19/07/2022 11:01

Fraud in civil transactions - trial practice in Vietnam

Fraud in civil transactions - trial practice in Vietnam

Deception in a civil transaction is the intentional act of one party to make the other party misunderstand the subject, nature, object, or content of the transaction, so that transaction has been established. So how to determine what is cheating in a real case and how to resolve that transaction?

Specifically, in the Judgment No. 13/2019/DSST dated August 20, 2019 on the dispute over the contract for the donation of land use rights, the summary content is as follows:

“During the period 2016-2017, Mr. L told Ms. T that Vietnam had a policy of granting the land use right certificate in exchange, believing Mr. L, Ms. T gave the land use right certificate to Mr. exchange procedure. Mr. L then asked Ms. T to come to the notary office to sign the paper, and Ms. T signed and pointed to the paper to make the procedure for granting and changing the land use right certificate. After a while, when Mr. L did not see Mr. L handing over the land use right certificate, Mrs. T asked Mr. L to hand over the paper so that Ms. T could divide the land among her children, but Mr. L abstained. It was not until 2018 that Ms. T learned that Mr. L had transferred the rights from Mrs. T to Mr. L's name by signing a contract to donate land use rights. Now, Ms. T requests the Court to declare the contract of donation of land use rights between Ms. T and Mr. L as an invalid civil transaction due to deception, requesting the Court to cancel the donation contracts.

As a result, the People's Court of Dat Do district declared the civil transaction invalid and canceled the contract of gifting the said land use right of Ms. T to Mr. L.

Vietnamese law has many provisions on deception in civil transactions, but the handling of fraud is limited to criminal sanctions. Today, deception is dealt with by civil remedies. The 1991 Civil Contract Ordinance of Vietnam allows declaring civil transactions invalid due to deception but does not specify what fraud is. The 1995 Civil Code is more advanced and introduces the concept of deception in Clause 1, Article 142, according to which: “Deception in civil transactions is an intentional act of one party to mislead the other party about the subject, object nature or content of the transaction, so that transaction has been established”. The Civil Code 2005 inherits the Civil Code of 1995 with some changes. Specifically, according to Article 132 of the Civil Code 2005: “Deception in a civil transaction is an intentional act of one party or a third party in order to mislead the other party about the subject, nature of the object or the content of a civil transaction”. The Civil Code 2015 of Vietnam maintains the above provision in Article 127 whereby “Deception in a civil transaction is an intentional act of one party or a third person in order to mislead the other party about the subject and nature of the object or the content of the incoming civil transaction that has already been established it”.

The case commented on here relates to a Contract established by fraud. Through the commentary, we will clarify two big questions: How to identify deception? If deception exists, how should it be handled? 

With the provisions of the Civil Code, deception is an "act". Usually, behaviors are job-specific. It can be an action or a word or both an action and a word. 

According to the judgment, Mr. L told Ms. T to give him the land use right certificate for the government to re-issue the certificate, causing Ms. T to give Mr. L the papers to carry out the grant. Mr. L then asked Ms. T to come to the notary office to sign the paper, and Ms. T signed and pointed to the paper to make the procedure for granting and changing the land use right certificate. Therefore, it shows that Mr. T has a behavior that causes Ms. T to misunderstand the gift contract.

To determine fraud in the above contract, the court verifies and argues in Vietnam as follows:

- Realizing that Ms. T is illiterate, the notarization must have a witness, the witness must be someone who has no rights and interests related to the notarization, while Mr. N is the witness and then that he entered into the subject transaction that he signed as a witness.

- The elderly Mrs. T no longer has the labor force, and is unable to create income assets for herself, the land use right is the only asset.

- The land use right is a common property of husband and wife, although it is transferred to Mrs. T, Mrs. T has the right to decide, but Mrs. T is illiterate, has limited civil acts, and Ms. T's children. It is also necessary to know this transfer of rights, but the transfer of rights on Ms. T's children is not known.

From the above-analyzed details, the Court has grounds to believe that Mr. L has intentionally made Ms. T misunderstand the transaction contents as presented by Ms. T, so he has established the transaction. Ms. T's request is reasonable to accept. Determining the contract for the donation of land use rights between the donor, Mrs. Tran Thi T, and the donor, Mr. Duong Van L, is an invalid civil transaction due to deception and cancellation of the above contracts.

Therefore, the result of this civil transaction is invalid. According to Article 132 of the Civil Code 2005: "When a party to a civil transaction is deceived or threatened, it has the right to request the court to declare that civil transaction invalid...". The Civil Code 2015 maintains the provision mentioned in Article 127 whereby "When a party to a civil transaction is deceived or threatened or coerced, it has the right to request the court to declare that civil transaction invalid."

Similar provisions already exist in the Civil Code 1995 in Clause 1, Article 142. Perhaps the Civil Code has inherited the Ordinance on Civil Contracts on allowing the declaration of contracts entered into due to deception. Because the Ordinance stipulates that when a contracting party is deceived, he has the right to ask the court to determine the contract is void.

The above is a judgment on the practice of adjudicating the case of signing contracts due to fraud, often involving large-value assets such as houses and land, so participants need to be careful when participating in transactions.

Quang Chinh
71


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