Decree 210/2026/ND-CP detailing the Law on Construction regarding construction contracts

DECREE

Detailing and guiding the implementation of a number of articles of the Law on Construction regarding construction contracts^[1]

Pursuant to Law No. 63/2025/QH15 on Organisation of the Government;

Pursuant to Law No. 135/2025/QH15 on Construction;

At the proposal of the Minister of Construction;

The Government promulgates the Decree detailing and guiding the implementation of a number of articles of the Law on Construction regarding construction contracts.

Chapter I

GENERAL PROVISIONS

Article 1. Scope of regulation

1. This Decree details a number of articles of the Law on Construction regarding construction contracts, including:

a/ Article 82 regarding the classification, contents and dossiers of construction contracts;

b/ Clause 4, Article 83 regarding measures and levels of security for performance of obligations under construction contracts for public investment projects and public-private partnership (PPP) projects;

c/ Clause 4, Article 84 regarding methods, contents and procedures for modification of construction contracts;

d/ Article 85 regarding suspension and termination of construction contracts;

dd/ Article 87 regarding payment, account-finalisation and liquidation of construction contracts.

2. Measures for organising and guiding the implementation of the Law on Construction regarding requirements for management of the performance of construction contracts and subcontractor agreements.

Article 2. Subjects of application

This Decree applies to principals, contractors, and organisations and individuals involved in the conclusion, and management of the performance, of construction contracts.

Article 3. Interpretation of terms

In this Decree, the terms below are construed as follows:

1. Principal means an organisation or individual that concludes a construction contract with a contractor for the performance of one, part or all of jobs concerning construction activities. A principal may directly conclude a contract or authorise another individual or legal person to do so in accordance with law.

2. Contractor means an organisation or individual or a combination of organisations and individuals that conclude a construction contract with a principal for the performance of one, part or all of jobs concerning construction activities. A contractor may directly conclude a contract or authorise another individual or legal person to do so in accordance with law.

3. General conditions of a construction contract means a document attached to a construction contract that sets out basic rights and obligations of, and relationships among, the parties to the construction contract, as well as other necessary contents.

4. Particular conditions of a construction contract means a document attached to a construction contract that concretises, modifies or supplements a number of provisions of the general conditions of the construction contract.

5. Annex to a construction contract means a document attached to a construction contract that details, clarifies or supplements a number of contents of the construction contract. In case a contract annex supplements the contents of the construction contract, the corresponding contractual provision shall be deemed modified.

6. Working day means a calendar day, excluding Saturdays, Sundays, public holidays and Lunar New Year holidays prescribed by law.

7. Scope of work under a contract means all construction works, work items, products, services and other jobs that the contractor is obliged and responsible to perform as agreed in the contract.

8. Reasonably arising work volume or job means the work volume or job outside the scope of work under the contract that needs to be adjusted or supplemented during contract performance and is agreed upon by the parties.

9. Contractual obligations means commitments that the parties are required to perform as agreed in the contract and prescribed by law in order to ensure that the products of the construction contract meet the requirements on quality, schedule and costs and other requirements of the construction contract.

10. To-be-performed jobs under the contract means all jobs that the contractor is obliged to perform in order to create and complete the products of the construction contract in compliance with the contractual requirements.

Article 4. Principles for conclusion of construction contracts and requirements for management of construction contract performance

1. The conclusion of a construction contract must comply with Clause 2, Article 80 of the Law on Construction, the civil law, other relevant laws, and the following principles:

a/ For a joint-name contractor, the division of the work volume and the to-be-performed jobs under the joint-name agreement must be consistent with the capacity of each member of the joint-name entity;

b/ In case the project owner concludes contracts with multiple principal contractors to perform the to-be-performed jobs of the project, the scope of work, implementation schedule and other relevant contents of each contract must be consistent with the project’s overall scope of work, implementation schedule and other relevant contents, so as to avoid overlaps;

c/ In case a principal contractor concludes contracts with subcontractors, the scope of work, implementation schedule and other relevant contents of the subcontractor agreements must be consistent with the scope of work, implementation schedule and other relevant contents of the principal contractor contract, so as to avoid overlaps.

2. Within the ambit of their respective rights, obligations and responsibilities, the parties shall formulate plans and work out measures for organising the performance of the concluded construction contract in order to achieve the agreements set out therein. Depending on the specific requirements of each construction contract, the management of the performance of a construction contract covers:

a/ Management of contract performance schedule and progress;

b/ Quality management;

c/ Management of the work volume and price of the contract;

d/ Management of occupational safety, environmental protection, and fire and explosion protection (if applicable);

dd/ Management of modifications to the contract;

e/ Other matters as agreed by the parties in accordance with relevant laws.

3. In case the parties to a construction contract agree to appoint representatives to manage the performance of the contract, each party shall appoint and notify the other party of its representative, together with the scope, responsibilities and powers of such representative, for managing the performance of the contract.

4. All recommendations, proposals, requests and opinions of the parties to a construction contract arising in the course of contract performance management shall be made in writing (for electronic transactions, they shall be made in the form of data messages in accordance with the law on electronic transactions). A written recommendation, proposal or request must specify its grounds and basis, benefits (if any), and the time limit for reply in accordance with the agreement in the contract.

a/ In case the party receiving a recommendation, proposal or request fails to deal with it in accordance with the agreement, it shall bear responsibility and compensate the other party for damage (if any);

b/ For construction contracts under public investment projects or PPP projects, the party receiving a recommendation, proposal or request shall reply in writing, stating whether it accepts or rejects the recommendation, proposal or request within the time limit agreed by the parties in the construction contract, which is at most 7 working days from the date of receipt; in case of rejection, it shall clearly state the reason;

c/ Recommendations, proposals and requests of the parties arising in the course of contract performance management shall be sent to the transaction address or information exchange address agreed by the parties in the construction contract.

5. For EPC, EP and EC contracts:

a/ The parties shall negotiate and clearly define the scope of work, design requirements, supply of equipment and technology, and handover conditions; the design, scope of work and price of the contract shall be managed in a consistent manner throughout contract performance;

b/ The contractor shall be held responsible for the completeness and consistency of the design, equipment and technology within the scope of work of the contract; the principal shall control milestones for design, equipment supply, installation, trial operation and handover of works; payments shall be linked to the results achieved at major milestones of the contract;

c/ Before procuring supplies and equipment within the scope of work under the contract, the contractor shall prepare requirements concerning technical specifications, technology and origin and seek the principal’s opinion or approval before conducting procurement, if so agreed by the parties in the contract. The principal’s opinion or approval does not lessen the contractor’s responsibility for procurement of supplies and equipment as agreed in the contract. In case the contract does not contain such agreement, the contractor shall comply with the approved design dossier and the technical specifications, technology and origin of supplies and equipment specified in the contract when conducting the procurement.

6. For construction contracts under special public investment projects or emergency or urgent projects or works, the project owners may themselves decide on the conclusion of the contracts and contract performance management in a timely and flexible manner appropriate to the requirements of the projects or works (including also the conclusion of in-principle contracts or instalment contracts) but must ensure satisfaction of schedule and quality requirements and be held responsible for their decision.

7. For construction contracts under public investment projects that require the application or testing of new construction technologies or new materials for which no national standards are available, the jobs involving such application or testing and the corresponding costs must comply with the regulations on science, technology and innovation contracts.

8. For electronic construction contracts (construction contracts entered into by electronic means in accordance with the law on electronic transactions), the conclusion of contracts and contract performance management must comply with the law on electronic transactions.

Article 5. Grounds for conclusion of construction contracts

1. Grounds for conclusion of a construction contract include legal grounds; requirements regarding the scope and contents of to-be-performed jobs; contractor selection results (if any); results of contract negotiation and finalisation (if any); and other relevant documents.

2. For EPC, EC and EP contracts, in addition to the grounds specified in Clause 1 of this Article, the grounds for contract conclusion also include the approved commentary report and basic design or front-end engineering design (FEED).

3. For turnkey contracts, in addition to the grounds specified in Clause 1 of this Article, the grounds for contract conclusion also include the project implementation assignment, investment policy (if any), and the approved prefeasibility study report on construction investment (if any).

Chapter II

SPECIFIC PROVISIONS

Section 1

CLASSIFICATION, CONTENTS AND DOSSIERS OF CONSTRUCTION CONTRACTS

Article 6. Classification and scope of application of construction contracts

1. Based on the nature and contents of the to-be-performed jobs, construction contracts shall be classified in accordance with Clause 1, Article 82 of the Law on Construction and the following specific provisions:

a/ Construction consultancy contract (below referred to as consultancy contract) is a construction contract for the performance of one, part or all of the consultancy jobs in construction activities.

b/ Construction execution contract is a construction contract for the construction of a work or work item or for the performance of a portion of the construction execution work according to the construction design.

c/ Procurement contract is a construction contract for the procurement and supply of supplies and equipment according to the technological design.

d/ Engineering-Procurement (EP) contract is a construction contract for the performance of the jobs of engineering and procurement and supply of supplies and equipment according to the technological design.

dd/ Engineering-Construction (EC) contract is a construction contract for the engineering and construction of works.

e/ Procurement-Construction (PC) contract is a construction contract for the procurement and supply of supplies and equipment according to the technological design for installation in construction works, and for the construction of works.

g/ Engineering-Procurement-Construction (EPC) contract is a construction contract for the performance of assorted jobs, ranging from engineering, procurement and supply of supplies and equipment to construction, trial operation, acceptance testing and handover of the works to the principal.

h/ Turnkey contract is a construction contract for the performance of all of the following jobs: formulation of the feasibility study report; engineering; procurement and supply of supplies and equipment; construction of the works; trial operation; acceptance testing; and handover of the works to the principal.

i/ Other construction contracts are construction contracts for the performance of other jobs in construction activities beyond the jobs covered by the contracts specified in Points a, b, c, d, dd, e, g and h of this Clause, such as insurance contracts and mine clearance contracts.

2. Based on the contract pricing method, construction contracts shall be classified in accordance with Clause 2, Article 82 of the Law on Construction and the following specific provisions:

a/ Package contract is a type of construction contract under which the contract price is determined at the time of contract conclusion and remains unchanged throughout the process of contract performance corresponding to the agreed contents and scope of work, technical requirements, product quality, implementation schedule and other contractual terms, except force majeure events, fundamental change of circumstances, change in the scope of work, or other cases agreed by the parties in accordance with law.

b/ Fixed unit price-based contract is a type of construction contract under which the unit prices for performing the jobs falling under the scope of the contract remain unchanged throughout the process of contract performance, except the case specified in Point b, Clause 2, Article 24 of this Decree, force majeure events, fundamental change of circumstances, or other cases agreed by the parties in accordance with law.

c/ Adjustable unit price-based contract is a type of construction contract under which unit prices and the contract price may be adjusted in accordance with the contractual agreements with regard to all jobs specified in the contract.

d/ Time-based contract is a type of construction contract under which the contract price is determined on the basis of unit rates for units of time, agreed hourly, daily, weekly or monthly wage as specified in the contract, and other reasonable costs as agreed in the contract.

dd/ Cost-plus-charge contract is a type of construction contract under which, at the time of contract conclusion, the parties agree that the contract price shall be determined on the basis of the direct costs necessary to perform the jobs falling under the scope of the contract, together with the contractor’s management costs, general costs and profit.

e/ Output-based contract is a type of construction contract under which, at the time of contract conclusion, the parties agree that the contract price shall be determined on the basis of specific requirements concerning the quantity and quality of output products; the amount payable under the contract shall be based on the contract performance results accepted in terms of quality and quantity of output products and other factors (if any).

g/ Percentage-based contract is a type of construction contract under which, at the time of contract conclusion, the parties agree that the contract price shall be determined as a percentage of the cost or value of the jobs to be performed.

h/ Mixed contract is a type of construction contract under which the contract price is determined by combining the contract pricing methods specified in Points a, b, c, d, dd, e and g of this Clause for different portions of jobs under the contract.

i/ Other construction contracts are construction contracts under which the contract price is agreed by the parties and does not fall into any of the cases specified in Points a, b, c, d, dd, e, g and h of this Clause.

3. In addition to the types of contracts specified in Clauses 1 and 2 of this Article, construction contracts may also be classified according to the relationships among the contracting parties and according to other criteria consistent with international practices. Based on the relationships among the contracting parties, construction contracts include:

a/ Principal contractor contract, which is a construction contract concluded between the project owner and a principal contractor;

b/ Subcontractor agreement, which is a construction contract concluded between a principal contractor and a subcontractor, including cases in which the subcontractor is designated by the project owner;

c/ Internal assignment contract, which is a contract between a principal and a contractor that belong to the same agency or organisation;

d/ Construction contract involving foreign elements, which is a construction contract under which at least one contracting party is a foreign organisation or individual.

Article 7. Contents of construction contracts; construction contract dossiers and order of priority of construction contract documents; information on construction contracts

1. The contents of construction contracts must comply with Clause 4, Article 82 of the Law on Construction. Construction contract dossiers and the order of priority of documents accompanying construction contracts must comply with Clause 5, Article 82 of the Law on Construction.

2. Information on a construction contract shall be stated in the contract, including:

a/ Type and number of the contract; name of jobs; name of the bidding package; name of the project (if any); construction location; and grounds for conclusion of the contract;

b/ Transaction names of the contracting parties; representatives of the parties; business registration addresses or transaction addresses; tax identification numbers; enterprise registration certificates (if any); account numbers; telephone numbers; fax numbers; email addresses; time and place of contract conclusion; and other relevant information;

c/ In case the contractor is a joint-name contractor, information on each member of the joint-name entity as specified in Point b of this Clause shall fully be stated, clearly identifying the lead member of the joint-name entity.

Article 8. To-be-performed jobs and work volume under construction contracts

1. The to-be-performed jobs and work volume under a construction contract are the jobs and work volume that the contractor is required to perform as agreed by the parties, in conformity with the scope of work under the contract; bidding dossier or dossier of requirements, bid dossier or dossier of proposals (if any); minutes of negotiation or contract negotiations (if any); and relevant legal documents.

2. Depending on the specific type of construction contract, the scope of work under each type of contract may include the following principal jobs:

a/ For construction consultancy contracts: consultancy on formulation of construction investment projects; surveys; construction design; verification; inspection; testing; cost management; project management; construction execution supervision; consultancy on building information modelling (BIM); green building consultancy; and other consultancy tasks related to construction activities;

b/ For construction execution contracts: execution of construction of works on the basis of design dossiers provided or approved by the principal; technical instructions, technical requirements, and applicable standards and technical regulations; supply of supplies, materials and equipment serving construction execution; installation of building equipment and technological equipment; demolition of construction works; testing and quality inspection; and certain related jobs. The scope of work under a construction execution contract may also include procurement of building equipment and preparation of construction drawing designs executed after the technical design, as agreed in the contract;

c/ For procurement contracts: procurement of supplies and technological equipment; building equipment (if any); installation of equipment in construction works (if any); provision of use instructions and trial operation; operation, training and technology transfer (if any), in accordance with technological designs;

d/ For EP contracts: preparation of designs to be executed after the basic design or FEED; and procurement and supply of supplies and technological equipment in accordance with the design and technical standards. The scope of work under an EP contract may also include procurement and supply of supplies and building equipment, installation of equipment in construction works, and construction surveys serving design activities (if any);

dd/ For EC contracts: preparation of designs to be executed after the basic design or FEED; execution of work construction and related jobs specified in Point b of this Clause; and construction surveys serving design activities (if any);

e/ For PC contracts: procurement and supply of supplies and equipment in accordance with the technological design for installation in the works; execution of work construction; and related jobs specified in Point b of this Clause;

g/ For EPC contracts: preparation of designs to be executed after the basic design or FEED; supply of supplies, materials, building equipment and technological equipment for installation in the works; construction of the works; training and instructions on operation, servicing, maintenance and repair; technology transfer; no-load and load trial operation; other jobs in accordance with the approved commentary report, basic design or FEED; and construction surveys serving design activities (if any);

h/ For turnkey contracts: formulation of the feasibility study report; surveys and design; supply of equipment and execution of work construction; training and provision of instructions on operation, servicing, maintenance and repair; technology transfer; no-load and load trial operation; handover of the works that are ready for operation to the principal; and other jobs in accordance with the approved investment policy and investment project.

Article 9. Quality and technical requirements; acceptance testing and handover of construction contract products

1. Agreements between the parties on quality and technical requirements; technical regulations, standards and technical instructions (if any); and the origin requirements applicable to construction contract products must comply with the regulations on quality management, construction execution and maintenance of construction works and other relevant regulations, and must satisfy the requirements of the bidding dossier or dossier of requirements, bid dossier or dossier of proposals (if any); minutes of negotiation (if any); and relevant legal documents.

2. Agreements between the parties on acceptance testing and handover of construction contract products:

a/ The parties shall agree in the contract on the jobs subject to acceptance testing and handover; bases for acceptance testing and handover; procedures and timing for acceptance testing and handover of products of completed jobs; personnel participating in the acceptance testing and handover; forms of acceptance testing and handover records; and requirements concerning signatories, minutes and documents used for acceptance testing and handover, which must comply with law.

The parties’ agreements must comply with the regulations on management of construction activities, quality management, construction execution and maintenance of construction works, and other relevant regulations.

b/ Contract products accepted and handed over must satisfy the quality and technical requirements and origin requirements specified in Clause 1 of this Article.

c/ For jobs that are required to be accepted before proceeding with other jobs, the contractor shall make an advance notice to the principal for acceptance in accordance with the regulations on quality management, construction execution and maintenance of construction works.

d/ Defective products (products that fail to satisfy contract requirements) shall be inspected, assessed and remedied; in case defects cannot be remedied, the products shall be rejected and replaced, unless otherwise agreed by the parties in accordance with law. The party responsible for the defects shall bear all costs related to remediation, replacement, testing and inspection (if any) and other costs associated with rectifying the defects, as well as any effects on the contract performance schedule.

Article 10. Time and schedule for performance of construction contracts

1. The effective period of a construction contract is the period from the time the construction contract takes effect to the time the parties have completed all contractual obligations, including the time for performing additional jobs and carrying out contract liquidation procedures (if any); or to the time the contract is terminated in accordance with law.

2. The time for performance of jobs under a construction contract is the period from the time the contract takes effect, or from the time of commencing the performance of jobs as agreed by the parties, to the time all jobs under the contract have been completed and accepted as agreed in the contract (including also extensions granted under the contract); but does not include the warranty period, and the period of design author supervision and contract liquidation procedures (if any). The time of performance of jobs under a construction contract shall be agreed by the parties in the construction contract. For construction contracts for bidding packages under public investment projects, the time for performance of jobs under a contract is the time for implementation of the bidding package as prescribed by the law on bidding.

3. The construction contract performance schedule is overall and detailed plans showing milestones for completion, acceptance testing and handover, as well as the timing and sequence of performance of principal jobs and products within the scope of the construction contract, in the form of a schedule table, chart or timeline or another form agreed by the parties.

4. The contractor shall prepare a construction contract performance schedule and submit it to the principal for approval for use as a basis for implementation, if so agreed by the parties.

a/ In case there are requirements concerning deadlines for completion of specific jobs, phases or products of the contract, the parties shall agree on such deadlines in the contract;

b/ For a construction contract to be performed in difference phases, in addition to the overall contract performance schedule for the entire contract, a detailed performance schedule may be prepared for each phase;

c/ For a procurement contract, the supply schedule for supplies and equipment should specify the principal milestones for handover of supplies and equipment, including the volume and types of equipment for each handover;

d/ For EC, EP, EPC and turnkey contracts, in addition to the overall contract performance schedule and detailed schedule for each phase, the contract performance schedule should specify the schedule for each type of job (formulation of the construction investment project, design, supply of supplies and equipment, and execution of work construction).

5. It is encouraged to update and monitor schedules through digital systems, project management software or digital data platforms.

Article 11. Construction contract price and scope of application

1. The price of a construction contract is the amount of money that the principal undertakes to pay to the contractor for the performance of jobs according to the requirements on safety, quality, schedule, work volume, payment terms, advance payment and other requirements as agreed in the contract. The price of a construction contract shall be determined based on the bid-winning price or the result of negotiation on the contract between the parties.

2. The parties to a construction contract shall agree in the contract on expenses (including also provisions for risks, if any) and taxes, charges and fees (if any) included or not included in the contract price; the adjusted construction contract price must suit the type of contract and form of contract price and shall be agreed upon by the parties in the contract.

3. Scope of application of the forms of contract price specified in Clause 2, Article 6 of this Decree:

a/ The form of package contract shall be commonly applied to cases in which there are sufficient conditions to clearly determine the work volume and unit prices or prices for performance of jobs as required in construction contracts in the process of organising contractor selection, negotiation, and contract conclusion and less possibilities for occurrence of changes in the work volume or price fluctuation risks regarding input costs for performance of the contracts; or cases in which the work volume and unit prices cannot yet be clearly determined, but the contracting parties are capable of managing risks and arising changes, or determining the nature and characteristics of the output products, including also EC, EP, EPC and turnkey contracts, and other types of construction contracts;

b/ The form of fixed unit price-based contract shall be commonly applied to cases in which there are sufficient conditions to clearly determine the scope of work in the process of organising contractor selection, negotiation, and contract conclusion and less possibilities for occurrence of price fluctuation risks, but the exact quantity of jobs and work volume required to be completed has not yet been determined. The contract price at the time of contract conclusion shall be based on the quantity of jobs, work volume, fixed unit prices agreed upon in the contract, and the provisions for the quantity of jobs and work volume that may arise, as determined in accordance with law;

c/ The form of adjustable unit price-based contract shall be commonly applied to cases in which there are insufficient conditions to clearly determine price fluctuation risks affecting the input costs for contract performance in the process of contractor selection, negotiation, and contract conclusion process. The contract price at the time of contract conclusion shall be based on the work volume, quantity and quality of jobs and unit prices at the time of contract conclusion, including also provisions for the quantity of jobs and work volume that may arise, and provisions for price escalation (if any). The methods of adjusting unit prices and construction contract prices, and provisions for price escalation shall be agreed upon by the parties in accordance with law;

d/ The form of time-based contract shall be commonly applied to construction consultancy services or related jobs in construction activities when it is difficult to determine the scope and duration of performing the services or jobs;

dd/ The form of cost-plus-fee contract shall be commonly applied to cases in which, in the process of contractor selection, negotiation, and contract conclusion, the parties do not yet have sufficient bases to determine the scope of work or the necessity of input factors and costs required to perform the jobs expected to be performed under the contracts. At the time of contract conclusion, the parties shall agree on the contractor’s management costs, general costs and profit, the methods for determining the direct costs and other related costs (if any) for performance of the contract. The contractor’s management costs, general costs and profit may be a fixed amount or a percentage of the actual direct costs as certified by the parties, or take other forms as agreed by the parties;

e/ The form of output-based contract shall be commonly applied to jobs or services which, at the time of contract conclusion, the parties are only able to determine the requirements on the output of the contract, while the payment shall be based on the contract performance results accepted in terms of quality, quantity and other relevant factors. Specific requirements on the quantity and quality of output products; methods of inspection, assessment and determination of the level of satisfaction of output quality requirements; payment deductions; price adjustment (if any); and other contents shall be agreed upon by the parties in the contract;

g/ The form of percentage-based contract shall be commonly applied to construction consultancy services and insurance in construction activities. For public investment projects, the form of percentage-based contract shall be applied to insurance in construction activities;

h/ The form of mixed contract shall be commonly applied to contracts under which several forms of contract price specified in Points a, b, c, d, dd, e and g of this Clause are applied to different portions of jobs within the scope of work of the contract.

Article 12. Advance payment for construction contracts

1. Advance payment for a construction contract is an interest-free amount of money paid in advance by the principal to the contractor for performance of jobs under the contract.

2. The level of advance payment, number of advance payments, time of making advance payment, advance payment guarantee and the level of recovery of advanced amounts in each time of making advance payment shall be agreed upon in the construction contract, including also cases in which the contractor is a joint-name contractor. For a joint-name contractor, the advance payment to each contractor in the joint-name entity shall be agreed upon in the construction contract or join-name agreement.

3. In addition to Clauses 1 and 2 of this Article, the advance payment for construction contracts for public investment projects and PPP projects is specified as follows:

a/ The advance payment for a construction contract shall be made after the contract takes effect and the principal has received an advance payment guarantee (in case such guarantee is required) corresponding to the value calculated in each currency as agreed upon by the parties. For a construction execution contract, there must be a site clearance plan or a site handover minutes (for the whole or part of the site) from the organisation implementing site clearance to the project owner as agreed upon in the contract;

b/ The level of advance payment, number of advance payments, time of making advance payment, advance payment guarantee and the level of recovery of advanced amounts in each time of making advance payment shall be specified in the bidding dossier, dossier of requirements, or draft construction contract sent to the contractor for use as a basis for the contractor to calculate its bid price or proposed price, and must be consistent with the capacity of balancing, arranging and allocating capital to perform the contract;

c/ For a construction contract under which the contract advance payment exceeds VND 1 billion, before the principal makes the advance payment to the contractor, the contractor shall provide the principal with a contract advance payment guarantee in an amount and currency equivalent to the contract advance payment. Advance payment guarantee is not compulsory for construction contracts with an advance payment of VND 1 billion or less, or for construction contracts performed under the self-performance method, including also those implemented by residential communities under target programmes;

d/ The contract advance payment guarantee must remain valid until the principal fully recovers the advance payment. The value of the contract advance payment guarantee shall be reduced gradually in proportion to the amount of the advance payment recovered in each time of making payment between the parties or the guarantee amount paid by the guarantor to the principal (if any);

dd/ The contractor shall use the contract advance payment for the right purposes and subjects;

e/ For a construction contract requiring the manufacture of structures or semi-finished products of high value, or the reserve of materials to ensure compliance with the construction execution plan and schedule under the concluded contract, the parties shall agree on an advance payment plan and advance payment level for such jobs (which shall not be included in the contract advance payment specified in Point g of this Clause) so as to ensure the contract performance schedule;

g/ The contract advance payment must not exceed 30% of the contract price at the time of contract conclusion (including also provisions, if any). In case a higher advanced amount is required for the contractor to make deposits or advance payments to manufacturers or suppliers of supplies and equipment according to the technological design to meet project requirements, or in other necessary cases, the investment deciders’ approval is required. For projects for which the Prime Minister is the investment decider, the competence to decide on an advance payment exceeding 30% shall rest on related ministers, heads of ministerial-level agencies, or Chairpersons of the provincial-level People’s Committees;

h/ The minimum advance payment level for consultancy contracts is 15% of the contract price, for contracts valued at more than VND 10 billion; or 20% of the contract price, for contracts valued at VND 10 billion or less;

i/ The minimum advance payment for construction execution contracts is 10% of the contract price, for contracts valued at more than VND 50 billion; 15% of the contract price, for contracts valued from VND 10 billion to VND 50 billion; or 20% of the contract price, for contracts valued at less than VND 10 billion;

k/ The minimum advance payment level for contracts on provision of supplies and equipment, EC, EP, PC and EPC contracts, turnkey contracts, and other types of construction contracts is 10% of the contract price;

l/ In case the parties agree on an advance payment higher than the minimum advance payment specified above, the portion of the contract price corresponding to the advance payment amount exceeding the minimum advance payment level shall not be entitled to price adjustment from the date the advance payment is made (including also cases of making the advance payment in multiple times);

m/ The advance amount shall be gradually recovered upon making payments, with the amount to be recovered at each time being agreed upon by the parties and specified in the contract, provided that the advance amount is fully recovered by the time the cumulative payment value (including the contract advance payment and payments for the completed work volume) reaches 80% of the concluded contract price.

Article 13. Security for performance of obligations under construction contracts

1. Security for performance of obligations under construction contracts must comply with Article 83 of the Law on Construction.

2. The measures and levels of security for performance of obligations under construction contracts for public investment projects and PPP projects are specified as follows:

a/ Security for performance of obligations under a construction contract includes contract performance security, payment security, advance payment guarantee, and warranty security;

b/ Security for performance of obligations under a construction contract shall be provided by guarantee and deposit measures and other security measures in accordance with law, with priority given to the guarantee measure.

In case of applying the escrow deposit measure or in case the principal retains amounts of money from payments as security for the contractor’s performance of its obligations under the contract, the securing party shall be entitled to any interest arisen from such escrow deposit or retained amounts;

c/ Contract performance security is not required for the cases specified in Clause 2, Article 68 of the Law on Bidding;

d/ For construction contracts under PPP projects, the proof of the principal’s sufficient financial capacity to perform the construction contract shall be provided through credit agreements or loan agreements with financial institutions; measures for securing the performance of payment obligations must comply with agreements between the parties and relevant laws;

dd/ The levels of contract performance security must be between 2% and 10% of the construction contract price; in case a contract performance security exceeding 10% is required for risk prevention purposes, the law on bidding shall apply.

The contractor shall not be refunded the contract performance security if refusing to perform the contract after the contract takes effect; or in case of delay in contract performance due to the contractor’s fault but the contractor refuses to extend the validity of the contract performance security; or in other cases of violations that are subject to recovery of the contract performance security as agreed by the parties in the contract and prescribed by law.

The principal shall refund the contract performance security to the securing party after the contractor has fulfilled obligations under the contract or has shifted to the stage of performing the warranty obligation and the principal has received warranty security, for contracts involving jobs subject to warranty under regulations;

e/ The levels of the contract advance payment guarantee must comply with Point c, Clause 3, Article 12 of this Decree;

g/ The levels of warranty security for construction works and the refund of warranty security must comply with the Government’s Decree detailing a number of contents regarding quality management, construction execution, and maintenance of construction jobs. The contractor shall only be refunded the warranty security for the contract products after the warranty period has expired and the principal has confirmed completion of the warranty.

Contractors are encouraged to commit to extending the warranty period for contract products beyond the warranty period required under bidding dossiers or dossiers of requirements. In such case, in the contract, the parties shall agree on the specific contents, scope, security measures, and other contents related to the warranty of the contract products applicable during the period extending beyond the warranty period required under the bidding dossiers or dossiers of requirements;

h/ In case the contractor is a joint-name contractor, each member of the joint-name entity shall pay to the principal a security for performance of the construction contract at the level corresponding to the part of the contract value and obligations subject to security that such member undertakes. If members of the joint-name entity have reached an agreement that the contractor leading the joint-name entity pays contract performance security, such contractor shall pay the contract performance security to the principal; and the performance of obligations by each member of the joint-name entity to the contractor leading the joint-name entity shall be agreed upon by the parties.

Article 14. General rights, obligations and responsibilities of parties to construction contracts

1. Parties to a construction contract have the rights, obligations and responsibilities as prescribed in the Law on Construction, relevant laws and as agreed upon by the parties in the contract in accordance with law.

2. The principal and the contractor shall send a written notice to the other party about rights and responsibilities of its representative for contract performance management, including also contract management consultancy (if any). When either party changes its representative for contract performance management, it shall send a written notice thereof to the other party. Particularly when the contractor changes its representative for contract performance management or key personnel, such change shall be approved by the principal, if the parties have reached such agreement.

3. In addition to those specified in Clauses 1 and 2 of this Article, parties to construction contracts have specific rights, obligations and responsibilities specified in Articles 15 and 16 of this Decree, corresponding to their jobs under the construction contracts.

Article 15. Rights, obligations and responsibilities of the principal

1. Rights of the principal

a/ To request the contractor to hand over dossiers and materials related to contract products as agreed upon in the concluded contract;

b/ To reject the contractor’s proposals and recommendations that are unreasonable or inconsistent with the agreements in the contract within the time limit agreed upon in the contract and prescribed by law;

c/ To examine the quality and schedule of job performance within the scope of the contract, the contractor’s facilities for manufacturing equipment and semi-finished structures (if any), without hindering the contractor’s normal operations;

d/ To refuse to accept and receive products that do not conform to agreements in the contract;

dd/ To own and use the consultancy products as agreed upon in the contract.

2. Obligations and responsibilities of the principal

a/ To keep confidential information relating to the contract as stated in the construction contract or prescribed by law;

b/ To consider and approve the list of qualified subcontractors not included in the construction contract as requested by the contractor;

c/ To timely provide related dossiers, documents, equipment and machinery, and supplies as agreed upon in the contract (if any) and prescribed by relevant laws; to settle the contractor’s proposals within its competence in the process of contract performance within the time limit as agreed upon by the parties in the contract;

d/ To ensure the conditions for commencement of construction under regulations; to protect copyright with regard to copyrighted consultancy products (if any), and organise acceptance testing and handover of construction contract products;

dd/ To pay the contractor late-payment interests under Clause 5, Article 28 of this Decree and as agreed upon in the contract;

e/ To coordinate with the contractor in the training, technology transfer, and provision of  installation, use and operation instructions;

g/ For EPC, EC and EP contracts established through negotiation and selection of EPC, EC and EP contractors based on approved basic design or FEED: To timely accept, appraise and approve, or submit to the competent agency for timely appraisal and approval of, construction designs implemented after the basic design or FEED as agreed upon in the contract and prescribed in the Government’s Decree detailing a number of articles of the Law on Construction regarding the management of construction activities;

h/ For turnkey contracts: In addition to the obligations and responsibilities specified in Points a, b, c, d, dd and e of this Clause, the principal also has the obligation and responsibility to accept the feasibility study report and the techno-economic report for appraisal and approval by the competent person, or to appraise and approve such reports within its competence.

Article 16. Rights, obligations and responsibilities of the contractor

1. Rights of the contractor

a/ To propose to the principal the work volume arising outside the contract; to change construction execution measures after obtaining the principal’s consent in order to speed up the progress, ensure quality, safety and efficiency of construction works on the basis of the concluded contract price;

b/ To refuse to perform the contract if the principal has yet to meet the conditions according to the concluded contract and relevant laws;

c/ To propose changes in the conditions for provision of consultancy services for the benefit of the principal or upon detecting factors affecting the quality of consultancy products;

d/ To request the principal to conduct acceptance testing and receive construction contract products;

dd/ To request the principal to pay loan interest due to late payment under Clause 5, Article 28 of this Decree and as agreed upon in the contract.

2. Obligations and responsibilities of the contractor

a/ To keep confidential information relating to the contract as stated in the construction contract or prescribed by law;

b/ To preserve and hand over to the principal the documents and working facilities (if any) provided by the latter under the contract upon completion of jobs; to immediately send to the principal a written notice of the insufficiency of provided information and documents and poor quality of working facilities for job completion;

c/ To provide labour, materials, construction execution machinery and equipment, and other related material conditions in sufficient quantities and of types under the contract; and the construction drawing design (in case the contractor formulates construction drawing designs) for the performance of the jobs under the concluded contract;

d/ To receive and manage construction sites and protect the alignment, elevation and borderline markers of construction works; to keep construction execution daily logs; to coordinate with other contractors on construction sites;

dd/ To move its supplies, machinery, equipment and other assets out of construction sites within the specified time limit after construction works are accepted and handed over or when the contract is terminated under Article 27 of this Decree, unless otherwise agreed in the contract; to restore the ground area as agreed upon in the contract;

e/ To provide sufficient information and technical documents and hand over technological equipment, ensuring requirements on the quantity, quality, type, origin, location and time, as well as requirements on packaging, transportation, storage and preservation under the contract; to compensate for damage, losses, and costs arising from its own fault, unless otherwise agreed upon;

g/ To ensure that the technological equipment does not infringe upon intellectual property rights in accordance with law and to be held responsible for any disputes arising, except cases of violations arising from the design or data provided by the principal; the parties are obligated to promptly notify each other of third-party complaints related to intellectual property rights and shall be responsible for failing to promptly notify the other party of complaints filed by a third party about intellectual property rights to the technological equipment after it knows or must have known these complaints;

h/ To notify the principal in advance, within a specified period as agreed upon by the parties, of the time of equipment handover, which must not be less than 21 days for construction contracts under public investment projects and PPP projects;

i/ To guide the installation, operation, maintenance and training (if agreed upon) and coordinate in trial operation of technological equipment;

k/ For EPC, EC and EP contracts established through negotiation and selection of EPC, EC and EP contractors based on approved basic designs or FEED: To draw up construction designs implemented after the basic designs or FEED for submission to the principal or competent person for appraisal and approval in accordance with law; for EPC, EC and EP contracts under public investment projects or PPP projects, construction designs do not include construction cost estimates for works and work items within the scope of the EPC, EC and EP contracts;

l/ For turnkey contracts: In addition to the obligations and responsibilities specified in Points a, b, c, d, dd, e, g, h and i of this Clause, the contractor also has the obligation and responsibility to formulate the feasibility study report and techno-economic report, and take part in defending the project together with the principal before the competent person, and finalise the contract products as requested by the principal as agreed upon in the contract.

Article 17. Settlement of disputes over construction contracts

1. The selection of methods for settling disputes over construction contracts specified in Clause 5, Article 86 of the Law on Construction shall be agreed upon by the parties. When settling a dispute, the parties shall respect contractual agreements and commitments made in the course of contract performance, ensuring objectivity, equality and cooperation.

2. During the dispute settlement process, the parties shall continue to fulfill their contractual obligations for jobs that are not affected by the dispute; not interrupt the contract performance, except cases of force majeure events or being requested by a competent agency, or in case the performance of the construction contract is suspended under Points a and b, Clause 2, Article 26 of this Decree.

3. The application of the dispute settlement model according to international practices (below referred to as the dispute settlement committee) specified in Point b, Clause 5, Article 86 of the Law on Construction is as follows:

a/ The parties shall reach an agreement in the contract on the specific time of establishment of the dispute settlement committee (which may be formed immediately after the contract is signed and operate permanently in the course of contract performance, or after a dispute arises); the number of, and requirement on standards, qualifications, and experience applicable to, members of the dispute settlement committee in conformity with the requirements of the contract, the nature and content of jobs under the construction contract; the binding nature of the decision or recommendation on dispute settlement; the process of selecting members of the dispute settlement committee and the order and procedures for subsequent settlement when either party disagrees with the decision or recommendation on dispute settlement;

b/ Members selected to participate in the dispute settlement committee must ensure objectivity and independence, and avoid conflict of interest with relevant parties;

c/ Expenses to pay remuneration to members of the dispute settlement committee and other related expenses shall be borne equally by each party, unless otherwise agreed upon by the parties.

Article 18. Risks, force majeure events and fundamentally changed circumstances

1. The parties shall agree on the specific responsibilities of each party regarding risk management, handling and remediation for foreseeable risks (including risks related to price fluctuations, construction execution conditions, mobilisation of machinery and equipment, work volume-related risks, and other risks) or unforeseen risks at the time of contract conclusion that may occur in the course of contract performance, causing damage, incurring costs, prolonging the contract performance time, or affecting the fulfillment of obligations of the parties to the contract.

2. Force majeure events and fundamentally changed circumstances must comply with Article 13 of the Law on Construction. In the contract, the parties shall agree on the procedures, processes, and responsibilities of each party in handling force majeure events or fundamentally changed circumstances upon their occurrence, such as written notification; assessment of the impact on the performance of contractual obligations; proposals for amendment, suspension, termination, payment, and liquidation of the construction contract (if any).

3. In case of extraordinary price fluctuations that fall beyond the parties’ ability to forecast at the time of contract conclusion and may cause serious damage to either party and seriously affect the performance of the concluded contract:

a/ Based on the nature and content of the jobs, and specific conditions of the contract (time of contract conclusion; work volume already performed; work volume to be furthered completed; the scope and volume of work that are affected, and measures taken by the affected party), the parties shall analyse and assess the impact of price fluctuations compared to the time of contract conclusion, the damage of each party in case of continued implementation or termination of the contract, and refer to Article 13 of the Law on Construction for considering and deciding on contract modification under Clauses 2 and 3, Article 84 of the Law on Construction, ensuring the harmony of interests and sharing of risks between the parties;

b/ The method, content and procedures for amending construction contracts must comply with Section 2 of this Decree.

4. In the course of performing a construction contract, if either party is unable to perform or fails to fully perform its obligations under the contract due to a force majeure event or fundamentally changed circumstance, it shall notify the other party in writing and propose a handling plan to ensure prevention, mitigation and handling of arising risks.

Article 19. Subcontractor agreements

1. One principal contractor contract may have multiple subcontractor agreements; the use of subcontractors shall be agreed upon in the contract. When entering into a subcontractor agreement, the principal contractor shall comply with the following provisions:

a/ To enter into the subcontractor agreement in conformity with capabilities of subcontractors;

b/ The principal contractor shall be responsible before the project owner for the contract performance progress, quality, occupational safety, environmental protection, its own mistakes and other jobs performed by subcontractors;

c/ For a construction contract under a public investment project, the assignment of subcontractors to perform one or several of jobs under the scope of work the contract must comply with the law on bidding; in case of using a subcontractor not included in the list of subcontractors accompanying the contract, a written approval from the project owner is required.

2. Subcontractors designated by the project owner (if any)

a/ Subcontractors designated by the project owner are those to be hired by the principal contractor as designated by the project owner when the principal contractor, after being requested by the project owner, fails to meet the requirements on safety, quality and performance progress as concluded in the contract;

b/ For a construction contract that has subcontractors designated by the project owner, the parties to the contract shall agree on, and state in the contract, specific circumstances in which the project owner may designate subcontractors;

c/ The principal contractor has the right to reject a subcontractor designated by the project owner if the designation does not fall in the cases agreed upon by the parties in the contract and the jobs performed by the principal contractor and subcontractors still conform to the contract or when there are sufficient grounds to prove that the subcontractor designated by the project owner fails to meet the contract’s requirements;

d/ For a construction contract under a public investment project or PPP project, the designation of subcontractors by the project owner must not lead to a change in the contract price agreed upon with the principal contractor. The project owner may designate subcontractors in the cases in which the designation of subcontractors is permitted under the contract; the designation of subcontractors must bring about efficiency for the project and avoid waste.

3. The project owner may make payment directly to subcontractors on the basis of the proposal of the principal contractor and agreements under the contract.

4. Subcontractors have all rights, obligations and responsibilities of the contractor as specified in this Decree and other relevant laws.

Article 20. Insurance and warranty under construction contracts

1. The purchase of compulsory insurance in construction activities must comply with Article 10 of the Law on Construction and the Decree specifying the insurance conditions, premium rates, and minimum insurance payouts for compulsory insurance. In the contract, the parties shall agree on the responsibilities of each party in purchasing insurance.

2. The parties shall agree on the conditions and duration of warranty for the contract products; level of the warranty security; form of the warranty security; and refund of the warranty security after the warranty period ends. The contractor shall provide warranty services as agreed upon in the contract and the Government’s Decree specifying a number of provisions on quality management, construction execution, and maintenance of construction works. In case the contractor fails to provide warranty services within the agreed time limits or provides services but fails to meet the required quality and schedule, the principal has the right to use the warranty security to hire another organisation or individual to provide the warranty service, or to provide the warranty service itself if it meets the required capacity conditions.

3. The measures and levels of warranty security for construction contracts under public investment projects and PPP projects must comply with Clause 2, Article 13 of this Decree.

Article 21. Complaints during construction contract performance

1. The filing of a complaint during construction contract performance in this Decree is understood that when either party detects that the other party performs improperly or fails to perform the obligations as agreed in the contract, it has the right to request the other party to comply with the provisions of the concluded contract. Then, the detecting party has the right to file a complaint against the other party about this matter.

2. When either party files a complaint against the other party, it shall present specific bases or pieces of evidence to clarify the complaint.

3. Complaints filed by either party shall be sent to the transaction or information exchange address as agreed by the parties in the contract.

4. In addition to Clauses 1, 2 and 3 of this Article, for a construction contract under a public investment project or PPP project, within 7 days after receiving a complaint, the complaint recipient shall reply in writing to the complainant, clearly stating whether or not it accepts the content of the complaint; in case of refusing to accept the complaint, it shall clearly state the reason.

5. Complaints not settled by the parties to the contract shall be settled according to the contract dispute settlement procedures agreed upon by the parties under Article 17 of this Decree.

Section 2

METHODS, CONTENTS AND PROCEDURES FOR MODIFYING CONSTRUCTION CONTRACTS

Article 22. Contents, methods and procedures for modifying construction contracts

1. Contract modification is the contractual parties agreeing to adjust or supplement one or more of the contents of a concluded contract. Contract modification may be carried out in the cases specified in Clause 2, Article 84 of the Law on Construction. The modification of a construction contract as specified in Clause 1, Article 84 of the Law on Construction may cover one or more of the following contents:

a/ Adjustment of job volume, contract performance schedule and duration, and contract unit price and price.

b/ Change or adjustment of construction design;

c/ Change or adjustment of the requirements on the content, scope of work, technical specifications, product quality, or advance payment or payment terms; security for the performance of contractual obligations, insurance and warranty for products under the construction contract;

d/ Amendment of the contract type, contract price form, price adjustment method, data sources for contract price adjustment and other relevant contents;

dd/ Other contents of the contract as agreed upon by the parties in accordance with law.

2. The parties shall specifically agree on the content and scope of and cases eligible for contract modification, and the order and procedures for contract modification. The adjustment of job volume, contract unit price and price, and contract performance duration and schedule is specified in Articles 23, 24 and 25 of this Decree.

3. The method and formula for calculating contract unit price and price adjustments shall be agreed upon by the parties in the contract in accordance with law, or the parties may apply the adjustment formula widely used in international practices, as appropriate to the nature, content and scope of work, contract price type, payment currency and specific provisions on risk management for cost elements under the construction contract.

4. For construction contracts under public investment projects or PPP projects, the modification thereof must comply with Clause 3, Article 84 of the Law on Construction. Procedures for modifying a construction contract are as follows:

a/ The party requesting contract modification shall send to the other party to-be-modified contents and accompanying dossiers and documents (if any), clearly stating the grounds and bases for modification, and assessing the impacts of contract modification on contract performance duration and schedule, contract price, product quality under the contract and other necessary contents;

b/ Within 7 working days, the party receiving the contract modification request shall respond to the requesting party; in case of disagreeing with the contract modification request, it shall notify such to the other party in writing, clearly stating the reason;

c/ The parties shall negotiate the to-be-modified contents and conclude a contract modification document as a basis for the implementation. If the negotiation fails, the principal shall organise the performance of such jobs in accordance with the law on bidding and relevant laws;

d/ If the contract modification requires adjustment of investment policy, the feasibility study report, construction design implemented after being approved, construction investment costs (total construction investment, construction estimates, bidding package estimates, etc.), construction survey task or plan, design or supervision task, or other relevant contents, the principal shall adjust such contents in accordance with law before concluding the contract modification document.

Article 23. Adjustment of volume or jobs under a construction contract

1. The contractual parties shall specifically agree on cases eligible for adjustment of volume or jobs and the scope, order and procedures for such adjustment.

2. For construction contracts under public investment projects or PPP projects, the adjustment of the volume or jobs under such a contract is as follows:

a/ For a package contract, the volume and jobs under the contract may be adjusted in case a reasonable increase or decrease in volume and job arises from the adjustment of the scope of work under the contract at the request of the principal or at the proposal of the contractor approved by the principal, or in case of a force majeure event or a fundamental change in the circumstances in which the contract is performed as specified in Clauses 1 and 2, Article 13 of the Law on Construction, which affects the contract performance;

b/ For a fixed unit price- and adjustable unit price-based contract: The volume and jobs for which unit prices are stated in the contract shall be determined according to the actually completed volume (which may be higher or lower than the volume stated in the contract) that have undergone acceptance testing. If wishing to add reasonable volume and jobs for which no unit prices are stated in the contract, the parties shall agree, calculate and add them to the contract. If the parties cannot reach agreement, the performance of the additional volume and jobs must comply with law; for construction contracts under public investment projects or PPP projects, the selection of contractors to carry out additional volume and jobs must comply with the law on bidding;

c/ In case the adjustment of volume or jobs among members of a joint-name entity of contractors does not change the construction contract price, the principal shall make decision on the basis of reaching agreement or consensus among members of the joint-name entity and the capacity and experience of each member, ensuring safety, quality, efficiency, and contract performance duration and schedule.

3. For reasonable additional volume and jobs, the contractual parties shall reach agreement or consensus on unit prices or the principles and methods for determining and adjusting unit prices under Article 24 of this Decree, as a basis for contract modification before carrying out such additional volume and jobs. For construction contracts under public investment projects or PPP projects, if the parties cannot reach agreement, the selection of contractors to carry out the additional volume and jobs must comply with the law on bidding.

Article 24. Adjustment of unit prices and prices of a construction contract

1. The contractual parties shall specifically agree on cases eligible for adjustment of unit prices or prices of the construction contract under Clauses 2 and 3, Article 84 of the Law on Construction. The method for adjusting unit prices and prices of the construction contract must be appropriate to the nature of jobs, contract price type and payment currency and shall be agreed upon by the parties.

2. For construction contracts under public investment projects or PPP projects, in addition to complying with Clause 1 of this Article, the adjustment of the unit prices of jobs under a construction contract and the adjustment of the contract price must comply with Clause 3, Article 84 of the Law on Construction and the following provisions:

a/ The adjustment of the unit prices of jobs under a construction contract shall be applied to the job volume for which, at the time of contract conclusion, the parties agreed that the unit prices could be adjusted;

b/ In case the actually performed job volume increases or decreases by more than 20% of the job volume stated in the contract and such increase or decrease results in a change of more than 0.25% of the contract price and 1% of the unit price for performing such job, the parties shall agree on a new unit price in adherence to the principles agreed in the contract for such volume for making payment. The new unit price shall apply to the actually performed job volume exceeding 120% of the volume stated in the contract; in case the actually performed job volume decreases by more than 20% of the job volume stated in the contract, the new unit price shall apply to the entire actually completed job volume that has undergone acceptance testing;

c/ In case the actually performed job volume increases or decreases by 20% or less of the job volume stated in the contract, the unit price stated in the contract, including the unit price adjusted as agreed in the contract (if any), shall be applied for making payment;

d/ In case no unit price is stated in the contract for the additional job volume, the parties shall agree on a new unit price in adherence to the principles agreed in the contract regarding unit prices for additional job volume not yet included in the contract for making payment;

dd/ The adjustment of unit prices and contract prices shall be carried out by using the direct clearing method or the price adjustment coefficient (Pn)-based method as provided in the Appendix to this Decree.

For a specific construction contract, it is allowed to combine the direct clearing method and the price adjustment coefficient (Pn)-based method. Pn may be applied to the whole contract or to a work item; a group or type of activities; or cost elements. In case Pn is not applied to the whole contract, the parties shall agree on a formula for determining Pn for a specific work item, group or type of activities, or cost elements;

e/ Price or price index information sources and the method of contract price adjustment must be appropriate to the content and nature of the jobs, cost structure and type of contract price, and shall be agreed upon by the parties and specifically stated in the contract. In case sources of databases and information on prices or construction price indices announced by the Ministry of Construction or provincial-level People’s Committees are inappropriate or unavailable, the principal shall organise the determination of prices and construction price indices in accordance with the regulations on management of construction investment costs, or refer to price or price index information sources issued or announced by the Ministry of Finance or other competent agencies or units.

For cost items arising overseas, the parties may agree to use databases and information on prices or price indices issued or announced by competent agencies or organisations in the places where the costs arise;

g/ A contract modification document is not required to be concluded for management and payment of the adjusted price value already agreed upon by the parties in the contract.

Article 25. Adjustment of construction contract performance duration and schedule

1. The contractual parties shall specifically agree on cases eligible for adjustment of performance duration and schedule, and deadlines for completion of specific jobs and products under the contract, and on the responsibilities of each party for damage caused by extension of such duration, schedule and deadlines.

2. For construction contracts under public investment projects or PPP projects, in case the adjustment of performance duration or schedule of a contract results in the prolongation of the project implementation duration, the project owner shall report such to the investment decision-maker for considering and deciding on adjustment of the project implementation duration before the parties agree on adjustment of the contract performance duration and schedule.

Section 3

SUSPENSION AND TERMINATION OF CONSTRUCTION CONTRACTS

Article 26. Suspension of construction contracts

1. The suspension of construction contract performance must comply with Clauses 1, 3 and 4, Article 85 of the Law on Construction.

2. In addition to complying with Clause 1 of this Article, the suspension of construction contracts under public investment projects or PPP projects is as follows:

a/ The contractor may suspend the construction contract performance in case the principal fails to make full payment as agreed upon by the parties for the payment period beyond 28 days from the payment deadline specified in Point 1, Clause 4, Article 28 of this Decree, unless otherwise agreed upon by the parties;

b/ Either party may suspend the contract performance when the other party fails to fulfil its obligation to provide security for the performance of obligations under the construction contract in accordance with Article 83 of the Law on Construction and Article 13 of this Decree;

c/ The party suspending performance of jobs under the contract shall notify such in writing to the other party, clearly stating the reason for the suspension. The period for notification shall be agreed in the construction contract but must not exceed 28 days, except in force majeure events affecting the contract performance. The parties shall negotiate to continue implementing the agreements reached in the concluded contract. In case the party suspending the contract performance fails to make a notice of the suspension or the reason for the suspension does not comply with the contract, it shall pay compensation to the other party under Clause 2, Article 86 of the Law on Construction.

Article 27. Termination of construction contracts

1. The termination of construction contracts must comply with Clauses 2, 3 and 4, Article 85 of the Law on Construction.

2. Serious breaches of contractual obligations as specified in the Civil Code which entitle the aggrieved party to cancel a construction contract or unilaterally terminate performance of a construction contract include the following cases:

a/ The contractor or the principal establishes or conducts a transaction to transfer the construction contract to another individual or organisation without the consent of the other party;

b/ The contractor refuses to perform jobs under the contract or fails to perform jobs under the contract for 56 consecutive days, seriously affecting the contract performance schedule and the project implementation duration, unless otherwise agreed upon by the parties;

c/ Jobs under the contract have been suspended for more than 56 consecutive days due to the principal’s fault without a plausible reason;

d/ The principal fails to make payment to the contractor after 56 days from the payment deadline as agreed in the contract, unless otherwise agreed upon by the parties;

dd/ Other breaches which, as agreed upon by the parties or prescribed by law, constitute grounds for cancellation of the construction contract or unilateral termination of the contract performance.

3. In case there is no grounds for contract termination, the aggrieved party may not unilaterally terminate performance of or cancel the contract, and in case the parties do not otherwise agree, but a contractual party arbitrarily fails to perform the contract, such failure shall be considered breach of obligation and that party shall bear civil liability, including the liability to continue fulfilling obligations in accordance with the Civil Code and relevant laws.

4. In case the principal or the contractor goes bankrupt or is dissolved, the parties shall exercise rights and perform obligations as agreed in accordance with law or under the decision of the court competent to settle the bankruptcy case or of the agency competent to settle the dissolution case.

5. The notification time limit specified in Clause 3, Article 85 of the Law on Construction is 28 days, unless otherwise agreed upon by the parties. The notice must clearly state the reason, basis and grounds for contract termination. In case the party terminating the contract fails to make a notice, thereby causing damage to the other party, it shall pay compensation to the other party.

6. The parties shall agree in the construction contract on the period for removing all supplies, personnel, machinery, equipment and other assets under the contractor’s ownership from the construction site from the time the contract is terminated. In case the parties cannot reach agreement, the principal shall decide on the period for contractor to remove all supplies, personnel, machinery, equipment and other assets under its/his/her ownership from the construction site. After that period, if the contractor has yet to carry out such removal, the principal shall apply the Civil Code’s provisions concerning the disposal of assets dropped or abandoned by other persons.

7. The construction contract shall no longer be effective from the time it is terminated and the parties shall complete the procedures for contract liquidation within the period as agreed in the contract which, however, must not exceed 56 days from the date of notification of contract termination, unless otherwise agreed upon by the parties. Particularly for construction contracts under public investment projects or PPP projects, the liquidation period must comply with Point b, Clause 3, Article 31 of this Decree.

After the above period, if either party fails to carry out the contract liquidation, unilateral liquidation of the contract must comply with Clause 1, Article 31 of this Decree.

Section 4

PAYMENT, ACCOUNT-FINALISATION AND LIQUIDATION OF CONSTRUCTION CONTRACTS

Article 28. Payment of construction contracts

The payment of a construction contract must comply with Clause 2, Article 87 of the Law on Construction and the following provisions:

1. The form of payment shall be agreed upon by the parties in the contract, ensuring compliance with relevant laws.

2. The currency used for payment must comply with Point c, Clause 2, Article 87 of the Law on Construction. In case the parties agree on payment to be made in different currencies, it is required to specify the portion of the contract price corresponding to each currency in conformity with the bidding dossier or dossier of requirements, the bid dossier or dossier of proposals, and records of negotiations (if any).

3. For a joint-name entity of contractors, the payment to the contractors shall be made as agreed upon by the parties in the construction contract or joint-name agreement.

4. In addition to complying with Clauses 1, 2 and 3 of this Article, the payment of a construction contract under a public investment project or PPP project is as follows:

a/ The number of payments, stages of payment and time of payment shall be agreed upon by the parties in conformity with the jobs of the contract and contract performance schedule. When payment is made under the agreement in the contract, the parties are not required to sign contract annexes, except the case of adding jobs to the contract.

b/ If, by the payment deadline, the parties fail to have sufficient grounds for determining the payment value (having insufficient data for adjustment of unit price or contract price; or having insufficient time for determining product quality), the payment value may be temporarily determined on the basis of the unit price and contract price applicable at the time of contract conclusion; when there are sufficient conditions for determining the payment value, the principal shall make payment to the contractor under Clause 4 of this Article;

c/ For a package contract: Payment shall be made in percentage of the contract price or prices of works or work items or volume of jobs corresponding to the payment stages as agreed upon by the parties in the contract. Upon payment, no certification of specific completed volume is required, except cases in which an additional volume arises outside the scope of the contract.

d/ For a fixed unit price- and adjustable unit price-based contract: Payment shall be made on the basis of the actually completed job volume (including increased or decreased volume, if any) that has undergone acceptance testing for each payment, and the unit price specified in the contract or the adjusted unit price as agreed in the contract;

dd/ For a time-based contract, payment shall be made as follows: Remuneration for experts shall be determined by multiplying the experts’ pay rate and related expenses as agreed by the parties in the contract by the accepted actual working time (on a monthly, weekly, daily or hourly basis). Non-remuneration expenses for experts shall be paid by the method stated in the contract;

e/ For a cost-plus-charge contract: Payment shall be made on the basis of actual costs determined by the method agreed upon by the parties in the contract for contract performance, plus the contractor’s profit as agreed in the contract;

g/ For an output-based contract: The payment amount shall be determined on the basis of the actually accepted value corresponding to the stage of payment agreed upon by the parties in the contract, plus or minus any increase or decrease in the payment value stated in the contract on the basis of outputs;

h/ For a percentage-based contract: The payment value shall be determined by multiplying the percentage specified in the contract or the percentage modified under the contract (if any) by the value of the accepted job (or by the value of the work, for an insurance contract);

i/ For a combined price-based contract: Payment shall be made under the provisions on construction contract payment of Points c, d, dd, e, g and h of this Clause;

k/ Payment for additional volume (outside the scope of the contract) for which no unit price is specified in the contract shall be made under agreements in the contract or additional agreements reached by the parties before performance, ensuring compliance with relevant laws;

l/ The time limit for payment is 14 working days after the principal receives a complete and valid dossier for payment as agreed in the contract, except the case specified in Point m of this Clause;

m/ For construction contracts under construction investment projects using ODA capital or loans of foreign credit institutions, payment time limits must comply with relevant treaties. When negotiating about the payment time limit, the parties shall base themselves on the relevant treaty and investment capital payment procedures specified by law to make appropriate agreements.

5. The principal shall make full and timely payment to the contractor as agreed in the contract. In case the principal makes late payment, it shall pay interest on the late-paid amount corresponding to the period of late payment. The late-payment interest rate shall be agreed upon by the parties in the contract; if no agreement is reached, the late-payment interest rate shall be determined according to the overdue interest rate announced by the commercial bank where the contractor opens its payment account, corresponding to the respective periods of late payment.

Article 29. Payment dossiers for construction contracts

1. The contractor shall prepare a payment dossier for the construction contract in conformity with contract type, contract price and agreements in the contract (including also forms, if any) and shall be certified by the representative of the principal or the representative of consultants (if any) and the representative of the contractor. The components of the payment dossier (including forms, if any) shall be agreed upon by the parties corresponding to the type of construction contract.

For construction contracts under public investment projects or PPP projects, the components of a payment dossier are specified in Clauses 2 thru 12 of this Article.

2. Components of a payment dossier for a package contract:

a/ A record of acceptance testing of the completed job volume in the payment period; this record is the certification of the completion of a work or work item or job volume within the scope of work to be performed under the contract (within the scope of work to be performed according to design, for construction execution contracts, or within the scope of consulting tasks to be performed, for consultancy contracts) without requiring certification of the specific completed volume;

b/ A table of calculation of the value of additional jobs (if any) outside the scope of the concluded contract;

c/ The contractor’s payment request, which must indicate the value of the completed job volume under the contract and value of additional job volume (if any), the advance amount reduced, and the value requested to be paid after clearing these amounts.

3. Components of a payment dossier for a fixed unit price-based contract:

a/ A written record of acceptance-testing of the actually completed job volume (which may be higher or lower than that specified in the contract) in the payment period;

b/ A table of calculation of values of jobs for which no unit prices are specified in the contract (if any), showing the volume and unit price for these jobs;

c/ The contractor’s payment request, which must indicate the value of the completed job volume under the contract, value of additional job volumes (if any), the advance amount reduced, and the value requested to be paid in the period after clearing these amounts.

4. Components of a payment dossier for an adjustable unit price-based contract:

a/ A written record of acceptance testing of the actually completed job volume (which may be higher or lower than that specified in the contract) in the payment period;

b/ A table of calculation of unit price, adjusted price (or unit price, payment price) as agreed in the contract, table of calculation of the values for jobs for which no unit price is specified in the contract (if any), showing volume and unit price for these jobs;

c/ The contractor’s payment request, which must indicate the value of the completed job volume under the contract, values of additional job volume (if any), the advance amount reduced, amounts subject to subtraction under the contract, and value requested to be paid in the period after these amounts are cleared.

5. Components of a payment dossier for a time-based contract:

a/ A written record of acceptance testing of the actual working time or a timesheet (on a monthly, weekly, daily or hourly basis) corresponding to the result of jobs in the payment period. In case it is necessary to add experts to perform additional jobs during the contract performance period while the rate of remuneration for those experts has not yet been specified in the contract, the parties shall agree on the rate of remuneration before the addition, ensuring compliance with relevant laws. In this case, the payment dossier must comprise a sheet for calculating values of additional jobs (if any) outside the scope of work stated in the contract;

b/ The contractor’s payment request, which must indicate the value of the completed job volume under the contract, values of additional jobs (if any), advance amount reduced, and the value requested to be paid in the period after these amounts are cleared.

6. For a construction contract involving equipment supply, the completed job volume may be determined based on invoices, documents, bills of lading, written records of acceptance testing and handover of equipment, and other relevant documents.

7. For a construction contract involving consulting jobs for which it is hard to determine the completed job volume (the completed job volume is only relative), the completed job volume shall be determined based on dossiers, documents or products completed by the contractor and certified by the principal in each payment period as agreed in the contract.

8. Components of a payment dossier for a cost-plus-fee contract:

a/ A written record of acceptance testing of the actually completed job volume;

b/ A table for calculating the actual direct costs certified by the parties and the value of management costs, general costs and the contractor’s profit as agreed in the contract;

c/ The contractor’s payment request, which must indicate the value of the actual direct costs for completing the jobs under the contract, advance amount reduced, and payment value requested to be paid in the period after these amounts are cleared.

9. Components of a payment dossier for an output-based contract:

a/ A written record of acceptance testing of the actually completed job volume; such record shall be determined on the basis of dossiers, documents or products completed by the contractor and certified by the principal as required in the contract;

b/ The contractor’s payment request, which must indicate the value of the output-based jobs completed under the contract, the adjusted value (if any), advance amount reduced, and value requested to be paid after these amounts are cleared.

10. Components of a payment dossier for a percentage-based contract:

a/ A written record of acceptance testing of the completed job volume (which may be higher or lower than that specified in the contract) in the payment period; such record shall be determined on the basis of dossiers, documents or products completed by the contractor and certified by the principal corresponding to the payment stages (instalments) as agreed upon by the parties in the contract;

b/ A table for calculating the value of additional jobs (if any) outside the scope of work stated in the contract;

c/ The contractor’s payment request, which must indicate the value of completed job volume accepted under the contract, value of additional job volume (if any), advance amount reduced, and value requested to be paid after these amounts are cleared, certified by the principal’s representative or the contractor’s representative.

11. For a combined price-based contract, components of the payment dossier must comply with the corresponding provisions of Clauses 2 thru 10 of this Article.

12. For provisional payment under Point b, Clause 4, Article 28 of this Decree, the principal shall, on a case-by-case basis, decide on a dossier for provisional payment, ensuring the that documents that have yet to satisfy the conditions specified in the contract may only be temporarily certified. For documents that already satisfy the conditions for certification, the payment dossier must comprise all required components as agreed in the contract and those specified in Clauses 2 thru 11 of this Article.

13. In addition to the documents specified in Clauses 2 thru 12 of this Article, for construction contracts using ODA capital or foreign concessional loans of donors, a payment dossier must also comply with the international agreements and treaties concerning ODA capital or foreign concessional loans concluded between the Government of Vietnam and donors, and with the Government of Vietnam’s regulation on the management and use of ODA capital and foreign concessional loans.

14. The principal and agencies, organisations and individuals involved in the contract payment may not impose payment dossier requirements that are contrary to agreements in the contract and to this Decree for the purpose of obstructing payment as agreed in the contract.

Article 30. Account-finalisation of construction contracts

Account-finalisation of construction contracts must comply with Clauses 1, 3 and 5, Article 87 of the Law on Construction and the following provisions:

1. A dossier for account-finalisation of a construction contract shall be prepared by the contractor in conformity with the construction contract type, contract price, and agreements in the contract (including forms, if any), and shall be certified by the principal’s representative or consultants’ representative (if any) and the contractor’s representative. In case of unilateral account-finalisation of a contract under Clauses 1 and 5, Article 87 of the Law on Construction, the party wishing for the unilateral account-finalisation shall prepare a dossier for account-finalisation of the contract; the components of such dossier must comply with the agreements in the contract and this Decree.

The components of a dossier for account-finalisation of a construction contract and the time limit for account-finalisation of a construction contract under a public investment project or PPP project are specified in Clauses 2 and 3 of this Article.

2. A dossier for account-finalisation of a construction contract must comprise:

a/ A written record of acceptance testing of all jobs within the contract’s scope and additional jobs outside the contract’s scope;

b/ A table for calculating the value of account-finalisation of the contract (known as A-B account-finalisation) showing the value of the completed job volume under the contract; value of additional job volume (if any) outside the signed contract’s scope of work, paid or temporarily paid value and the remaining value to be paid by the principal to the contractor;

c/ As-built documents, construction execution logs, for a contract involving construction execution jobs;

d/ Other documents as agreed in the contract.

3. The time limit for account-finalisation of a construction contract is 60 days from the date on which all contractual jobs have been completed and accepted as agreed in the contract. For a large-scale or complex construction contract, this time limit may be extended but must not exceed 120 days.

4. For joint-name contractors, account-finalisation of the value of the portion of the contract corresponding to the scope of work of each contractor in the joint-name entity shall be agreed upon by the parties in the construction contract.

Article 31. Liquidation of construction contracts

1. Liquidation of construction contracts must comply with Clauses 1, 4 and 5, Article 87 of the Law on Construction. For the case specified in Clause 5, Article 87 of the Law on Construction, a contract shall be liquidated by the party unilaterally wishing for the liquidation as agreed in the contract.

2. A construction contract shall be liquidated in the following cases:

a/ The parties have fulfilled their obligations under the contract;

b/ The contract is terminated under Clause 2, Article 85 of the Law on Construction.

3. In addition to complying with Clause 1 of this Article, the liquidation of construction contracts under public investment projects or PPP projects is as follows:

a/ The parties may agree that the contract automatically ceases to be effective upon their completion of their obligations under the signed contract or may prepare a record of contract liquidation. In case the parties agree to prepare a record of contract liquidation, the contractor shall prepare and submit the record to the principal for certification;

b/ The time limit for liquidation of a construction contract is 45 days from the date on which the parties fulfill all obligations under the contract or the construction contract is terminated under Clause 2, Article 85 of the Law on Construction. For a large-scale or complex construction contract, the liquidation time limit may be extended but must not exceed 90 days.

Chapter III

IMPLEMENTATION PROVISIONS

Article 32. Effect

1. This Decree takes effect on July 1, 2026.

2. From the effective date of this Decree, the following legal documents cease to be effective:

a/ The Government’s Decree No. 37/2015/ND-CP of April 22, 2015, providing in detail construction contracts; and the Government’s Decree No. 50/2021/ND-CP of April 1, 2021, amending and supplementing a number of articles of the Government’s Decree No. 37/2015/ND-CP of April 22, 2015, providing in detail construction contracts;

b/ Article 9 of the Government’s Decree No. 35/2023/ND-CP of June 20, 2023, amending and supplementing a number of articles of the Decrees in the fields under the state management of the Ministry of Construction.

Article 33. Transitional handling

1. For construction contracts under public investment projects or PPP projects:

a/ In case the bidding dossier or the dossier of requirements has been approved but has not yet been issued, or the draft construction contract has not yet been sent to the contractor, the contents relating to the construction contract shall be considered for modification to ensure compliance with this Decree;

b/ In case the bidding dossier or the dossier of requirements has been issued, or the draft construction contract has been sent to the contractor, and changes in the contents relating to the construction contract are made to ensure compliance with this Decree, it is required to notify thereof to all contractors that have purchased/received the bidding dossier or the dossier of requirement or to contractors for modifying relevant contents in the bid dossier or the dossier of proposals as appropriate;

c/ In case the bid has been closed, it is not required to modify the contents relating to the construction contract in the bidding dossier or the dossier of requirement; during the negotiation and finalisation of the construction contract, the parties shall agree to apply this Decree, ensuring compliance with the law on bidding and other relevant laws. In case the parties fail to reach agreement, they shall continue to apply the relevant contents in the bidding dossier or the dossier of requirement;

d/ Construction contracts concluded and being performed before the effective date of this Decree must continue to comply with the regulations on construction contracts and the law on bidding effective before the effective date of this Decree, except the case specified in Clause 7, Article 95 of the Law on Construction.

2. For construction contracts under other projects already concluded and being performed before the effective date of this Decree, the parties shall consider and agree on the application of this Decree, ensuring compliance with the law on construction and other relevant laws. In case the parties cannot reach agreement, they shall comply with the regulations on construction contracts and other relevant regulations effective at the time of contract conclusion.

Article 34. Organisation of implementation

1. When preparing, appraising and approving bidding dossiers or dossiers of requirements with contents relating to construction contracts, and when negotiating, concluding, and managing the performance of, construction contracts, related entities shall comply with this Decree; organise the archiving of contract dossiers under regulations; provide information serving inspection, examination and audit; and take responsibility before law and the investment decision-maker for the management of the construction contract performance.

2. The Ministry of Construction shall guide and examine the implementation of regulations on construction contracts; publicise model construction contracts for organisations and individuals to refer to in the course of establishing, and managing the performance of, construction contracts; and organise the dissemination, training and further training to build capacity for management of construction contracts.

3. Organisations and individuals are encouraged to refer to and use a set of model contract conditions issued by reputable professional associations (such as FIDIC and NEC) for the establishment and performance of construction contracts, and need to consider making adjustments to contract contents to ensure compliance with Vietnam’s laws.

4. Ministers, heads of ministerial-level agencies, Chairpersons of provincial-level People’s Committees, and related organisations and individuals shall implement this Decree.-

On behalf of the Government
For the Prime Minister
Deputy Prime Minister
PHAM GIA TUC

* The Appendix to this Decree is not translated.