Unilateral termination of the authorization contract and some outstanding notes in Vietnam

Judgment 90/2018/DS-PT on the dispute over the land use right transfer contract (LURC) of the People's Court of Ba Ria - Vung Tau below will be an illustration of the above question.

" In 2012, Ms. N and Mr. H1 authorized Ms. P to transfer the land use right owned by Ms. N and Mr. H1 according to the contract of sale notarized at the notary office B. On March 18, 2013, Mr. H1, Mrs. N unilaterally terminated the land use right contract which was notarized by Notary Office B. However, in 2015, Ms. P transferred the above-mentioned land use right to Mr. T, Ms. L.

Mr. T and Ms. L requested the Court to declare the unilateral document to terminate the QU of Ms. N and Mr. H1 and Ms. P as null and void, to recognize the contract of land use right transfer, and to force Mr. H1 and Mrs. N to pay back the amount of the contract. money has been assigned to Ms. P in the land use right transfer contract.

Mr. H1, Mrs. N terminated the land use right contract before Ms. P transferred the land to Mr. T and Mrs. L, so Mr. H1 and Mrs. N did not accept the request of Mr. T and Ms. L. At the same time, there is a request to declare the land use right transfer contract invalid".

The court declared:

+ Mr. H1, Ms. N did not notify Ms. P (authorized person), Mr. T, Ms. L (third party) of the cancellation of this BOD.

+ Mr. H1, Ms. N authorizes Ms. P to transfer the land use right and Ms. P to transfer the land use right to Mr. T, Ms. L within the scope of Mr. H1 and Ms. N's authorization.

Therefore, the contract to transfer the land use right between Ms. P and Mr. T and Ms. L is legal and not invalidated. Mr. H1 and N requested to cancel the contract on the transfer of land use rights in the case of unilateral termination of the contract as prescribed in Article 426 of the 2005 Civil Code of Vietnam, Mr. H1, Mrs. N must bear all the consequences of unilaterally terminating the performance of the contract of transfer of land use rights between Ms. P and Mr. T, Ms. L.

Regarding the provisions of the law to cancel the UNSC, it is necessary to comply with certain conditions prescribed in the Civil Code, the Law on Notarization 2014 of Vietnam.

Firstly, if the UNSC is not notarized, the unilateral termination of the UNSC shall be based on the provisions of the Civil Code.

Unilateral termination of the implementation of the CPC of the 2005 Civil Code and the 2015 Civil Code are the same. The 2015 Civil Code of Vietnam stipulates:

Article 569. Unilateral termination of performance of authorization contracts

1. Where an authorization involves payment of remuneration, the principal has the right, at any time, to terminate unilaterally the performance of the contract but must remunerate the attorney in proportion to the acts performed and compensate for damage. If the authorization does not involve payment of remuneration, the principal has the right, at any time, to terminate the performance of the contract, subject to giving reasonable prior notice to the attorney.

A principal must notify any third person in writing of the termination of the performance of the contract by the principal. If the principal fails to do so, any contract with any such third person shall remain in effect, unless such third person knows or should know of the termination of the performance of the contract.

Therefore, based on the above provisions, when cancelling the contract, the following must be noted:

+ Is the Board of Directors remunerated or not? If there is remuneration, it must pay remuneration for the work and compensate for damage to the authorized party, if not, notify a reasonable time in advance.

+ Must notify the third party in writing.

+ The notification to the authorized party should be in writing and should also include witnesses or evidence to ensure that the third party has received information about the cancellation of the BOD. There are many cases where the authorized person has received a notice of the cancellation of the BOD but still continues to do it (According to Ms. N and Mr. H1, they may have informed Ms. P, but there is no evidence to prove that Ms. P received the notice.) This is also something that needs special attention.

Second, if the Council has been notarized, in addition to the provisions of the Civil Code, it must comply with the provisions of the Law on Notarization 2014.

If the contract of sale has been notarized, the unilateral cancellation of the contract shall be in accordance with the provisions of Article 51 of the Law on Notary 2014 of Vietnam:

Article 51. Notarization of the modification, supplementation or cancellation of contracts or transactions

1. The modification, supplementation or cancellation of a notarized contract or transaction may be notarized only with the written agreements or commitments of all parties to that contract or transaction

If notarized, the contract is more valuable. However, according to the provisions of the Law on Notarization 2014 of Vietnam, the notarized contract must have a written commitment from the participants of the contract, that is, to cancel the contract. requires the participation of the authorizing party and the authorized party. Therefore, with this provision, it is not possible to unilaterally cancel the notarized authorization contract.

From the above analysis, when implementing the council, it is also necessary to be careful in choosing an authorized person, which should be a person of trust and good dignity so as not to affect his/her interests. In addition, the content of the council should have specific provisions on the cancellation of the council and the responsibilities of the parties.

And finally, transactions or notices should be made in writing and have witnesses, because if there is a dispute, it will be important evidence to protect your interests.