Vietnam: For the invalidity of civil transactions due to the breach of legal prohibitions under Article 123 of the 2015 Civil Code, are these legal prohibitions prescribed by laws or laws and their guiding and elaborating documents?
- For the invalidity of civil transactions due to the breach of legal prohibitions under Article 123 of the 2015 Civil Code, are these legal prohibitions prescribed by laws or laws and their guiding and elaborating documents?
- What are the legal consequences of invalid civil transactions in Vietnam?
- What are the cases of invalidity of civil contracts in Vietnam?
For the invalidity of civil transactions due to the breach of legal prohibitions under Article 123 of the 2015 Civil Code, are these legal prohibitions prescribed by laws or laws and their guiding and elaborating documents?
Under Article 123 of the 2015 Civil Code on the invalidity of civil transactions due to breach of legal prohibitions or contravention of social ethics:
- Civil transactions with objectives and contents which breach legal prohibitions or which contravene social ethics shall be invalid.
- Legal prohibitions mean provisions of law which do not permit entities to perform certain acts.
- Social ethics are common standards of conduct as between persons in social life, which are recognized and respected by the community.
In addition, Official Dispatch 1083/VKSTC-V9 of 2024 stipulates:
For the invalidity of civil transactions due to the breach of legal prohibitions under Article 123 of the 2015 Civil Code, are these legal prohibitions prescribed by laws or laws and their guiding and elaborating documents? (Ho Chi Minh City Procuracy)
Answer:
Article 123 of the 2015 Civil Code stipulates that "Legal prohibitions mean provisions of law which do not permit entities to perform certain acts". Therefore, these prohibitions must be prescribed by the law or code. Documents guiding and elaborating laws cannot set their own prohibitions because the prohibitions lead to restrictions on human rights and citizens' rights.
The regulations of the provincial People's Committee on the minimum land area for parcel separation are documents elaborating Clause 1, Article 29 of the Government's Decree No. 43/2014/ND-CP, this is a regulation on conditions for parcel separation, not a prohibition.
Thus, civil transactions are invalid due to the breach of legal prohibitions prescribed by laws and codes.
Documents guiding and elaborating laws cannot set their own prohibitions because the prohibitions lead to restrictions on human rights and citizens' rights.
What are the legal consequences of invalid civil transactions in Vietnam?
Under the provisions of Article 131 of the 2015 Civil Code:
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.
5. The settlement of consequences of invalid civil transactions regarding personal rights shall be prescribed in this Code and relevant laws.
Thus, the legal consequences of invalid civil transactions are:
- 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.
- 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.
- A bona fide person in receiving yield and/or income is not required to return such yield and/or income.
- The party at fault which caused damage must compensate therefore.
- The settlement of consequences of invalid civil transactions regarding personal rights shall be prescribed in the 2015 Civil Code and relevant laws.
What are the cases of invalidity of civil contracts in Vietnam?
In Article 407 of the 2015 Civil Code on invalidity of civil contracts in Vietnam:
Invalid civil contracts
1. The provisions on invalid civil transactions in Articles 123 to 138 inclusive of this Code shall also govern invalid contracts.
2. Invalidity of a principal contract shall terminate an ancillary contract, unless the parties agree that the ancillary contract replaces the principal contract. This provision shall not apply with respect to security for the performance of civil obligations.
3. Invalidity of an ancillary contract shall not terminate the principal contract, unless the parties agree that the ancillary contract is an inseparable part of the principal contract.
In addition, in Article 408 of the Civil Code 2015, there are provisions on the invalidity of civil contracts due to the impossibility of performing subject matter as follows:
Invalidity of civil contracts due to impossibility of performing subject matter
1. If, immediately as from the time a contract is signed, it is impossible to perform the subject matter of the contract for objective reasons, the contract shall be invalid.
2. If, when entering into a contract, one party knew or should have known that it was impossible to perform the subject matter of the contract for objective reasons but failed to notify the other party which entered into the contract, the former party must compensate the latter party for damage, unless the latter party knew or should have known that it was impossible to perform the subject matter of the contract.
3. The provision in Clause 1 and Clause 2 of this Article shall also apply to a contract containing one or more parts with subject matter which is impossible to perform, but the remaining parts of the contract shall remain valid.
Thus, a civil contract in Vietnam is invalid in the following cases:
- Invalidity of civil contracts due to the impossibility of performing subject matter
- Invalidity of civil contracts due to breach of legal prohibitions or contravention of social ethics;
- Invalidity of civil contracts due to falsification;
- Invalidity of civil contracts established and performed by minors or legally incapacitated persons or persons with limited cognition and behavior control or persons with limited legal capacity;
- Invalidity of civil contracts due to misunderstanding;
- Invalidity of civil contracts due to deception, threat or compulsion;
- Invalidity of civil contracts due to non-compliance with form.
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