09:04 | 13/01/2023

Shall the contract on the sale of the used vehicle in Vietnam be invalid due to a failure to authenticate or notarize?

Shall the contract on the sale of the used vehicle in Vietnam be invalid due to a failure to authenticate or notarize? – asked Ms. Nhi (Kien Giang, Vietnam)

Is it compulsory for contract on the sale of a used vehicle in Vietnam to be authenticated or notarized?

Pursuant to Clause 2, Article 8 of Circular 58/2020/TT-BCA stipulating documents on vehicle ownership transfer as follows:

Vehicle documentation
...
2. The documentation of vehicle title transfer shall include any of the following:
a) Invoices, financial documents (receipts) or documentation on sale and gifting of vehicle (decision, contract, inheritance document) as per the law;
b) Written agreement on sale or gifting of vehicle between individuals must be authenticated or notarized, or certified by the employers with respect to the armed forces; and foreign nationals working for diplomatic missions, consular posts and representative offices of international organizations, and registers his/her vehicle at the address of his/her employer, he/she must provide the confirmation from them.
c) As for liquidated vehicles of police: A decision on liquidation of vehicle made by the competent authority and invoice of selling public property or selling state-owned property;
d) As for liquidated vehicles of military: A certificate of vehicle registration, an official dispatch certifying that the vehicle has been moved out of the military equipment of the Department of Vehicles affiliated to the Ministry of National Defense and an invoice of selling public property or selling state-owned property.
...

Accordingly, the documentation of vehicle title transfer include the papers specified in Clause 2, Article 8 above. In which, written contract on sale or gifting of vehicle between individuals must be authenticated or notarized, or certified,...

Therefore, the contract of sale and purchase of used cars must be notarized or authenticated.

Shall the contract on the sale of the used vehicle in Vietnam be invalid due to a failure to authenticate or notarize?

Shall the contract on the sale of the used vehicle in Vietnam be invalid due to a failure to authenticate or notarize?

Pursuant to Article 117 of the 2015 Civil Code, the conditions for the validity of civil transactions are as follows:

Conditions for effective civil transactions
1. A civil transaction shall be effective when it satisfies all of the following conditions:
a) Participants in the transaction have legal personality and/or legal capacity in conformity with such transaction;
b) Participants in the transaction act entirely voluntarily;
c) The purpose and contents of the transaction are not contrary to the law and/or social ethics.
2. The forms of civil transactions shall be the conditions for its effectiveness in cases where it is so provided for by law.

Pursuant to Clause 2, Article 119 of the 2015 Civil Code, the form of civil transactions is as follows:

Forms of civil transactions
...
2. In cases where it is provided for by law that a civil transaction must be expressed in writing, notarized, authenticated, registered or permitted, such provisions must be complied with.

Pursuant to Article 131 of the 2015 Civil Code, the legal consequences of invalid civil transactions are as follows:

Legal consequences of invalid civil transactions
1. An invalid civil transaction shall not give rise to, change or terminate any civil rights and obligations of the parties as from the time the transaction is entered into.
2. When a civil transaction is invalid, the parties shall restore everything to its original state and shall return to each other what they have received.
If the restitution is not able to make in kind, it may paid in money.
3. A bona fide person in receiving yield and/or income is not required to return such yield and/or income.
4. The party at fault which caused damage must compensate therefore.
...

Accordingly, the unnotarized old car sales contract will be invalidated due to a violation of the regulations on the form of the contract. The legal consequences of an invalid civil transaction are specified in Article 131 above.

Thus, because your used car sales contract is not notarized, it will be invalidated due to a breach of contract form. When the contract is void, your friend is obligated to return the amount you originally paid. At the same time, the party causing damage is obliged to compensate.

Can a contract on the sale of a used vehicle in Vietnam which are unnotarized or unauthenticated carry out the transfer procedure?

Pursuant to Article 19 of Circular 58/2020/TT-BCA stipulating the solutions to registering the title transfer for vehicles that have transfer their legal ownership to various persons as follows:

Solutions to registering the title transfer for vehicles that have transfer their legal ownership to various persons
1. Title transfer procedures and documentation: The person using the vehicle is going to the vehicle registration management agency to carry out the procedure for title transfer and present documentation as prescribed in Article 9 of this Circular, clearly stating the process of legal sale and delivery of vehicles, commit the origin of the vehicle and submit the following documents:
a) The certificate of vehicle registration and license plate specified in Clause 3 Article 6 of this Circular;
b) A proven documentation of the title transfer of the person whose name is put in the vehicle registration certificate, and a proven documentation of the title transfer of the person who is the end-seller (if any).
2. Title transfer procedures and documentation: The vehicle user shall come to the vehicle registry of the residence: present the documentation prescribed in Article 9 of this Circular and submit the following documents:
a) The declaration of vehicle registration (form 01);
b) A proof of vehicle registration fee according to statutory regulations;
c) The certificate of revocation of vehicle registration and license plate (for inter-provincial title transfer for automobile, or title transfer for motorbike within the same vehicle registry).
...

Accordingly, the procedures and documents for registration of vehicle name transfer are specified in Article 19 above, which include proven documentation of the title transfer of the person whose name is put in the vehicle registration certificate, and proven documentation of the title transfer of the person who is the end-seller (if any).

And this document must be notarized or authenticated. Therefore, if the sale and purchase contract is not notarized or authenticated, it will not be able to carry out the procedures for registration of the vehicle title transfer.

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