Vietnam: Are authorized representatives allowed to sell the land to others without the consent of the owner?

Hello, Lawnet would like to answer as follows:

1. Regulations on authorization in Vietnam

According to Article 135 of the Civil Code 2015, the grounds for establishing the right of representation are as follows:

Article 135. Basis for establishment of representation rights

Representation rights shall be established according to a power of attorney between a principal and a representative (hereinafter referred to as authorized representation); according to a decision of a competent authority, a charter of a juridical person or as prescribed by law (hereinafter referred to as legal representation).

Thus, authorization is one of two forms to establish the right of representation.

According to Article 138 of the 2015 Civil Code, the authorized representatives are prescribed as follows:

Article 138. Authorized representatives

Each natural or juridical person may authorize another natural or juridical person to enter into and perform a civil transaction.

Members of a household, co-operative group or a non-juridical person may agree to authorize another natural or juridical person to enter into and perform a civil transaction related to their common property.

A person aged from fifteen years to below eighteen years may be an authorized representative, except where the law provides for that the civil transaction must be entered into and performed by a person who has reached eighteen years of age.

Thus, authorization is an individual or legal person's permission to another organization or individual on their behalf to establish and perform civil transactions.

2. Are authorized representatives allowed to sell the land to others without the consent of the owner?

According to Article 141 of the 2015 Civil Code, the scope of representation is as follows:

Article 141. Scope of representation

Each representative may only enter into and/or perform civil transactions within his/her scope of representation according to any of the following bases:

a) The decision of the competent authority;

b) The charter of the juridical person;

c) Contents of authorization;

d) Other regulations as prescribed by law.

If it fails to determine the specific scope authorization prescribed in Clause 1 of this Article, the legal representative has the right to enter into and perform all civil transactions in the interests of the principal, unless otherwise prescribed by law.

A natural or juridical person may represent multiple natural or juridical persons but he/she/it may not, on behalf of the principal, enter into and perform a civil transaction with him/her/it or with a third party that he/she/it also acts as a representative therefor, unless otherwise prescribed by law.

The representative must inform the parties of the scope of his/her representation.

The authorized person may only establish and perform civil transactions within the scope of representation according to four bases: the decisions of competent agencies, the charter of the legal entity, the content of the authorization, and other provisions of law.

So, if the two parties agree to sell land to another person in the authorization, the authorized person has grounds to sell the land to another person without the authorization of the principal.

On the contrary, if the two parties do not specifically agree on the sale of land to another person in the content of the authorization, the authorized person needs to obtain the consent of the principal before selling the land to another person.

3. What are the consequences of civil transactions entered into and performed by representatives beyond scope of representation?

According to Article 143 of the Civil Code 2015, the consequences of civil transactions entered into and performed by representatives beyond scope of representation are specified as follows:

Article 143. Consequences of civil transactions entered into and performed by representatives beyond scope of representation

A civil transaction entered into and performed by a representative beyond his or her scope of representation shall not give rise to rights and obligations of the principal with respect to that part of the transaction which exceeded the scope of representation, except for any of the following cases:

a) The principal gives consent;

b) The principal knows it without any objection within an appropriate time limit;

c) It is the principal's fault that the other party does not know or is not able to know that the person entering into and performing the civil transaction therewith was beyond his/her scope of representation.

If a civil transaction entered into and performed by a representative beyond his/her scope of representation does not give rise to rights and obligations of the principal with respect to that part of the transaction, the representative must fulfill the obligations owning to the person with which he/she transacted in respect of the part of transaction which is beyond the scope of representation, unless such person knew or should have known that the scope of representation was exceeded.

A person having transacted with such representative has the right to terminate unilaterally the performance of or to terminate the civil transaction with respect to that part which is beyond the scope of representation or with respect to the entire transaction and to demand compensation for any damage, except where such person knew or should have known that the scope of representation was exceeded or the case prescribed in Point a Clause 1 of this Article.

Where a person and a representative enter into and perform a civil transaction deliberately beyond the scope of representation of the representative and thereby cause damage to the principal, they shall be jointly liable to compensate for the damage.

Thus, for the transaction of arbitrarily selling land beyond the scope of representation, the transaction between the authorized person and the third party will automatically be invalidated. In addition, the authorized person is liable and responsible for performing the obligations to the third party unless the third party knew or ought to have known about exceeding the scope of representation and still executes the transaction.

Best regards!

Please Login to be able to download