The purpose of a civil transaction is the benefit that the subject wishes to achieve when establishing that transaction in Vietnam. In some cases, the interests of the subjects are not achieved because the civil transaction is invalid. In this case, subjects need to clearly understand the statute of limitations for requesting the Court to declare a civil transaction invalid in order to appropriately resolve the issue.
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Conditions for effective civil transactions in Vietnam
Civil transaction is a contract or a unilateral legal act which gives rise to, changes or terminates civil rights and/or obligations. Civil transactions which fail to satisfy any one of the conditions specified in Article 117 of the Civil Code 2015 shall be invalid, unless otherwise prescribed by this Code. Specific conditions are as follows:
- Participants in the transaction have legal personality and/or legal capacity in conformity with such transaction;
- Participants in the transaction act entirely voluntarily;
- The purpose and contents of the transaction are not contrary to the law and/or social ethics.
In addition, the forms of civil transactions shall be the conditions for its effectiveness in cases where it is so provided for by law.
Issues related to invalid civil transactions in Vietnam (Internet image)
Cases where civil transactions are invalid in Vietnam
Pursuant to the provisions from Articles 123 to 129 of the Civil Code 2015, cases of invalid civil transactions include:
- Invalidity of civil transactions due to breach of legal prohibitions or contravention of social ethics
- Invalidity of civil transactions due to falsification
- Invalidity of civil transactions established and performed by minors or legally incapacitated persons or persons with limited cognition and behavior control or persons with limited legal capacity
- Invalidity of civil transactions due to misunderstanding
- Invalidity of civil transactions due to deception, threat or compulsion
- Invalidity of civil transactions established by person lacking in cognition and behavior control
- Invalidity of civil transactions due to non-compliance with form.
Thus, if you fall into the cases specified in Articles 123 to 129 of the Civil Code 2015, the civil transaction will be invalid, unless otherwise provided by this law.
Legal consequences of invalid civil transactions in Vietnam
According to the provisions of Article 131 of the Civil Code 2015, an invalid civil transaction shall not give rise to, change or terminate any civil rights and obligations of the parties as from the time the transaction is entered into. At the same time, when a civil transaction is invalid, the parties shall restore everything to its original state and shall return to each other what they have received. If the restitution is not able to make in kind, it may paid in money.
A bona fide person in receiving yield and/or income is not required to return such yield and/or income.
The party at fault which caused damage must compensate therefore.
Article 132 of the Civil Code 2015 stipulates that depending on the cause leading to a civil transaction being invalid, the statute of limitations is determined specifically as follows:
- For cases where a civil transaction is invalid due to violating prohibitions of the law, contrary to social ethics, and the civil transaction is invalid due to fabrication, the statute of limitations for requesting the Court to declare a civil transaction invalid is not limited.
- In addition, the time limit within which a request may be made to a court to declare a civil transaction invalid as specified in Articles 125 thru 129 of this Code shall be two years as from the date on which:
- The representative of a minor, a legally incapacitated person, a person with limited cognition and behavior control or a person with limited legal capacity knows and should know the ward established and/or performed the transaction himself/herself.
- The mistaken or cheated person in a transaction knows and should know that such transaction is established due to misunderstanding or cheating;
- The person that threatened or compelled other persons in a transaction put an end to such acts;
- The person lacking in cognition and behavior control establishes his/her transaction;
- The civil transaction is established in non-compliance with form.
Note: For cases in Articles 125, 126, 127, 128 and 129 of the Civil Code 2015 that expire after the 2-year statute of limitations without a request to declare the civil transaction invalid, the civil transaction will be valid.
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