Commercial contracts and contract dispute resolution is a field that is notoriously complex because the involved parties are often not individuals but business organizations. Thus, the stakes are higher, requiring the attorneys in charge to be extremely cautious yet forceful.
Further, in the modern world of global transactions and international commercial contracts, businesses require a thorough analysis of the worldwide implications of their actions. Of paramount importance for a business that has significant presence and interaction is comprehensive legal knowledge in negotiating and drafting commercial contracts. This is especially true for expanding multinational businesses who need to adapt to different legal and cultural landscapes in many different countries. Varied economies, politics and even modes of dispute and negotiation play a role in the success of an international business.
With extensive experience in Vietnam contract law and Vietnam commercial law and disputes, Le & Tran is one of the premier transactional commercial contract and litigation firms in Vietnam when it comes to negotiating and drafting and commercial agreements and transactions, sale & purchase transactions, and the supply of goods and services to name a few. Our list of clients comprises multinationals and conglomerates in an array of industries: construction, food and beverage, shipping, maritime, energy, technology, banking & finance, insurance, etc.
What are Vietnam commercial contracts?
A commercial contract or commercial agreement is an arrangement between two or more parties on a commercial matter governed by Vietnam contract law and Vietnam commercial law. They are also known by the name “business-to-business agreements” which is distinguishable from “consumer contracts” with a customer. Commercial contracts are used by a wide array of commercial enterprises for a myriad of purposes to further the business goals of the company. Commercial contract samples include purchase and sales agreements for assets or property, supplier contracts for the delivery of goods, banking and financial contracts, service and maintenance contracts, construction contracts, and many others too numerous to list. In short, any contract made between two businesses may be classified as a commercial contract.
What are the types of commercial contracts?
The types of commercial contracts encompass an endless variety of business-to-business transactions. The form and content of these agreements is largely dependent on the nature of the business sector, the scope and number of parties to the transaction, Vietnam commercial laws and regulations, and custom and usage in the particular industry. Some of the many examples of the types of commercial agreements include:
- Agreements to purchase a business or assets
- Agreements for the supply of goods or services
- Cargo and transport agreements
- Construction agreements
- Employment contracts
- Confidentiality agreements
- Non-competition agreements
- Agreements related to mergers and acquisitions
- Franchising agreements
- Joint venture agreements
- Lease and rental agreements
- Licensing, distribution and purchase agreements
- Technology licensing and services
- Shareholder agreements and share transfers
- Referral and commission agreements
- Banking and finance agreements
- Escrow agreements
- Cost sharing agreements
- Aviation equipment and service agreements
- Agribusiness agreements
This is not an exclusive list of the types of contracts in Vietnam commercial law and there are numerous other examples that could be cited. However, it is clear that no matter what economic sector your business operates in, it is imperative that you negotiate and standardize your commercial contract documentation and procedure in order to protect your company’s revenues and consumer relationships and to prevent future commercial litigation, uncollected payments, negative publicity, and breach of contract and claims of poor quality products or services.
What should be included in a commercial contract?
There are many provisions that are required in a commercial contract in order for the document to be effective in protecting your business and reaching your business goals. What should or should not be included varies depending on the economic sector the business is operating in, the laws and regulations affecting the transaction, and common custom and practice in the industry. A commercial contract example for the purchase by a company of a membership (ownership) interest from another company, would include, amongst other provisions:
- Purchase and sale terms
- Representations and warranties of both buyer and seller
- Organizational structure and subsidiaries
- Financing and capitalization commitments
- Restrictions on the conduct of the business
- Title to assets and real property
- Liabilities and litigation
- Intellectual property
- Employee matters
- Statements and bookkeeping
- Confidentiality and non-competition clauses
- Assignment and severability of provisions
- Dispute resolution clause, venue and choice of law
Of course, these commercial contract provisions are quite complex and contain language that a typical business manager, who is focused on the success of the company, would not be familiar with or truly realize the legal implications. As such, it is strongly recommended that in all situations a commercial contract lawyer be retained by the business for drafting and negotiating commercial contracts.
Negotiating and drafting commercial agreements
Both drafting and negotiating enforceable commercial contracts are fundamental to the success of your business. It must be performed by a professional attorney that is well-versed in commercial contract law and the business or industrial sector you are operating in. In order to protect your business in the commercial context, a commercial contract lawyer will need to conduct a detailed analysis of your business operations to provide an assessment of the current requirements of your business, the issues or obstacles that may arise, and the future opportunities or expansion goals of your enterprise.
It helps to have a legal partner with thorough knowledge of the market and the challenges faced by businesses in your field. With over a decade of commercial contract law expertise, Le & Tran commercial contract lawyers have assisted a wide array of clients, from large established multinational businesses with numerous cross-border transactions, to start ups working to create an impression in the industry. With a multi-disciplinary practice that includes commercial agreements, mergers and acquisitions, banking and finance, insurance, intellectual property, real estate, labor and employment law, and taxation, Le & Tran commercial contract lawyers provide holistic solutions with the goal of freeing you from legal concerns so you may seize opportunities and expand your business.
How do you draft a commercial contract?
Initially, the process of drafting and negotiating commercial contracts must be done meticulously, with an eye on every detail of the document. It must take into account, not only the particular transaction, but also the long-term ramifications on the business and the potential disputes that may arise. As a result, business will almost always require a commercial contract lawyer when they conduct significant business transactions with other entities, especially in the context of multiparty or cross-border commercial transactions. Although the parties to a commercial agreement may begin with the best intentions, a disagreement or dispute may occur when one party believes the other did not completely fulfill their obligations under the contract (ex. Insufficient or poor quality goods; late delivery, imperfect title, etc.). To avoid this, companies must take every precaution prior to the commencement of business to avoid future disputes, litigation, and financial loss.
How to negotiate commercial contracts
In addition, not only do the terms of commercial contracts need to be carefully prepared, there is the other party or parties to the transaction to consider. These companies often have different priorities and requirements that could potentially be detrimental to your business. As such, a competent commercial contract lawyer should be present to represent both the short and long-term interests of your organization in both drafting and negotiating commercial agreements with business partners.
In an ideal world, both parties to a commercial contract are on equal footing and approach the negotiation of commercial agreements with an open mind and equitable purpose. However, this is rarely the case in the reality of the business world and commercial agreements are normally drafted and negotiated with one party having more power than the other (ex. A banking and financial institution versus a start-up business). For the less powerful entity, a commercial contract lawyer will likely be necessary to protect your interests and level the playing field with a well-prepared and well-financed organization.
What does a commercial contract lawyer do?
Commercial contract lawyers are those that deal with commercial and business legal matters on behalf of a business client. They assist with drafting and negotiating commercial contracts, continuously researching and tracking changes in the market and the applicable laws and regulations, and provide representation to businesses in matters that require arbitration or litigation.
Commercial contract lawyers assist with business transactions and guarantee that commercial agreements are valid and legal. This may include the creation of confidentiality or non-competition agreements, amending the conditions in commercial contracts, or examining legal documents for omissions, exclusions or loop holes. The lawyer will also negotiate the terms of a commercial agreement with another party to protect its legitimate legal interests.
In addition, commercial contract lawyers research the market and the often rapidly-changing laws that may affect their clients’ business operations. In Vietnam in particular, the provisions in commercial contract law, the criminal code and the labor code, for instance, have undergone significant revisions in the last decade that has affected both domestic and foreign companies.
Further, should a dispute arise, a commercial contract lawyer may seek a solution that protects the client’s operations, assets or reputation, such as preparing a cease and desist letter to an individual or organization violating the company’s intellectual property rights. With authority from the client, a commercial contact lawyer may also file motions in court and seek to resolve disputes through mediation, arbitration or litigation. Overall, the basic goal of a commercial contract lawyer is to safeguard the best interests of the business he or she represents.
Do I need a lawyer for business contracts?
Le & Tran Vietnam contract lawyers possess a wealth of knowledge that spans the South East Asian region and beyond. Established in 2011 in Vietnam, the Firm has made a mark in the in the international legal community and has been recognized by Chambers and Partners- Asia Pacific, Benchmark Litigation and Legal 500, among others as one of the most respected legal firms in the region. Detailed knowledge of international and regional commercial contract legal framework is a hallmark of the commercial contracts team and ensures that our clients a have decided advantage over other parties in trade negotiations and disputes.
Extensive experience in customs disputes and enforcement, which stem from commercial contracts, is another of Le & Tran’s strong areas of practice. Some of these issues involve consultation with the provisions of Free Trade Agreements or finding solutions through international bodies, such as the World Trade Organization (WTO). Le & Tran has assisted numerous businesses with the navigation and resolution of all manner of customs disputes in Vietnam and worldwide to achieve the trade expansion goals of our clients.
With that comprehension, the commercial contracts team at Le & Tran tackles each case with a thoughtfully tailored plan. Since each business is unique and distinctly intricate, we acknowledge the importance of a customized approach. Relying on our experience, our commercial contract lawyers channel their forcefulness, meticulous attention to detail, and innovative thinking to design the most optimal strategies and achieve the most favorable outcomes for our clients. Led by Mr. Stephen Le, AsiaLaw’s 2017 Disputes Star, our practice guarantees professionalism, efficiency and excellence from negotiating sessions to trials.
Le & Tran’s internationally recognized commercial contract lawyers are always available to answer any of your questions related to commercial contracts. Our main office is located in Ho Chi Minh City, the business center of Vietnam. Please feel free to contact us at firstname.lastname@example.org to arrange a free consultation.