Law applies to resolving disputes on clothing purchase contracts between Vietnamese enterprises and Chinese enterprises

Law applies to resolving disputes on clothing purchase contracts between Vietnamese enterprises and Chinese enterprises

Pursuant to Clause 1, Article 664 of the 2015 Civil Code, regulations on determination of law applying to civil relations involving foreign elements are as follows:

1. The international agreements to which the Socialist Republic of Vietnam is a signatory or Vietnamese law shall apply to civil relations involving foreign elements.

According to Clause 1, Article 1 of the 1980 Vienna Convention on the International Sale of Goods (CISG), it stipulates the conditions for application of this Convention:

Article 1

(1) This Convention applies to contracts of sale of goods between parties whose places of business are in different States:

(a) when the States are Contracting States; or

(b) when the rules of private international law lead to the application of the law of a Contracting State.

(2) The fact that the parties have their places of business in different States is to be disregarded whenever this fact does not appear either from the contract or from any dealings between, or from information disclosed by, the parties at any time before or at the conclusion of the contract.

(3) Neither the nationality of the parties nor the civil or commercial character of the parties or of the contract is to be taken into consideration in determining the application of this Convention.

Article 2

This Convention does not apply to sales:

(a) of goods bought for personal, family or household use, unless the seller, at any time before or at the conclusion of the contract, neither knew nor ought to have known that the goods were bought for any such use;

(b) by auction;

(c) on execution or otherwise by authority of law;

(d) of stocks, shares, investment securities, negotiable instruments or money;

(e) of ships, vessels, hovercraft or aircraft;

(f) of electricity.

Vietnam and China are both members of the Vienna Convention and their cashew partners are based in two different countries. At the same time, the contract between the two parties to buy and sell clothes is not in the case of not applying this Convention.

Therefore, the applicable law to resolve disputes over clothing sales contracts between you and your partner in China is the 1980 Vienna Convention on the International Sale of Goods (CISG). 

In addition, Article 9 of the 1980 Vienna Convention on the International Sale of Goods (CISG) also stipulates the application of customary practices to resolve this dispute:

(1) The parties are bound by any usage to which they have agreed and by any practices which they have established between themselves.

(2) The parties are considered, unless otherwise agreed, to have impliedly made applicable to their contract or its formation a usage of which the parties knew or ought to have known and which in international trade is widely known to, and regularly observed by, parties to contracts of the type involved in the particular trade concerned.

Law applies to resolving disputes on clothing purchase contracts between Vietnamese enterprises and Chinese enterprises (Image from the Internet)

What is determination of commercial headquarters when one of parties in an international commercial contract has multiple headquarters in Vietnam? 

Pursuant to Clause a, Article 10 of the 1980 Vienna Convention on the International Sale of Goods (CISG), it stipulates way to determine the commercial headquarters when one of the parties to an international commercial contract has multiple headquarters as follows:

(a) if a party has more than one place of business, the place of business is that which has the closest relationship to the contract and its performance, having regard to the circumstances known to or contemplated by the parties at any time before or at the conclusion of the contract;

Best regards!