What are current forms of agency in Vietnam? What are judgments related to agency contract disputes in Vietnam?

1. What are current forms of agency in Vietnam?

According to Article 168 of the Commercial Law 2005 of Vietnam, the provisions regarding agency contracts are as follows:

Article 168. Agency contract

The agency contract must be made in writing or in another form with equivalent legal validity.

Currently, the forms of agency are stipulated in Article 169 of the Commercial Law 2005 of Vietnam as follows:

- First, off-take agency is the type of agency where the agent conducts the full purchase and sale of a certain amount of goods or provides a complete service for the principal.

- Second, exclusive agency is where the principal appoints only one agent to purchase and sell one or several items or provide one or several types of services within a certain geographical area.

- Third, general goods sale or purchase or service provision agency is where the agent organizes a subordinate agency system to conduct the goods purchase, sales, and services provision for the principal.

The master agent represents the subordinate agency system. Subordinate agents operate under the management of the master agent and in the name of the master agent.

- Other types of agency as agreed by the parties.

Thus, according to Vietnamese commercial law, there are four main types of agency currently: off-take agency, exclusive agency, general goods sale or purchase or service provision agency, and other types of agency as agreed by the parties.

Additionally, the agency contract must be made in writing or in another form with equivalent legal validity.

2. What are judgments related to agency contract disputes in Vietnam?

Below are some court cases related to agency contract disputes resolved by the courts in Vietnam:

Judgment 05/2019/KDTM-PT dated October 30, 2019, regarding an agency contract dispute

- Adjudicating agency: People's Court of Thai Nguyen Province

- Excerpt of the content: “Mr. Bui Van Luong, authorized representative of HB Company, stated: On December 31, 2015, HB Company signed an agency contract with QS Company to distribute cement. The contract is effective from the date of signing until December 31, 2016, then extended until December 31, 2017. The contract stipulates that Party A (QS Company) agrees for the agent (HB Company) to settle delayed payments backed by bank payment guarantees. The agent can take goods on deferred payment and must pay for the previous month's goods within the first 5 days of the following month. Beyond this period, Party B must bear the short-term loan interest rate from the Vietnam Investment and Development Bank.”

Judgment 148/2020/DS-PT dated March 12, 2020, regarding an agency contract dispute

- Adjudicating agency: People's Court of Ho Chi Minh City

- Excerpt of the content: “On September 29, 2012, Mr. Le Hai C, representing V Company, signed an agency distribution contract with Mrs. H. Immediately after that, V Company delivered a batch of T (MPT) wine valued at VND 348,000,000 to Mrs. H for trial sales, but after 2 months, no goods were sold, so Mrs. H returned the goods to V Company, and V Company also refunded Mrs. H. While V Company and Mrs. H had not yet terminated the agency contract, on January 29, 2013, Mr. Nguyen Phuoc T2 visited Mrs. H's house introducing himself as the General Director of T Company and proposed a contract to buy 200 bottles of MPT wine.”

Judgment 02/2020/KDTM-PT dated February 20, 2020, regarding an agency contract dispute

- Adjudicating agency: People's Court of City B, People’s Court of Dong Nai Province

- Excerpt of the content: “Company C received goods from Company B under delivery notes dated September 06, 2017, and September 16, 2017, with 28 rolls of iron sheets, valued at VND 2,990,981,708. Company F did not directly receive all goods but did so through transportation companies hired by Company F to pick up at Company B’s warehouse. Company C did not provide written notice to Company B before receiving the goods, which did not comply with the agency contract agreement, and the plaintiff acknowledged errors in the goods receipt procedure. However, Company C’s failure to directly receive goods at Company B's warehouse does not change the nature of the commercial agency. Because Company C, as the agent, sold all 28 rolls of iron sheets delivered by Company B, thus, Company C must fulfill the payment obligation to the principal in accordance with Article 175 of the Commercial Law 2005.”

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