What are events of force majeure in contracts in Vietnam?

What are events of force majeure in contracts in Vietnam? 

Pursuant to Clause 1 Article 156 of the Civil Code in 2015 stipulating time periods excluded from prescriptive periods for initiating legal action for civil cases and from prescriptive periods for requesting resolution of civil cases:

Time periods excluded from prescriptive periods for initiating legal action for civil cases and from prescriptive periods for requesting resolution of civil cases

The time period during which one of the following events occurs shall be excluded from prescriptive periods for initiating legal action for civil cases and from prescriptive periods for requesting resolution of civil cases:

1. An event of force majeure or other objective hindrance which renders the person with the right to initiate legal action for a civil case or make the request not able to do so within the prescriptive period.

An event of force majeure is an event which occurs in an objective manner which is not able to be foreseen and which is not able to be remedied by all possible necessary and admissible measures being taken.

An objective hindrance is a hindrance which in an objective context results in a person with civil rights or obligations not knowing that his or her lawful rights and interests have been infringed or not being able to exercise his or her rights or fulfill his or her civil obligations;

2. The person with the right to initiate legal action for a civil case or to make the request is a minor or a legally incapacitated person, a person with limited cognition and behavior control or a person with limited legal capacity, and does not yet have a representative.

3. The representative of a minor or a legally incapacitated person, a person with limited cognition and behavior control or a person with limited legal capacity has not yet been replaced in any of the following cases:

a) The representative being natural person dies or the representative being juridical person ceases to exist;

b) The representative, for good reasons, cannot continue his/her representation.

As regulated above, an event of force majeure is an event which occurs in an objective manner which is not able to be foreseen and which is not able to be remedied by all possible necessary and admissible measures being taken.

There are some cases of force majeure in current contracts, including natural disasters (floods, earthquakes, storms, etc.), war, epidemics, economic crises, economic recessions, political instability, fires, warehouse explosions, etc.

What are events of force majeure in contracts in Vietnam? - image from internet

Shall people who are not able to perform a civil obligation due to an event of force majeure have civil liability in Vietnam? 

Pursuant to Article 351 of the Civil Code in 2015 stipulating civil liability arising from breach of civil obligations:

Civil liability arising from breach of civil obligations

1. An obligor which fails to perform or performs incorrectly an obligation has civil liability to the obligee.

Breach of obligations means that the obligor fails to perform the obligations on time, perform the obligations incompletely or incorrectly.

2. Where an obligor is not able to perform a civil obligation due to an event of force majeure, it shall not have civil liability, unless otherwise agreed or otherwise provided by law.

3. An obligor shall not have civil liability if it is able to prove that failure to perform an obligation is due entirely to the fault of the obligee.

As regulated above, where an obligor is not able to perform a civil obligation due to an event of force majeure, it shall not have civil liability, unless otherwise agreed or otherwise provided by law.

What is the maximum time for extension of performance of contracts in force majeure circumstances in Vietnam?

Pursuant to Article 296 of the Law on Commercial in 2005 sitpulating extension of time limit for performance of contracts, or refusal to perform contracts in force majeure circumstances:

Extension of time limit for performance of contracts, or refusal to perform contracts in force majeure circumstances

1. In a force majeure circumstance, the parties may agree to extend the time limit for performing their respective contractual obligations. If the parties do not agree or cannot agree upon such extension, the time limit for performing contractual obligations shall be extended for a period of time equal to the time length of such force majeure circumstance plus a reasonable period of time for remedying consequences, but not exceeding:

a/ Five months for goods or services for which the agreed time limit for their delivery or provision does not exceed twelve months from the date the contract is entered into;

b/ Eight months for goods or services for which the agreed time limit for their delivery or provision exceeds twelve months from the date the contract is entered into.

2. Beyond the time limits specified in Clause 1 of this Article, the parties may refuse to perform the contract and neither party is entitled to request the other party to pay damages.

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As regulated above, in a force majeure circumstance, the parties may agree to extend the time limit for performing their respective contractual obligations.

If the parties do not agree or cannot agree upon such extension, the time limit for performing contractual obligations shall be extended for a period of time equal to the time length of such force majeure circumstance plus a reasonable period of time for remedying consequences, but not exceeding:

- Five months for goods or services for which the agreed time limit for their delivery or provision does not exceed twelve months from the date the contract is entered into;

- Eight months for goods or services for which the agreed time limit for their delivery or provision exceeds twelve months from the date the contract is entered into.

Best regards!