Relationship Between the Security Contract and the Contract with the Secured Obligation
Based on Article 29 of Decree 21/2021/ND-CP (effective from May 15, 2021) stipulates the following content:
The invalidation, cancellation, or unilateral termination of a security contract does not terminate the underlying secured obligation contract.
In cases where the underlying secured obligation contract is invalidated, canceled, or unilaterally terminated, the resolution is as follows:
a) If the parties have not performed the secured obligation contract, the security contract is terminated;
b) If the parties have partially or wholly performed the secured obligation contract, the security contract is not terminated. The secured party has the right to dispose of the secured assets to pay off the returning obligation of the obligor towards them.
Sincerely!
