Regulations on supplementary clauses in business contracts

Supplementary clauses in business contracts are among the issues frequently encountered when parties enter into contractual agreements. The following article examines the legal provisions governing supplementary clauses in business contracts and addresses several related questions, thereby helping contractual parties better understand their rights and obligations.

I. Importance of supplementary clauses in business contracts

Supplementary clauses in business contracts play a crucial role in specifying and clarifying agreed terms. They serve as an effective legal instrument to supplement or amend information or provisions without affecting the principal contract, thereby saving time and reinforcing the legal validity of the agreement. Clearly documenting amendments, additions, or adjustments through such clauses enables the parties to anticipate potential situations and formulate appropriate handling measures, thereby minimizing disputes.

II. Legal provisions on supplementary clauses in business contracts

Understanding the legal framework governing supplementary clauses in business contracts is a common need among various entities. However, in the context of evolving Vietnamese legislation, properly interpreting and applying such regulations is not always straightforward.

NPLaw provides an overview of the legal provisions relating to supplementary clauses as well as the circumstances under which such clauses may be added in accordance with the latest regulations.

1. What are supplementary clauses in business contracts?

A business contract is a civil contract entered into between business entities or between such entities and relevant parties for the purpose of conducting business activities with a profit objective.

Supplementary clauses are typically implemented by the parties through contract appendices or separate supplemental agreements. Pursuant to Clause 1, Article 403 of the Civil Code 2015, a contract may include appendices detailing certain provisions. Such appendices have the same legal validity as the contract, and their contents must not contradict the main contract.

Accordingly, supplementary clauses in a business contract may be understood as agreements between the parties to amend, supplement, or further specify the contents of the originally executed contract. These clauses may take the form of a separate document attached to the main contract or a contract appendix. It obtains the same legal effect as the principal contract and allows the parties to add rights, obligations, or detailed provisions without the need to redraft the entire contract.

2. When should parties add supplementary clauses instead of entering into a new contract?

Pursuant to Article 421 of the Civil Code 2015, a contract may be amended or supplemented in the following circumstances:

The parties agree to amend or supplement the contract.

The contract may be amended or supplemented due to a fundamental change in circumstances as provided under Article 420 of the Civil Code, where such change satisfies all of the following conditions:

• The change in circumstances arises from objective causes occurring after contract formation;
• At the time of contract formation, the parties could not have foreseen such change;
• The change is so substantial that had it been foreseen, the contract would not have been concluded or would have been concluded with entirely different terms;
• Continued performance of the contract without amendment would cause serious damage to one party;
• The affected party has taken all necessary and reasonable measures, within its capacity and consistent with the nature of the contract, to prevent or mitigate the adverse impact.

Based on the above provisions, supplementary clauses are appropriate instead of entering into a new contract in the following cases:

• Where the parties agree to make minor adjustments to certain terms without affecting the principal purpose of the original contract;
• Where the parties wish to clarify existing provisions or introduce additional terms without altering the overall structure of the contract;
• Where a fundamental change in circumstances necessitates amendments or additions to the original contractual terms.

3. What contents may be included in supplementary clauses?

Pursuant to Article 385 of the Civil Code 2015, a contract is an agreement between parties to establish, modify, or terminate civil rights and obligations. Furthermore, Clause 2, Article 3 of the Civil Code provides that individuals and legal entities may establish, perform, and terminate their civil rights and obligations on the basis of freedom and voluntariness. Any commitment or agreement that does not violate prohibitions of law or contravene social ethics is legally binding and must be respected by other parties.

Accordingly, in principle, the parties may agree on supplementary clauses covering any matters aimed at clarifying, supplementing, or detailing the provisions of the main contract. Such supplementary clauses commonly include:

• Supplementary provisions to original terms: Adding detailed information or clarifying provisions that are not sufficiently specified in the main contract, such as detailed descriptions of goods, services, or specific implementation procedures.
• Additional new provisions: Recording new agreements or information not previously included in the main contract, thereby completing and supplementing necessary transactional details.
• Supplementary provisions on rights and obligations: Adding or clarifying rights and obligations of the parties, particularly in areas such as working conditions, rest periods, or living conditions in employment contracts.
• Supplementary provisions on contract performance: Providing further details on delivery timelines, delivery locations, inspection procedures, or dispute handling mechanisms.

III. Questions on supplementary clauses in business contracts

1. Is failure to perform a supplementary clause considered a breach of contract?

Pursuant to Clause 1, Article 403 of the Civil Code 2015, a contract may include appendices detailing certain provisions, and such appendices have the same legal validity as the contract, provided that their contents do not contradict the main contract.

Supplementary clauses constitute an integral part of the contract, agreed upon and undertaken by the parties through appendices or supplemental agreements. Therefore, failure to comply with such clauses is equivalent to failure to comply with contractual commitments.

Accordingly, if a party fails to perform a supplementary clause, such failure shall be deemed a breach of contract. Any failure to fully or timely perform agreed obligations, whether under the main contract or supplementary clauses, constitutes a contractual breach and may lead to legal liability.

2. Can supplementary clauses be agreed upon after the contract has taken effect?

Pursuant to Article 401 of the Civil Code 2015, a lawfully executed contract takes effect from the time of its conclusion, unless otherwise agreed or provided by law.

From the effective date, the parties are bound to perform their respective rights and obligations. A contract may only be amended or terminated by agreement of the parties or as provided by law.

A contract may include appendices detailing certain provisions, which have the same legal validity as the contract, provided they do not contradict the main contract (Clause 1, Article 403 of the Civil Code 2015).

Under Article 421 of the Civil Code 2015, a contract may be amended or supplemented in the following cases:

• By agreement of the parties;
• Due to a fundamental change in circumstances under Article 420;
• Provided that the amended contract complies with the form of the original contract.

Accordingly, supplementary clauses may be agreed upon after the contract has taken effect through an amendment agreement or contract appendix, provided such document complies with the form of the original contract and is mutually agreed upon by the parties.

3. Will a supplementary clause be invalid if it causes serious disadvantage to one party?

Pursuant to Clause 2, Article 403 of the Civil Code 2015, where a contract appendix contains provisions inconsistent with the main contract, such provisions shall be invalid unless otherwise agreed.

Where the parties accept such inconsistency, the relevant provision of the main contract shall be deemed amended.

Accordingly, unless otherwise agreed or accepted by the parties, a supplementary clause that contradicts the main contract and causes serious disadvantage to one party may be deemed invalid.

4. Can supplementary clauses create new obligations not stipulated in the main contract?

Supplementary clauses may be established through supplemental agreements or contract appendices. Under Clause 1, Article 403 of the Civil Code 2015, contract appendices have the same legal validity as the contract, provided their contents do not contradict the main contract.

Furthermore, pursuant to Article 122 of the Civil Code 2015, a civil transaction is invalid if it fails to satisfy the conditions set out in Article 117, except where otherwise provided, are follows: 

• The parties have legal capacity and capacity for civil acts appropriate to the transaction;
• The parties participate voluntarily;
• The purpose and content do not violate prohibitions of law or contravene social ethics;
• The form of the transaction complies with legal requirements where applicable.

Accordingly, supplementary clauses may create new obligations not stipulated in the main contract, provided that such clauses are clearly agreed upon, mutually consented to, and do not violate conditions for contract validity.

5. Are orally agreed supplementary clauses valid if the main contract is in writing?

Pursuant to Clause 1, Article 403 and Clause 3, Article 421 of the Civil Code 2015, a contract may include appendices, and amendments must comply with the form of the original contract.

Accordingly, where the main contract is in writing but supplementary clauses are agreed orally, such supplementary clauses shall not be legally valid, as amendments and supplements must comply with the form of the original contract as required by law.

IV. Legal advisory services on supplementary clauses in business contracts

The above constitutes NPLaw’s overview addressing legal issues concerning supplementary clauses in business contracts. With a team of experienced lawyers and legal professionals, NPLaw provides reputable and professional legal services, ensuring optimal protection of clients’ lawful rights and interests. Should you require legal assistance, you may contact NPLaw for consultation and support.