Vietnam has a complex and detailed legal system regarding civil transactions, including provisions set forth in the Civil Code of 2015 and other related legal documents. The Civil Code of 2015 is the most important legal basis regarding civil transactions in Vietnam. It regulates the fundamental elements of civil transactions, including full content and form, voluntariness, legality, necessity, and feasibility.
One of the most important aspects in doing business in Vietnam is to learn and apply the rules of contract in business activities as this can be one of the most widely used action daily. On another level, aspects that valid or invalid a contract is largely based according to the Civil Code of 2015.
Some notable contents in the Civil Code of 2015 include:
Conditions for the validity of civil transactions
A civil transaction is valid when it meets the following conditions:
a) The parties have legal capacity and civil conduct capacity appropriate to the established civil transaction;
b) The parties engage in the civil transaction entirely voluntarily;
c) The purpose and content of the civil transaction do not violate the prohibitions of the law, nor are they contrary to social ethics.
The form of civil transactions is a condition for the validity of civil transactions in cases where the law provides.
Forms of civil transactions
Civil transactions are manifested by spoken words, in writing, or by specific conduct. Civil transactions conducted through electronic means under the form of data messages as regulated by the law on electronic transactions are considered transactions in writing.
In cases where the law stipulates that civil transactions must be evidenced by authenticated, notarized, or registered writings, such provisions must be complied with.
Conditions of civil transactions
In cases where the parties agree on conditions for the occurrence or cancellation of civil transactions, when those conditions occur, the civil transaction arises or is canceled.
If the conditions for the occurrence or cancellation of civil transactions cannot occur due to the intentional direct or indirect obstruction by one party, it is deemed that the conditions have occurred; if one party intentionally influences the occurrence of conditions directly or indirectly, it is deemed that the conditions have not occurred.
Interpretation of civil transactions
If a civil transaction has unclear or ambiguous content, is understood in various meanings, and does not fall under the provisions of Article 404 of the Civil Code of 2015 regarding contracts or Article 648 of the Civil Code of 2015 regarding testamentary dispositions, the interpretation of that civil transaction is carried out in the following order:
a) According to the true intentions of the parties when establishing the transaction;
b) According to the meaning consistent with the purpose of the transaction;
c) According to the customs at the place where the transaction is established.
Invalid civil transactions
A civil transaction that does not meet any of the conditions specified in Article 117 of the Civil Code of 2015 is invalid, except as otherwise provided by the Civil Code of 2015.
Thus, there are cases where civil transactions will be invalid:
• Civil transactions are invalid due to violations of the law, contrary to social ethics.
• Civil transactions are invalid due to fraud.
• Civil transactions are invalid due to minors, persons without civil conduct capacity, persons with difficulties in perception, control of conduct, persons with limited civil conduct capacity to establish or perform.
• Civil transactions are invalid due to confusion.
• Civil transactions are invalid due to deception, coercion, duress.
• Civil transactions are invalid due to the person establishing it not being aware of and able to control their actions.
• Civil transactions are invalid due to non-compliance with form requirements.
• Civil transactions are partially invalid.
Legal consequences of invalid civil transactions
An invalid civil transaction does not create, change, or terminate the civil rights and obligations of the parties from the time the transaction was established.
When a civil transaction is invalid, the parties restore the initial state and return what they have received to each other. If it cannot be returned in kind, the value is reimbursed in money.
The party in good faith in gaining benefits does not have to return those benefits. The party at fault causing damage must compensate.
The resolution of the consequences of invalid civil transactions related to personal rights is governed by the Civil Code of 2015 and other relevant laws.
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