Applying The Force Majeure Clause to exempt liability under the contract

In the current context, where changes in economic factors, policies, and politics are strongly impacting business operations of enterprises, clauses on force majeure events or objective impediments become particularly important. They help a party to a contract mitigate risks arising from delays in or the inability to perform contractual obligations, or serve as a basis for adjusting key terms of the contract. However, in practice, when reviewing standard contracts used by some enterprises and participating in dispute resolution, we have observed that many enterprises do not pay due attention to force majeure clause. This leads to the use of template provisions that fail to consider realistically possible events, the reasonableness in the context of the parties’ transactions, and fail to anticipate situations that may arise based on assessments of policy changes, conflicts, and market fluctuations… Precisely these issues cause the clause to merely “exist” in the contract without ensuring legal protection for the enterprises themselves.

1. What is a force majeure event?

Currently, force majeure events are most comprehensively regulated under the Civil Code 2015. The spirit of the law provides that when a force majeure situation arises, the affected party is exempt from liability, except where the parties have otherwise agreed in the contract. Accordingly, the law defines a force majeure event as an event that occurs objectively, cannot be foreseen, and cannot be remedied despite the application of all necessary and possible measures. Thus, before considering how the contract regulates the manner in which the parties respond when a force majeure event occurs, the parties must first understand that a force majeure event must satisfy the elements of being objective, unforeseeable, and unavoidable. The regulation on force majeure events is quite similar to the regulation on “objective obstacles”, therefore in some cases the parties have misunderstandings leading to incorrect application of the provisions, and inadvertently become the breaching party under the contract. Accordingly, an objective obstacle refers to obstacles caused by objective circumstances impacting the person who has civil rights or civil obligations, making such person unable to know about the infringement of their legitimate rights and interests or unable to exercise their civil rights or perform their civil obligations.

2. Exemption from liability in the event of a force majeure event

Exemption from Liability in Force Majeure Situations In cases where the contract between the parties is governed by civil law, the law recognizes that the obligated party is exempt from civil liability if it fails to properly perform its contractual obligations due to a force majeure event. With respect to liability for compensation for damage in transportation contracts, in the event that a force majeure event results in the transported property being lost, damaged, or destroyed during transportation, the carrier shall not be liable for damages. At the same time, regarding the regime of compensation for damage, no obligation to compensate for damages shall arise in cases where the damage occurs due to a force majeure event. However, it should be noted that contracts are based on the voluntary agreement of the parties but must not contravene regulations; therefore, the law recognizes that the parties are exempted from liability except where the parties have otherwise agreed. The parties may agree on specific obligations to be performed when a force majeure event occurs in order to minimize risks to the other party. At the same time, the agreement should also specify the situations that the parties determine to be force majeure events, the time limit for remedy, the time limit for suspension of performance of obligations, the duration of the force majeure event, and the parties’ agreement that upon expiration of that period, they are permitted to terminate the contract without being considered in breach.

Depending on the agreement of the parties, the contract may provide for different response mechanisms, whereby the parties may selectively apply different methods of performance in descending order of priority before resorting to ceasing performance of obligations and proceeding to termination of the contract. Or in other words, the clause must stipulate the manner of conduct that each party accepts when a force majeure event occurs; the extent of performance will depend on the level of detail in the corresponding clause in the contract. In practice, force majeure clauses in practice are often drafted in very general terms; the parties need to base themselves on the nature of the contract, the surrounding context, and objective factors both within and outside the territory of Vietnam in order to clearly record them in the contract.

Some situations considered as force majeure events and appropriate responses under the regulations, for example: Sudden changes in laws or government policies that the parties could not reasonably foresee, typically such as a new regulation requiring the immediate cessation of export or import of a certain group of goods, whereas previously there had been no restrictions whatsoever on the business of such goods. Or impacts from natural disasters leading to one party being unable to supply sufficient and timely quantities of agricultural products due to damage, or unable to transport them to the destination on time because transportation vehicles have been notified not to circulate in order to ensure safety… On that basis, when a force majeure event occurs, the affected party must promptly notify the other party in accordance with the contractual provisions the other party within the recorded time limit, while at the same time providing full evidence confirming the occurrence of the force majeure event, and demonstrating that the affected party has made efforts to seek alternative solutions or to mitigate damage for the other party.

In summary, establishing a force majeure clause in a contract is not simply a matter of copying the provisions from the Civil Code, but rather a process of assessment based on the specific characteristics of each transaction and market fluctuations. A well-drafted force majeure clause when it moves beyond mere formal presence to become an active risk management mechanism.

To truly be protected, enterprises need to note that such a clause must genuinely specify (list realistic situations instead of using only general phrases), establish response procedures (clearly define the notification deadlines and the obligation to mitigate damage), and finally demonstrate good faith (prove efforts to remedy before claiming exemption). In the current context of a global economy full of unpredictable variables, the careful design of this clause is precisely the difference between a resilient enterprise and one exposed to prolonged and unnecessary legal disputes.

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Time of writing: 10/02/2026

The article contains general information which is of reference value, in case you want to receive legal opinions on issues you need clarification on, please get in touch with our Lawyer  at  info@cdlaf.vn

You can refer for more information:

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• Closure of a Representative Office of a Foreign Trader in Vietnam
• New regulations on foreign e-commerce platforms operating in Vietnam
• E-commerce Law 2025: Mandatory Obligations for Platform Management Entities from July 2026
• 05 new points of the Law on investment 2025 effective from March 01, 2026