Rights and obligations of parties to contracts for purchase and sale of goods in Vietnam

Rights and obligations of parties to contracts for purchase and sale of goods in Vietnam (Internet image)

1. Forms of contracts for purchase and sale of goods in Vietnam

According to Article 24 of the Commercial Law 2005, the forms of contracts for purchase and sale of goods are as follows:

- Contracts for sale and purchase of goods may be expressed in verbal or written form or established by specific acts.

-. For types of contracts for purchase and sale of goods, which, as provided for by law, must be made in writing, such provisions must be complied with.

2. Rights and obligations of parties to contracts for purchase and sale of goods in Vietnam

Rights and obligations of parties to contracts for purchase and sale of goods in Vietnam under Section 2 of the Commercial Law 2005 include the following:

2.1. Delivery of goods and goods-related documents

- The seller must deliver goods and relevant documents, as agreed in contracts on quantity, quality, packing and preservation modes and other contractual terms.

- In cases where there is no specific agreement, the seller is obliged to deliver goods and relevant documents according to the provisions of the Commercial Law 2005.

2.2 Place of delivery of goods

- The seller is obliged to deliver goods at the agreed place.

- In cases where there is no agreement on place of goods delivery, such a place shall be specified as follows:

+ In cases where goods are things attached to land, the seller must deliver goods at the place where such goods exist;

+ In cases where the contract contains a provision on goods transportation, the seller is obliged to deliver goods to the first carrier;

+ In cases where the contract contains no provision on goods transportation, and at the time the contract is entered into, the parties know the location of the goods storage, the place of goods loading or the place of goods manufacture, the seller shall have to deliver the goods at such place;

+ In other cases, the seller shall have to deliver goods at his/her place of business, or his/her place of residence identified at the time the purchase and sale contract is entered into in cases he/she has no place of business.

2.3 Responsibilities upon delivery of goods where carriers are involved

- Where goods are handed over to the carrier without being identified with specific signs or marks on them, accompanied with transportation documents or otherwise, the seller must notify the purchaser of the handover of goods to the carrier and clearly identify names and method of recognizing transported goods.

- Where the seller is obliged to arrange the goods transportation, the seller shall have to enter into necessary contracts for the transportation of goods to the destination by means of transportation suitable to specific circumstances and under normal conditions for such modes of transportation.

- Where the seller is not obliged to purchase insurance for the goods in the course of transportation and if requested by the purchaser, the seller must supply to the purchaser all necessary information on the goods and the transportation thereof to enable the purchaser to purchase insurance for the goods.

2.4 Time limit for delivery of goods

- The seller must deliver goods at the time already agreed upon in the contract;

- Where only the time limit for delivery of goods is agreed upon without a specific time for delivery of goods, the seller may deliver goods at any time within such time limit and must notify the purchaser of the delivery in advance;

- Where there is no agreement on the time limit for delivery of goods, the seller must deliver goods within a reasonable time limit after the contract is entered into.

2.5 Delivery of goods before the agreed time

Where the seller delivers goods earlier than the agreed time, the purchaser may receive or reject the goods, unless otherwise agreed upon by the parties.

2.6 Goods which are not appropriate to contracts

- Where it is not specified in the contract, goods shall be considered not appropriate to the contract when they fall into one of the following cases:

+ They are not suitable to common use purposes of goods of the same type;

+ They are not suitable to any specific purpose that has been notified by the purchaser to the seller or the seller should have known at the time the contract is entered into;

+ Their quality is not the same as the quality of the samples previously handed over by the seller to the purchaser;

+ They are not preserved or packaged by a method common to such goods, or not preserved by proper preserving methods in cases where no common preserving method is available.

- The purchaser may reject the goods if such goods are not appropriate to the contract according to the provisions of Clause 1 of this Article.

2.7 Liability for goods which are not appropriate to contracts

Unless otherwise agreed upon by the parties, the liability for goods which are not appropriate to contracts is provided for as follows:

- The seller shall not be liable for any defect of the goods if the purchaser, at the time the contract is entered into, knew or should have known such defect;

- Except for the case specified in Clause 1 of this Article, within the time limit for lodging complaint provided for in this Law, the seller shall be liable for any defect of the goods which already exists before the time of passing the risk to the purchaser despite the fact that such defect may be discovered after passing the risks.

- The seller shall be liable for defects of goods occurring after the pass of risks if such defects are attributable to contract breaches by the seller.

2.8 Remedies in case of delivery of goods in insufficient quantity or delivery of goods not appropriate to contracts

- Unless otherwise agreed, and where the contract only provides for a time limit for delivery of goods and does not determine a specific time for delivery of goods, and the seller delivers goods before the expiration of such time limit but in insufficient quantity or goods not appropriate to the contract, the seller may still deliver the deficit quantity of goods or provide substitute goods which are appropriate to the contract or remedy the inappropriateness of the goods within the remaining duration.

- Where the seller, when applying the remedies provided for in Clause 1 of this Article, causes disadvantages or unreasonable costs to the purchaser, the purchaser shall have the right to request the seller to deal with such disadvantages or bear such costs.

2.9 Delivery of goods-related documents

- Where there is an agreement on the delivery of documents, the seller is obliged to deliver all goods-related documents to the purchaser within the time limit, at the place and by mode already agreed.

- Where there is no agreement on the time limit and place for delivery of goods-related documents to the purchaser, the seller must deliver such documents to the purchaser within a reasonable time limit and at a convenient place so that the purchaser can receive the goods.

- Where the seller has delivered goods-related documents before the agreed time, the seller can still rectify errors of such documents within the remaining duration of the time limit.

- When the seller, when rectifying errors mentioned in Clause 3 of this Article, causes disadvantages or unreasonable costs to the purchaser, the purchaser shall have the right to request the seller to deal with such disadvantages or bear such costs.

2.10 Delivery of goods in excessive quantity

- Where the seller delivers goods in excessive quantity, the purchaser may reject or accept such excessive quantity of goods.

- Where the purchaser accepts the excessive quantity of goods, the purchaser must pay for that quantity at the price agreed in the contract unless otherwise agreed upon by the parties.

2.11 Pre-delivery examination of goods

- Where it is agreed by the parties that the purchaser or the purchaser’s representative shall examine the goods before the delivery, the seller must ensure that the purchaser or the purchaser’s representative shall be given conditions for conducting such examination.

- Except where it is otherwise agreed, the purchaser or the purchaser’s representative in the cases mentioned in Clause 1 of this Article must examine the goods within the shortest period of time allowed by practical circumstances.

Where the contract provides for the transportation of goods, the examination of goods may be postponed until the goods are transported to the destination.

- Where the purchaser or the purchaser’s representative does not conduct the examination of goods before the delivery of goods as agreed, the seller may deliver the goods according to the contract.

- The seller shall not be liable for defects of goods which the purchaser or the purchaser’s representative has known or should have known but failed to notify them to the seller within a reasonable time limit after the examination of goods.

- The seller shall be liable for defects of goods already examined by the purchaser or the purchaser’s representative if the defects of the goods cannot be detected in the course of examination through common measures and the seller knew or should have known such defects but failed to notify them to the purchaser.

2.12 Obligation to assure the ownership right over goods

The seller must assure that:

-. The ownership right of the purchaser over goods sold is not disputed by any third party;

- The goods are lawful;

- The handover of the goods is lawful.

2.13 Obligation to assure intellectual property rights over goods

- The seller must not sell goods infringing upon intellectual property rights. The seller shall be held responsible for any dispute related intellectual property rights over goods sold.

- Where the purchaser requests the seller to observe technical drawings, designs, formulas or specifications furnished by the purchaser, the purchaser shall be liable for complaints related to infringements of intellectual property rights which arise from the fact that the seller has complied with the request of the purchaser.

2.14 Notification requirements

- The seller shall lose the right to invoke the provisions of Clause 2, Article 46 of the Commercial Law 2005 when failing to promptly notify the purchaser of a third party’s complaint about the delivered goods after the seller knew or should have known such complaint, except for cases where the purchaser knew or should have known a third party’s complaint.

- The purchaser shall lose the right to invoke the provisions of Article 45 and Clause 1, Article 46 of the Commercial Law 2005 when failing to promptly notify the seller of a third party’s complaint about the delivered goods after the purchaser knew or should have known such complaint, except for cases where the purchaser knew or should have known a third party’s complaint.

2.15 Obligation of the seller in cases where goods are subject to measures of security for performance of civil obligations

Where the goods sold are subject to measures of security for performance of civil obligations, the seller must notify the purchaser of such security measures and must obtain the consent of the security beneficiary regarding the sale of such goods.

2.16 Obligation to provide warranty for goods

- Where goods are purchased and sold under warranty, the seller shall have to provide warranty for such goods according to the agreed contents and duration.

- The seller must fulfill the warranty obligation as soon as the practical situation permits.

- The seller must bear all warranty expenses unless otherwise agreed.

2.17 Payment

- The purchaser is obliged to pay for goods and receive goods as agreed upon.

- The purchaser must comply with the payment modes and make the payment according to the agreed order and procedures and the provisions of law.

- The purchaser shall still have to pay for goods in cases where goods are lost or damaged after the time the risk is passed from the seller to the purchaser, except for cases where the loss or damage is caused due to the fault of the seller.

2.18 Suspension of payment for goods

Unless otherwise agreed, the suspension of payment for goods is provided for as follows:

- The purchaser that has proofs of deceit of the seller shall have the right to suspend the payment.

- The purchaser that has proofs that the goods are subject to a dispute shall have the right to suspend the payment until the said dispute is settled.

- The purchaser that has proofs that the seller has delivered goods which do not conform with the contract shall have the right to suspend the payment until the seller remedy such inconformity.

- If the proofs produced by the purchaser for the cases of payment suspension mentioned in Clauses 2 and 3 of this Article are unfounded, thus causing damage to the seller, the purchaser must pay compensations for such damage and be subject to other penalties provided for in the Commercial Law 2005.

2.19 Determination of prices

Where there is neither agreement on goods price or on the price-determining method nor other price indexes, the goods price shall be determined according to the price of such type of goods under similar conditions on mode of goods delivery, time of goods purchase and sale, geographical market, payment mode and other conditions which affect the prices.

2.20 Pricing by weight

Unless otherwise agreed, if the goods price is determined according to the weight of the goods, such weight must be net weight.

2.21 Place of payment

Where there is no agreement on specific place of payment, the purchaser must pay to the seller at one of the following places:

- The seller’s place of business, which is identified at the time of entering into the contract; or the seller’s place of residence where the seller has no place of business.

- The place where the goods or documents are delivered, if the payment is made concurrently with the delivery of goods or documents.

2.22 Time limit for payment

Unless otherwise agreed, the time limit for payment is provided for as follows:

- The purchaser must make payment to the seller at the time the seller delivers the goods or the goods-related documents.

- The purchaser is not obliged to make payment until the goods examination can be completed in cases where an agreement is reached according to the provisions of Article 44 of the Commercial Law 2005.

2.23 Receipt of goods

The purchaser is obliged to receive the goods as agreed upon and do appropriate things to help the seller deliver the goods.

2.24 Pass of risks in cases where there is a fixed place of delivery of goods

Unless otherwise agreed, if the seller is obliged to deliver the goods to the purchaser at a particular place, the risk of goods loss or damage shall be passed to the purchaser as soon as the goods are delivered to the purchaser or the person authorized by the purchaser to receive the goods at such place, even in cases where the seller is authorized to retain the documents which establish the ownership rights over the goods.

2.25 Pass of risks in cases where there is no fixed place of delivery of goods

Unless otherwise agreed, if the contract contains provisions on the goods transportation and the seller is not obliged to deliver the goods at a given place, the risk of goods loss or damage shall be passed to the purchaser as soon as the goods are delivered to the first carrier.

2.26 Pass of risks in cases where goods are handed over to a bailee that is not a carrier

Unless otherwise agreed, if the goods are being kept by a bailee that is not a carrier, the risks of goods loss or damage shall be passed to the purchaser in one of the following cases:

- Upon receipt by the purchaser of documents of title to the goods;

- Upon the confirmation by the bailee of the purchaser’s right to possession of the goods.

2.27 Pass of risks in case of purchase and sale of goods in transportation

Unless otherwise agreed, if the subject matter of the contract is goods in transportation, the risk of goods loss or damage shall be passed to the purchaser as from the time the contract is entered into.

2.28 Pass of risks in other cases

Unless otherwise agreed, the pass of risks in other cases is provided for as follows:

- For cases not specified in Articles 57, 58, 59 and 60 of the Commercial Law 2005, the risk of goods loss or damage is to be passed to the purchaser as from the time the goods fall under the purchaser’s right of disposal and the purchaser breaches the contract by rejecting the goods.

- Risk of goods loss or damage is not to be passed to the purchaser if the goods are neither clearly identified by their signs, codes or bills of transportation, nor notified to the purchaser, nor identified by any means.

2.29 Time of transferring ownership of goods

Unless otherwise provided for by law or agreed upon by the parties, ownership of goods shall be passed from the seller to the purchaser as from the time of handover of the goods.

Quoc Dat

>> CLICK HERE TO READ THIS ARTICLE IN VIETNAMESE