During the performance of a contract, it is common for the parties to seek adjustments or amendments to certain terms in order to better reflect practical circumstances. However, not all requests for contract amendments are legally justified. Where one party unilaterally requests or proceeds to amend a contract without legitimate grounds, such conduct may lead to disputes and adversely affect the lawful rights and interests of the other party. How does the law regulate contract amendments, and what remedies are available when such amendments lack valid justification? The following article clarifies the relevant legal framework and provides practical guidance for such unjustified contract amendments.

I. Current situation of unjustified contract amendments

In practice, contract amendments are prevalent across various sectors, including the sale of goods, construction, leasing, labor, services, and investment. However, a concerning trend is the increasing occurrence of one party requesting or unilaterally implementing contract amendments without legitimate grounds, leading to numerous legal disputes and damages to the parties involved.

Many enterprises or individuals, after a contract has taken effect, unilaterally request changes to pricing, timelines, payment conditions, or performance obligations, citing subjective reasons such as financial difficulties, changes in business plans, or market fluctuations, yet without any legal basis or consent from the counterparty. Such actions result in conflicts of interest, may even undermine the original agreement, and adversely affect the stability and legal certainty of civil and commercial transactions.

Such a trend not only causes economic losses but also erodes trust in the binding nature of contracts, increasing the number of disputes brought before courts or commercial arbitration. In recent years, the growing number of civil and commercial cases involving unilateral contract modification or termination reflects a lack of compliance with the principles of good faith and honesty in contract formation and performance.

II. Understanding unjustified contract amendments

1. Circumstances leading to unjustified contract amendments

In practice, unjustified contract amendments often arise in the following situations:

  • Changes in economic interests: When market conditions fluctuate, such as increases in raw material and goods prices or operational costs, many enterprises or individuals seek to amend pricing terms or payment methods to mitigate losses, despite lacking a legal basis.
  • Difficulties in performing obligations: A party lacking sufficient financial or human resources to perform the contract within the agreed timeframe unilaterally propose amendments or extensions without lawful justification.
  • Abuse of contractual position: In some cases, the party in a stronger position (e.g., project owners, landlords, or employers) compels the other party to accept amendments that are advantageous to itself.
  • Lack of legal knowledge or weak management: Certain individuals or enterprises fail to understand the legal requirements for contract amendments and unilaterally alter contractual terms without obtaining the other party’s consent, resulting in contractual breaches.

All such scenarios entail legal risks, as contract amendments are only valid when agreed upon by the parties or permitted by law.

2. Are unjustified contract amendments permissible?

Pursuant to the Civil Code 2015, particularly Article 401 on the validity of contracts and Article 421 on contract amendments, a contract may only be amended by mutual agreement of the parties or in accordance with the law.

Amendments under statutory provisions are permitted in cases of fundamental change in circumstances, subject to the conditions set out in Article 420 of the Civil Code 2015, including:

  • The change in circumstances occurs due to objective reasons after the contract is concluded;
  • At the time of contract formation, the parties could not have reasonably foreseen such changes;
  • The change is so substantial that if it had 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, consistent with the nature of the contract, to prevent or mitigate the adverse impact on its interests.

Accordingly, if a contract amendment lacks legitimate justification (i.e., it is neither based on legally recognized grounds nor agreed upon by the other party), such amendment is unlawful and non-binding. The party unilaterally amending the contract may be deemed in breach and held liable for damages or required to continue performing the contract in accordance with its original terms.

III. Legal provisions on unjustified contract amendments

1. Main legal provisions on unjustified contract amendments

Under the Civil Code 2015, contract amendments are primarily governed by the following provisions:

  • Article 385: Defining a contract as an agreement between parties to establish, modify, or terminate civil rights and obligations.
  • Article 401: Providing that a contract may be amended or supplemented by agreement of the parties or as otherwise prescribed by law. It implies that no party may unilaterally alter contractual terms without legal grounds.
  • Article 420: Regulating contract modification or termination in cases of fundamental change in circumstances.

It is therefore evident that the law does not recognize unilateral contract amendments made without legal basis or mutual consent. Any alteration of contractual terms in violation of these principles constitutes a breach of civil obligations.

2. Violations arising from unjustified contract amendments

Unjustified contract amendments may result in various violations under civil and commercial law, including:

  • Violation of the principle of freedom and voluntariness in commitments and agreements (Article 3 of the Civil Code 2015), where one party imposes amendments against the will of the other;
  • Breach of the obligation to perform the contract in accordance with agreed terms, timelines, and methods (Article 361 of the Civil Code 2015). A party unilaterally altering contractual terms without consent is deemed to have failed to properly perform its obligations.

Legal consequences: A party that unilaterally amends a contract without justification may be subject to:

  • An obligation to perform the contract in accordance with its original terms;
  • Compensation for damages suffered by the affected party (Article 360 of the Civil Code 2015);
  • Contractual sanctions, if stipulated under Article 418 of the Civil Code 2015.

In summary, Vietnamese law only permits contract amendments where there are lawful grounds or mutual consent. Any unjustified amendment constitutes a violation and may result in strict legal sanctions.

IV. Questions on unjustified contract amendments

1. Is the affected party entitled to claim damages, and what is the procedure?

Pursuant to Articles 360 and 419 of the Civil Code 2015, a party suffering damage due to a contractual breach (including unlawful amendments) has the right to claim compensation.

Procedure:

  • Step 1: Issuing a written request requiring cessation of the breach and restoration of the original contract terms;
  • Step 2: Collecting evidence of actual damages (invoices, documents, related contracts, etc.);
  • Step 3: Submitting a written claim for compensation to the breaching party, specifying legal grounds and damages incurred;
  • Step 4: If unresolved, initiate legal proceedings before a competent court or commercial arbitration tribunal.

2. How do unjustified amendments affect insurance contracts?

In insurance, the contract forms the legal basis for determining rights and obligations between the buyer and the insurer. Any unilateral amendment (e.g., changes in premiums, coverage scope, or duration) without justification or mutual consent renders the amended provisions legally invalid.

Consequences may include:

  • Insurance benefits being denied upon occurrence of the insured event;
  • Partial or total invalidity of the contract if the amendment alters its fundamental nature;
  • Liability of the breaching party to refund premiums or compensate for damages arising from the unlawful conduct.

3. What liabilities does the amending party take?

A party unilaterally amending a contract without justification takes civil liability, including:

  • Restoration of the original contract terms;
  • Compensation for damages caused by the unlawful amendment;
  • Payment of contractual sanctions (if applicable);
  • In serious cases involving fraudulent intent, potential criminal liability (e.g., fraud or abuse of trust to appropriate property).

4. What should the affected party do in dispute resolution?

The affected party may choose among the following dispute resolution mechanisms:

  • Negotiation or mediation with the breaching party;
  • Commercial arbitration (if agreed in the contract);
  • Litigation before a competent People’s Court under the Civil Procedure Code 2015.

During such a process, the affected party should:

  • Prepare evidence proving damages and contractual breaches;
  • Identify legal grounds to request invalidation of the unlawful amendment;
  • Seek compensation and restoration of lawful rights and interests.

5. Who has authority to determine disputes over unjustified amendments?

In case of disputes, the People’s Court or a commercial arbitration tribunal has jurisdiction to assess the legality of the contract amendment.

Based on the contract terms, evidence, parties’ intentions, and applicable law, the competent authority will determine the legal validity of the amendment and impose liability, including damages or sanctions, where appropriate.

V. Do you need legal assistance for unjustified contract amendments?

If you or your business encounter difficulties in drafting, negotiating, amending, or resolving contract disputes, particularly in cases involving unjustified amendments, seeking assistance from legal professionals or contract law specialists is essential.

A lawyer can assist you in:

  • Assessing the legality of contract amendments;
  • Advising on appropriate negotiation or litigation strategies;
  • Preparing legal documentation to effectively protect your lawful rights and interests.

Should you have any questions regarding unjustified contract amendments or other legal matters, please contact NPLaw for direct consultation and guidance.