Can employer have the right to temporarily suspend the contract performance when the contractor fails to meet requirements for contract progress as agreed in Vietnam?
Can employer have the right to temporarily suspend the contract performance when the contractor fails to meet requirements for contract progress as agreed in Vietnam?
My side is a contractor for a construction project. But now the construction progress has been slower than agreed. Now we want to suspend the performance of the contract, is it possible? How many days in advance is the notice required in Vietnam?
Can employer have the right to temporarily suspend the contract performance when the contractor fails to meet requirements for contract progress as agreed in Vietnam?
Pursuant to Clause 2, Article 40 of Decree 37/2015/ND-CP stipulating the parties to the contract are entitled to temporarily suspend the contract in the following cases:
a) The employer has the right to temporarily suspend the contract performance when the contractor fails to meet requirements for quality, labor safety and contract progress as agreed in the contract.
b) The contractor has the right to temporarily suspend the contract performance and prolong the contract progress when the employer is in breach of payment terms, specifically no adequate payment is made to the contractor as agreed after 28 days since the payment deadline as prescribed in Clause 10, Article 19 hereof except otherwise as agreed by the two parties; no payment guarantee is made for quantity of work to be executed.
Thus, if the construction progress is not carried out as agreed, the employer has the right to suspend the contract performance in Vietnam.
How many days in advance is the notice required in Vietnam?
In Clause 3, Article 40 of Decree 37/2015/ND-CP, the deadline for notification of contract suspension is as follows:
3. Before one party temporarily suspends the contract performance, a written notice must be made to the other party 28 days in advance with reasons for temporary suspension being specified; the employer and contractor shall be responsible for carrying out negotiations to continue to maintain agreements as signed in the contract except force majeure events.
In case one party fails to make a notice about temporary suspension or reasons specified are found contrary to the signed contract, it shall be responsible for making compensation for losses caused to the other party.
Therefore, the notice of contract suspension must be notified at least 28 days in advance, otherwise, compensation will be required as prescribed.
Best Regards!
