Vietnam's New Decree Reshapes Standard Form Contracts: Strengthening Transparency and Consumer Protection
Vietnam's government has further strengthened the transparency and fairness of standard form contracts through a new decree. Regulation of one-sided contract terms and misleading disclosures by businesses has been clarified, with notable progress in consumer protection especially in B2C transactions. A Vietnamese attorney explains in detail the practical implications — covered sectors, compliance obligations, and disclosure/registration procedures. NEXORA Law Firm supports the drafting, revision, and notification of standard form contracts across numerous sectors, including retail, e-commerce, education, leasing, and insurance/finance, helping Japanese companies protect their brand and manage risk by ensuring contract compliance.
With economic development and the increasing diversification of transaction formats, the use of standard form contracts (Hợp đồng theo mẫu) has become increasingly common, particularly among businesses supplying essential goods and services. However, many foreign companies operating in Vietnam have an insufficient understanding of the legal requirements governing standard form contracts and, in a number of cases, have not carried out the necessary procedures. In response, on May 16, 2024, the Vietnamese government promulgated Decree No. 55/2024/ND-CP, which took effect on July 1, 2024. This decree gives concrete effect to certain provisions of the Law on Protection of Consumers' Rights, and introduces several important changes to the common requirements applicable to standard form contracts.
01 - What Is a Standard Form Contract (Hợp đồng theo mẫu)?
Under Article 405 of Vietnam's Civil Code, a "standard form contract" (Hợp đồng theo mẫu) is a contract containing standard terms proposed by one party, such that if the other party responds within a reasonable period and accepts, it is deemed to have accepted the proposed contract terms in their entirety. Under this definition, where a business supplying goods or services unilaterally sets the contract terms and applies them without allowing modification, the contract is classified as a "standard form contract."
Such standard form contracts are widely used, particularly by businesses handling large volumes of transactions or providing consumer-facing services, as a means of ensuring efficiency and consistency. That said, the use of a standard form contract must comply with relevant legislation, including the Law on Protection of Consumers' Rights, and care is required because the inclusion of an improper clause may render the contract's effect void.
02 - Principles Governing Standard Form Contracts
The following key principles apply when using a standard form contract.
2.1. Principle of Publication
A standard form contract must be published in a manner that allows, or should allow, the counterparty to be aware of its content.
Businesses are obligated to publish the contract content by, among other means:
Posting it in a visible location at the place of business.
Publishing it on a website or application (where applicable) so that consumers can review the content before signing the contract or making an advance payment.
2.2. Principle Favoring Consumers
Interpretation of ambiguous terms: where a standard form contract contains an ambiguous provision, that provision is to be interpreted in favor of the consumer.
Invalidity of unfair terms: the following types of terms in a standard form contract are void:
A term releasing the business from liability.
A term restricting or excluding a consumer's legitimate rights.
Language requirements: Vietnamese must be used in consumer contracts, standard form contracts, and transaction terms. By further agreement of the parties, an ethnic minority language of Vietnam or a foreign language may additionally be used. Where there is a discrepancy between the different-language versions, the version favoring the consumer prevails.
2.3. Principle of Registration
Businesses supplying the following goods or services must register their standard form contract with the national consumer protection authority before using it:
Supply of household electricity
Supply of household water
Pay television services
Terrestrial mobile telecommunications services (voice, messaging, internet access)
Terrestrial fixed-line telecommunications services (voice, internet access)
Air passenger transport
Rail passenger transport
Sale and purchase of condominium units
These registration-covered categories are designated under Prime Ministerial Decision No. 07/2024/QD-TTg of 2024.
03 - The Basic Content of a Standard Form Contract
3.1. Required Basic Content
A standard form contract must include the following basic content:
a) Information on the contracting parties: name, address, phone number, and other contact information (where applicable).
b) Information on the products, goods, or services being sold or provided.
c) The method of measurement, quantity, weight, quality, utility, price, and the components of the final price (where disclosure is required under relevant law).
d) The method and deadline for payment.
e) The time, place, and method of sale/provision of the products, goods, or services.
f) The rights and obligations of the parties (to ensure compliance with relevant law).
g) Responsibility for the protection of consumer information.
h) Responsibility upon completion or termination of contract performance.
i) The response to force majeure events (in accordance with statutory provisions).
j) The method of dispute resolution.
k) The date the contract is concluded and the contract term.
3.2. Prohibited Terms That May Not Be Included in a Standard Form Contract
A standard form contract may not include prohibited terms such as the following:
a) A term restricting or excluding liability specified under the Law on Protection of Consumers' Rights.
b) A term restricting or excluding a consumer's right to complain or bring a claim.
c) A term allowing the business to unilaterally change the contract content or transaction terms (where the consumer has no option to terminate the contract).
d) A term allowing the business to unilaterally change or set the price (except where permitted by law).
e) A term shifting liability to a third party without the consumer's consent.
f) A term imposing a penalty or termination condition unfavorable to the consumer.
g) A term making the collection or use of consumer information a condition of the contract (except where permitted by law).
h) A term that, contrary to the principle of good faith, tilts the balance of rights and obligations between the parties unfavorably against the consumer.
3.3. Practical Importance
A standard form contract is an important tool for building trust with consumers and avoiding legal risk. Because a contract containing improper or prohibited terms risks being held legally invalid, businesses must exercise great care when drafting such contracts.
04 - Key Changes Concerning Standard Form Contracts
4.1. Multilingual Standard Form Contracts
Decree No. 55/2024/ND-CP of 2024 requires the use of Vietnamese in standard form contracts while permitting the concurrent use of other languages by agreement of the parties. Under the previous Decree No. 99/2011, only Vietnamese was permitted. This change reflects the realities of international commerce and is intended to promote clearer communication between the parties.
4.2. Changes to Registration Procedures
Registration obligation: Decree No. 55/2024/ND-CP requires businesses to register their standard form contract with the competent authority before use (applicable to all standard form contracts). Registration is also required before accepting an advance payment, deposit, or security from consumers.
Introduction of a new application form: a new, simplified application form has been introduced to streamline and expedite the registration process.
Extended review period: to ensure thorough review of complex cases, the review period for registration has been extended from the previous 20 business days (under Decree No. 99/2011) to a maximum of 60 business days.
Disclosure obligation: businesses are required to publish notice of completed registration both at their business premises and online.
4.3. Revocation and Amendment of Standard Form Contracts
Decree No. 55/2024/ND-CP grants consumer protection organizations the authority to demand the revocation or amendment of a standard form contract.
Obligation to notify of the amended version: businesses must publish the amended or revoked contract and notify consumers of the new version.
4.4. Oversight Authority Over Standard Form Contracts
Decree No. 55/2024/ND-CP clarifies the framework for cooperation between central and local authorities and sets out in concrete terms the division of responsibility for the administration and oversight of standard form contracts.
Practical Significance:
These changes enhance the transparency of standard form contracts and strengthen consumer protection. At the same time, businesses will need to exercise greater care in the process of drafting and registering their contracts.
Standard form contracts are an important tool enabling businesses that supply goods or services to a large number of consumers to conduct transactions efficiently and consistently. However, with the introduction of the new requirements and procedures under Decree No. 55/2024/ND-CP, businesses are now called upon to ensure an even greater degree of legal compliance and transparency. By properly understanding and implementing these rules, companies can strengthen their relationship of trust with consumers and pursue sustainable business while avoiding legal risk.