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Commercial Contract Claims: Avoid Missing Notification Deadlines and Losing Your Right to Seek Remedies

In commercial sales transactions, when a party discovers that its counterparty has delivered goods of the wrong quality, delivered an insufficient quantity, delayed delivery, made late payment or otherwise failed to perform its contractual obligations, the aggrieved party will commonly submit a claim requesting an explanation and remedial action. However, a claim notice is not merely a document reporting an incident. If it is not issued within the applicable time limit, with sufficient detail and in accordance with the required procedure, the aggrieved party may encounter difficulties in preserving and enforcing its rights to require repair, replacement, payment of interest, contractual penalties, damages or termination of the contract.

Importantly, the claim notification period and the limitation period for commencing legal proceedings are two distinct legal concepts. The fact that the parties are exchanging correspondence, negotiating or processing a claim does not automatically mean that the limitation period for commencing legal proceedings is suspended. Accordingly, businesses must monitor the applicable deadlines for notifying breaches, exercising remedial rights and initiating dispute resolution proceedings simultaneously.

This article focuses on contracts for the sale of goods and related commercial obligations, with reference to Vietnam’s Commercial Law 2005, the United Nations Convention on Contracts for the International Sale of Goods 1980 (CISG) and the UNIDROIT Principles of International Commercial Contracts (PICC).

1. Claims under Commercial Contracts: Why Should Businesses Act Without Delay?

In practice, a claim is generally understood as a notification by one party to another concerning a breach of contract or non-conforming performance, accompanied by a request for an explanation, corrective action or performance of a specific obligation.

Circumstances giving rise to claims may include:

• Buyer’s claims: Short or excess delivery, incorrect goods, defective or substandard quality, failure to meet technical specifications, delayed delivery, missing documents, failure to provide warranty services, or third-party claims concerning title to the goods.
• Seller’s claims: Late or incomplete payment, failure to take delivery of the goods, failure to cooperate in receiving the goods, or failure to perform obligations necessary for the seller to complete delivery.
• Claims by either party: Breaches of confidentiality, information disclosure, cooperation, preservation of goods or other ancillary obligations agreed upon in the contract.

Claims serve three important functions in commercial contracts.

First, a claim helps identify the specific matter in dispute, the time at which the aggrieved party discovered or became aware of the breach, and the relief sought.

Second, timely notification gives the notified party an opportunity to inspect, investigate, repair, replace, make supplementary delivery or otherwise mitigate the loss. It also provides a basis for negotiations before the dispute escalates.

Third, in certain circumstances, timely notification is an important condition for the aggrieved party to preserve its right to rely on the non-conformity of goods or exercise a particular remedy. This is particularly important when the CISG applies.

However, a claim notice must be distinguished from a demand for contractual remedies and a request for dispute resolution. A notice of breach does not automatically constitute a declaration of avoidance, a notice of termination, a demand for late payment interest, a claim for damages or a statement of claim initiating legal proceedings. Businesses should clearly specify each request and comply with the corresponding legal requirements.

2. Claim Notification Deadlines: Do Not Rely Solely on Statutory Time Limits

2.1. Domestic Commercial Contracts

Under Article 318 of Vietnam’s Commercial Law 2005, the claim notification period is primarily determined by the parties’ agreement. In the absence of an agreement, the following default periods apply:

Type of claim	Default period	Commencement of the period
Claims concerning the quantity of goods	3 months	From the date of delivery
Claims concerning the quality of goods	6 months	From the date of delivery
Claims concerning the quality of goods subject to a warranty	3 months	From the expiry of the warranty period
Claims concerning other contractual breaches	9 months	From the date on which the breaching party was required to perform its contractual obligation
Claims concerning other breaches where a warranty applies	9 months	From the expiry of the warranty period

These are default periods applicable where the parties have not agreed otherwise. Businesses should also take into account the exceptions referred to in Article 318. Accordingly, businesses should not focus solely on the 3-, 6- or 9-month periods without reviewing the contractual provisions on claims, inspection, acceptance and warranties.

Particular attention should be paid to goods with latent defects that cannot readily be identified through ordinary inspection. Businesses should clearly specify how the date of discovery of a defect is determined, the notification period for latent defects and the relationship between the claim notification period and the warranty period. If a contract merely provides that the buyer must submit a claim within a specified number of days from receipt of the goods, disputes may arise as to whether that period also applies to latent defects.

Another point worth noting is that Article 318 is not limited to claims made by buyers. In cases involving breaches of payment, taking-delivery or other obligations by the buyer, the seller should also determine the appropriate notification period and method in accordance with the contract and applicable law.

2.2. International Sales Contracts Governed by the CISG

The CISG establishes a separate notification regime for cases involving goods that do not conform to the contract.

Under Article 38, the buyer must examine the goods, or cause them to be examined, within as short a period as is practicable in the circumstances. Where the contract involves carriage of the goods, examination may be deferred until the goods arrive at their destination.

Under Article 39, the buyer may lose the right to rely on a lack of conformity if it fails to notify the seller, subject to the following requirements:

• The notice must be given within a reasonable time after the buyer discovered or ought to have discovered the lack of conformity.
• The notice must specify the nature of the lack of conformity.
• In any event, the buyer must notify the seller no later than two years from the date on which the goods were actually handed over to the buyer, unless this time limit is inconsistent with a contractual period of guarantee.

Unlike Vietnam’s Commercial Law, the CISG does not prescribe fixed periods of 3, 6 or 9 months for all cases. What constitutes a “reasonable time” depends on the specific circumstances, including the nature of the goods, the type of defect, the possibility of inspection, relevant trade practices and delivery conditions.

Accordingly, in international transactions, businesses should not wait until a complete expert assessment has been issued before sending a notice. Once signs of non-conformity have been identified, the buyer should promptly send an initial notice describing the issues identified and supplement it with inspection or expert assessment results when available.

It should be noted that Article 39 CISG governs the buyer’s notification obligation when relying on a lack of conformity of goods. This provision should not be broadly interpreted as establishing a general claim notification period applicable to every breach by either the buyer or the seller.

2.3. The Role of the UNIDROIT PICC

The PICC does not establish a general claim notification period applicable to all contractual breaches. Instead, it provides for notification obligations in specific circumstances.

For example, under Article 7.3.2(2), where performance is offered late or is otherwise non-conforming, the aggrieved party may lose its right to terminate the contract if it fails to notify the other party within a reasonable time after it knew or ought to have known of the late or non-conforming performance.

Under Article 1.10, a notice may be given by any means appropriate in the circumstances. In principle, a notice becomes effective when it reaches the addressee.

Therefore, businesses should identify the precise set of rules governing their contracts rather than automatically applying the claim notification periods under Vietnam’s Commercial Law to every international transaction.

3. How Should a Claim Be Submitted to Ensure Legal Effectiveness and Evidentiary Value?

3.1. Form of the Claim Notice

Vietnam’s Commercial Law does not prescribe a single mandatory form for all claims under Article 318. Businesses should therefore review the contractual notification provisions, including the following matters:

• Must a claim be made in writing, or may notification be given by email?
• Which email address and recipient must receive the notice?
• Is there a requirement to send a hard copy simultaneously, use registered or tracked mail, or submit the notice through a contract management system?
• When is a notice deemed to have been sent or received?
• Must the recipient be the other party’s legal representative or an authorized person?

Under the CISG, Article 39 does not impose a general mandatory form for notices of non-conformity. In practice, such notices may be given through various means, but the buyer must be able to prove their content and the time at which they were given.

Under the PICC, the means of notification must be appropriate in the circumstances, and the notice becomes effective when it reaches the addressee pursuant to Article 1.10.

Recommendation: Businesses should use communication methods that allow them to retain and prove the sending, receipt and content of notices. Email is convenient, but it should be sent to the agreed address, with the original email, attachments, transmission and receipt information, and subsequent correspondence properly retained. For high-value matters or cases involving a significant risk of dispute, businesses should consider sending an additional notice through a delivery service that provides proof of receipt.

3.2. Content of the Claim Notice

An effective claim notice should not merely state that “the goods are defective” or “the counterparty has breached the contract”. In particular, under Article 39 CISG, the buyer must specify the nature of the lack of conformity.

Businesses should include, at a minimum, the following information:

Item	Information to be included
Contract details	Contract number, signing date, relevant appendices and purchase orders
Subject matter of the claim	Description of goods, product codes, batch numbers, quantities, delivery consignments and delivery dates
Breach	Short delivery, defective quality, delayed delivery, non-payment, failure to take delivery or other contractual breaches
Description of the breach	Specific deviations from contractual provisions, technical standards or agreed obligations
Evidence	Delivery records, inspection reports, photographs, videos, expert assessment reports, invoices, bills of lading and correspondence
Requested remedies	Repair, replacement, supplementary delivery, payment, price reduction, refund or other appropriate remedies
Performance deadline	The proposed deadline or the deadline prescribed by the contract or applicable law
Reservation of rights	An express reservation of rights to claim interest, contractual penalties, damages and other available remedies, where the relevant conditions are satisfied

For quality-related claims, where the cause or full extent of the defect has not yet been determined, the buyer may issue an initial notice describing the identified symptoms, specifying the relevant batch of goods and stating that inspection or expert assessment is underway. The buyer should subsequently update the information and its requests once the results become available.

This approach helps reduce the risk of a notice being considered overly general or of notification being delayed merely because the business is waiting for technical conclusions.

4. How Long Does the Notified Party Have to Respond?

A common misconception is that the party receiving a claim must respond within 7, 15 or 30 days from the date of receipt.

In fact, Article 318 of Vietnam’s Commercial Law, Articles 38–44 CISG and the general provisions of the PICC do not establish a universal response deadline applicable to all contracts for the sale of goods.

The response period may be specified in the contract, a claim-handling procedure or applicable sector-specific regulations. Where the contract contains no such provision, businesses should consider the specific obligations involved, the circumstances of the transaction and the reasonableness of the other party’s request.

Failure to respond to a claim does not automatically constitute an admission of all the allegations or liability for damages, unless there is a specific legal basis or agreement providing otherwise.

Conversely, the party receiving a claim should not remain silent or provide only a vague response. An effective response procedure should include:

1. Acknowledging receipt of the notice and identifying the person responsible for handling the claim.
2. Reviewing the contract, delivery records and relevant documents.
3. Requesting additional information or evidence where necessary.
4. Agreeing on an inspection, expert assessment or verification process.
5. Clearly identifying which allegations are accepted, which are disputed or remain unaccepted, and the reasons for such position.
6. Proposing corrective measures, implementation deadlines and responsibilities where a breach is established.

During the process, the parties should prepare minutes of meetings, inspection records, expert assessment reports or written confirmations of the agreed remedial measures. These documents may play an important role if the dispute is subsequently referred to arbitration or a court.

5. Claims Should Not Focus Solely on Correcting the Breach: Do Not Overlook Interest, Penalties and Damages

A common mistake is for businesses to request only that their counterparties repair, replace or make supplementary delivery of goods, without addressing the monetary claims and other rights that may arise from the breach.

In practice, depending on the contract and applicable law, the aggrieved party may consider pursuing multiple remedies simultaneously or sequentially.

5.1. Requiring Repair, Replacement, Supplementary Delivery or Proper Performance of the Contract

This is often the first remedy sought when a business still wishes to continue performing the contract.

Under Vietnam’s Commercial Law, the aggrieved party may require specific performance of the contract pursuant to Article 297 and related provisions. Under the CISG, the buyer may require the seller to perform its obligations, repair the goods or deliver substitute goods, provided the applicable conditions under Article 46 are satisfied. Article 48 CISG also provides for the seller’s right to remedy a failure to perform, subject to certain conditions.

However, businesses should clearly specify the following matters in their claim notices:

• The required remedial measures;
• The deadline for completion;
• The acceptance criteria following remediation;
• Transportation, inspection, dismantling, installation or storage costs; and
• Liability for losses arising during the remedial period.

Allowing the breaching party an opportunity to remedy the breach should not be expressed as a waiver of other rights if the business intends to preserve those rights.

5.2. Claiming Interest for Late Payment

For transactions governed by Vietnam’s Commercial Law, Article 306 permits the aggrieved party to claim interest on overdue payments for the purchase price of goods, service remuneration or reasonable expenses, at the interest rate determined in accordance with that provision, unless otherwise agreed or otherwise provided by law.

For contracts governed by the CISG, Article 78 recognizes the right to claim interest on sums in arrears. However, the CISG does not prescribe a uniform interest rate. Determining the applicable rate may therefore require consideration of the governing law and other relevant legal grounds.

Businesses should clearly state the following information in a notice or payment demand:

• The outstanding principal amount;
• The payment due date;
• The period of delay;
• The applicable interest rate and its legal basis;
• The interest calculation up to the date of the demand and whether interest will continue to accrue thereafter.

Businesses should not wait until legal proceedings are initiated to review their interest claims, particularly in contracts involving multiple payment instalments or long-outstanding debts.

5.3. Claiming Contractual Penalties

Under Vietnam’s Commercial Law, a contractual penalty may only be imposed where it has been agreed upon in the contract or is otherwise supported by the relevant legal provisions.

Article 301 provides that the penalty for a contractual breach, or the aggregate penalties for multiple breaches, must not exceed 8% of the value of the breached contractual obligation, except where the law provides otherwise.

Before claiming a contractual penalty, businesses should verify:

• Whether the contract contains a contractual penalty clause;
• Whether the alleged breach falls within the scope of that clause;
• Whether the agreed penalty rate complies with applicable law; and
• How the value of the breached contractual obligation should be determined.

An important point to note is that failure to include a contractual penalty claim in the initial claim notice does not necessarily result in the loss of the right to claim such a penalty. However, if the contract imposes a specific notification condition or deadline for exercising this right, the business must comply with it. Expressly identifying the penalty claim during the claim-handling process also helps prevent such claims from being overlooked during negotiations or dispute resolution proceedings.

5.4. Claiming Damages

Under Articles 302–305 of Vietnam’s Commercial Law, liability for damages generally requires a contractual breach, actual loss and a direct causal relationship between the breach and the loss. The party claiming damages bears the burden of proving the loss and must take reasonable measures to mitigate it.

Under the CISG, Article 74 governs the scope of damages, including loss suffered and loss of profit resulting from the breach, subject to the foreseeability limitation at the time the contract was concluded. Article 77 establishes the duty to mitigate loss.

Accordingly, as soon as a breach is discovered, businesses should begin collecting evidence concerning:

• Inspection, expert assessment, repair and replacement costs;
• Storage, preservation, transportation or disposal costs relating to the goods;
• Costs of purchasing substitute goods or making substitute sales;
• Provable lost profits; and
• Other reasonable expenses directly arising from the breach.

Businesses should not wait until the entire claim-handling process has concluded before compiling evidence of loss. Evidence of damages is often generated over time and may become difficult to collect if it is not preserved from the outset.

5.5. Suspending, Terminating or Avoiding the Contract

Where a breach is serious or the breaching party fails to remedy it within a reasonable period, the business may consider more substantial remedies.

Under Vietnam’s Commercial Law, the following remedies must be distinguished:

• Suspension of performance of the contract under Article 308;
• Suspension of the contract under Article 310; and
• Avoidance of the contract under Article 312 and related provisions.

These remedies have different conditions for application and legal consequences. The terms should not be used interchangeably in notices.

Under the CISG, either the buyer or the seller may declare the contract avoided where the conditions under Article 49 or Article 64, as applicable, are satisfied. In particular, Articles 49(2) and 64(2) impose certain restrictions on the timing of the exercise of the right to avoid the contract.

Under the PICC, the right to terminate a contract is exercised by notice pursuant to Article 7.3.2. In cases of late or non-conforming performance, the aggrieved party may lose its right to terminate if it fails to give notice within a reasonable time.

Recommendation: If a business wishes to continue the contract, its notice should focus on the required corrective measures and the deadline for performance. If it intends to terminate the contractual relationship, it should assess the applicable conditions, the deadline for exercising the relevant right and the legal consequences before issuing the notice. Businesses should not simply state that “the contract will be cancelled if the breach is not remedied” without identifying the relevant legal grounds and conditions.

6. Does Filing a Claim Suspend the Limitation Period for Legal Proceedings?

Under Article 319 of Vietnam’s Commercial Law 2005, the limitation period for initiating legal proceedings in respect of commercial disputes is two years from the time when the legitimate rights and interests are infringed, unless otherwise provided by law.

Meanwhile, the claim notification period under Article 318 is a separate time limit. These two periods serve different purposes and are calculated differently. Filing a claim, awaiting a response or continuing negotiations does not automatically suspend the limitation period for commencing legal proceedings.

However, attention should be paid to Article 157 of Vietnam’s Civil Code 2015 concerning the recommencement of the limitation period for initiating civil lawsuits. Accordingly, the limitation period may recommence where one of the following circumstances occurs:

• The obligor acknowledges part or all of its obligations;
• The obligor acknowledges or has performed part of its obligations; or
• The parties have reached a settlement through their own negotiations.

The limitation period recommences on the day following the date on which the relevant event occurs.

This does not mean that every exchange of correspondence relating to a claim automatically causes the limitation period to recommence. Businesses must assess the content of the correspondence, the conduct of the parties and the evidence demonstrating acknowledgment of obligations or an amicable settlement. They should not assume that an email requesting a matter to be “reconsidered” or a meeting that has not produced any outcome automatically causes the limitation period to recommence.

For international disputes governed by the CISG, it should be noted that the CISG does not generally regulate limitation periods for legal proceedings. Businesses must identify the applicable law governing limitation periods and the relevant rules. The two-year period under Article 319 of Vietnam’s Commercial Law should not automatically be applied to every international contract.

A key risk management principle should therefore be observed: During the claim-handling and negotiation process, businesses should continue monitoring the limitation period for commencing legal proceedings as though it were running, unless there is a clear legal basis for determining otherwise.

7. Recommended Internal Procedures for Handling Commercial Contract Claims

To avoid overlooking rights and deadlines, businesses may establish an internal procedure consisting of the following steps:

Step	Required action	Legal and evidentiary considerations
1. Identify the breach	Record the date of discovery, the person identifying the breach, and the condition of the goods or affected obligation	Prepare records, take photographs and retain relevant emails and documents
2. Review the contract	Review provisions on inspection, acceptance, claims, warranties, notices and dispute resolution	Identify the governing law, applicable deadlines and designated notification addresses
3. Calculate deadlines	Determine the claim notification period, any applicable notification period under the CISG/PICC, and the limitation period for legal proceedings	Do not confuse claim notification deadlines with limitation periods
4. Issue the notice	Send the claim through an appropriate method, describing the breach and available supporting evidence	Retain proof of dispatch, receipt and the contents of the notice
5. Verify and respond	Conduct inspections or expert assessments, request explanations and determine responsibility	Prepare written records identifying matters admitted or disputed
6. Submit claims	Determine whether to request repair, replacement, supplementary delivery, payment, interest, penalties, damages or contract termination	Do not focus solely on corrective measures while overlooking monetary claims
7. Negotiate and implement	Agree on remedial measures, deadlines, costs, acceptance procedures and consequences of non-performance	Record the outcome of negotiations in writing
8. Monitor the limitation period	Monitor the limitation period independently of the progress of the claim-handling process	Prepare arbitration or court proceedings before the limitation period expires

8. Checklist: Matters to Review Before Closing a Claim

Before accepting a remedial proposal or closing a claim file, businesses should review the following matters:

• Have all contractual breaches and the affected obligations been fully identified?
• Have the claim notification deadlines under the contract and applicable law been checked?
• Has the notice been sent to the correct address and recipient through a method that can be evidenced?
• Does the notice describe the nature of the breach or non-conformity in sufficient detail?
• Have all relevant delivery, inspection, expert assessment and inter-party communication records been retained?
• Have the appropriate remedies, including repair, replacement, supplementary delivery or specific performance, been clearly identified?
• Has the right to claim interest for late payment been reviewed?
• Does the contract contain a contractual penalty clause, and has the corresponding penalty claim been considered?
• Have the losses, supporting evidence and mitigation measures been properly documented?
• If suspension, avoidance or termination of the contract is contemplated, have the applicable conditions and deadlines been reviewed?
• Has the limitation period for legal proceedings been identified, without assuming that a claim or negotiations automatically suspend it?
• Does the written settlement of the claim clearly address or reserve any outstanding claims and rights?

9. Conclusion: Timely Notification Is Essential, but Preserving All Available Rights Is What Matters Most

Filing a claim is an important step in managing and addressing breaches of commercial contracts. However, businesses should not regard the submission of a single claim notice as sufficient to protect their legal interests.

To mitigate risks, businesses must simultaneously address four key matters: notification deadlines; the content and evidence supporting the claim; the proper identification of all available rights and remedies; and the limitation period for commencing legal proceedings.

In particular, businesses should not assume that the claim notification period, the response period and the limitation period for legal proceedings are the same. Nor should they assume that the counterparty’s ongoing investigation, negotiations or promise to remedy the breach will automatically preserve all of their legal rights.

In commercial contracts, the most effective preventive measure is to establish clear claim and notification provisions from the outset. Such provisions should address inspection periods, notification deadlines for defects, procedures for latent defects, methods of sending and receiving notices, response deadlines, inspection and expert assessment rights, remedial deadlines, and the reservation of rights to claim interest, contractual penalties, damages, suspend performance or avoid the contract.

A well-designed claim management procedure not only helps resolve disputes more efficiently but also prevents businesses from finding themselves in a situation where, despite having identified a breach and engaged in repeated discussions with their counterparties, they are ultimately unable to fully exercise their legal rights.

Legal Disclaimer

This article provides general legal information and focuses on contracts for the sale of goods and related commercial obligations. Its application to any particular case must be assessed by reference to the contractual terms, governing law, nature of the transaction and applicable sector-specific regulations. The CISG applies only where the transaction falls within the scope of the Convention. The PICC applies where selected by the parties or may be used as an appropriate supplementary reference within its permissible scope.

BFSC advises readers to use the information in this article for reference purposes only.

For legal advice on commercial claims and disputes, particularly disputes arising from commercial contracts, please contact the Secretariat of BFSC Law LLC in Hanoi using the contact details available on our website.

11/11/2026