On 10 December 2025, the National Assembly of Viet Nam adopted the Construction Law 2025, introducing significant reforms to the legal framework governing construction activities. The new law replaces a number of administrative-driven rules under the Construction Law 2014 with a more contract-oriented and risk-based approach, aligning Vietnamese construction law more closely with international practices.

This update highlights selected changes of practical relevance to construction contractors, investors, and parties to construction contracts.

Vietnam Construction Law 2025: Key Updates for Contractors and Construction Contracts

Effective date: 1 July 2026
Governing legislation: Construction Law No. 135/2025/QH15

1. Shift from Administrative Control to Contractual Autonomy

A central theme of the Construction Law 2025 is the reduction of administrative intervention in construction relationships. The law places greater emphasis on:

• contractual freedom;

• commercial risk allocation; and

• negotiated solutions between investors and contractors.

This shift is particularly evident in the new rules on insurance, contract amendments, liquidated damages, and force majeure.

2. Delegation of Construction Insurance Obligations

Under the Construction Law 2025, investors may delegate the obligation to procure mandatory construction insurance to construction contractors during the construction phase.

While this change reduces administrative burdens for investors, it increases contractors’ exposure to:

• insurance cost fluctuations; and

• delays attributable to investors that extend construction periods.

Practical note: Contractors should carefully address insurance scope, premium adjustments, and delay-related risks in construction contracts.

3. Reduced Risk of Contract Invalidity – But Not Reduced Liability

The Construction Law 2025 removes certain prohibited acts relating to contractor selection and capacity that previously existed under the Construction Law 2014. This change primarily reduces the risk that construction contracts may be declared invalid due to procedural deficiencies.

However, contractors remain fully responsible for:

• compliance during bidding and prequalification;

• meeting statutory and tender-based capacity requirements; and

• civil, administrative, or criminal liabilities arising from violations in construction activities.

4. Stricter Control over Design Modifications

The Construction Law 2025 expressly prohibits unauthorized modifications to approved construction designs where such modifications adversely affect construction safety, environmental protection, or fire prevention and firefighting.

The law does not provide specific thresholds for determining such impacts, creating potential legal uncertainty.

Practical note: Contractors should strictly limit their works to approved designs and avoid informal or undocumented design variations.

5. Clarification of the Legal Nature of Construction Contracts

The Construction Law 2025 no longer characterizes construction contracts simply as “civil contracts.” Instead, it clarifies that construction contracts are governed concurrently by:

• the Construction Law;

• the Civil Code; and

• other relevant legislation.

This clarification enhances consistency in contract drafting, interpretation, and dispute resolution.

6. Contract Amendments Replace Administrative “Adjustments”

The concept of administrative “adjustment” of construction contracts has been replaced by contractual amendment based on mutual agreement.

Either party may request a contract amendment where statutory or agreed conditions are satisfied, and parties may agree on additional amendment-triggering events, provided such agreements comply with applicable law.

Practical note: The new framework strengthens the legal basis for variation and renegotiation claims, particularly for contractors.

7. Conditional Recognition of Liquidated Damages

The Construction Law 2025 recognizes liquidated damages, provided that pre-agreed amounts correspond to:

• the breached contractual obligation; and

• the severity of the breach.

Courts may scrutinize liquidated damages clauses, particularly where contractual penalties have also been imposed.

Practical note: Liquidated damages provisions should be carefully calibrated to enhance enforceability.

8. Statutory Force Majeure and Fundamental Change of Circumstances

For the first time, the Construction Law expressly codifies force majeure and fundamental change of circumstances, providing non-exhaustive statutory lists and referring to the Civil Code for interpretation.

Parties may contractually expand these events, provided such provisions are consistent with applicable law. Transitional provisions allow these rules to apply to contracts signed before 1 July 2025, with effect from 1 July 2026.

Key Takeaways

• The Construction Law 2025 favors contractual risk allocation over administrative control.

• Contractors face increased responsibility for insurance, design compliance, and contract management.

• Careful drafting of variation, liquidated damages, and force majeure clauses is more important than ever.

• The new framework enhances predictability but places greater emphasis on contractual precision.

This article is provided for general information purposes only and does not constitute legal advice.

For legal advice on construction law, contractor liabilities, or construction contracts, please contact the Secretariat of BFSC Law LLC in Hanoi at the following address:

Office 1034, 10th Floor, Pacific Place Building,
83B Ly Thuong Kiet Street, Cua Nam Ward, Hanoi City
Tel: (+84) 24 7108 2688 | Email: [email protected]

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