What are the contents of construction contracts in Vietnam? Latest model construction contract in Vietnam

Hello, Lawnet would like to answer as follows:

1. What is a construction contract?

According to the provisions of Clause 1, Article 2 of Decree 37/2015/ND-CP, a construction contract is a civil contract negotiated in writing between the employer and contractor for execution of a part or whole of the construction investment activity.

Clause 2 and Clause 3, Article 2 of Decree 37/2015/ND-CP. stipulate the employer and the contractor as follows:

- The employer means the investor or its representative, general contractor or main contractor.

Thus, a construction contract is a contract between the employer and contractor for execution of a part or whole of the construction investment activity.

2. What are the contents of construction contracts in Vietnam?

According to the provisions of Article 141 of the Construction Law 2014, a construction contract includes the following contents:

- Applied legal bases;

- Language used in the contract,

- Content and volume of work;

- Quality, technical requirements of work; pre-acceptance test and handover;

- Contract performance duration and schedule;

- Contract price, advance payment, currency used in payment, and payment for the contract;

- Contract performance security, contract advance guarantee;

- Adjustment of the construction contract;

- Rights and obligations of the parties to the construction contract;

- Liability for violations of the contract, rewards and fines for violations of the contract;

- Suspension and termination of the contract;

- Settlement of disputes over the contract;

- Risks and force majeure events;

- Settlement and liquidation of the contract;

- Other contents.

Note: For general construction contracts, beside the contents prescribed above, the management contents and responsibilities of the construction contractor shall be added.

3. Latest model construction contract in Vietnam

According to the provisions of Clause 3, Article 7, Circular 02/2023/TT-BXD stipulating the latest model construction contract in Vietnam:

- Model consulting contract  Download

- Model performance contract  Download

- Model performance contracts, consulting contracts, engineering, procurement, and construction (EPC) contracts  Download

4. What are the validity of construction contract in Vietnam?

According to Article 6 of Decree 37/2015/ND-CP, regulations on the validity of construction contract in Vietnam are as follows:

- A construction contract shall become legally effective when it meets the following conditions:

+ Persons who participate in signing a contract must obtain adequate legal capacity;

+ Meet the principles for contract signing as prescribed in Article 4 of Decree 37/2015/ND-CP;

+ Form of a contract is in writing and signed by representative of the parties to a contract according to the law. In case either of the parties is an organization, such party shall sign its name and affix stamp according to the law.

- The effective date of a contract is the date when it has been signed (affixed with stamp if any) or other specific times as agreed in the contract and the employer has received performance bond issued by the contractor (for a contract with provisions on performance bond being specified).

- Legality of construction contract:

+ A construction contract that has become effective shall be the highest legal foundation that the employer, contractor and other related parties have the obligations to perform;

+ A construction contract that has become effective shall be the highest legal foundation for settling dispute between the parties. Any dispute that is not yet agreed by the parties to the contract shall be settled on the basis of relevant law provisions;

+ Regulatory agencies and agencies that perform controlling, allocation, provision of capital, investigation and auditing, and other relevant agencies shall perform their functions and duties as defined without encroachment on rights and interests of the parties in reliance on terms and conditions of the effective construction contract.

Thus, a Construction Contract is legally effective when it meets the following conditions:

- Persons who participate in signing a contract must obtain adequate legal capacity;

- Meet the principles for contract signing according to regulations;

- Form of a contract is in writing and signed by authorized representatives of the parties.

- The effective date of a contract is the date when it has been signed (affixed with stamp if any) or other specific times as agreed in the contract and the employer has received performance bond issued by the contractor (for a contract with provisions on performance bond being specified).

At the same time, a valid construction contract is the highest legal basis for the parties to implement and resolve disputes. The state agencies must comply and not violate the rights of the parties.

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