Contract Essentials and Key Legal Principles môn Principle of Management | Trường Đại học Quốc tế, Đại học Quốc gia Thành phố Hồ Chí Minh

What is a contract? .
Article 385. Definition of civil contract
Civil contract means an agreement between parties in relation to the establishment,
modification or termination of civil rights and obligations.
Article 116. Civil transactions
Civil transaction is a contract or a unilateral legal act which gives rise to, changes or
terminates civil rights and/or obligations.
Please be very careful when you must distinguish the different between a Normal
Agreement and A Contract. As a normal agreement will not lead to any changes in civil rights and obligation.
For examble: if Mr A and Mr B agree with each other to organize a birthday party
for Mr C, then this is just an agreement, not a contract.
However, if Mr A agrees (or signed an agreement) with Mr B in which Mr A will
organize a birthday party for Mr C and Mr B will pay Mr A 10 million VND, then this is a contract.
The commercial contract is established by Business Entities (Enterprise, Cooperative,
legally establish economic organization) for profit purpose
Who can enter a contract?
For an Individual: He or She must be Fully 18 years old to enter a contract or a
transaction. Please be careful with the word Full. If Someone is 18-year-old and he/she
legally owning a house, he/she may not be able to transfer the house ownership to
someone else unless he/she is full 18. (You have learned about it from your Legal
class). The word Full is apply for all ages. ( full 6 years old -full15 years; full 15 years to full 18 years).
Restricted civil Act capacity in Vietnamese: là người có năng lực hành vi dân
sự bị hạn chế. Ví dụ như là người nghiện ma tuý, nghiện các chất kích thích dẫn
đến phá tán tài sản gia đình và được Toà ra quyết định tuyên bố là ngừoi bị hạn
chế năng lực thì không được tham gia giao dịch, ký hợp đồng, trừ những trường
hợp như mua đồ ăn thức uống. Còn những người nghiện bình thường mà không
được toà tuyên bố thì có thể không phải nằm trong diện bị hạn chế này. Để tránh
sự nhầm lẫn ko cần thiết thì khi thi tất cả các câu liên quan đến nghiện ngập,
dùng chất kích thích mặc định là ở trường hợp BỊ HẠN CHẾ
Lost of civil act capacity: mất năng lực hành vi dân sự: người mắc các bệnh về
tâm thần, hoặc các bệnh dẫn đến không thể nhận thức, làm chủ được hành vi.
Ví dụ như bệnh down, tâm thần, delirium
If an organization want to enter a contract, it must be a legally established organization.
And only the at law representative may in the name of the organization/enterprise signed a contract.
A Contract can be in written form, verbal form or specific form. According to Civil code
2015, a contract is not required to be stamped to be valid (A contract is valid
when:Subject have civil act and legal capacity. Objectives and contents do not violate
prohibitory provision of law and not contrary to social moral; Subject completely willing
to enter the contract; and it is made in a specific form as provided by law)
Article 45.- Obligation to assure the ownership right over goods. The seller must assure that:
1. The ownership right of the purchaser over goods sold is not disputed by any third party; 2. The goods are lawful;
3. The handover of the goods is lawful.
Article 46.- Obligation to assure intellectual property rights over goods
1. The seller must not sell goods infringing upon intellectual property rights. The
seller shall be held responsible for any dispute related intellectual property rights over goods sold.
2. Where the purchaser requests the seller to observe technical drawings, designs,
formulas or specifications furnished by the purchaser, the purchaser shall be liable
for complaints related to infringements of intellectual property rights which arise from
the fact that the seller has complied with the request of the purchase
Some Important Subject factors affect subject will :
Article 124. Invalidity of civil transactions due to falsification
1. If the parties falsely enter into a civil transaction for the purpose of concealing
another transaction, the false transaction shall be invalid and the concealed transaction remains valid,
Example: In the original contract, A sold his house to B at the price of 10 billion
VND. In order to conduct tax avoidance, A and B established a second contract
(fake one); in this contract, the transaction price of the house is reduce to 5 billion
VND. If the authority discovers the true details, the fake contract is invalid and
the original contract is valid.
2. If the parties enter a civil transaction falsely for the purpose of evading
responsibilities to a third person, such transaction shall be invalid.
Example: A signed a contract to transfer his Bike to B on the 1st of Jun 2021. The
contract also states that the bike would be transfer to B on the 3rd of Jun 2021.
Then on the 2nd of Jun, Mr A signed another contract and immediately transfer
the bike to Mr C. As a result Mr B will received nothing. If this case is brought to
court, base on falsity, the court may declare the first transaction be valid and the
second transaction be invalid. ( this example is just to help you have a better
understanding about the case, do not link it with Bona fide third party)
Unable to be aware of/control acts: Article 128. Invalidity of civil transactions
established by person lacking in cognition and behavior control
A person who has legal capacity but has entered a civil transaction at the time of he/she
is lacking in cognition and behavior control shall have the right to request a court to
declare such civil transaction invalid.
Example: being completely drunk or being drugged. In exam, all case related to drunk are completely drunk.
Where will a contract be made and performed?
In term of making and performing a contract, if there are no agreement from the
involved parties, the contract will be made/performed at the place of resident of the
offeror (individual) or the head office of the offeror (legal entity).
Example: If A offer to sell his car to B, then the contract will be made at A resident, and
the performance of obligation ( delivery of the car and payment) will also be done at A
resident, unless they have other agreement. Bona fide third party:
If it is properties not subject for registration ( iPhone, a watch) and the bona fide third
party acquired it from a indemnifiable contract (buy/purchase the properties)= >the bona
fide third party will have full authority to keep the properties ( unless it is stolen)
If it is properties not subject for registration ( iPhone, a watch) and the bona fide third
party acquired it from a unindemnifiable contract (the properties was given, gifted, to the
bonna fide third party for free)= >the bona fide third party will no authority to keep the properties
If it is a property subject for registration, anyone who successfully registered for such
property will have the right to retain it. Contract Offers:
A contract offer must alway be in a clear expression.
If you want to modified or revoke the offfer => do it before or right at the time the offerree received the offer.
When offeree received the offer and modify the content => not a valid acceptant but a
new offer which need to be re-approved
When an offer is accepted => it will be terminated and the involve parties will begin to made/establish the contract.
Time limit for the performance of contract:
If there are agreement, then involve parties must strictly perform the obligation
according to the time limit. You must know what is delay in performance, postpone in
performance . if you want to postpone the performance, you must notify and be
approved. Based on the approval, you completed your performance => still perform on time.
Must know and understand what the remedies for breach of contract are, security measure….
Must know when a contract is terminated.
Periodic performance: obligations which can be perform at different specifics period if
there are agreement from the involve parties.
Example: hợp đồng trả góp, A mua chiếc xe giá trị 25 tr theo hình thức trả góp trong 1
năm, có ngày tháng trả cụ thể ví dụ ¼ trả 5 tr, 1/7 trả 10 tr, 1/12 trả 10 tr => periodic performance
Contract through a third party: if the third party fail the obligation => the party which hire
the third party will responsible for the third party failure.
The different between separated obligation and divisible obligation:
To be more precise, the correct phrase for separated obligation is : contracts including
obligation which can be performed separately. This apply in case when we there are
many obligor performs their part of the obligation.
Là dạng hợp đồng mà trong đó các nghĩa vụ có thể được thực hiện riêng biệt. ví
dụ như ông A ký hợp đồng với cty B thi công 1 cái biệt thự vườn, thì trong đó các
nghĩa vụ có thể được thực hiện riêng biệt, ví dụ như 1 nhóm thì thi công xây biệt
thự, một nhóm thi công làm vườn.
Divisible obligation: an obligation which can be divided and performed part by part if there are agreement.
Example: ông A mua căn nhà từ ông B, giá 10 tỷ đồng, nếu ông a đồng ý thì ông B có
thể chia ra trả tiền vào nhiều lần khác nhau.