In today’s business environment, cooperation among individuals, enterprises, and organizations has become increasingly common. NPLaw would like to help readers better understand the legal regulations applicable to breaches of cooperation commitments through the following article.
I. Current situation relating to breach of cooperation commitments
In the current economy, business cooperation has become a main factor for the success of many enterprises. Cooperation agreements create opportunities to expand markets, share risks, and leverage competitive advantages. However, not all cooperative relationships proceed smoothly.
When one party fails to comply with the agreed commitments, a breach of cooperation commitments may cause serious damages, not only affecting finance but also impacting reputation and future business opportunities. Such problems explain why disputes concerning cooperation commitments frequently arise before courts, commercial arbitration, or other dispute resolution bodies.
II. Legal provisions relating to breach of cooperation commitments
The law currently provides specific regulations concerning breaches of cooperation commitments. Understanding these provisions is essential as a legal basis for protecting rights when disputes arise.
1. What is a breach of cooperation commitments?
A breach of cooperation commitments is understood as an act of one or more parties in a cooperation agreement failing to perform, or improperly performing their obligations as agreed under a contract or cooperation arrangement.
Examples include: Failure to contribute capital as agreed, failure to provide information as committed, violation of common operational rules, or unilateral termination of the agreement without legitimate grounds.
2. What remedies are commonly applied in the breach of cooperation commitments?
Pursuant to Article 292 of the Commercial Law 2005, remedies in commercial relations include:
- Compulsory execution of the contract;
- Sanctions for breach;
- Compensation for damages;
- Suspension of contract performance;
- Termination of contract performance;
- Rescission of the contract;
- Other measures as agreed by the parties, provided they are not contrary to the fundamental principles of Vietnamese law, international treaties to which the Socialist Republic of Vietnam is a member, or international commercial practices.
Accordingly, when a breach of cooperation commitments occurs, depending on the specific case and the agreement of the parties, the non-breaching party may apply these remedies to protect its legitimate rights and interests.
3. Which state authorities have jurisdiction to handle breaches of cooperation commitments?
Authorities competent to handle such breaches include:
- People’s Courts: Parties may file lawsuits before the Court to request remedies, compensation for damages, and protection of their rights under the Civil Procedure Code 2015, as amended in 2025.
- Commercial Arbitration: If the contract contains an arbitration clause, the parties may bring the dispute to a Commercial Arbitration Center under the Law on Commercial Arbitration 2010.
Thus, depending on the case, the parties may choose an appropriate dispute resolution body.
III. Questions regarding breach of cooperation commitments
1. When a breach occurs, how should the non-breaching party collect evidence to protect its rights?
The non-breaching party should collect and preserve the following:
- Original or certified copy of the contract/cooperation agreement;
- Documents and notices: Emails, letters, meeting minutes relating to the commitments and the breach;
- Evidence of damages: Invoices, financial reports, photos, or videos demonstrating the consequences;
- Witness statements, if available.
These are essential to prove the breach and provide a strong legal basis for claiming damages or initiating litigation.
2. How may the non-breaching party claim compensation when a breach occurs?
Article 13 of the Civil Code 2015 stipulates:
- Individuals or legal entities, whose civil rights are infringed, are entitled to full compensation for damages, except where otherwise agreed or provided by law.
Additionally, Article 360 of the Civil Code 2015 provides:
- Where damages are caused by a breach of obligations, the obligor must compensate fully for the damages, unless otherwise agreed or provided by law.
Accordingly, when a breach of cooperation commitments occurs, the non-breaching party may claim full compensation for damages pursuant to these provisions.
3. Is a breach of cooperation commitments considered a contractual breach under the Civil Code?
Article 410 of the Civil Code 2015 stipulates that parties must perform their obligations as agreed in bilateral contracts. Failure to do so constitutes a contractual breach. Therefore, a breach of cooperation commitments is regarded as a contractual breach under the law.
4. Are there cases where a breach does not result in liability?
- Where the breach results from a force majeure under Clause 2, Article 351 of the Civil Code 2015:
- If a party fails to execute its obligations due to a force majeure, it shall not take civil liability, unless otherwise agreed or provided by law.
- Where the parties agree to exemption from liability in certain circumstances.
Thus, liability for a breach depends on the nature of the case and the contract provisions.
5. Can the breaching party be prohibited from participating in other cooperation projects?
The law does not directly prohibit participation in future cooperation projects. However, serious breaches may lead to:
- Loss of reputation, making it difficult to secure new partners;
- Being sued, resulting in unfavorable judgments affecting future legal transactions;
- Being blacklisted in industries or projects that evaluate credibility, thereby being excluded from potential candidates.
Hence, breaches of cooperation commitments not only cause immediate losses but may also affect long-term cooperation opportunities.
IV. Legal advisory services relating to breach of cooperation commitments
Breaches of cooperation commitments always obtain complex legal consequences. To maximize protection of rights and interests, engaging a lawyer specializing in contracts and dispute resolution is the safest and most effective solution. With a team of experienced lawyers and legal specialists, NPLaw provides reliable and professional legal services, ensuring the best protection of our Clients’ legitimate rights. Should you require legal support, please contact NPLaw for consultation and assistance.a
