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In today’s increasingly complex business environment, a contract is not just a transactional agreement—it is a legal shield that protects a company’s interests. However, many Vietnamese businesses still make fundamental contract drafting mistakes, resulting in unnecessary disputes. Below are five common pitfalls to avoid.
1. Failing to clearly define the rights and obligations of the parties
One of the most serious mistakes is drafting a contract without clearly specifying who does what, when, how far, and in what manner. Vague or overly general language around responsibilities makes it difficult to determine whether a breach has occurred.
This is particularly common in provisions related to payment obligations, delivery of goods/services, and handling of delays—where ambiguity can lead to multiple interpretations and limit enforceability.
2. Omitting breach and penalty clauses
Many contracts outline obligations but fail to specify the legal consequences of a breach. Without these provisions, it becomes difficult for businesses to claim compensation or enforce rights when the other party fails to perform.
By establishing clear terms for penalties, indemnification, and dispute resolution, contracts not only enhance enforceability but also act as a deterrent against non-compliance.
3. Using generic or copied contract templates
Some companies use contracts found online or recycle old templates without tailoring them to the specific transaction. This often results in inconsistent, inapplicable, or even legally conflicting provisions.
Every transaction has its own nature, objectives, and terms. Using an untailored template increases legal and commercial risks, particularly when contractual terms don’t match the real-world context.
4. Lacking a dispute resolution clause
Many contracts omit key elements such as the dispute resolution forum (court or arbitration), governing law, or language of the contract—especially in cross-border transactions. In the event of a dispute, the absence of such provisions can lead to delays, increased costs, and jurisdictional confusion.
Clearly defining dispute resolution mechanisms from the outset provides transparency, streamlines proceedings, and reduces unnecessary legal costs.
5. Not reviewed by legal experts or in-house counsel
Due to limited legal staffing or overconfidence, many businesses execute contracts without thorough legal contract reviewing or advice of a Vietnam law firm. This can result in overlooked wording issues, contradictory terms, or missing protections.
Having a lawyer or legal department review the contract before signing ensures legal soundness, reduces exposure to disputes, and protects the company’s commercial interests.
Contract drafting is not just a procedural formality—it is a key risk management strategy. Avoiding the common mistakes above helps businesses safeguard their rights and build sustainable, transparent business relationships.
ASL Law is a leading full-service and independent Vietnamese law firm made up of experienced and talented lawyers. ASL Law is ranked as the top tier Law Firm in Vietnam by Legal500, Asia Law, WTR, and Asia Business Law Journal. Based in both Hanoi and Ho Chi Minh City in Vietnam, the firm’s main purpose is to provide the most practical, efficient and lawful advice to its domestic and international clients. If we can be of assistance, please email to [email protected].
ASL LAW is the top-tier Vietnam law firm for Contract Reviewing and Drafting. If you need any advice, please contact us for further information or collaboration.
