Instructions on determination of damages for damaged property in Vietnam specified in Article 589 of the Civil Code 2015

Instructions on determination of damages for damaged property in Vietnam specified in Article 589 of the Civil Code 2015 (Internet image)

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

1. What is damage caused by infringement of property?

According to Article 589 of the Civil Code 2015, in the event of an infringement of property, the compensable damage shall comprise:

(1) Property which was lost, destroyed or damaged; 

(2) Interests associated with the use and exploitation of the property was lost or declined;

(3) Reasonable costs for the prevention, mitigation and remedy of the damage;

(4) Other damage as prescribed by law.

2. Instructions on determination of damages for damaged property in Vietnam specified in Article 589 of the Civil Code 2015 

According to Article 6 of Resolution 02/2022/NQ-HDTP, the determination of damages for damaged property specified in Article 589 of the Civil Code 2015 in Vietnam as follows:

- The damages for lost, destroyed or damaged property specified in Clause 1, Article 589 of the Civil Code 2015 shall be based on the agreement of the parties; in case the agreement fails, the damages shall be determined as follows:

+ In case the property is an object, the damages for the lost or destroyed property shall be determined based on the market price of the property of the same type or the property with the same features, technical standards, uses, and the level of wear and tear of the lost or destroyed property at the time of compensation settlement.

If the property is money, the damages shall be determined as the lost or damaged amount of money.

As for valuable papers that are lost or damaged but cannot be restored, the damages shall be determined as the value of the lost or destroyed valuable papers at the time of compensation settlement. Where valuable papers are lost or damaged but can be restored, the damages shall be determined as expenses necessary to restore those papers.

+ As for damaged property, the damages shall be the cost to repair and restore the property to its pre-damaged condition at the market price at the time of settlement of compensation to determine the loss; if the damaged property cannot be repaired or restored, the damages shall be determined according to the guidance at Point a, Clause 1 of Article 6 of Resolution 02/2022/NQ-HDTP.

- Benefits associated with the use and exploitation of lost or reduced property specified in Clause 2, Article 589 of the Civil Code 2015 are yields and profits that the aggrieved person has or is expected to have obtained if the property is not lost or destroyed.

Yields and profits are calculated according to the actual price being earned, if not yet earned, at the market price of the same type or the 1-month average rental price of the property of the same type or property with the same technical standards, features, uses and quality at the time the first-instance Court determines the damages;

As for property on the market that are not available for rent, their yields and profits are determined on the basis of the average income of three consecutive months brought by the damaged property under normal conditions before the time when the loss occurred.

- Reasonable expenses to prevent, limit and remedy the loss specified in Clause 3, Article 589 of the Civil Code 2015 are actual and necessary expenses at the time of spending under normal conditions for the imposition of necessary measures to prevent further loss; repair and restore the original condition of the infringed property.

For example: T set fire to H’s house. The cost of extinguishing the fire is X dong; the cost of repairing and restoring the house to its original state is Y dong. In this case, X dong is the cost to prevent and limit the loss. Y dong is the cost of repairing the loss.

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