23/02/2024 10:11

The risk of losing property when concluding an oral contract in Vietnam

The risk of losing property when concluding an oral contract in Vietnam

Because of my trust in my cousin, I allowed her to rent a space for business. Both parties did not create a written contract but instead entered into an oral agreement. Now, we want to take back the space for business, but she refuses and has filed a lawsuit. Thus, how should I handle this case? "Ha Anh-Quang Ninh, Vietnam

Hello, you can refer to the analysis below:

The practice of entering into oral contracts regarding assets is becoming very common in society. Many people choose to enter into contracts in this form due to trust and familiarity. However, in practice, entering into oral contracts can easily lead to disputes that affect the rights of the parties involved, and in some cases, there is a risk of losing assets.

Legal consequences of entering into oral contracts in Vietnam

In reality, for simple and uncomplicated transactions with low value, people mainly agree orally with each other due to trust. This has become a habit for many people, who are unaware that entering into contracts in this form carries many risks and does not fully guarantee their legal rights and interests.

According to regulations, oral contracts are only recognized by civil law in cases where it is not mandatory to have a written agreement. Participants in the transaction must have full legal capacity and a voluntary spirit, and the purpose and content must not be contrary to the law and ethics. In principle, this is also considered a contract and has binding legal effects on both parties. Therefore, oral contracts in certain cases still have legal validity.

In addition, contracts with specific regulations, such as labor contracts, land use rights transfer contracts, power of attorney contracts, etc., are only legally valid when entered into in writing. Even for transactions related to real estate, notarization or authentication must be performed for legal validity.

Due to the incomplete and vague nature of the transaction content, when entering into oral contracts, parties only quickly agree on certain key points without anticipating the potential situations that may arise during the contract execution, as well as compensation in case of disputes or damages. Entering into oral contracts can lead to many consequences, especially disputes, and it is difficult to prove the content of the previous transaction to seek legal protection for the parties' rights and legitimate interests.

When the court requires evidence, the parties involved also have no documents to provide. If they want to file a lawsuit but cannot present evidence, the lawsuit cannot be pursued. At the same time, agreements made verbally have very low evidentiary value, and if brought to court, it will be difficult to prove the existence of the agreement and its contents if one party denies it.

Risk of losing properties due to oral contracts in Vietnam

Many people, due to a lack of understanding of the law and trust, only agree and communicate orally without drafting a written contract or going through authentication. In reality, there are many damages in oral contract disputes because there is hardly any evidence for legal protection.

Renting a house and then losing the property altogether is the story of Mr. N. Because they were close friends, Mr. N's family allowed Mrs. Q to rent a house in Tan Binh District, Ho Chi Minh City, without establishing a written rental agreement, only relying on a verbal agreement. After Mr. N and Mrs. Q passed away, Mr. N's descendants sought to reclaim the house from Mrs. Q's descendants, but they refused. Determined to pursue the case, Mr. N's descendants took the matter to court. However, since the plaintiffs could not provide evidence of ownership or land use rights, or prove that the defendants were residing on or renting the property, the court ruled in favor of Mrs. Q's family, stating that they were the rightful owners of the property.

Another case involving an invalid oral contract occurred in March 2015. Mr. N.V.T. (residing in District 11, Ho Chi Minh City) purchased a portion of a house in District 6 for over 3 billion VND. The entire house was mortgaged to a bank, and the owner promised that Mr. T. could separate his portion of the house after the purchase. Based on this agreement, Mr. T. paid a deposit of 500 million VND. However, in July 2015, the owner informed Mr. T. that the house could not be separated. Mr. T. filed a lawsuit against the owner to reclaim his money. The bank representative confirmed that there was no official document allowing the separation of the mortgaged property. As a result, the court rejected the oral agreement between the two parties regarding the bank and declared the deposit contract null and void.

There are many real-life stories related to trust that lead to undesirable legal consequences. These stories serve as a cautionary lesson for people when entering into contracts, especially those involving real estate. The above cases are typical examples of oral contracts, where individuals lack the knowledge to prevent legal consequences.

Therefore, before engaging in contract transactions, parties need to thoroughly understand the conditions of the transaction and clearly agree on the rights and obligations of each party. It is necessary to fully comply with the agreed-upon terms to minimize potential disputes. It is advisable to minimize oral contracts when conducting transactions in order to protect oneself.

Although oral contracts are still common in daily life, participants often do not preserve evidence of these transactions due to their familiarity and trust in each other. However, for high-value transactions such as real estate or contracts governed by the Civil Law to ensure rights and interests, parties must adhere to the regulations regarding content, form, and fulfillment.

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