed before the outbreak to request the court to terminate or amend the contract. Unfortunately, Vietnamese courts have temporarily suspended all hearing and proceedings to contain the outbreak.

The full post can be downloaded here.

Vietnam Business Law