What are the conditions for effective civil transactions in Vietnam?

What are the conditions for effective civil transactions in Vietnam? (Internet image) 

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

1. What are civil transactions?

Civil transaction is a contract or a unilateral legal act which gives rise to, changes or terminates civil rights and/or obligations.

(Article 116 of the Civil Code 2015)

2. What are the conditions for effective civil transactions in Vietnam?

According to Article 117 of the Civil Code 2015, a civil transaction shall be effective when it satisfies all of the following conditions:

- 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.

The forms of civil transactions shall be the conditions for its effectiveness in cases where it is so provided for by law.

3. What is the interpretation of civil transactions in Vietnam? 

(i) In cases where a civil transaction may be understood in different ways does not fall under the provisions of points (ii), (iii), such transaction must be interpreted in the following order:

- In accordance with the real intention of the parties at the time when the transaction was entered into;

- In a manner consistent with the objective of the transaction;

- In accordance with the customary practice of the place where the transaction was entered into.

(ii) Interpretation of contracts

- Where a contract contains terms and conditions which are unclear, the interpretation of such terms and conditions shall be based not only on the wording of the contract but also on the mutual intentions of the parties during the process prior to and after the time of establishment and performance of the contract.

- Where a term of a contract may be interpreted in different ways, it shall be interpreted in the way which, when effective, will best benefit the parties.

- Where the wording of a contract may be interpreted in different ways, such wording shall be interpreted in the way most appropriate to the nature of the contract.

- Where a contract contains a term or wording which is difficult to understand, such term or wording shall be interpreted in accordance with the customary practice of the place where the contract was entered into.

- Where there is a conflict between the mutual intentions of the parties and the wording used in the contract, the mutual intentions of the parties shall be used in order to interpret the contract.

- Where the party in a powerful position inserts into the contract contents which are disadvantageous to the party in a weak position, the contract shall be interpreted in a manner favoring the party in a weak position.

(iii) Interpretation of contents of wills

Where the contents of a will are unclear and may be interpreted in different ways, the person announcing the will and the heirs must interpret jointly the contents of the will based on the true wishes of the deceased, taking into consideration the relationship of the deceased with the heirs under the will. If such persons fail to agree on the interpretation of the contents of the will, they have the right to request a court for settlement.

Where part of the contents of a will is not able to be interpreted but the remainder of the will is not affected, only that part which is not able to be interpreted shall not be legally effective.

(Article 121 of the Civil Code 2015)

4. Forms of civil transactions in Vietnam

Article 119 of the Civil Code 2015 stipulates the the forms of civil transactions as follows:

- A civil transaction shall be expressed verbally, in writing, or through specific acts.

Civil transactions by way of electronic means in form of data messages prescribed in law on electronic transactions shall be deemed to be written civil transactions.

- In cases where it is provided for by law that a civil transaction must be expressed in writing, notarized, authenticated, registered or permitted, such provisions must be complied with.

Nguyen Ngoc Que Anh

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