Change of Circumstances under Vietnamese Contract Law

Abstract This chapter examines the doctrine of change of circumstances under Vietnamese contract law. Traditionally, Vietnamese legislation recognized only force majeure as an exception to the principle of pacta sunt servanda, following an ‘all-or-nothing’ approach: either contractual performance becomes objectively impossible—thus releasing the obligor from liability—or the contract must be fulfilled regardless of hardship. The 2015 Vietnamese Civil Code introduced Article 420 entitled ‘Performance of Contract in the Case of a Fundamental Change of Circumstances’, which permits contract modifications when unforeseen events make performance excessively burdensome. The chapter provides a detailed analysis of the legal conditions for invoking this doctrine and its legal consequences, highlighting that the change emphasizes the importance of good faith alongside contractual freedom. It also notes specific legislative concerns regarding courts’ authority to adjust contracts. While a legislative advancement, its practical application will require cautious interpretation as an exception to pacta sunt servanda.