VIETNAM Law and Practice Contributed by: Tran Thai Binh and Duong Thi Minh Han, LNT & Partners
affects the property lease. If the land lease termination is lawful then any damages caused to the property lease will be borne by the land tenant. If the land lease termination is not lawful, however, the landlord may be responsible to the land tenant in bearing the com - pensation owed to the property lessee, as well as the cost of any other damages that arise as a result of the unlawful termination. 6.23 Remedies/Damages for Breach In the event of a tenant breach and termination of a lease, the landlord can claim for actual damages incurred directly from such breach, a penalty (at 8% of the obligation breached), and late-payment inter - est for the breach of payment obligation (at less than 20% per annum). Alternatively, landlords usually hold a security deposit in cash, equivalent to one-to-three months’ rent, or may place a lien on and dispose of the property on the premises. It is recommended that landlords seek specific advice for the best approach on the application of the above remedial measures prior to executing the lease contract. 7. Construction 7.1 Common Structures Used to Price Construction Projects Construction project pricing may include: • a lump-sum price; • a fixed price; • a fixed price with adjustments; • a time-based price; and • a price with combined methods. 7.2 Assigning Responsibility for the Design and Construction of a Project Construction usually involves:
The (main) contractors and/or construction manage - ment board (if established by the developer for project management) are directly responsible and liable for the scope of works undertaken in terms of quality and safety before the laws and the developers. Any sec - ondary contractor will be liable before its main con - tracts. Assigning contractors’ responsibilities wholly or partially must be agreed and/or approved by the owner in formal and written documents, otherwise such assignment is invalid and ineffective. The assign - ment of responsibility must not be contrary to, and must always comply with, the laws on construction management in quality, progress, quantity, occupa - tional safety and environmental control. 7.3 Management of Construction Risk Risks in construction are usually passed to (main) con - tractors under contract between the parties through penalty and indemnification. Nevertheless, mandatory insurance against risks in construction investment activities must be procured, including construction and public liability policies. 7.4 Management of Schedule-Related Risk It is provided under the laws of construction that the construction schedule of the project must be properly monitored by the developer, monitoring department, main contractors or any related parties. A delay at any stage must not affect the overall investment schedule. The principal of the construction contract is entitled to suspend the performance of the contract and to unilaterally terminate the contract if the contractor is causing continuous delays to the schedule agreed by the parties (unless the parties agree otherwise). Penalties and damages are available for the breach in construction schedule, either for the contractual par - ties or third parties, being the developer or the owner if agreed by the parties. Furthermore, the developer is required to submit a request for amendment to the general investment schedule. 7.5 Additional Forms of Security to Guarantee a Contractor’s Performance In order to guarantee the performance of contractors, the owner may require contractors to comply with
• the project’s developer; • the building contractor;
• the supply contractor of building products and materials or assembling equipment etc; and • the advisory contractor in survey, design, project management, monitoring, piloting, assessing, etc.
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