Contract adjustment due to a fundamental change of circumstances under Article 420 of the Civil Code: Legal gaps and directions for reform

Contract adjustment due to a fundamental change of circumstances applies when performance remains possible but continuing under the original terms would impose severe hardship on one party because of objective and unforeseeable changes. Article 420 of Vietnam’s 2015 Civil Code recognizes this mechanism by allowing the affected party to request renegotiation and, where necessary, judicial modification or termination of the contract. However, several issues remain unclear, including the criteria for determining a fundamental change of circumstances, its distinction from force majeure, the duty to renegotiate, risk allocation, and limits on judicial intervention. Through legal analysis and comparison with the UNIDROIT Principles and German and French law, the study recommends making contractual risk allocation central to the mechanism, formalizing the duty to renegotiate, and restricting judicial modification to necessary circumstances.