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What is a contract dispute and how to resolve a contract dispute?

Contract disputes occur when there is a conflict or violation of the terms agreed upon between the parties in the contract. To resolve disputes effectively, methods such as negotiation, mediation, arbitration or filing a lawsuit in court should be applied. This article will help you better understand the concept of contract disputes and common ways of resolving them to protect your rights and maintain cooperative relationships.

1. What is a contract dispute?

A contract dispute is a situation where two or more parties to a contract or agreement have conflicts or disagreements about the performance, terms, or provision of products or services under the contract. This dispute may arise from misunderstandings, breach of contract, or conflicting rights and obligations between the parties to the contract.ac

In the event of a contract dispute, the parties will usually attempt to resolve the issue through negotiation or through a dispute resolution process, such as arbitration or litigation in court. The goal of this process is to find a fair and equitable solution to resolve the dispute and implement the contract to the satisfaction of all parties involved.

2. Common types of contract disputes

In the field of commercial contract disputes, there are several common forms, based on different aspects of the contract. Commercial contract disputes have countless reasons, big and small. But they can be divided into the following four main types:

a. Contract disputes by territorial scope:

Including types of contracts such as cross-border contracts and domestic contracts, where the scope of contract performance is determined within or outside the national territory.

b. Contract disputes based on breach content:

This occurs when the seller or buyer fails to comply with the terms of the contract, violates the terms, conditions, or commitments specified in the contract.

c. Contract disputes according to scope of transaction:

Types of disputes that arise in the specific context of each commercial transaction include disputes in goods sales transactions, agency contracts, service supply contracts, and goods sales and purchase entrustment contracts, depending on the participation of the parties.

d. Contract disputes based on legality:

Disputes arising from violations of legal principles, illegal contracts or non-compliance with legal regulations may be part of the assessment of the legality of the contract.

Each type of dispute requires a distinct approach and resolution process based on this classification, with the goal of fairly and efficiently resolving conflicts between contracting parties.

3. Methods of resolving contract disputes in Vietnam and internationally

Regarding the method of resolving commercial contract disputes, there are the following 4 methods:

a. Negotiation method:

This is the method chosen by the disputing parties and is often stated in the dispute resolution clause in the contract. In this method, the parties negotiate themselves or send lawyers to participate in the negotiation.

b. Mediation method:

This method involves a third party intermediary (Mediator/mediation center) discussing and agreeing to a solution to resolve the disagreement between them and voluntarily implementing the solution agreed upon through mediation.

c. Through the Court:

A method of dispute resolution in which the parties go through a court with the participation of a judge to resolve the dispute. This method usually prolongs the time to resolve the dispute.

d. Through Commercial Arbitration:

This is a method in which the parties agree to submit the dispute to an Arbitration Center for resolution and the arbitration decision is final and immediately enforceable.