05 notable points when entering into an authorization contract in Vietnam

05 notable points when entering into an authorization contract in Vietnam (Internet image)

Regarding this issue, LawNet would like to answer as follows:

According to Article 562 of the Civil Code 2015, authorization contract means an agreement between parties whereby an attorney has the obligation to perform an act in the name of a principal. The principal shall only be required to pay remuneration if so agreed or so provided by law.

Notable point when entering into an authorization contract under the Civil Code 2015 are as follows:

1. Rights and obligations of attorneys in Vietnam

According to Articles 565 and 566 of the Civil Code 2015, the rights and obligations of attorneys are prescribed as follows:

- Obligation of attorneys

+ Perform the act in accordance with the authorization and inform the principal of such performance.

+ Notify any third parties involved in the performance of the authorized act of the duration and scope of the authorization and of any amendments of or additions to such scope.

+ Take care of and preserve documents and facilities provided for the performance of the authorized act.

+ Keep all information confidential which the attorney comes to know during the performance of the authorized act.

+ Return to the principal any property received and benefits derived during the performance of the authorized act as agreed or as provided by law.

+ Compensate for damage caused by a breach of any of the obligations provided in this Article.

- Rights of attorneys

+ Require the principal to provide the information, documentation and facilities necessary for performance of the authorized act.

+ Receive remuneration and be reimbursed for reasonable expenses incurred in the performance of the authorized act.

2. Rights and obligations of the principals in Vietnam

The rights and obligations of the principals are based on the provisions of Articles 567 and 568 of the Civil Code 2015, specifically:

- Obligation of principals

+ Provide the information, documentation and facilities necessary for the attorney to perform the authorized act.

+ Be liable for undertakings given by the attorney within the scope of the authorization.

+ Reimburse the attorney for reasonable expenses incurred by the attorney in the performance of the authorized act and pay any agreed remuneration to the attorney.

- Rights of principals

+ Require the attorney to report fully on the performance of the authorized act.

+ Require the attorney to return any property and benefits derived from the performance of the authorized act, unless otherwise agreed.

+ Compensate for damage caused by a breach of any of the obligations provided in Article 565 of this Code.

3. Duration of authorization in Vietnam

Article 563 of the Civil Code 2015 stipulates that the duration of the authorization shall be as agreed by the parties or as provided by law. If there is no agreement and the duration is not provided by law, the authorization contract shall be effective for one year from the date on which the authorization is made.

4. In what case can an attorney sub-authorize its authorization in Vietnam?

- An attorney may only sub-authorize its authorization to a third person in any of the following cases:

+ With the consent of the principal;

+ Due to force majeure events that if the sub-authorization does not apply, the purposes of entering into a civil transaction for the interests of the principal is unachievable.

- A sub-authorization shall not exceed the scope of the original authorization.

- The formalities of the sub-authorization contract must conform to the formalities of the original authorization contract.

(Based on Article 564 of the Civil Code 2015)

5. Unilateral termination of performance of authorization contracts in Vietnam

Article 569 of the Civil Code 2015 stipulates unilateral termination of performance of authorization contracts as follows:

- Where an authorization involves payment of remuneration, the principal has the right, at any time, to terminate unilaterally the performance of the contract but must remunerate the attorney in proportion to the acts performed and compensate for damage.

If the authorization does not involve payment of remuneration, the principal has the right, at any time, to terminate the performance of the contract, subject to giving reasonable prior notice to the attorney.

A principal must notify any third person in writing of the termination of the performance of the contract by the principal. If the principal fails to do so, any contract with any such third person shall remain in effect, unless such third person knows or should know of the termination of the performance of the contract.

- Where an authorization does not involve payment of remuneration, the attorney has the right, at any time, to terminate unilaterally the performance of the contract, subject to giving reasonable prior notice to the principal.

If the authorization involves payment of remuneration, the attorney has the right, at any time, to terminate unilaterally the performance of the contract and must compensate for any damage caused to the principal.

Nguyen Nhu Mai

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