Fundamental Changes of Circumstances in Construction Contracts

Practical Perspectives from Legal, Contract Management and Cost Consultancy

In the first months of 2026, the Vietnamese construction market has been experiencing an unprecedented period of volatility.

From geopolitical tensions and military conflicts in the Middle East, supply chain disruptions, and escalating fuel prices, to mounting pressure from public investment disbursement and infrastructure demand, all of these factors are creating cascading impacts directly affecting the costs and schedules of construction projects.

Diesel prices have surged. Steel, cement, asphalt, and construction input materials continue to fluctuate. Logistics and transportation costs have increased significantly. Commercial assumptions once considered “reasonable” at the tender stage are no longer valid.

What is particularly notable is that: most projects are not “impossible to perform”..

Construction works may still proceed. Projects may still be completed. However:

• actual costs have significantly exceeded the original budget;
• project schedules have become increasingly difficult to maintain;
• and the commercial equilibrium of contracts is being severely disrupted.

Against this backdrop, the issue of fundamental changes of circumstances in construction contracts has become one of the most discussed topics among:

• Employers;
• Contractors;
• Contract Managers;
• Commercial Teams;
• Consultants;
• and construction law practitioners.

When “ordinary commercial risk” is no longer ordinary

In practice, many businesses are currently facing difficult questions:

• Does the increase in material prices constitute force majeure?
• Can Article 420 of the 2015 Civil Code be applied?
• Are contractors entitled to request contract adjustments?
• How should employers respond while protecting both budget and project progress?
• What supporting documents are required for a cost escalation claim?
• If no agreement is reached, where will disputes ultimately lead?

These are no longer merely academic questions. They are practical issues arising daily across:

• infrastructure projects;
• EPC projects;
• energy developments;
• airport projects;
• transportation works;
• public investment projects;
• and large-scale construction developments.

In Official Letter No. 5026/BXD-KTQLXD dated 3 April 2026, the Ministry of Construction also acknowledged that, in many projects:

• actual costs have significantly deviated from tendered prices;
• original schedules are no longer feasible;
• and certain initial commercial assumptions underlying the contracts are no longer appropriate.

Following this, various directives, resolutions, and governmental instructions have continuously been issued to address difficulties relating to fuel prices, construction materials, and public investment progress.

In this context, understanding the true nature of:

• “Force Majeure”;
• “Fundamental Change of Circumstances”;
• and “commercial equilibrium of contracts”

has become more important than ever.

Is a Fundamental Change of Circumstances in Construction Contracts Truly Different from Force Majeure?

This is currently one of the most debated issues within the construction industry.

In reality, many businesses tend to:: “categorize every major disruption as force majeure”.

However, from a legal perspective, “Force Majeure” and “Fundamental Change of Circumstances” are two entirely different mechanisms.

While force majeure is generally associated with: situations where contractual performance becomes impossible, a fundamental change of circumstances in construction contracts relates to situations where:

• the contract may still be performed,
• but continuing performance under the original terms may seriously disrupt the commercial equilibrium between the parties.

This is precisely why Article 420 of the 2015 Civil Code is increasingly being invoked in:

• negotiations;
• cost escalation claims;
• dispute boards;
• and construction disputes.

Nevertheless, one of the biggest challenges today is that: many businesses are aware of Article 420, but do not yet fully understand how to apply it properly.

An Event That Goes Beyond Legal Theory — Focusing on How the Market Actually Operates

In response to these practical challenges, CNC, together with experts in:

• legal practice;
• contract management;
• and cost consultancy

is organizing the following seminar:

“Fundamental Changes of Circumstances in Construction Contracts – Practical Perspectives from Legal, Contract Management and Cost Consultancy”

What distinguishes this program is that: it is not merely a theoretical legal seminar.

Instead, the event is designed as a multidisciplinary practical forum where issues will be examined from:

• legal perspectives;
• project operation perspectives;
• claim and contract management perspectives;
• cost data perspectives;
• and commercial perspectives.

In other words: the program is not only about “legal provisions”, but about: what businesses should actually do when contractual equilibrium begins to collapse.

Practical Perspectives to Be Shared During the Program

Legal Perspective: How Should Article 420 Truly Be Understood?

Although Article 420 of the 2015 Civil Code has existed for nearly a decade, in practice:

• many businesses still confuse “Force Majeure” with “Fundamental Change of Circumstances”;
• or view Article 420 merely as a mechanism to “request price increases”.

In reality, the essence of Article 420 lies in: contract rebalancing.

This topic will be analyzed in depth during the seminar:

• When does cost escalation remain an ordinary commercial risk?
• When may it qualify as a fundamental change of circumstances?
• What are the actual conditions for application?
• Where does the burden of proof lie?
• Why do many claims fail despite substantial cost increases?

Contract Management Perspective: Why Do Many Claims Fail?

In project practice, the issue is often not:

“whether costs have increased.

Rather, it is:

“whether such impacts can be properly substantiated”.

Many contract adjustment requests encounter difficulties due to:

• lack of baseline data;
• insufficient market data;
• inability to prove actual impacts;
• inability to demonstrate mitigation efforts;
• or failure to establish the connection between market changes and disruption of contractual commercial equilibrium.

From a contract management and project operation perspective, the seminar will discuss:

• effective claim strategies;
• documentation logic;
• negotiation approaches;
• and practical lessons learned from contractors’ experiences.

Cost Consultancy Perspective: Data Is Becoming the Most Powerful Tool

One of the biggest changes in today’s market is that:

pricing data and market data are becoming decisive factors in contract adjustment request.

Participants will gain insights into:

• construction material price trends;
• the impact of fuel prices on construction costs;
• methods for assessing actual cost impacts;
• and how cost consultants evaluate the reasonableness of adjustment requests.

This is particularly important in a context where:

• auditors;
• employers;
• regulatory authorities;
• and dispute boards/arbitral tribunals

are requiring increasingly higher standards of proof.

What Will Participants Gain?

The seminar is designed with strong practical orientation, focusing on: “frameworks that can be directly applied to ongoing projects”.

Participants will have access to:

✅ A Framework for Assessing the Applicability of Fundamental Changes of Circumstances in Construction Contracts

Including questions such as:

• Are the changes objective in nature?
• Did they occur after contract execution?
• Could they reasonably have been foreseen?
• How severely do they affect cost structures and project schedules?
• Have mitigation measures been implemented?

This framework is particularly important for:

• contractors;
• employers;
• commercial managers;
• contract managers; and
• project legal teams.

✅ Claim Preparation and Evidentiary Checklists

Including:

• baseline records;
• pricing data;
• impact documentation;
• mitigation records;
• and logical linkage between market changes and disruption of commercial equilibrium.

This is also one of the key factors determining whether a claim for the application of the doctrine of fundamental change of circumstances in a construction contract would be sufficiently persuasive.

✅ A “Contract Rebalancing” Perspective”

One of the key insights of the seminar is that: Article 420 is not a mechanism for “requesting price increases“. Rather, it is: a mechanism for rebalancing contracts.

This means that solutions may include:

• schedule adjustments;
• cashflow adjustments;
• risk reallocation;
• modification of implementation methods;
• or restructuring of contractual commercial arrangements.

✅ A Dispute Avoidance Perspective

Instead of approaching issues from a: ““win–lose” perspective, the program aims to address, “how contracts can continue operating sustainably.”

This mindset is particularly important for:

• EPC projects;
• infrastructure developments;
• public investment projects;
• and long-term construction contracts.

Program Information

According to the program agenda:

• 14:00 – 14:15: Opening Remarks
• 14:15 – 14:45: Force Majeure vs Fundamental Change of Circumstances
• 14:45 – 15:15: Contractor’s Perspective
• 15:15 – 15:45: Cost Consultancy Perspective
• 15:45 – 16:15: Legal Perspective
• 16:15 – 16:45: Q&A and Practical Discussion

Format: Online & Offline.

• Online via Zoom
• Offline: Royal Hotel Saigon, 133 Nguyen Hue Blvd, Saigon Ward, HCMC. Lobby: Saigon Hall

In a Volatile Market, Understanding Article 420 Is No Longer an Academic Exercise

As war, fuel prices, logistics disruptions, and public investment pressures simultaneously affect the construction market, many contracts are entering a situation where:

they remain performable, but no longer commercially balanced.

In this context, properly understanding and applying the concept of fundamental changes of circumstances in construction contracts is no longer merely a legal issue:

• a project management issue;
• a commercial strategy issue;
• a risk management issue;
• and in many cases.

Through practical perspectives from legal practice, contract management, and cost consultancy, the seminar aims to provide:

• practical analysis;
• applicable frameworks;
• claim and negotiation strategies;
• and valuable lessons learned from the market.

to help businesses better evaluate, respond to, and navigate today’s rapidly changing environment.

Registration

📌 Physical attendance is limited.
📌 Priority confirmation will be given to:

• employers;
• contractors;
• consultants;
• contract/commercial/cost managers;
• and project legal teams.

👉 Register here:

REGISTRATION LINK: https://us06web.zoom.us/webinar/register/WN_nS9lB5b4RySqPVdctKN81g

Or QR Code

📩 For further information regarding the program and participation:

• Email: trang.huynh@cnccounsel.com
• Hotline: 094 756 6869

We look forward to welcoming and engaging with you at the event.

Disclaimer: The contents of this program and article are intended solely for academic and professional discussion purposes. They do not constitute legal advice for any specific matter. The application of Article 420 of the 2015 Civil Code or any contract adjustment mechanism must be assessed based on the specific circumstances of each contract and project.