I. The current situation of failed contract negotiations
Failed contract negotiations are becoming increasingly common across various business sectors, particularly in the context of progressively stringent legal and compliance requirements. Parties frequently have difficulties in reaching agreement on core contractual terms such as pricing, scope of work, implementation schedule, and risk allocation mechanisms.
Many parties fail to fully assess legal, financial, and performance-related factors, resulting in adjustments or changes in position during the negotiation process. A lack of transparency in information disclosure or the introduction of unfavorable conditions at the final stage of negotiations may also undermine mutual trust between the parties, thereby making it more difficult to reach an agreement.
Beyond technical considerations, failed contract negotiations may also reflect deficiencies in negotiation skills and contract management practices. The absence of a clear negotiation strategy, contingency plans, or effective control over information exchanges often causes negotiations to be prolonged without achieving any substantive outcome, leading to significant waste of time and resources for the parties involved.
II. Understanding failed contract negotiations
1. What constitutes failed contract negotiations?
Following the announcement of the bid-winning result, if the procurement package is subject to contract negotiations, the first-ranked bidder shall be invited by the investor to conduct contract negotiations in accordance with Clause 1 Article 45 of Decree No. 214/2025/ND-CP. Failed contract negotiations may also be understood from the perspective of the contractual formation provisions under the Civil Code 2015.
Accordingly, a contract is formed only when the parties reach agreement on the essential contents through the mechanism of offer and acceptance in accordance with Clause 1 Article 393 of the Civil Code. In practice, the negotiation process constitutes the stage during which the parties exchange, amend, and finalize the contractual offer. However, if one party does not fully accept the offered terms but instead proposes amendments or supplements that materially alter the essential contents, such response shall, under Article 392 of the Civil Code, be deemed a new offer. If the parties continuously fail to reach final consensus on the principal contractual terms, no contractual relationship shall be formed.
Accordingly, failed contract negotiations may be understood as the consequence of the parties’ failure to reach the consensus necessary for the contract to become legally effective.
2. Why may failed contract negotiations still occur despite a bidder having won the bid?
Even after winning a bid, failed contract negotiations may still occur for the following reasons:
- Pursuant to Clause 6 Article 45 of Decree No. 214/2025/ND-CP, if a bidder participates in negotiations but fails to conduct negotiations in compliance with the principles and contents prescribed under Clauses 3 and 4 of the same Article, or if the bidder has conducted negotiations but refuses to sign the contract negotiation minutes for the purpose of withdrawing from the awarded bid or causing disadvantage to the investor, such bidder shall be disqualified and shall not be entitled to the return of the bid security value.
- Clause 7 Article 45 of Decree No. 214/2025/ND-CP further provides that a bidder has the right to refuse negotiations and is entitled to the return of the bid security if the investor fails to conduct negotiations in accordance with the principles and contents prescribed under Clauses 3 and 4 of the same Article.
For example, if either the bidder or the investor violates the principle prohibiting any alteration to the unit price determined during the financial evaluation stage (except in procurement packages applying the quality-based selection method) under Point b Clause 3 of the Article, the other party shall have the right to refuse to continue negotiations. Such circumstances may ultimately result in failed contract negotiations.
3. Are failed contract negotiations always attributable to the bidder’s fault?
Failed contract negotiations are not necessarily attributable to the bidder, as they may also arise from the investor’s conduct. Clause 7 Article 45 of Decree No. 214/2025/ND-CP expressly provides that a bidder has the right to refuse negotiations and obtain a refund of the bid security where the investor fails to conduct negotiations in accordance with the principles and contents prescribed under Clauses 3 and 4 of the same Article.
Accordingly, failed contract negotiations may result from the investor’s violation of the principles governing contract negotiations rather than always being caused by the bidder.
4. What is the difference between “unilateral withdrawal” and failed contract negotiations?
First, failed contract negotiations refer to circumstances where the parties have conducted negotiations but are unable to reach agreement on the contractual contents. If, following the negotiation process, the parties fail to agree on the negotiation contents prescribed under Clause 4 Article 45 of Decree No. 214/2025/ND-CP, the negotiations shall be deemed unsuccessful. It constitutes a lawful situation arising from the parties’ inability to reach consensus.
In contrast, “unilateral withdrawal” refers to the act of a bidder refusing to continue participating in negotiations or refusing to execute the contract despite having been duly invited in accordance with applicable regulations. If a bidder refuses to negotiate or declines to execute the contract without legitimate grounds, such bidder may be subject to sanctions, including forfeiture of the bid security under Clause 6 Article 45 of the Decree. Such a conduct constitutes a breach of obligations during the contractor selection process.
Accordingly, while failed contract negotiations constitute an objective consequence of the parties’ failure to reach agreement, “unilateral withdrawal” reflects a subjective decision made by one party.
III. Legal provisions relevant to failed contract negotiations
1. Under the law, after how many deadlocked negotiation sessions may negotiations be deemed unsuccessful?
Under current laws, there is no specific provision prescribing the number of deadlocked negotiation sessions required for negotiations to be deemed unsuccessful. The determination of failed contract negotiations depends on the actual outcome of the negotiation process.
If the parties have conducted negotiations but remain unable to reach agreement on the essential contractual terms despite repeated discussions and clarifications, the negotiations may be considered unsuccessful. Pursuant to Clause 1 Article 393 of the Civil Code 2015, a contract is formed only when there is complete acceptance of the contractual offer; therefore, if no consensus is reached, no contract shall come into existence.
Accordingly, failed contract negotiations are not determined based on the number of negotiation sessions but rather on the parties’ inability to reach final agreement on the essential terms of the contract.
2. How is the reporting procedure to the competent authority implemented after failed contract negotiations?
Where contract negotiations fail, the reporting procedure to the competent authority may generally be conducted through the following steps:
- Preparation of negotiation minutes: Immediately upon completion of the negotiation process, the parties must prepare minutes recording all negotiated contents, matters agreed upon and not agreed upon, and clearly stating the reasons for the failure to reach agreement.
- Completion of the reporting dossier: The responsible party (typically the negotiating entity) shall compile the dossier, including the negotiation minutes, relevant documents, and a written report analyzing the causes of the failed contract negotiations and proposing handling measures.
- Submission to the competent authority: The dossier shall be submitted to the competent authority for review and comprehensive assessment of the negotiation process and the reasonableness of the proposed solutions.
- Review and issuance of decision: Based on the dossier, the competent authority shall issue an appropriate decision, such as approving an alternative handling method or directing subsequent procedures in accordance with applicable regulations.
3. What does the law provide regarding a bidder’s right to file a complaint if the bidder believes that the procuring entity intentionally caused the contract negotiations to fail?
Pursuant to Clause 1 Article 2 of the Law on Complaints 2011, as amended and supplemented by Clause 1 Article 2 of the amended Law on Citizen Reception, the Law on Complaints, and the Law on Denunciations 2025, a complaint is defined as the act whereby an individual or organization requests a competent authority, organization, or individual to review an administrative decision or administrative act if there are grounds to believe that such decision or act is unlawful and infringes upon its lawful rights and interests. If the conduct of the procuring entity during negotiations bears the nature of an administrative act (for example, issuing decisions or exercising state-management authority), the bidder may choose to pursue the complaint mechanism under this law.
In addition to the right to file a complaint in the aforementioned circumstances, the bidder also has the right to submit a petition. Where the bidder considers that its lawful rights and interests have been adversely affected, it may petition the competent authority, investor, or procuring entity to review issues arising during the contractor or investor selection process and the contractor or investor selection results, under Clause 1 Article 89 of the Law on Bidding 2023; the Law on Investment under Public-Private Partnership; the Customs Law; the Law on Value-Added Tax; the Law on Export and Import Duties; the Law on Investment; the Law on Public Investment; and the Law on Management and Use of Public Assets 2025.
However, it should be noted that once a complaint mechanism has been selected, the matter will not concurrently be resolved under the petition mechanism applicable in bidding activities.
IV. Questions regarding failed contract negotiations
1. Does failed contract negotiation mean that the bidding package must be re-tendered from the beginning?
Failed contract negotiations do not necessarily mean that the bidding package must be re-tendered from the outset. Pursuant to the provisions on contract negotiation and finalization under Clause 8 Article 45 of Decree No. 214/2025/ND-CP, if negotiations fail, the investor shall consider and decide whether to invite the next-ranked bidder to participate in contract negotiations.
Only where there is no remaining bidder satisfying the requirements or where the contractor selection process cannot continue shall cancellation of the bidding process be considered in accordance with Article 17 of the Law on Bidding 2023, at which point re-tendering may arise.
Accordingly, failed contract negotiations do not automatically lead to re-tendering; re-tendering is merely the final option where no suitable contractor can be selected.
2. Where contract negotiations fail, is the procuring entity required to prepare minutes clearly stating the reasons?
Bidding laws do not expressly provide a mandatory requirement to prepare minutes if contract negotiations fail. However, from a procedural perspective, such minutes constitute an important document for recording the causes of the failed negotiations and serving as a legal basis for reporting to the investor in order to decide whether to invite the next-ranked bidder to negotiations or proceed with cancellation of the bidding process in accordance with regulations.
Such minutes also serve as a solid basis for protecting the procuring entity when handling bid security if the fault lies with the bidder (for example, intentionally refusing to execute the contract or reversing previously offered conditions). Even where the bidder refuses to sign, the procuring entity should still prepare minutes recording the entire course of events, together with signatures of participating members, to serve as evidence in resolving future disputes or complaints.
3. After determining that contract negotiations have failed, must such information be publicly disclosed on the National E-Procurement System?
Pursuant to Clause 1 Article 22 of Decree No. 214/2025/ND-CP regarding disclosure of contractor selection information, contractor selection information must be publicly posted on the National E-Procurement System in accordance with Articles 7 and 8 of the Law on Bidding 2023. Although failed contract negotiations are not specifically required to be publicly disclosed on the National E-Procurement System, such information should nevertheless be reflected in the publicly disclosed information, for example through the contractor selection results under Point l Clause 1 Article 7 of the Law on Bidding 2023.
Accordingly, information relating to failed negotiations should be indirectly disclosed as part of the contractor selection results in compliance with the transparency obligations under bidding laws.
4. Is a bidder entitled to reimbursement of dossier preparation costs if contract negotiations fail due to the investor’s fault?
Pursuant to Point d Clause 1 Article 15 of the Law on Bidding 2023, as guided by Article 14 of Decree No. 214/2025/ND-CP and supplemented by Clause 3 Article 2 of Decree No. 17/2025/ND-CP, bidders are responsible for costs related to the preparation of expressions of interest, prequalification applications, bid dossiers, proposal dossiers, participation in bidding activities, and complaint resolution costs (if any). Therefore, bidders are not entitled to reimbursement of dossier preparation costs where contract negotiations fail due to the investor’s fault.
However, where failed contract negotiations result from the investor’s failure to conduct negotiations in accordance with the prescribed principles and contents of negotiations, the bidder shall be entitled to the return of the bid security pursuant to Clause 7 Article 45 of Decree No. 214/2025/ND-CP.
5. Which legal document provides guidance on handling situations arising after failed contract negotiations?
At present, there is no specific legal document providing guidance on the procedures for handling situations arising after failed contract negotiations. Nevertheless, Clause 8 Article 45 and Clause 4 Article 71 of Decree No. 214/2025/ND-CP provide that where negotiations fail, the investor shall consider and decide whether to invite the next-ranked bidder to participate in negotiations.
Although there is currently no separate and specific procedure governing the handling of situations arising after failed contract negotiations, the law has provided a general direction by allowing the investor to consider inviting the next-ranked bidder to negotiations in order to ensure the continuation of the contractor selection process.
V. Are you looking for a reputable and experienced lawyer to assist with issues related to failed contract negotiations?
NPLaw provides in-depth legal consultancy services in the fields of bidding and contract negotiations, helping clients identify risks and maximize the protection of their lawful rights and interests. With a team of highly experienced lawyers, NPLaw is committed to delivering practical and effective legal solutions. Contact us today for prompt and accurate assistance.
It can be seen that failed contract negotiations not only disrupt the execution of contracts but also entail various legal risks if the parties do not clearly understand the applicable regulations and appropriate handling methods. Proper understanding of the legal nature of failed negotiations, compliance with regulations, and proactive development of effective negotiation strategies will help minimize disputes and ensure that the contractor selection process is conducted transparently and efficiently.
The above information is provided for reference purposes only. Should you require advice regarding any specific case, please contact NPLaw Firm for immediate consultation.
