What is a civil transaction? Conditions for effective civil transactions in Vietnam

What is a civil transaction? Conditions for effective civil transactions in Vietnam (Internet image)

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

1. What is civil transaction?

According to Article 116 of the Civil Code 2015, civil transaction is a contract or a unilateral legal act which gives rise to, changes or terminates civil rights and/or obligations.

2. Conditions for effective civil transactions in Vietnam

According to Article 117 of the Civil Code 2015, the conditions for effective civil transactions are as follows:

- 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. Regulations on invalidity of civil transactions due to non-compliance with form in Vietnam

According to Article 129 of the Civil Code 2015, a civil transaction violating conditions for validity pertaining to form shall be invalid, except for any of the following cases:

- If the form of a civil transaction, required to be established in writing, does not comply with regulations of law, but a party or the parties has/have fulfill at least two third of the obligations in the transaction, a court, at his/her/their request(s), shall issue a decision on recognition of the validity of such transaction.

- If the form of a civil transaction, required to be established in writing, violates against regulations on notarizing or authorization, but a party or the parties has/have fulfill at least two third of the obligations in the transaction, a court, at his/her/their request(s), shall issue a decision on recognition of the validity of such transaction.

In this case, the parties need not perform the notarizing or authorization.

4. Time limit for requesting court to declare civil transactions invalid in Vietnam

Time limit for requesting court to declare civil transactions invalid under Article 132 of the Civil Code 2015 is as follows:

- 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 the Civil Code 2015 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.

- After the time limit prescribed in Clause 1 of Article 132 of the Civil Code 2015, if there is still no request for declaring civil transaction invalid, such transaction still remains valid.

- For civil transactions specified in Articles 123 and 124 of the Civil Code 2015, the time limit for requesting a court to declare such civil transactions invalid shall not be restricted.

5. Regulations on protection of the interests of bona fide third parties with regard to invalid civil transactions in Vietnam

Regulations on protection of the interests of bona fide third parties with regard to invalid civil transactions under Article 133 of the Civil Code 2015 are as follows:

- In cases where a civil transaction is invalid but the transacted property being a moveable property is not required to be registered and such property has already been transferred to a bona fide third party through another transaction, the transaction with the third party shall remain valid, except for the case specified in Article 167 of the Civil Code 2015.

- In cases where a civil transaction is invalid but the transacted property is registered at a competent authority and such property has already been transferred to a bona fide third party through another transaction which is established according to that registration, such transaction shall remain valid.

In cases where the transacted property which is required to be registered has not registered at a competent authority, the transaction with the third party shall be invalid, except for cases the bona fide third party received such property through an auction or a transaction with an another party being the owner of such property pursuant to a judgment or decision of a competent authority but thereafter such person is not the owner of the property as a result of the judgment or decision being amended or annulled.

- The owner of a property shall have no right to reclaim the property from the bona fide third party if the transaction with such party remains valid as prescribed in Clause 2 of Article 133 of the Civil Code 2015, but the owner may proceed against the party at fault to refund appropriate expenses and compensate for his/her damage.

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