Commercial contract disputes: Causes and Resolution

Commercial contract dispute usually arises when there is a disagreement between the parties to the contract regarding the rights and obligations during the transaction process. These conflicts can seriously affect business activities, even leading to large financial losses. To resolve these disputes, methods such as negotiation, conciliation, arbitration, and court are often applied. The following article will analyze the causes and methods of resolving commercial contract disputes in detail.

How are commercial contract disputes understood?

According to the provisions of Clause 1, Article 3 of the Law on Commercial 2005, commercial activities are understood as transactions for profit, including buying and selling goods, providing services, investing, and other activities of a commercial nature. Commercial contract disputes are disagreements between parties involved in these commercial transactions regarding their rights and obligations during contract performance.

Commercial contracts can include many types such as goods purchase and sale contracts, service provision contracts, investment contracts, or other contracts in the commercial field. When there is inconsistency or violation of contractual terms, the parties may face a dispute. Accordingly, commercial contract disputes can be understood as conflicts arising from the implementation or non-performance of terms in commercial contracts.

Causes of commercial contract disputes

Commercial contract disputes often arise from many different causes. Below are some common causes of commercial contract disputes:

• Violation of contract terms: One party does not fulfill its obligations or does not ensure the quality of products or services according to contract requirements.
• Difficulty in determining rights and obligations: The parties are not clear about their rights and obligations, leading to disagreement when implementing the contract.
• Force majeure situations: Events beyond the control of the parties such as natural disasters, war, epidemics, or other unpredictable factors can cause disruptions in contract performance, leading to disputes.
• Delay in payment or delivery: Disputes may arise when one party fails to make payment or delivery on time as agreed in the contract.
• Difficulty in determining contract value: Unclearness of contract value or change in value during contract implementation can cause disputes between parties.
• Conflicts about contract conditions and scope: The parties may have different understandings of contract conditions or scope of work performance, leading to disagreements during contract performance.
• Non-compliance with information security regulations: Violating information security provisions, especially in commercial contracts related to technology or data, can lead to disputes.
• Differences in product/service quality: Conflicts may arise when the product or service does not meet the quality requirements agreed in the contract.
• Disagreement on dispute resolution method: The parties cannot agree on a dispute resolution method, leading to arguments and prolonging the resolution time.

Identifying the specific cause of each dispute helps the parties find an effective and quick solution.

Methods of resolving commercial contract disputes

To resolve commercial contract disputes, several methods can be applied according to Vietnamese law, including negotiation, conciliation, arbitration and court.

Negotiate

• Negotiation is a simple and quick method of resolving disputes. Negotiation requires the participating parties to agree on the terms for resolving the dispute without the intervention of a third party.
• This helps save time and costs, while protecting the cooperative relationship between the parties. However, the results depend on the goodwill of the parties.

Reconcile

• According to Article 3 and Article 4 of Decree 22/2017/ND-CP, commercial mediation is a method of resolving commercial disputes carried out by an organization or individual chosen by the parties as a mediator.
• Mediation is a voluntary process, the parties will participate in mediation on the basis of consensus and equality of rights.
• The mediator is responsible for helping the parties reach an agreement and end the dispute.

Resolve disputes by arbitration

• Arbitration is a method of resolving commercial disputes through an independent arbitration organization with jurisdiction according to the provisions of Article 3 of the Law on Commercial Arbitration 2010.
• Arbitration is recommended in commercial disputes because of its confidentiality, flexibility and speed of resolution. The parties may agree before or after a dispute to submit the dispute to arbitration.

Resolve disputes in Court

• If the above methods do not bring results, the parties can request the Court to resolve the dispute.
• According to Article 30 of the Code of Civil Procedure 2015, the Court has the authority to resolve commercial contract disputes if there is a request to sue from one party.
• The settlement procedure at Court may take longer, but it ensures fairness and is highly binding on the parties.

Consulting service for resolving commercial contract disputes at Long Phan

Long Phan provides professional commercial contract dispute resolution and consulting services, helping businesses. Long Phan’s services include:

• Consulting on regulations on commercial contract disputes.
• Consulting on identifying and handling contract violations, from negotiating to correct violations to requesting compensation for damages.
• Consulting on choosing the appropriate dispute resolution method according to customer requirements.
• Support customers in negotiation, negotiation and mediation to resolve disputes.
• Advise on the implementation of emergency measures to protect rights in the event of a dispute.

The commercial contract dispute resolution methods that Long Phan provides will help customers quickly find appropriate and effective solutions for disputes arising in their commercial activities. Contact us via the hotline 0906735386 for support from experts in contract and commercial disputes.