Vietnam: Financial lessees shall properly implement terms and conditions in financial leasing contracts

According to Decree No. 39/2014/NĐ-CP of Vietnam’s Government: “Financial leasing means medium-term and long-term credit activities based on financial leasing contracts between the lessors and the lessees. The lessors commit to buying assets for financial leasing at the request of the lessees and hold the ownership over financially leased assets during the lease term. The lessees use the leased assets and pay rents therefor during the lease term under the financial leasing contracts.”

Specifically, according to Article 20 of Decree No. 39/2014/NĐ-CP of Vietnam’s Government, lessees shall have the following obligations:

1. To be responsible for the selection of leased assets, suppliers, terms and conditions relating to leased assets, including technical specifications, types, prices and time limits for delivery, installation and warranty and other leased asset-related terms and conditions.

2. To use leased assets for right purposes as agreed upon in financial leasing contracts; to refrain from selling or transferring the right to use leased assets to other individuals and organizations, unless otherwise agreed between lessors and lessees in financial leasing contracts.

3. To provide information on suppliers, quarterly reports on their production and business activities, annual financial settlement as well as matters related to leased assets at lessors’ request; to create conditions for lessors to check leased assets.

4. To pay rents and pay other expenses related to leased assets under provisions of financial leasing contracts.

5. To bear all risks of loss of leased assets, all expenses for maintenance, repair or replacement of leased assets throughout the lease term and be responsible for all consequences caused by the use of leased assets to other organizations and individuals in the course of using leased assets.

6. To refrain from erasing or damaging lessors’ ownership signs affixed on leased assets.

7. To refrain from using leased assets for mortgage, pledge or use as security for performance of other obligations.

8. To pay the remaining rent and expenses incurred to lost or irreparably damaged leased assets or upon the termination of financial leasing contracts ahead of schedule as lessees violate terms and conditions which constitute grounds for terminating contracts prescribed in financial leasing contracts.

9. To properly implement other terms and conditions in financial leasing contracts.

View more details at Decree No. 39/2014/NĐ-CP of Vietnam’s Government, effective from June 25, 2014.

Le Hai

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