“In civil and commercial agreements, the parties to the contract may choose Vietnamese or other foreign languages to be the language of contracts. Except in cases where specialized laws may require the contract to be written (or have a copy) in Vietnamese.“
In general, when the foreign enterprises engage in a transaction with individuals and organizations in Vietnam, they often use Vietnamese contracts or bilingual English-Vietnamese contracts following business practices in Vietnam.
2005 Law on Commerce, which is the principle legal reference for commercial transactions in Vietnam, does not specify the contract language. The 2005 Civil Code, which has a broader scope of regulations on civil actions, only provides a definition for civil transactions made orally or in writing; this content is retained in the new 2015 Civil Code which will take effect from January 1st, 2017. However, 2004 Civil Procedure Code specifies that the language and scripts to be used in civil procedures shall be Vietnamese which means that when disputes occur, the contract will be examined on the base of Vietnamese; this content is retained in the new 2015 Civil Procedure Code which will take effect from July 1st 2016.
Enterprises need to comply with the regulations for the documents to be used when working with the Vietnamese government agencies and commercial arbitration as follows:
Technology transfer: the 2016 Technology Transfer Act specifies in detail that the contract language should be agreed upon by the parties; in case of conducting transaction in Vietnam, a contract in Vietnamese is required and the legality of Vietnamese and foreign-language contracts should be equal.
Consumer Goods: the 2010 Law on Protection of Consumer Rights specifies that the language used in contracts signing with consumers is Vietnamese.
Information Technology: the 2010 Postal Act clearly specifies that the contracts of supply and use of postal services in writing must be presented in Vietnamese; if the parties agree to use additional languages, Vietnamese documents and other language documents should have the same legal value.
Urban construction: Decree No. 37/2015/ND-CP specifies that the language used for the construction contract is Vietnamese. For construction contracts with foreign elements, the contract language will be Vietnamese and a foreign language which will be agreed upon by the parties; in case no agreement is reached, English will be used.
There are two concerns relating to the contracts that should be noted: