1. What is a construction contract dispute?

A construction contract is a civil agreement, formalized in writing, between a client (employer) and a contractor for the execution of all or part a construction investment project. Construction is a legally complex field, therefore, a construction contract plays an essential role in maintaining a transparent, clear legal environment that ensures the rights and obligations of the involved parties.

Nevertheless, in practice, the implementation of construction contracts often faces many challenges,  when the execution process is extended, and many regulations overlap, easily leading to disputes. Construction contract disputes are disagreements and conflicts between the employers and the contractors, or between themselves, pertaining to the rights and obligations of the involved parties in the performance of the contract. Construction contract disputes typically stem from various reasons, such as breaches of contractual obligations, workmanship quality, project timelines, payment issues, unforeseen costs, or issues related to legal regulations.

2. Common types of construction contract disputes

Numerous factors can trigger construction contract disputes, however,  the most common disputes revolve around the following:

• Payment dispute: Payment stands out as one of the most contentious issues of any contractual arrangement. This issue becomes even more sensitive in the construction industry, given the substantial value typically associated with construction contracts and the fact that payment schedule often depends on other factors. Such disputes may arise when the employer fails to pay on time or only partially pays the agreed-upon sum, thereby imposing financial strainon the contractor.
• Progress of implementation dispute: Project progress is one of the most important elements in a construction contract, as it determines the completion timeline of the project and the coordination among various parties involved. This is also the main cause of many disputes in the construction industry. Project-related disputes often arise when the contractor fails to meet agreed-upon time frame, thereby disrupting the overall project blueprint; when the employer delays site  handover on time, preventing the contractor’s ability to proceed as scheduled and causing subsequent delays; or other force majeure events such as natural disasters, pandemics, or changes in legal regulations that impact the project implementation. Project progress disputes result in financial setbacks and affect the reputation and collaborative relationship among the parties involved.
• Construction quality dispute: Construction quality disputes are a prevalent issue in the construction industry,arising from inconsistencies among the parties involved in the execution, inspection, and handover phases of the project. Several factors can cause these disputes, such as inaccurate or flawed designs, substandard materials, or non-compliant construction practices. Construction quality disputes tend to be complex and can lead to serious consequences, including safety hazards and life-threatening risks for users.
• Unilateral termination of contract dispute: Unilateral termination of construction contracts is one of the most contentious reasons for disputes between parties. Due to the complexity of construction contracts, the extended construction periods, and the substantial contract value, terminating the contract without adhering to legal provisions or agreed-upon terms can result in significant losses for the other party and may affect other parties as well. The reasons for unilateral termination of a construction contract can stem from various issues such as a serious breach of payment or performance obligations by one party, preventing the other party from continuing the contract; insufficient financial capacity to continue fulfilling the contract, or prolonged difficulties due to legal regulations...

3. Challenges that a construction contract dispute lawyer will resolve

Many companies or entities operating in the construction industry often lack dedicated in-house legal departments, if they exist, it cannot fully maximize their role. A primary reason is that construction law requires an in-depth understanding of many different fields, from civil and commercial law to specific regulations related to construction, planning, environment, labor safety, and finance. As a result, legal departments within construction companies,even when present, may lack the necessary resources and specialized expertise to anticipate and address legal risks throughout the contract execution process.

In this context, companies frequently do not fully recognize potential risk, leading to insufficient preparation for handling emerging legal disputes. Although construction contracts are legally significant documents, without professional legal advice and support from the beginning, the parties will face many complex issues when disputes arise. Typically, companies only seek legal support after a dispute has already occurred; at that point, a lawyer can primarily address the legal consequences rather than provide proactive risks prevention or protect legal rights from the beginning.

When involved in resolving construction contract disputes at this stage, lawyers must address several key issues to ensure maximum protection of the client's legal rights and interests.

First, unclear contract terms

The contract is the primary legal basis for resolving construction contract disputes. The terms and conditions stipulated within the contract are considered key points in defining the rights and obligations of each party, serving as the foundation for parties to exercise and protect their legal rights when disputes arise. Therefore, unclear contract terms can significantly impede the  determination of fault and responsibility when a construction contract dispute occurs. Article 141 of the Construction Law 2014 specifies the required content of construction contracts as follows:

“Article 141. Content of Construction Contracts

1. A construction contract includes the following contents:

a) Applicable legal basis;

b) Applicable language;

c) Content and scope of work;

d) Quality and technical requirements of the work, acceptance procedures, and handover protocols;

đ) Time and progress of contract implementation;

e) Contract price, advance payment terms, currency  for payments, and payment for the construction contract;

g) Performance guarantee, advance payment guarantee;

h) Construction contract adjustment;

i) Rights and obligations of the parties involved in the construction contract;

k) Responsibility for contract violations, rewards, and penalties for contract violations;

l) Suspension and termination of the construction contract;

m) Dispute resolution for the construction contract;

n) Risks and force majeure events;

o) Final settlement and liquidation of the construction contract;

p) Other relevant contents.

2. For a general contractor construction contract, in addition to the contents specified in Clause 1 of this Article, it must also include the content and responsibility for the management of the general contractor."

These represent fundamental contents that any construction contract must encompass. However, in practice, when lawyers are engaged to resolve construction contract disputes, these basic provisions are frequently inadequately addressed, or in some cases, although the contract contains such provisions, but they are often formulated vaguely and cannot be applied effectively in resolving disputes or protecting the legal rights of the violated party.

Second, the need for extensive specialized knowledge

Resolving construction contract disputes requires not only a robust understanding of legal principles but also specialized knowledge of the construction industry. The construction industry involves various technical factors, including construction standards, labor safety, building materials, and issues related to design, execution, and project acceptance; additionally, there are issues of finance, payment, and banking... These factors directly influence contract implementation and can cause disputes. Therefore, when lawyers are tasked with resolving construction contract disputes, they must possess not only a comprehensive understanding of relevant laws and government policies but also familiarity with specific standards and regulations governing each field. Without a thorough understanding of these issues, lawyers may find it challenging to fully grasp the dispute and protect the client’s interests.

Third, challenges in gathering documents and evidence

Construction contract disputes frequently involve many parties and multiple areas, so gathering sufficient documents and evidence requires significant time and reliance on the cooperation of the relevant parties.

Furthermore, the execution of construction contracts is often over prolonged period, with some disputes arising after both parties have completed the project handover process or even several years after the project has been put into service. This presents considerable challenges in obtaining the necessary documents and evidence.

Documents related to construction contracts, such as design records, acceptance reports, supervision reports, or payment documents, are often inadequately stored or may be lost due to the extended duration of the project or the absence of systematic archiving procedures among the parties. Searching for and gathering these documents is not only time-consuming but also necessitates the collaboration of multiple parties, which can sometimes be difficult to secure.

4. Skills of construction contract dispute lawyer

To effectively resolve construction contract disputes, lawyers must possess comprehensive legal knowledge and solid practical skills.

First, skills in analyzing and evaluating construction contracts

A contract is more than merely a agreement between parties, it serves as a legal foundation to protect the parties' legitimate rights and resolve any arising disputes. Upon undertaking a case, the lawyer should prioritize reviewing the construction contract signed between the parties. By scrutinizing the terms stipulated within the contract, the lawyer can assess the client's legal position in the dispute and determine the most appropriate strategy for resolving the contract dispute to maximize the client’s legal rights and interests. Furthermore, through reviewing and evaluating the construction contract, the lawyer can identify inconsistencies, omissions requiring further substantiation, thereby defining the additional documents and evidence must be gathered to protect the client.

Second, skills in collecting, examining, and handling evidence

When participating in the resolution of a construction contract dispute, a lawyer may act as a defender of the legal rights and interests of either the plaintiff or the defendant. The lawyer needs to clearly define their legal status to be able to collect, examine, and evaluate evidence in a manner that is consistent with the legal situation of the client.

As counsel for the plaintiff, the lawyer must proactively collect and submit evidence to the court to substantiate the grounds for the lawsuit. Therefore, the lawyer needs to focus on gathering evidence that demonstrates the defendant’s breach of contract, comparing the agreed terms with actual behavior, and substantiating the damages suffered by the plaintiff as a result of  the defendant’s breach. This provides the lawyer with a solid foundation for asserting claims for for damages and penalties for the breach of contract, thereby maximizing the protection of the client's legal rights.

As counsel for the defendant, the lawyer must first study and evaluate the evidence submitted by the plaintiff to the court. The lawyer needs to carefully examine the appropriateness, objectivity, and legality of them. Civil procedure law stipulates that lawyers have the right and obligation to collect and submit evidence to the court, so as counsel for the defendant’s legal rights and interests, the lawyer must present evidence to refute the plaintiff’s claims and clarify the objective facts to protect the client. If disproving the plaintiff’s claims is unfounded, the lawyer must propose an alternative defense strategy tailored to the client’s legal situation. For example, the lawyer might present evidence indicating that the defendant’s breach of contract resulted from objective factors or demonstrate that the defendant has made efforts to mitigate the damages, such as repairing mistakes during the construction process, minimizing losses, or acting in good faith to resolve the dispute. This can potentially lessen the defendant's responsibility when the competent authorities review and resolve the dispute.

Third, skills in communication and negotiation

Construction contract disputes often involve and affect multiple parties, so communication and negotiation skills are key factors for lawyer to resolve these dispute effectively. Construction contract disputes can arise from various reasons, including disagreements on  project progress, construction quality, payment, and compensation. Therefore, the lawyer’s communication and negotiation skillshelp bridge gaps between parties, reduce tensions, and create opportunities for resolving the dispute quickly and effectively, while ensuring the protection of the client’s interests.

Communication skill encompass not only the ability to articulate but also to listen, understand the needs and viewpoints of all parties involved, and demonstrate sensitivity and flexibility in handling situations. During negotiations, the lawyer knows should adjust their strategy to suit the specific  circumstances of the case and identify reasonable solutions to reconcile the demands of the opposing party without affecting the client’s rights. Successful negotiation can help resolve disputes without requiring court judgments, saving time and costs for all parties involved.

Fourth, skills in working with competent authorities

When resolving construction contract disputes, the ability to effectively engage with competent authorities is crucial for a lawyer to protect the client’s interests. In the construction industry, these authorities can include courts, regulatory bodies such as the Department of Construction, the Ministry of Construction, or other competent organizations, depending on the nature of the dispute. When working with these authorities, the lawyer must have a firm grasp of their legal regulations and procedures to ensure the accurate preparation of files and documents.

5. Methods of resolving construction contract disputes

• Negotiation

In any dispute, negotiation is typically the initial method employed in the dispute resolution process. The parties involved in the contractual relationship engage in direct discussions, exchanges, and negotiations, proposing solutions to find common ground and address issues arising from construction contract execution. Resolving disputes through negotiation enables parties to save time and litigation costs while maintaining long-term business relationships. This approach relies on the voluntary participation of the parties, and negotiation is only effective when all parties demonstrate goodwill and d reach a consensus.

• Mediation

If the parties cannot reach a mutual agreement during negotiation, they may seek a third party to act as a bridge to resolve conflicts and address obstacles in the construction contract dispute resolution process. The third party, whether an individual or a legal entity, must possess certain qualities such as professional expertise, legal knowledge, practical experience, and independence from the disputing parties. The mediator cannot have any interests that conflict with those of the parties involved. While mediation is not a mandatory procedure in the construction contract dispute resolution process, it is considered a valuable and frequently applied method that helps parties save money and time while preserving their business relationship.

• Resolving construction contract disputes in court

If negotiation and mediation fail, the court is typically the chosen authority to resolve construction contract disputes. In this case, the party involved has the right to file a lawsuit with the competent court to request a resolution. The competent court is the one located where the defendant resides or works if the defendant is an individual, or where the defendant's office is located if the defendant is a legal entity or organization.

After receiving the plaintiff's lawsuit file, if the court determines that it has jurisdiction and the file is valid, it will issue a notice for the plaintiff to pay the advance court fees. The plaintiff must pay the advance court fees within 7 days. If there are deficiencies in the lawsuit file, the court will notify the plaintiff to amend and resubmit the lawsuit. After that, the court will formally accept the case and proceed according to civil procedure.

6. Lawyer’s experience in resolving construction contract disputes

• Lawyer’s experience in the negotiation and mediation stages

Negotiation and mediation represent the initial and typically least tense stages in resolving construction contract disputes. This period offers a valuable opportunity for all parties to identify common ground and minimize conflicts in the dispute resolution process. Therefore, this stage is considered the "golden period" for lawyers to assist clients in resolving disputes, minimizing legal risks, and protecting their legal rights.

To maximize the effectiveness of negotiation and mediation, the lawyer should leverage their experience and specialized knowledge to analyze the contract, clarify points of conflict, and establish a legal basis to support their client’s argument. This includes reviewing and evaluating non-compliance with agreed-upon terms, breaches of contract, and the legal consequences arising from such actions on the contract performance and each party’s interests.

The lawyer’s role during this stage is not to show power or compete for interests, but to act as a bridge, protecting the client’s legal rights and creating a "balance" for both parties to reach a solution. Therefore, to ensure the smooth progression of negotiation and mediation, the lawyer must carefully study the issues that have arisen, clearly identify violations, and assess damages to propose solutions that satisfy both parties.

A lawyer’s experience and skillfulness during this stage not only in expediting dispute resolution, saving time and costs but also in preserving potential future business relationships between the parties.

• Experience of lawyers in preparing lawsuit file for resolving construction contract disputes

In resolving construction contract disputes, the preparation of a lawsuit file is essential for the acceptance and successful adjudication of the case. A complete, accurate, and persuasive lawsuit file will be a strong foundation for the lawyer to protect the client’s rights and increase the chances of winning the case.

First, identifying the client’s lawsuit claim

Before preparation of the lawsuit file, the lawyer must fully understand the client’s lawsuit claim. This includes:

• Clarifying the violated rights and interests: The lawyer needs to accurately identify the client’s violated rights during the construction contract performance process by studying and evaluating the terms agreed upon in the contract; reviewing, compiling, and assessing the violations that occurred during the contract execution; researching the legal regulations governing the construction contract dispute and any relevant regulations in the field in which the parties have engaged in.
• Identifying specific requests for the defendant: By clarifying the violated rights and interests, the lawyer establishes a basis for discussion and collaboration with the client. Analyzing the legal issues arising from the dispute between the client and the opposing party to define the specific claims, ensuring maximum protection of the client's legal rights and interests during the case resolution process.

Second, determining the conditions for the court to accept the lawsuit

• Identifying the dispute resolution authority: The lawyer needs to review the dispute resolution clause, if an arbitration agreement exists, its validity must be assessed. If the arbitration agreement is deemed invalid under Article 18 of the Commercial Arbitration Law 2010, the case will still fall under the court’s jurisdiction. If the parties do not mention arbitration, the default dispute resolution authority is the court;
• Identifying the plaintiff’s legal standing;
• Identifying the statute of limitations: The statute of limitations for requesting the court to resolve a contract dispute is 3 years from the date the affected party knows or should have known that their legal rights were violated.

Third, gathering relevant evidence and documents

As previously mentioned, a key task of a lawyer when handling construction contract disputes is gathering evidence and documents to protect the client’s interests. Given that construction contract execution often extends and involves multiple stages, and different parties, documents collection can be complex. To ensure that the case has enough grounds, the lawyer must undertake specific actions to obtain necessary records and documents, such as:

• Documents proving the defendant’s breach of contract.
• Documents proving the client’s compliance with and fulfillment of contractual obligations.
• Documents and evidence proving the damages incurred by the client, etc.
• …

Fourth, drafting the lawsuit petition

After gathering sufficient necessary documents and evidence, the lawyer drafts the lawsuit petition. The petition must comply with the form and content requirements in Article 189 of the 2015 Civil Procedure Code. It must include basic information concerning the plaintiff and defendant, clearly presenting the claims and the legal grounds supporting them.

Fifth, submitting the lawsuit file

The lawsuit file includes the lawsuit petition and all accompanying supporting documents and evidence. When preparing the file, the lawyer must ensure that the plaintiff meets the criteria for filing a lawsuit and the court will accept the case. Careful attention must be paid to the completeness and legality of all documents and evidence presented in accordance with the requirements outlined in the lawsuit petition.

(i) Completeness: The lawsuit file must include the following documents:

• Lawsuit petition: The content of the petition must clearly state the claims, the dispute, the disputes and the legal grounds upon which the  lawsuit is based.
• Documents proving the plaintiff's legal standing: If the plaintiff is an individual, an ID card is required; if the plaintiff is an organization, the Enterprise Registration Certificate (ERC), the company’s charter, and Power of attorney (if any) are required.
• Documents related to the contractual relationship: These include the construction contract, contract annex, invoices, payment receipts, debt reconciliation, liquidation records, acceptance minutes, handover minutes, etc.
• Documents reflecting contract performance: Technical design documents, minutes confirming the work performed, etc.
• Documents exchanged between the parties: Documents, meeting minutes, or exchanges between the parties when disputes arise.

(ii) Legality: Documents must be original, or certified true copies bearing valid notarization, or issued by a competent state authority. Documents in foreign languages or minority languages must be accompanied by a certified Vietnamese translation that has been either notarized or consular legalized.

Finally, the lawyer submits the lawsuit file to the competent court, either directly or via mail. The lawyer must have a thorough understanding of the civil procedure regulations to monitor the case acceptance and resolution process. Closely tracking the process allows the lawyer to respond promptly and protect the client’s interests in the best way.

Preparing the lawsuit file is a crucial stage that directly impacts the resolution of construction contract disputes. Lawyers must be knowledgeable in legal regulations and have practical experience in preparing lawsuit files to ensure the case follows the proper procedural timeline and avoid delays due to the need for additional or corrected documentation.

• Experience of lawyers in resolving construction contract disputes in court

Litigation in court is an important part of resolving construction contract disputes. To achieve a favorable outcome for the client, the lawyer must undertake thorough preparations in the following key areas:

First, prepararing before the trial

• Thorough understanding of the case file: The lawyer must carefully study the case file, including legal documents, evidence, and relevant witness testimonies. It is essential to ensure evidence has been gathered completely, lawfully, and is readily for use.
• Develop a litigation strategy: Analyze the strengths and weaknesses of both parties. This analysis should inform the development of key arguments, strategies for addressing potential counter-arguments, and backup plans for unexpected situations.
• Prepare questions and legal arguments: Draft a detailed set of questions for cross-examining the opposing party, witnesses, or experts, and anticipate their responses. The lawyer should focus on asking questions that affirm the issues or clarify the facts of the case. Additionally, prior to trial, the lawyer should prepare legal arguments in defense of the client, based on applicable legal provisions, contract terms, and persuasive reasoning that protect the client's interests.

Second, participating in the trial

• Questioning skills in court;
• Effective questioning at the court: The lawyer should execute the prepared questioning plan to clarify issues.
• The lawyer can use the information from the answers to rebut, present evidence that disprove opposing cliams, or focus the questions on the key points.
• During the questioning phase, the lawyer should pay attention to the questions posed by the opposing party’s arguments and assist the client in responding, avoiding being led into unfavorable positions. In some cases, the lawyer may refuse to answer specific questions.
• Argumentation in court: The lawyer needs to focus on analyzing and clarifying any errors, contradictions, or lack of evidence in the opposing party’s arguments. They should present their legal reasoning to maximize the protection of the client’s rights. Throughout the argumentation process, the lawyer must remain calm in tone and demeanor to avoid escalating tensions and maintain a positive impression during the trial.

Resolving construction contract disputes requires understanding the law, practical experience, and strong litigation skills. With a well-suited strategy and effective solutions, lawyers specializing in construction contract disputes can help clients protect their rights, save time, and minimize damages. The support of a professional lawyer ensures the dispute resolution process runs smoothly and provides the client peace of mind and trust.