CONTRACT FOR PURCHASE AND SELL OF GOODSTRADE BUSINESS VOID UNDER THE LAW OF VIETNAM

Legal grounds and the subject has the right to request the Court to declare the goods sale and purchase contract invalid .... The conditions of validity of the Goods Sale and Purchase Co

NATIONAL ECONOMICS UNIVERSITY

Falculty of Law

INDIVIDUAL ASSIGNMENT

CONTRACT FOR PURCHASE AND SELL OF

Table of Contents

A INTRODUCTION 3

1 Reason for choosing the topic 3

2 Research purpose and tasks 4

B MAIN TOPICS 4

I THEORETICAL BASIS OF CONTRACTS FOR THE PURCHASE OF GOODS VOID IN COMMERCIAL BUSINESS 4

1 Definition and features of the contract 4

2 Definition and characteristics of goods sale and purchase contract 5

3 Validity conditions of goods sale and purchase contracts 5

4 Overview of voidable goods sale and purchase contracts 6

5 Law governing invalid goods sale and purchase contracts 7

6 Factors affecting the establishment and settlement of invalid goods sale and purchase contracts 8

II VIETNAM LAW ON CONTRACTS FOR THE PURCHASE OF GOODS 1 Legal grounds and the subject has the right to request the Court to declare the goods sale and purchase contract invalid 9

2 Cases in which contracts for the sale of goods are void 9

3 Legal consequences of an invalid goods sale and purchase contract 12

4 Statute of limitations for requesting the Court to declare the goods sale and purchase contract invalid 13

III PRACTICAL APPLICATION AND SOLUTIONS TO COMPLETE LAW, ORGANIZATION FOR IMPLEMENTATION OF LAW ON VOID PRODUCTS BUY AND SELL CONTRACT 1 Practical application of current legal provisions on invalid goods sale and purchase contracts 14

2 Demand and some solutions to perfect the law, organize the implementation of the law on invalid goods sale and purchase contracts 16

C CONCLUSION 19

A INTRODUCTION

1 Reason for choosing the topic

The general trend of the world economy today is the trend of globalization and

regionalization of international economic life Economic and commercial linkages take place at both the global and regional levels All countries are facing this trend and are looking to

integrate their economies with the world economy Vietnam has joined the integration of

APTA, WTO, TPP and is facing that trend with certain great opportunities and challenges, but it can be affirmed that, in recent years, the policy of international integration has created certain advantages for the success of the national renovation cause For a long time, the contract has become a legal tool to establish the relationship of the subjects arising from civil and

economic exchanges The contract has a very important role, it is reflected in most of the

relationships of the parties in many fields In the current market economy, when civil and economic relations are becoming increasingly complex and expanding, buying and selling of goods is the main activity in commercial activities and is expressed in the form of contracts goods sale and purchase Contracts for the sale and purchase of goods have an important role in the economy as well as social life such as: being a tool, the basis for formulating and

implementing the business owners' own plans, and the basis for settle disputes, expand

diplomatic relations with countries around the world, etc When entering into a contract, the subject wants the contract to ensure the legality of the contract for easy implementation, to ensure profit as well as to strengthen cooperation and develop partnership relationships

However, for many objective and subjective reasons, the signed contract may be declared invalid To solve this problem as well as protect the legitimate rights and interests of the parties, the law has stipulated that the Sale of Goods Contract is void However, the purchase and sale

of goods is a core activity of commercial activities, which the current Commercial Law does not provide for this issue, however, it is specified in the current Civil Code as well as the

Commercial Code Civil 2015 From the above arguments, according to the author's wish, I want to evaluate the change of the Civil Code 2015 in the provisions on Contracts for the Sale

of Goods as well as provisions on Contracts of Sale and Purchase of Goods Because of

chemistry in other legal documents, the author has chosen the topic: "Contracts for the sale and purchase of goods in commercial business are invalid under Vietnamese law" This is a matter

of urgent theoretical and practical significance in resolving disputes that the Sale of Goods Contract is invalid in the current situation

2 Research purpose and tasks

The topic has the following purposes: To study the theoretical bases, analyze and evaluate the provisions of the current law and the actual application of the law, thereby offering solutions to improve the law and organize it law enforcement agency on the contract of sale of goods is void

- Assessing the legal status of invalid Goods Sale Contracts in commercial business

- Providing solutions to improve the law on invalid Contracts for Sale of Goods in commercial business

- Propose solutions to organize the implementation of the law on invalid Goods Sale Contracts in commercial business

Today, contracts are an important and popular legal tool for people to perform transactions

to satisfy almost all needs in social life However, in the legislative history of mankind, it is not easy to find an accurate term, like the term "contract" in use in many countries today Many countries believe that the term "contractus" (contractus) is derived from the Latin verb

"contrahere", meaning "to bind", and first appeared in Rome around the 5th century- IV BC In Vietnam, in real life, there are many different terms used to refer to a contract such as: contract, contract, document, deed, covenant, consent, consent In the future, the current documents of our state can no longer use the term "contract" or "treaty" as before, but use the terms

"functional", "instrumental"3 such as civil contracts, labor contracts, commercial contracts This

is a special point because in the laws of many countries, people only use the term "contract" in general, but do not use the term Civil contract, Commercial contract, Labor contract in a sense specifically the law of Vietnam Unlike the 2005 Civil Code, the concept of a civil contract, the

2015 Civil Code introduces the concept of a contract in general, according to Article 385 of the

2015 Civil Code, a contract is an agreement between the parties on the establishing, changing or terminating rights and obligations between the parties to the agreement

1.2 Features of the contract

Regardless of the field of social relations formed, a contract always has common

characteristics: a contract is an agreement on a voluntary basis of the parties to the contract, the contract generates the rights and obligations of the parties the parties to the contract, the rights and obligations in the contract are mainly attached to the material interests of the contracting parties First, a contract is an agreement on a voluntary basis by the parties to the contract Second, the contract gives rise to the rights and obligations of the parties to the contract Third, the rights and obligations in the contract are mainly associated with the material interests of the contracting parties

2 Definition and characteristics of goods sale and purchase contract

2.1 Commodity trading contracts

Buying and selling goods under Clause 8, Article 3 of the Commercial Law 2005

stipulates that it is a commercial activity, whereby the seller is obliged to deliver the goods, transfer the ownership of the goods to the buyer and receive payment; the buyer is obliged to pay

to the seller, receive the goods and take ownership of the goods as agreed Thus, the Goods Sale Contract is understood as follows: The Goods Sale Contract is a contract established (or signed) between the parties (the buyer and the seller), which is satisfied in terms of form as prescribed in Clause 1 of this Article Clause 1, Article 24 of the Commercial Law 2005, in which the subject matter of the Goods Sale Contract is the goods that are allowed to be traded in accordance with the law

2.2 Features of the contract of sale of goods

The characteristics of the Contract for the Sale of Goods can be considered in relation to the contract of sale of property according to the principle between the particular and the general In addition to the similar characteristics, the Goods Sale Contract has the following distinctive features: Firstly, on the subject matter, the Goods Sale Contract is established between the subjects who are traders Second, in terms of form, the Sale of Goods Contract can be expressed

in oral form, in writing or by specific acts of the contracting parties In certain cases, the law requires the parties to enter into a written contract, for example, an international Sale of Goods Contract must be made in writing or in another form that can be legally binding legal equivalent

as telegram, telex, fax or data message Third, the subject matter of the Goods Sale Contract is goods In the usual sense, goods are products of human labor created for the purpose of

satisfying human needs Increasingly, with the development of society, goods become abundant The concept of goods is specified in the laws of the current countries, although there are certain differences, but they tend to expand the objects that are goods that are allowed to circulate

3 Validity conditions of goods sale and purchase contracts

The conditions of validity of the Goods Sale and Purchase Contract are subject to the

provisions of the Civil Code 2005 and the Civil Code 2015 The law does not have separate provisions on the validity conditions of this contract Therefore, the valid conditions represent :

“1 A civil transaction shall take effect when the following conditions are fully satisfied : a) Subjects have civil legal capacity and civil act capacity in accordance with established civil transactions

b) Subjects participating in the transaction are completely voluntary

c) The purpose and content of the transaction do not violate the prohibition of the law, and

do not violate social ethics ;

2 The form of a civil transaction is an effective condition of the transaction in cases where it

is provided for by law ”

Accordingly, it can be determined that a Contract for the Sale of Goods is valid when the following conditions are satisfied :

Firstly, the contracting party must have the legal capacity and civil act capacity in

accordance with the established civil transactions in order to perform the obligations under the contract In addition to legal capacity and civil act capacity, in practice, the parties to the

contract are mainly traders Therefore, when entering into a contract of sale and purchase for profit, traders must meet the conditions of having a legal business registration for the goods being traded

Secondly, the purpose and content of the contract do not violate the prohibition of the law,

do not violate social ethics

Thirdly, the voluntariness of the subjects, in entering into a contract, the parties must be

completely voluntary, which is free will in order to ensure that the validity of the contract is in fact consistent with the genuine will of the parties Otherwise, it is no longer a contract

Fourthly, the form of the contract in accordance with the provisions of law (if so provided

by law) A contract for the sale and purchase of goods is expressed orally, in writing or

established by specific acts

For all types of goods sale and purchase contracts that are required by law to be made in writing, such provisions must be complied with Accordingly, for cases where a contract is required by law to be made in writing or in other forms of equivalent value, the parties must comply with the provisions of law If the parties do not make it in writing, it can be considered

as a basis for declaring the contract void

4 Overview of voidable goods sale and purchase contracts

4.1 Definition of contract of sale of goods

According to the above analysis, a Contract for the Sale of Goods is a contract

established (or signed) between parties (buyer and seller), satisfied in terms of form

according to the provisions of the Civil Code 2005 and the Ministry of Industry and Trade The Civil Law 2015 and the Commercial Law 2005, in which the subject matter of the Goods Sale Contract is the goods that are allowed to be traded in accordance with the law

A voidable contract in general and a voidable Goods Sale Contract in particular is a contract that has no effect in reality

“Non-effect means not being able to generate an effect If in the establishment the terms of form as well as substance are not respected, the contract shall be deemed to have not been entered into and therefore cannot give effect at all ”

4.2 Characteristics of a contract for the sale and purchase of voidable goods

Firstly, A voidable Goods Sale Contract must be a contract that violates one of the

contract's validity conditions

Secondly, A Contract for the Sale of Goods that violates the conditions of validity

may be declared void or not

Thirdly, The Sale of Goods Contract is declared invalid without giving rise to the

rights and obligations between the parties

5 Law governing invalid goods sale and purchase contracts

5.1 Legal grounds for requesting to declare the goods sale and purchase contract invalid

To determine that the Sale of Goods Contract is invalid, it must be based on the grounds prescribed by law The basis for declaring the Goods Sale Contract invalid is based on the provisions of civil law (Civil Code 2005, Civil Code 2015), specialized laws (Commercial Law), in case:

Firstly, The Goods Sale Contract violates the subject conditions prescribed by law Secondly, Contract of Sale of Goods violates the prohibition of the law

Thirdly, Contracts for the sale of fake, deceived, and coerced Goods

Fourthly, in some cases, violation of the formal conditions is the basis for declaring

the Goods Sale Contract to be void Regarding the form of a contract, it is basically based

on the choice of the subjects, in some cases it is required by law to comply with the

conditions on the form in writing and in writing notarized .

5.2 Declare the contract of sale and purchase of goods invalid and deal with the legal consequences

- Declaring the Goods Sale Contract to be void: When there are sufficient grounds, the Court shall apply the provisions of civil law and commercial law to declare the Goods Sale Contract invalid The time when the Sale of Goods Contract is invalid is counted from the time of entering into the contract and does not give rise to the rights and obligations of the parties However, before the time the contract is declared invalid, the subjects have performed their obligations under the contract, so they must deal with the legal consequences of the invalid contract

- Legal consequences of declaring the Goods Sale Contract invalid: When declaring the Goods Sale Contract invalid, the most difficult thing is to deal with the legal consequences This settlement of consequences affects not only the two parties to the contract, but also the third person (if the goods have been transferred to the third person)

Vietnamese law settles the legal consequences for an invalid Goods Sale Contract based on the principle: "the parties restore the original condition, return to each other what they have received as at the time the contract was established

- “Return to each other what has been received”: Returning to each other what has been received is considered as a specific principle when dealing with the consequences of a void contract in general and a contract for the sale of voided Goods private This case only applies when the assets are goods that can be returned to each other In case the goods no longer exist, the monetary value shall be calculated for payment However, in our opinion, when solving, the machine should not be in the same way as the law In case the goods still exist but the parties agree to pay each other in cash, it is still accepted

In addition to the goods that are the subject of the contract, there are goods created

in the process of operation such as yields and profits, which are also considered reasonable

to deal with

6 Factors affecting the establishment and settlement of invalid goods sale and

purchase contracts

Firstly, the legal document is not complete and there is no consensus

Second, many regulations are not scientific and unreasonable

Third, Vietnamese law is not compatible with international law

Fourth, due to the ignorance of the law of the parties involved in the establishment

of the Sale of Goods Contract, specifically:

- Subjects directly enter into contracts

- Form and content of the contract

- The basis for entering into the contract

II VIETNAM LAW ON CONTRACTS FOR THE PURCHASE OF GOODS

1 Legal grounds and the subject has the right to request the Court to declare the goods sale and purchase contract invalid

1.1 Legal grounds:

Firstly, the Civil Code 2005 and the Civil Code 2015 (approved on November 24,

2015 and took effect on January 1, 2017)

Second, Commercial Law 2005

Third, Enterprise Law 2020

Fourth, other relevant legal documents

In addition to the legal documents governing the invalid Goods Sale Contract, there are also documents that are: Decree 59/2006/ND-CP dated June 12, 2006 guiding the

implementation of the Commercial Law on goods , business ban services, business

restrictions and conditional business…

1.2 The subject has the right to request the Court to declare the goods sale and

purchase contract invalid

The subject has the right to request the Court to declare a civil transaction invalid in general, which also applies to the Sale of Goods Contract in particular and is regulated

in each specific case:

Firstly, the subject is the legal representative of one or the parties to the contract Second, the buyer and seller in the Goods Sale Contract

2 Cases in which contracts for the sale of goods are void

• The contract of sale and purchase of goods is invalid because it violates the

prohibition of the law or is against social morality

So what is prohibited by law? Those are the provisions of the law that do not allow the subject to perform certain acts

Regarding social ethics, it is not a legal concept, it depends on many factors such as culture, history, economy Social ethics are common standards of behavior between

people in life social life, recognized and respected by the community Behavior contrary to those standards can be considered contrary to social ethics These two concepts have been

clearly stated in the content of Article 128 of the 2005 Civil Code, and are specifically repeated in accordance with Article 123 of the 2015 Civil Code

In principle, a contract that violates a legal prohibition is understood as a contract that violates a mandatory legal norm, which is generally drafted in the form of a prohibition to

do something, or as a form of not doing or have to do something However, according to the provisions of the Civil Code as above, which is "not allowing the subject to perform certain acts", can it be said that the rules of command written in the form of having to do something are not considered? is prohibited by law and therefore a breach of these terms does not result in the contract being void?

• The contract of sale of goods is invalid due to forgery

According to the Civil Code 2005 and the Civil Code 2015 of Vietnam stipulates:

“When the parties artificially establish a civil transaction in order to conceal another civil transaction, the fake transaction is invalid, and the The concealed transaction is still valid, unless such transaction is also invalid under the provisions of this Code In case a fake transaction is established in order to evade obligations towards a third party, such civil transaction shall be void So, a fake civil transaction is a transaction in which the outward expression of will is different from the inner will and results of the parties to the transaction

To put it simply, a fake civil transaction is a transaction with established content that does not reflect the true will of the parties According to the above provisions, fake transactions have the following cases:

First, the contract is created artificially to conceal another contract

Second, a sham contract to evade obligations to a third party

• An invalid goods sale and purchase contract has been established and performed by

a minor, a person who has lost his/her civil act capacity, a person with difficulties in perception and behavior control, or a person with limited civil act capacity

Accordingly, the Contract for the Sale of Goods is established by a minor, a person who has lost his/her civil act capacity, a person with difficulties in perception or behavior control, or a person with limited civil act capacity the performance is not invalidated in some of the following cases:

“a) A civil transaction of a person under the age of six or a person who has lost his/her civil act capacity in order to meet that person's daily essential needs;

b) Civil transactions only give rise to rights or only relieve obligations for minors, persons who have lost their civil act capacity, people with difficulties in cognition or behavior