Many businesses only open their contracts again once a dispute has started. Only then do they find that the final signed copy is missing, the signatory had no authority, the price change exists only in a text message, and the limitation period is about to run out. These problems are rarely caused by one badly drafted clause. They come from how the business manages contracts as a system: the register, the templates, signing authority, tracking of obligations and keeping evidence. This article sets out 12 signs in four groups, with the relevant legal rules, a quick self-assessment scale and the steps to take, so your business knows when to review the whole system rather than fix contracts one by one.
- Contract risk is usually system risk, not just an error in one clause.
- Signing authority and keeping evidence are the two points to prioritise. A transaction made by a person without authority to represent the company, or beyond the scope of that authority, may not bind the business (Articles 142 and 143, Civil Code 2015).
- Contract changes must be recorded in the right form: an amended contract must follow the form of the original contract (Clause 3, Article 421, Civil Code 2015).
- Penalty clauses must fit the applicable law: for commercial contracts, the contractual penalty generally may not exceed 8% of the value of the breached part of the obligation (Article 301, Commercial Law 2005).
- Recurring disputes are a signal to fix the template or the process. You also need to track the limitation period, which differs between the Civil Code and the Commercial Law.
Contract risk does not usually lie in one wrong clause. It lies in the system: who may sign, which template is used, how changes are recorded, and whether you can find the evidence when a dispute arises.
The 12 signs below fall into four groups: register, signing, performance and evidence. If your business recognises itself in several of them, it is time to review the system, not just individual contracts.
1. Why look at contracts as a system?
Most businesses only think about their contracts when there is a dispute. At that point, the questions are usually: where is the final signed copy, which appendix is still in force, who agreed to the change by email, and is there an acceptance record?
A good contract system answers those questions before you need them.
2. 12 signs that call for a review
Group A: Contract register and templates
- No central contract register. No one can say how many contracts the business has in force, with whom, and for what value.
- No one knows which contracts are about to expire or renew automatically. Lease, service and distribution contracts may renew automatically if notice is not given on time (see also the article “Auto-renewal contracts”).
- Each department uses its own template, and no one updates them. For the same type of transaction, the contractual penalty, payment terms and dispute mechanism differ from contract to contract.
Start with a simple register (counterparty, value, term, renewal clause, person in charge) and give a single point of contact responsibility for the set of templates for each type of transaction.
Group B: Signing and authority
- No signing authority matrix. Department heads or branch directors sign contracts without a written authorisation, or beyond the scope of their authorisation.
- No approval process before signing. High-value contracts, or contracts with unusual clauses, are signed without going through the legal or accounting team. Transactions with related persons may also need internal approval under the Law on Enterprises and the company charter.
- Contracts are signed electronically, but signatures and data are not controlled. It is unclear who holds the digital signature, where the original file is stored, and whether the data can be exported when needed as evidence.
Representation, related-person transactions and electronic transactions
- Civil Code 2015, Articles 142 and 143: a transaction made by a person without authority to represent, or by a representative acting beyond the scope of representation, generally does not create rights and obligations for the represented person (for the part in excess), except in certain cases, such as where the represented person accepts it, knows of it and does not object within a reasonable time, or is at fault.
- Law on Enterprises No. 59/2020/QH14 (as amended, most recently by Law No. 76/2025/QH15): contracts and transactions between the company and related persons must be approved by the competent body of the company in the cases provided by law. See Article 67 (multi-member limited liability companies), Article 86 (single-member limited liability companies) and Article 167 (joint stock companies).
- The Law on Electronic Transactions No. 20/2023/QH15 (in force from 1 July 2024) governs electronic transactions, electronic contracts and electronic signatures.
Analysis: When the signatory has no authority or exceeds it, the risk is not only the counterparty’s. The business may end up having to prove whether or not it accepted the transaction, while the contract has already been partly performed. For electronic contracts, the usual question in a dispute is not whether an electronic contract is valid. It is whether the business can produce the original data and prove who signed.
Issue a signing authority matrix by type and value of contract, with powers of attorney that set a clear scope and term. Check the list of related persons before signing. Decide who manages digital signatures and where the original files are stored. See also the articles “Authority to sign commercial contracts” and “Contracts by email, electronic signatures and scanned copies”.
Group C: Performance and changes
- Contracts are changed by email or text message without an appendix. Changing the price or timeline only by message can lead to disputes over whether the change is valid.
- Deadlines for obligations are not tracked. Payment, acceptance, warranty and deadlines for notifying a breach have no reminders. The business can easily breach its own obligations or miss its own rights.
- Penalty and compensation clauses do not fit the applicable law. For example, the contractual penalty in a commercial contract exceeds the statutory cap, or the contract provides for a contractual penalty but does not say whether the breaching party must pay both the penalty and damages.
- Contracts involve the exchange of personal data but have no data processing clause. Contracts with software, HR service and marketing providers often involve the personal data of employees or customers and need to be checked against the personal data protection rules.
Contract amendments, contractual penalties and personal data
- Civil Code 2015, Clause 3, Article 421: an amended contract must follow the form of the original contract.
- Commercial Law 2005, Article 301: the contractual penalty for a breach of a contractual obligation, or the total penalty for several breaches, is agreed by the parties but may not exceed 8% of the value of the breached part of the contractual obligation, unless the law provides otherwise.
- Civil Code 2015, Clause 3, Article 418: where the parties agree on a contractual penalty but do not agree that the breaching party must pay both the penalty and damages, the breaching party only pays the penalty.
- The Law on Personal Data Protection (Law No. 91/2025/QH15) (in force from 1 January 2026) and Decree No. 356/2025/ND-CP (which replaces Decree No. 13/2023/ND-CP) make up the current legal framework for personal data protection.
Analysis: As of October 2026, the Commercial Law 2005 is still the law in force. The law may be amended, so check the instruments in force when you sign. Whether a contract is governed by the Civil Code, the Commercial Law or a sector-specific law directly affects which penalty level will be accepted and how contractual penalties relate to damages. A single set of templates used for every type of transaction usually cannot reflect this difference.
Record every change to price, quantity or timeline in an appendix in the same form as the original contract. Set reminders for deadlines for obligations. Review penalty and compensation clauses against the law that applies to each type of contract. Add personal data processing clauses to contracts with providers who have access to data.
Group D: Storage and evidence
- Originals and performance records are not kept in full. The sealed signed copy, delivery records or acceptance records cannot be found, or the file copy differs from the signed version.
- The same type of dispute or complaint keeps recurring. Several late-payment cases for the same reason are a sign that the problem lies in the template or the process, not with individual counterparties.
Limitation periods for bringing a claim
- Civil Code 2015, Article 429: the limitation period for asking a court to resolve a contract dispute is 3 years from the date the person with the right to claim knew or should have known that their lawful rights and interests were infringed.
- Commercial Law 2005, Article 319: the limitation period for commercial disputes is two years from the time the lawful rights and interests were infringed, unless a law provides otherwise.
Analysis: These two limitation periods differ both in length and in when they start to run. Deciding which applies to a given case needs a lawyer’s assessment. Incomplete performance records weaken your ability to prove your case and make it hard to establish exactly when your rights were infringed.
Decide where to keep the original, the electronic copy, the appendices and the performance records for each contract. When a breach occurs, record the time and the evidence at once, and assess the applicable limitation period early rather than waiting for long negotiations to end.
3. Quick self-assessment
This is a reference scale proposed by FC Legal, not a legal standard.
| Number of signs | Assessment | Suggestion |
|---|---|---|
| 0–2 | The system is broadly sound | Keep reviewing the templates periodically |
| 3–5 | Local gaps | Deal with Groups B and D first |
| 6 or more | Systemic risk | A full Contract Health Check is recommended |
If you have sign no. 4 or no. 11, deal with it early even if your total is low. These two gaps directly affect whether a transaction binds the business and whether you can prove your case in a dispute.
Ask the FC Legal team to review your contract system and propose a standardisation roadmap by priority.
4. Where should your business start?
Six steps to standardise your contract system- Inventory: prepare a register of contracts in force, including counterparty, value, term and person in charge.
- Risk classification: identify contracts that are high-value, long-term, auto-renewing or contain unusual clauses.
- Standardise templates: group templates by type of transaction and review the key clauses.
- Set authority: issue a signing matrix and suitable powers of attorney.
- Track obligations: set reminders for payment, renewal and notice deadlines.
- Standardise storage: decide where to keep originals, electronic copies, appendices and performance records.
For businesses that want a fuller process, see the article “Commercial contracts: a management guide from negotiation to termination”.
5. What does FC Legal’s Contract Health Check include?
A Contract Health Check is a diagnostic step before the business decides how far to standardise. The result is a report that ranks the risks and sets out a roadmap by priority. The exact scope is agreed with each business after discussing the number and types of contracts it manages.
6. Frequently asked questions
How is a contract system review different from reviewing a single contract?
Reviewing one contract focuses on the clauses of a specific transaction. A system review looks at how the business manages all its contracts: the register, the templates, signing authority, the approval process, tracking of obligations and keeping evidence. Many recurring errors only show up at system level.
If a department head signs a contract without authorisation, does it bind the company?
Under Articles 142 and 143 of the Civil Code 2015, a transaction made by a person without authority to represent, or beyond the scope of representation, generally does not create rights and obligations for the represented person, unless the company accepts it, knows of it and does not object within a reasonable time, or is at fault. Each case needs to be assessed on the actual records.
Does a price change agreed by email need an appendix?
Clause 3, Article 421 of the Civil Code 2015 provides that an amended contract must follow the form of the original contract. If the original contract was in writing and signed, the business should record the change in an appendix in the same form to limit disputes over whether the change is valid.
What is the maximum contractual penalty in a commercial contract?
Under Article 301 of the Commercial Law 2005, the penalty or total penalty is agreed by the parties but may not exceed 8% of the value of the breached part of the contractual obligation, unless the law provides otherwise. Contracts in specialised sectors may be subject to their own rules, so identify the applicable law before drafting the penalty clause.
What is the limitation period for a contract dispute?
The Civil Code 2015 (Article 429) provides 3 years from the date the person with the right to claim knew or should have known that their rights were infringed. The Commercial Law 2005 (Article 319) provides two years from the time the rights were infringed for commercial disputes. Which rule applies to a given case needs a lawyer’s assessment.
7. Legal basis and references
- Civil Code No. 91/2015/QH13 (Articles 142, 143, 418, 421, 429).
- Commercial Law No. 36/2005/QH11, as amended (Articles 301, 319).
- Law on Enterprises No. 59/2020/QH14, as amended, most recently by Law No. 76/2025/QH15 (Articles 67, 86, 167).
- Law on Electronic Transactions No. 20/2023/QH15.
- Law on Personal Data Protection No. 91/2025/QH15 and Decree No. 356/2025/ND-CP.
Review your commercial contracts with an FC Legal lawyer
We check the clauses, the allocation of risk and propose amendments before your business signs.
- Review of drafts and clause-by-clause risk assessment
- Standardising template contracts, appendices and the internal approval process
- Support in negotiations and in handling breaches and disputes
Please do not send confidential documents or personal data through the form.
This article is for reference. It reflects the rules in force at the time of publication. For legal advice on a specific case, please contact an FC Legal lawyer.
Prepared by the FC Legal legal team and reviewed by FC Legal’s Managing Lawyer. Updated 4 October 2026.
