Socialist Republic of Vietnam

COMMERCIAL CODE

10 May 1997


Chapter I General Provisions

Chapter II Commercial Activities

Chapter III Negotiable Instruments

Chapter IV Commercial Remedies and Resolution of Commercial Disputes

Chapter V State Administration of Commerce

Chapter VI Implementation Provisions

Order 58 L-CTN on Promulgation of Commercial Law dated 23 May 1997



NOTES: Translated and published in co-operation with and as approved by the Ministry of Trade.

In some cases, to aid comprehension, footnotes and English words (appearing in parentheses) which are not in the Vietnamese text have been inserted.


COMMERCIAL LAW


PREAMBLE

The Commercial Law shall serve as the legal framework for the development of a socialist oriented market driven multi-sector commodity economy under State administration in which the State owned sector plays the leading role and, together with the co-operative economic sector, forms the cornerstone of the national economy; for development of the goods and commercial services market in all parts of the country; for expansion of commercial exchanges with foreign countries; for contribution to the strengthening of production activities, the improvement of the people's life, the protection of the legitimate rights of producers, consumers and business entities, and the accumulation [of wealth] required for rapid and sustainable growth of the entire economy during the process of industrialization and modernization and for the fulfilment of the objectives of a prosperous people, a strong nation and a fair and civilized society;

Pursuant to the 1992 Constitution of the Socialist Republic of Vietnam;

This Law provides for commercial activities in the Socialist Republic of Vietnam.

CHAPTER I

GENERAL PROVISIONS

SECTION 1

Governing Scope and Applicability of the Commercial Law

Article 1 Governing Scope of the Commercial Law

The Commercial Law governs commercial acts, establish the legal status of business entities and provides for principles and standards in commercial activities in the Socialist Republic of Vietnam.

Article 2 Subjects Governed by the Commercial Law

1. The Commercial Law applies to business entities conducting commercial activities in Vietnam.

2. Hawkers and small traders having small-scale business capital, turnover and income shall be subject to separate Regulations to be issued by the Government in accordance with the basic principles of this Law.

Article 3 Application of the Commercial Law and Relevant Laws

Commercial activities must comply with the provisions of this Law and other relevant legislation.

Article 4 Application of International Treaties, Foreign Laws and International Commercial Practices With Respect to Commercial Activities with Foreign Countries

1. Where an international treaty to which the Socialist Republic of Vietnam is a party or signatory contains provisions which are inconsistent with the provisions of this Law, contracting parties shall apply the provisions of the international treaty.

2. Contracting parties may agree to apply foreign laws provided that the foreign laws are not inconsistent with Vietnamese laws or where an international treaty to which the Socialist Republic of Vietnam is a party or a signatory provides for the application of such foreign laws.

3. Contracting parties may agree to apply international commercial practices provided that such international commercial practices are not inconsistent with Vietnamese laws.

Article 5 Definition of Terms

In this Law, the following terms shall have the meanings ascribed to them hereunder:

1. Commercial act is an act which is performed by a business entity during the course of its commercial activities and which give rises to rights and obligations between business entities or between the business entity and relevant parties;

2. Commercial activity is the performance by a business entity of one or more commercial acts and includes sales and purchases of goods, provision of commercial services, and commercial promotional activities for the purpose of making profits or for the purpose of implementing socio-economic policies;

3. Goods comprise machinery, equipment, raw materials, fuel, materials, consumer goods, other moveable assets in circulation in the market, residential houses which are used for purposes of leasing, sale and purchase or other business purposes;

4. Commercial services comprise services which are related to the sale and purchase of goods;

5. Commercial promotion is an activity aimed at seeking and enhancing opportunities for sale and purchase of goods or provision of commercial services;

6. Business entities comprise individuals, legal entities , co-operative groups and family households having business registration for commercial activities which are conducted independently and regularly;

7. Commercial assets are all assets which a business entity lawfully owns or has the right to use for the purpose of conducting commercial activities, including offices, shops, warehouses, equipment, machinery, goods, trade names, signboards, trademarks on goods, goods distribution and service provision networks.


SECTION 2

Basic Principles in Commercial Activities and Commercial Policies

Article 6 Right to Conduct Commercial Activities

Individuals, legal entities, co-operative groups and family households satisfying all conditions stipulated by law have the right to conduct commercial activities in fields and regions which are not prohibited by law.

In order to protect national interests, the State has the exclusive right to conduct commercial activities in certain fields and regions with respect to certain types of goods and services as stipulated in lists to be published by the Government.

The State shall protect the right to conduct lawful commercial activities and shall facilitate the commercial activities of business entities.

Article 7 Equality Before the Law and Co-operation in Commercial Activities

The State shall ensure equality before the law of business entities in all economic sectors with respect to commercial activities.

Business entities have the right to co-operate in commercial activities in the manners stipulated by law.

Article 8 Competition in Commerce

1. Business entities may engage in lawful competition in commercial activities.

2. Any competition which is harmful to the national interests and the following acts are prohibited:

(a) Speculation for the purpose of market control;

(b) Dumping of goods for the purpose of competition;

(c) Defamation of other business entities;

(d) Obstructing, enticing, bribing or threatening the staff or customers of other business entities;

(e) Infringement of the right to trademarks on goods and other industrial property rights of other business entities;

(f) Other acts of unlawful competition..

Article 9 Protection of Legitimate Rights of Producers and Consumers

1. Business entities are obliged to provide true and accurate information relating to the goods and services which they supply.

2. Business entities must be responsible for the lawfulness of the goods which they sell.

3. Business entities are prohibited from:

(a) Increasing or reducing prices to the detriment of producers and consumers;

(b) Deceiving or misleading customers;

(c) Selling imitation goods;

(d) Selling goods which do not meet the quality and specifications of registered goods in mixture with registered goods;

(e) Using deceptive advertisements;

(f) Conducting unlawful commercial promotion.

4. Consumers may establish organizations for the purpose of protecting their legitimate rights in accordance with law.

5. Where their interests are infringed upon, consumers have the right to lodge complaints against business entities with the competent State body or to institute court action against business entities in accordance with law.

Article 10 Policies With Respect to State Owned Enterprises

The State shall provide finance and invest in physical technical facilities and human resources for the development of State owned enterprises which deal in essential goods in order to ensure the leading role of State owned enterprises in commercial activities as one of the mechanisms used by the State to regulate supply and demand and to stabilize prices and thereby contribute to the implementation of national socio-economic policies.

The State shall adopt policies for the development of public service enterprises and enterprises which operate in non-profit or low-profit fields in which other economic sectors do not operate.

Article 11 Policies With Respect to Co-operatives and Other Forms of Economic Co-operation in Commerce

The State shall protect ownership rights and other legitimate rights and interests of co-operatives and other forms of economic co-operation in commerce; provide preferential treatment, support and favourable conditions for co-operatives and other forms of economic co-operation for the purposes of renewal and development; and ensure that the State owned sector and the co-operative economic sector together serve as the cornerstone of the national economy.

Article 12 Policies With Respect to Private Business Entities and Private Capitalists

The State shall protect ownership rights and other legitimate rights and interests of private business entities and private capitalists in commerce; encourage and provide favourable conditions for such business entities to co-operate and form joint ventures and associations with State owned enterprises by establishing agents, State capitalist enterprises or other forms of joint ownership with the aim of exploiting the potential of all economic sectors and reinforcing the potential for development of Vietnamese commercial enterprises and expansion of commercial activities with respect to goods and services.

Article 13 Commercial Policies With Respect to Rural Areas

The State shall adopt policies for developing commercial activities in the rural market and facilitating expansion and development of rural markets. State owned enterprises shall, as leading forces, co-ordinate with co-operatives and other economic sectors in the sale of agricultural materials and industrial goods and the purchase of agricultural products in order to improve the purchasing power of farmers and to establish the foundations for the process of economic restructuring, development of goods production, and industrialization and modernization of rural areas.

Article 14 Commercial Policies With Respect to Mountainous Areas, Offshore Islands and Remote and Distant Regions

The State shall adopt policies for the development of commercial activities in mountainous areas, offshore islands and remote and distant regions; policies for the sale of local products and for tax and credit preferential treatment of business entities dealing in essential goods; subsidization of prices and freight for enterprises delegated with the task of supplying goods required for the implementation of social policies; and policies for investment in construction of physical facilities and infrastructure in order to expand economic interaction in such areas.

Article 15 Policies With Respect to Goods Circulation and Commercial Services

The State shall encourage and facilitate expansion of goods circulation and development of commercial services which are not restricted or prohibited by law.

Where necessary, the State may apply economic or administrative measures for the purpose of regulating the market in order to maintain the balance of supply and demand or to implement socio-economic policies.

Circulation of goods and provision of services which are detrimental to national defence, security, social order and security, historical, cultural and ethical traditions and fine customs and practices of Vietnam, ecological environment, production and the health of the people are prohibited.

Any act which hinders lawful circulation of goods and provision of services in the market is prohibited.

The Government shall publish lists of goods the circulation of which is banned, [lists of] commercial services the business of which is prohibited and lists of goods and services the business of which is either prohibited or is subject to certain conditions.

Article 16 Foreign Trade Policies

The State shall exercise unified administration of foreign trade, adopt policies to expand goods exchanges with foreign countries on the basis of respect for independence, sovereignty, equality and mutual benefits with the objectives of multilateralization and diversification; encourage economic sectors to produce goods for export and to participate in export in accordance with law; grant preferential treatment in order to promote export and manufacture for export of competitive goods and to enhance export of commercial services; restrict importation of goods which are adequately produced and supplied by domestic producers thereby giving reasonable protection to local producers; give priority to importation of materials, equipment, high technology and modern techniques which are required for the development of production thereby serving the industrialization and modernization process of the nation.

The Government shall provide detailed policies with respect to foreign trade from time to time and policies with respect to overseas Vietnamese participating in foreign trade development.


SECTION 3

Business Entities

Article 17 Necessary Conditions To Become a Business Entity

Individuals being eighteen (18) or more years of age and having full capacity for civil acts, legal entities, co-operative groups and family households satisfying the conditions stipulated by law to conduct commercial activities and wishing to do so shall be issued with business registration certificates by the competent State body and shall become business entities.

Article 18 Persons Who Shall Not Be Recognized Business Entities

The following persons shall not be recognized as business entities:

1. Persons who lack full capacity for civil acts, have lost capacity for civil acts or have restricted capacity for civil acts;

2. Persons who are subject to criminal prosecution or are serving imprisonment sentences;

3. Persons whose right to conduct business is restrained by a court for reason of having committed offences of smuggling, speculation, trading in prohibited goods, manufacturing or trading in imitation goods, conducting illegal business activities, tax evasion, and deception of customers and other offences in accordance with law.

Article 19 Business Registration

Business registration shall be carried out at the competent State administrative body in accordance with law.

Article 20 Contents of Business Registration

The contents of business registration comprise:

1. Name of business entity and name of authorized representative;

2. Trade name, signboard;

3. Official transaction address;

4. Business activities;

5. Legal capital or initial invested capital;

6. Duration of operation;

7. Branches, shops, representative offices, if any.

During the course of operations, business entities are obliged to register any changes to the contents previously registered.

Article 21 Issuance of Business Registration Certificates

1. The business registration body is responsible for completing business registration within fifteen (15) days from the date of receipt of full and proper documents.

2. Where an application for issuance of a business registration certificate is refused, the business registration body must reply in writing to the applicant specifying the reasons therefor within the time-limit stipulated in clause 1 of this article.

3. Where an application for issuance of a business registration certificate is refused, the applicant may lodge a complaint with the competent State body or institute court action in accordance with law.

Article 22 Publication of Contents of Business Registration

Business entities must cause to be published the contents of business registration in local and central newspapers in accordance with law.

Article 23 Supply of Information Relating to Contents of Business Registration

Individuals, bodies and organizations may require the business registration body to supply information relating to the contents of business registration and to issue copies of business registration certificates or extracts thereof subject to payment of fees.

Article 24 Trade Names and Signboards

1. Business entities must have trade names and signboards.

Trade names may be accompanied by logos.

2. Trade names and signboards must not offend the historical, ethical and cultural traditions and fine customs and practices of Vietnam.

3. Trade names and signboards must be written in Vietnamese; foreign language text may be added in smaller size [print].

4. Trade names must appear on receipts, source documents and other documents used in the course of transactions of business entities.

Article 25 Books of Account and Retaining Receipts, Source Documents and Relevant Documents

1. Business entities must open books of account and keep records in and retain books of account, receipts, source documents and other documents relating to commercial activities in accordance with law.

2. Books of account, receipts, source documents and other documents relating to commercial activities may only be destroyed in compliance with the procedures stipulated by law.

Article 26 Registration, Declaration and Payment of Tax

Business entities must register, declare and pay tax.

Article 27 Representative Offices and Branches of Business Entities

1. Business entities may establish domestic and overseas branches and representative offices in accordance with law.

2. The content and scope of operation of branches and representative offices must be consistent with the content of operation of business entities.

Article 28 Opening and Use of Accounts

Business entities shall open and use bank accounts in accordance with law.

Article 29 Display of Prices

Business entities must display prices of goods and services at the location where the goods are sold or purchased or where the services are provided. The display of prices must be clear and must not mislead customers.

Article 30 Preparation of Receipts and Vouchers

Upon sale of goods or provision of services, business entities must prepare lawful receipts and source documents and provide a copy thereof to customers.

Article 31 Management of Commercial Activities

1. Business entities may directly manage their commercial activities or employ other persons to do so.

The employment of persons to manage commercial activities must be carried out by way of written contract.

2. Business entities are responsible for the commercial activities conducted by the persons whom they employ within the terms agreed in the contract.

3. Persons employed to manage commercial activities must be responsible to business entities in accordance with the contracts entered into with those business entities.

Article 32 Rental, Leasing Out and Assignment of Commercial Assets

Business entities may rent, lease out or assign commercial assets in accordance with law.

Article 33 Commercial Activities with Foreign Countries

Business entities may carry out commercial activities with foreign countries only upon satisfaction of all conditions stipulated by the Government and upon carrying out registration with the competent State body.

Article 34 Temporary Cessation of Commercial Activities

Where commercial activities temporarily cease, business entities must post notices indicating the duration of the temporary cessation at their official transaction address; where the duration of temporary cessation exceeds thirty (30) days, business entities must, in addition to posting notices, notify the competent State body in charge of issuance of business registration certificates and the tax office thereof.

Article 35 Termination of Commercial Activities

1. Commercial activities of business entities terminate in the following cases:

(a) The business entity terminates its commercial activities voluntarily;

(b) The operational duration stated in the certificate of business registration expires;

(c) The business entity is declared bankrupt or is dissolved;

(d) The competent State body issues a decision [to such effect];

(e) The business entity being an individual dies without heirs or the heirs fail to continue the commercial activities.

2. The rights and obligations of business entities upon termination of commercial activities shall be exercised and performed in accordance with law.

Article 36 Revocation of Business Registration

1. Business entities must carry out the procedures to revoke their business registration at the business registration body no later than fifteen (15) days after termination of their activities.

2. In the event of bankruptcy, business entities must carry out the procedures to revoke their business registration no later than fifteen (15) days after the date on which the court decision declaring bankruptcy becomes effective.

3. In the event of dissolution, business entities must carry out the procedures to revoke their business registration no later than fifteen (15) days after the date of the decision on dissolution.

4. Where a business entity being an individual dies without heirs, the business registration body shall revoke the business registration within one month of his or her death.

5. Where business entities terminate commercial activities pursuant to the decision of a competent State body, business entities must carry out the procedures to revoke their business registration within fifteen (15) days of receipt of such decision.


SECTION 4

Foreign Business Entities Conducting Commercial Activities in Vietnam

Article 37 Forms of Operation

Foreign business entities satisfying the conditions stipulated by Vietnamese laws may establish representative offices and branches in Vietnam.

Article 38 Representative Offices

Representative offices of foreign business entities in Vietnam shall, being subsidiary establishments of foreign business entities, be established in accordance with the law of Vietnam for the purpose of promotion of commercial activities.

Foreign business entities are responsible before the law of Vietnam for the operations of their representative offices in Vietnam.

Article 39 Branches

Branches of foreign business entities in Vietnam shall, being subsidiary establishments of foreign business entities, be established and conduct commercial activities in Vietnam in accordance with decisions of the Government of Vietnam.

Foreign business entities are responsible before the law of Vietnam for the operations of their branches in Vietnam.

Article 40 Operations

The operations of representative offices and branches of foreign business entities in Vietnam must be in accordance with the law of Vietnam and consistent with the operations of the foreign business entities.

Article 41 Rights of Representative Offices

Representative offices of foreign business entities in Vietnam have the right to:

1. Operate in accordance with the objectives, scope and duration stipulated in their licences;

2. Rent offices and residential houses; lease or purchase necessary equipment and facilities required for their operations;

3. Employ Vietnamese and foreigners to work for representative offices in accordance with the law of Vietnam;

4. Open accounts in foreign currency and accounts in Vietnamese Dong converted from foreign currency at banks which are licensed to operate in Vietnam; such accounts shall be used solely for the operations of representative offices;

5. Import necessary logistics for their operations subject to payment of duties in accordance with the law of Vietnam;

6. Have seals bearing the names of the representative offices in accordance with the law of Vietnam.

Article 42 Obligations of Representative Offices

Representative offices of foreign business entities in Vietnam are obliged to:

1. Comply with the law of Vietnam;

2. Undertake not to sell or purchase goods or provide commercial services;

3. Undertake not to enter into commercial contracts, except where they are legally authorized in writing by the foreign business entities;

4. Pay tax, fees and charges in accordance with the law of Vietnam;

5. Report on their operations in accordance with the law of Vietnam.

Article 43 Rights of Branches

Branches of foreign business entities in Vietnam have the right to:

1. Conduct commercial activities as stipulated in their licences;

2. Rent offices and residential houses; lease or purchase necessary equipment and facilities required for the operations of branches;

3. Employ Vietnamese and foreigners to work for the branches in accordance with the law of Vietnam;

4. Carry out transactions and enter into commercial contracts in Vietnam in accordance with the scope of operations stipulated in their licences;

5. Open Vietnamese Dong and foreign currency accounts at banks which are licensed to operate in Vietnam;

6. Import necessary logistics for their operations subject to payment of duties in accordance with the law of Vietnam;

7. Remit profits abroad in accordance with the law of Vietnam;

8. Have seals bearing the names of the branches in accordance with the law of Vietnam.

Article 44 Obligations of Branches

Branches of foreign business entities in Vietnam are obliged to:

1. Comply with the law of Vietnam;

2. Register, declare and pay tax, fees and charges in accordance with the law of Vietnam;

3. Adopt the accounting systems stipulated by the law of Vietnam; where it is necessary to adopt a different commonly used accounting system, the approval of the Ministry of Finance of Vietnam must be obtained;

4. Report on their operations in accordance with the law of Vietnam.


CHAPTER II

COMMERCIAL ACTIVITIES

SECTION 1

Types of Commercial Act

Article 45 Types of Commercial Act

Commercial acts under this Law comprise:

1. Sale and purchase of goods;

2. Representation of business entities;

3. Commercial brokerage;

4. Sale and purchase of goods by authorized dealers;

5. Sale and purchase of goods by agents;

6. Commercial processing;

7. Auction of goods;

8. Tendering of goods;

9. Goods delivery service;

10. Goods assessment service;

11. Promotion;

12. Commercial advertising;

13. Display of goods;

14. Trade fairs and exhibitions.


SECTION 2

Sale and Purchase of Goods

Article 46 Sale and Purchase of Goods

Sale and purchase of goods is a commercial act whereby the seller is obliged to deliver and transfer the ownership of goods to the purchaser and to receive payment; and the purchaser is obliged to pay the seller and receive the goods as agreed by the two parties.

Article 47 Parties to Sale and Purchase of Goods Transactions

The parties to sale and purchase of goods transactions shall be business entities or one party shall be a business entity.

Article 48 Subject Matter of Sale and Purchase of Goods

The subject matter of sale and purchase of goods shall be goods as stipulated in this Law.

Article 49 Contracts for Sale and Purchase of Goods

1. Sale and purchase of goods shall be carried out by way of contract.

2. Contracts for sale and purchase of goods shall be in oral or written form or by specific conduct.

3. Where the law prescribes that a contract for sale and purchase of goods must be in writing, the prescribed form must be complied with; telegraphs, telexes, facsimiles, E-mails and other forms of electronic communication shall be considered to be in written form.

Article 50 Principal Contents of Contracts for Sale and Purchase of Goods

Contracts for sale and purchase of goods must contain the following principal contents:

1. Name of goods;

2. Quantity;

3. Specifications, quality;

4. Price;

5. Method of payment;

6. Location and time for delivery and receipt of goods.

In addition to the principal contents stipulated in this article, parties may agree on other contents of the contract.

Article 51 Offers and Acceptance of Offers

1. An offer is a proposal to enter into a contract for sale and purchase of goods within a certain period of time which is made to one or more designated persons and includes the principal contents of a contract for sale and purchase of goods as stipulated in article 50 of this Law.

An offer includes an offer to sell and an offer to purchase goods.

2. An acceptance of offer is the notice communicated by the offeree to the offeror of the acceptance of the offer in its entirety.

Article 52 Amendment of or Addition to Offers

1. The act of an offeree making an amendment of or addition to one of the principal contents of an offer is deemed to be a rejection of the offer and to constitute a counter-offer.

2. The act of an offeree making an amendment of or addition to the contents of an offer without affecting its main contents is deemed to be an acceptance of the offer, unless the offeror immediately rejects the amendment or addition.

Article 53 Period of Liability of Offerors and Acceptors of Offers

1. The offeror is liable from the time when the offer is dispatched to the offeree until the expiry of the time-limit for acceptance of the offer.

Where the time-limit for acceptance of the offer is not specified, the offeror is liable for thirty (30) days from the time when the offer is dispatched to the offeree.

2. The acceptor of an offer is liable from the time when the acceptance of the offer is dispatched to the offeror.

Article 54 Acceptance of Offers After Expiry of Time-Limit for Acceptance

Where an offeror receives the acceptance of an offer after the expiry of the time-limit for its acceptance, the acceptance is invalid, except where the offeror immediately notifies the offeree of its acceptance.

Article 55 Time for Entering into Contracts for Sale and Purchase of Goods

A contract for sale and purchase of goods is deemed to be entered into at the time when it is signed by the parties present.

Where all parties are not present to sign the contract, a contract for sale and purchase of goods is deemed to be entered into at the time when the offeror receives, during the period of liability of the offeror, the notice of acceptance of all terms stated in the offer.

Article 56 Validity of Pre-Contractual Transactions and Negotiations

As from the time when the contract is entered into, all previous correspondence and negotiations in relation to the contract become invalid, unless otherwise agreed by the parties.

Article 57 Amendment of, Addition to and Termination of Contracts for Sale and Purchase of Goods

Parties may agree to amend, add to or terminate contracts for sale and purchase of goods in accordance with the procedures and formalities required for each type of contract.

Article 58 Time At Which Ownership Rights With Respect to Goods Pass

Ownership rights with respect to goods pass from the seller to the purchaser as from the point of time when the seller delivers the goods to the purchaser, unless otherwise agreed by the two parties or stipulated by law.

Article 59 Conditional Transfer of Ownership Rights With Respect to Goods

Where a contract for sale and purchase of goods provides for a condition precedent which must be satisfied before the seller can deliver the goods to the purchaser or the purchaser can receive the goods from the seller, ownership rights with respect to the goods may only pass from the seller to the purchaser upon satisfaction of that condition.

Article 60 Obligation to Deliver Goods and Relevant Documents

1. A seller must deliver goods in accordance with the quantity, quality, specifications and packaging and at the time as agreed in the contract.

2. Where the quality of goods is not specified in the contract, the seller must deliver goods of the average quality of that type of goods in circulation in the market at the time of delivery.

3. Where the packaging of goods is not specified in the contract, the seller must deliver goods in the packaging which is commonly used for that type of goods. Packaging must ensure safety of goods during transportation, allowing for the possibility of transhipment in normal loading and unloading conditions, and must be appropriate to the time and means of transportation.

4. A seller may, subject to the consent of the purchaser, authorize a third person to perform the obligation to deliver goods. In this case, the seller remains responsible to the purchaser for the delivery of goods by the authorized person.

5. A seller may only deliver goods earlier than the agreed time or in instalments where it is so agreed in the contract or accepted by the purchaser.

6. A seller is obliged to deliver documents relating to the goods as agreed in the contract.

Article 61 Examination of Goods Quality Prior to Delivery

Prior to delivery, a seller must examine the quality of goods, bear the costs of such examination and provide quality certificates in accordance with the conditions agreed with the purchaser. In the absence of specific agreement on the examination, the seller must examine the quality of goods in accordance with the terms normally applicable to that type of goods.

Article 62 Participation by Purchasers or Representatives of Purchasers in Process of Examination of Goods Quality at Place of Goods Delivery

1. Where it is agreed in a sales and purchase contract that a purchaser or its representative may participate in the examination of goods quality prior to delivery, a seller must ensure that the purchaser or its representative can do so.

2. Where the purchaser or its representative fails, despite having been advised by the seller of the need, to attend the examination of goods quality as agreed in the contract, the seller is entitled to deliver goods in accordance with the contract.

3. Irrespective of the participation by the purchaser or its representative in the examination of goods quality, the seller remains responsible for the quality of the goods.

Article 63 Right to Receive Payment

A seller shall receive payment as agreed in the contract for sale and purchase of goods. Where the seller receives payment late or receives no payment at all due to the fault of the purchaser, the seller is entitled to take action as stipulated in Chapter IV of this Law in order to protect its legitimate interests.

Article 64 Delivery of Goods to Carriers

A seller is deemed to have performed its goods delivery obligation upon delivery of goods to a carrier in accordance with the terms of delivery agreed by the two parties.

Article 65 Delivery of Goods in Incorrect Quantities and Delivery of Goods of Incorrect Type

1. Where a seller delivers goods in excess of the quantity agreed in the contract, the purchaser may refuse or accept the excessive quantity. In case of refusal by the purchaser, the seller must recover the excessive quantity and bear the costs therefor. Where the purchaser accepts the excessive quantity, the purchaser must pay for that quantity of goods at the price agreed by the two parties.

2. Where a seller fails to deliver goods in sufficient quantity as agreed, the purchaser is entitled to accept delivery and to pay for only the quantity of goods which is received or to take action as stipulated in Chapter IV of this Law in order to protect its legitimate interests.

3. Where a seller delivers, amongst other [goods], goods other than those agreed in the contract, the purchaser is entitled to refuse those goods.

4. The seller shall not be responsible for the delivery of goods in insufficient quantity or the delivery of goods of incorrect type and the purchaser shall not be responsible for receipt of excessive goods if, upon completion of delivery of goods, the parties do not lodge complaints as stipulated in articles 75 and 241 of this Law.

Article 66 Goods Under Warranty

Where goods for sale and purchase are under warranty, the seller is responsible for the quality of goods within the period of the warranty and bears the cost of warranty services, unless otherwise agreed by the parties.

Article 67 Right of Seller to Cease Delivery of Goods

1. The seller has the right to cease the delivery of goods in the following cases:

(a) Where the purchaser breaches the terms of payment agreed in the contract, the seller is entitled to cease delivery of goods until the purchaser completes payment;

(b) Where the purchaser is declared bankrupt or becomes insolvent, the seller is discharged from the obligation to deliver the goods and has the right to dispose of the goods.

2. Where the seller must retain and dispose of goods due to the fault of the purchaser under clause 1 of this article, the purchaser must bear the damage and relevant reasonable expenses.

Article 68 Liability of Sellers With Respect to Goods Which Do Not Conform with Contracts

A seller is liable for goods which do not conform with the contract, unless it can disprove its fault.

Where goods do not conform with the contract, the seller is liable for all damage caused, irrespective of whether the seller is aware of such damage or not.

Article 69 Responsibility to Guarantee Ownership Rights With Respect to Goods Sold

A seller is responsible for guaranteeing to the purchaser the ownership rights with respect to the goods sold in order that the purchaser is not involved in any dispute with any third person. After ownership rights pass, the seller must not perform any act which infringes upon the ownership rights of the purchaser.

Article 70 Refund of Payment

Where a seller has received payment or an advance from a purchaser but fails to fulfil the goods delivery obligation, the seller must refund to the purchaser such payment or advance even where its liability is relieved under article 77 of this Law.

Article 71 Obligation of Purchasers to Accept Goods and to Make Payment

1. A purchaser must perform the acts necessary for the seller to deliver goods, including providing guidelines on transportation of goods.

2. A purchaser must accept goods and make payment as agreed in the contract.

3. A purchaser must make payment for goods in cases where goods are lost or damaged after ownership rights have passed from the seller to the purchaser, unless the loss or damage is caused due to the fault of the seller.

Article 72 Right to Suspend Payment

1. The purchaser is entitled to suspend payment in whole or in part where, upon receipt of goods, the goods are found to be damaged or defective; and to make payment only when the seller has made good such damage or defects, unless otherwise agreed in the contract.

2. Where there is evidence indicating that the seller has been deceptive or has failed to deliver goods or that goods are the subject of a dispute between the seller and a third party, the purchaser is entitled to withhold its payment in whole or in part until the above matters have been settled.

Article 73 Time-Limit for Making Payment

The time-limit for the purchaser to make payment shall be agreed by both parties on the basis of the time and method of delivery of goods.

Article 74 Examination of Goods at Destination

The purchaser is entitled to examine goods at the destination within a reasonable period of time as appropriate to the nature of each type of goods in accordance with the contract.

Article 75 Notice of Goods Which Do Not Conform with Contracts

Where parties agree on the time-limit for notification of goods which do not conform with the contract, the purchaser must notify the seller of any such goods within the agreed time-limit; where the purchaser fails to notify the seller within such time-limit, the purchaser loses the right to complain.

Article 76 Risks With Respect to Goods During Transportation

The purchaser must bear the risks with respect to goods during transportation as from the time when the ownership rights pass from the seller to the purchaser and where the seller or carrier is not at fault.

Article 77 Relief from Liability for Non-Performance of Contractual Obligations

1. Parties are free from liability for non-performance of contractual obligations in whole or in part where the contract so provides.

2. Parties are free from liability for non-performance of contractual obligations in whole or in part where non-performance is caused by events of force majeure.

Events of force majeure are unexpected events occurring after the contract is entered into which are beyond the foresight and control of the parties.

3. The party which fails to perform its contractual obligations in whole or in part bears the onus of proof of the circumstances allowing for relief from liability.

Article 78 Notification and Certification of Circumstances Allowing for Relief from Liability

1. The party which fails to perform its contractual obligations in whole or in part must notify the other party immediately in writing of the circumstances allowing for relief from liability and their possible consequences; [it] must notify the other party immediately in writing when such circumstances come to an end; and, where it fails to notify the other party or gives late notice, it is liable to compensate for any damage.

2. Events of force majeure must be certified by competent bodies or organizations.

Article 79 Extension of Time-Limits and Refusal to Perform Contracts Due to Events of Force Majeure

1. In the case of events of force majeure, parties may agree to extend the time-limit for the performance of contractual obligations; in the absence of agreement, the time-limit shall be extended by a period equal to the length of time during which the event of force majeure subsists plus a reasonable period of time required to overcome [its] consequences provided that the extension does not exceed five months, in the case of goods which the parties have agreed to deliver within twelve (12) months, and does not exceed eight months, in the case of goods which the parties have agreed to deliver within a period of more than twelve (12) months, from the date on which the contract is entered into. Upon expiry of such time-limits, the parties are entitled to refuse to perform the contract and no party may claim damages from the other.

2. Where a party refuses to perform the contract, it must, within thirty (30) days of expiry of the time-limit stipulated in clause 1 of this article, notify the other party thereof prior to commencement by the other party of the performance of its contractual obligations.

3. The extension of time-limits for the performance of contractual obligations as provided for in clause 1 of this article does not apply to contracts for sale and purchase of goods which stipulate a fixed delivery time.

Article 80 Contracts for Sale and Purchase of Goods with Foreign Business Entities

A contract for sale and purchase of goods with a foreign business entity is a contract for sale and purchase of goods entered into between one party being a Vietnamese business entity and another party being a foreign business entity.

Article 81 Conditions for Validity of Contracts for Sale and Purchase of Goods with Foreign Business Entities

A contract for sale and purchase of goods with a foreign business entity is effective upon satisfaction of all of the following conditions:

1. The contracting parties, being the seller and the purchaser, must have full legal status.

The foreign party is a business entity the legal status of which is determined in accordance with the law of its home country.

The Vietnamese party must be a business entity which is permitted to carry on direct commercial activities with foreign parties.

2. The contracted goods are goods which are permitted to be sold and purchased in accordance with the law of the countries of the seller and the purchaser respectively.

3. A contract for sale and purchase of goods with a foreign business entity must include the principal contents of contracts for sale and purchase of goods stipulated in article 50 of this Law.

4. A contract for sale and purchase of goods with a foreign business entity must be made in writing.

Article 82 Application of Provisions Relating to Sale and Purchase of Goods to Foreign Business Entities

In addition to articles 80 and 81 of this Law, contracts for sale and purchase of goods with foreign business entities must comply with other provisions of this Law in relation to sale and purchase of goods.


SECTION 3

Representatives of Business Entities

Article 83 Representatives of Business Entities and Represented Persons

1. A representative of a business entity is a business entity which is authorized by another business entity to conduct commercial activities in the name and under the instructions of that [other] business entity for the purpose of remuneration.

2. A represented person is the business entity which authorizes another business entity to act as its representative.

3. In the event that a business entity nominates its personnel to act as its representative, the provisions of the Civil Code shall apply.

Article 84 Scope of Representation

Parties may agree to authorize a representative to conduct several or all commercial activities falling within the scope of activities of the represented person.

Article 85 Contracts for Representation of Business Entities

1. Representation of business entities shall be provided for by way of contract.

2. Contracts for representation must be made in writing and contain the following principal items :

(a) Names and addresses of parties;

(b) Scope of representation;

(c) Duration of representation;

(d) Rate of remuneration;

(e) Agreement on restraint of competition.

Article 86 Obligations of Representatives

The representative of a business entity has the following obligations:

1. To conduct commercial activities in the name and in the interests of the represented person;

2. To notify the represented person of [business] opportunities and the results of implementation of authorized commercial activities;

3. To comply with the instructions of the represented person, except where such instructions breach the law or are inconsistent with the contract for representation;

4. To restrain from conducting commercial activities in its own name or in the name of a third person within the scope of representation;

5. To restrain from disclosing or supplying to other people confidential information relating to commercial activities of the represented person during the period of representation and within two years of termination of the contract for representation;

6. To maintain the assets and documents assigned for the purpose of carrying out the representative acts;

7. To compensate for damage caused by it to the represented person.

Article 87 Obligations of Represented Persons

A represented person has the following obligations:

1. To notify the representative immediately of the signing of contracts negotiated by the representative, the performance of contracts entered into by the representative, and the acceptance or rejection of contracts which have been entered into by the representative beyond its powers;

2. To supply the assets, documents and information required for the representative to carry out the representative acts;

3. To pay remuneration to the representative as agreed in the contract for representation;

4. To notify promptly the representative of its inability to enter into or perform the contracts falling within the scope of representation;

5. To compensate for damage caused by it to the representative where the representative can prove that the represented person has breached its obligations stipulated in this article.

Article 88 Right to Remuneration

1. Representatives are entitled to remuneration in respect of contracts entered into within the scope of representation. The right to remuneration arises from the time agreed by the parties in the contract for representation.

2. The rate of remuneration shall be a percentage of the value of the contracts entered into within the scope of representation or a fixed amount as agreed by the parties.

3. Where a represented person imposes one or more obligations on a representative beyond the scope of the signed contract for representation, the consent of the representative is required. In this case, the representative is entitled to require further remuneration in addition to the remuneration stipulated in clause 1 of this article.

Article 89 Payment of Expenses

Unless otherwise agreed by the parties, representatives are entitled to claim for payment of reasonable expenses related to the performance of representative acts.

Article 90 Right to Withhold Assets

Representatives have the right to withhold assigned assets and documents as security for payment of remuneration and expenses which are due.

Article 91 Restraints on Competition

Parties may agree that the representative may not engage in commercial activities in competition with the represented person and may not act as the representative of competitors of the represented person.

Article 92 Unilateral Termination of Contracts for Representation

1. Where a contract for representation does not specify a definite duration, any party may unilaterally terminate the contract but must notify the other party no later than sixty (60) days prior to termination of the contract.

2. Where a represented person unilaterally terminates the contract for representation as stipulated in clause 1 of this article, the representative may require the represented person to pay an amount of remuneration in respect of the signing by the represented person of contracts with clients which were negotiated by the representative.

3. Where a representative unilaterally terminates the contract for representation, it forfeits the right to remuneration in respect of transactions which it would otherwise have been entitled to claim.


SECTION 4

Commercial Brokerage

Article 93 Commercial Brokers

A commercial broker is a business entity which acts as an intermediary between parties selling and purchasing goods and providing commercial services during the course of negotiations and signing contracts for sale and purchase of goods or provision of commercial services for the purpose of remuneration under a brokerage contract.

Article 94 Brokerage Contracts

1. Commercial brokerage must be provided for by way of contract.

2. Brokerage contracts must be made in writing with the following principal contents:

(a) Names and addresses of parties;

(b) Details of brokerage;

(c) Rate of remuneration;

(d) Period of validity of brokerage contract.

Article 95 Obligations of Brokers

A commercial broker is obliged to:

1. Carry out honestly the brokerage activities;

2. Take care of samples of goods and documents provided for the purpose of brokerage activities and return [samples and documents] to the principal upon completion of brokerage activities;

3. Restrain from disclosing or supplying information detrimental to the interests of the principal;

4. Compensate for damage caused by it to the principal;

5. Be responsible for the legal status, but not the capacity for payment, of the principal.

Article 96 Performance of Contracts Between Principals

Brokers may not be involved in the performance of contracts between principals, except where they are authorized to do so.

Article 97 Right to Remuneration

The right to remuneration of brokers arises from the time when the principals enter into a contract.

Article 98 Payment of Expenses Relating to Brokerage Activities

Brokers may claim payment from the principals of reasonable expenses relating to the brokerage activities, even where the brokerage activities fail to achieve the desired objectives of the principals.


SECTION 5

Sale and Purchase of Goods by Authorized Dealers

Article 99 Sale and Purchase of Goods by Authorized Dealers

The sale and purchase of goods by authorized dealers is a commercial act whereby authorized dealers carry out the sale and purchase of goods under their [own] names subject to terms agreed with the principals and are paid a commission.

Article 100 Authorized Dealers

An authorized sale and purchase dealer is a business entity dealing in goods which are consistent with the goods being the subject matter of the authorized sale and purchase and carrying out the sale and purchase of goods on terms agreed with the principal.

Article 101 Principals

A sale and purchase principal may, or may not, be a business entity which authorizes an authorized dealer to conduct the sale and purchase of goods at the request of the principal and pays a commission.

Article 102 [Authorized] Goods

Goods which are permitted to be circulated may be the subject matter of an authorized sale and purchase.

Article 103 Commissions

Commissions are payable to authorized sale and purchase dealers as agreed by the two contracting parties or as stipulated by law.

Article 104 Contracts for Sale and Purchase Authorization

1. Sale and purchase authorization must be provided for by way of contract.

2. Contracts for sale and purchase authorization must be made in writing with the following principal contents:

(a) Names and addresses of parties;

(b) Goods being the subject matter of authorized sale and purchase;

(c) Quantity, quality, specifications, price and other specific terms;

(d) Commission;

(e) Period of validity of authorization contract.

Article 105 Authorization of Third Parties

An authorized dealer may not authorize a third party to perform the signed contract for sale and purchase authorization without the written consent of the principal.

Article 106 Multiple Principals

An authorized dealer may conduct an authorized sale and purchase of goods on behalf of more than one principal.

Article 107 Obligations of Authorized Dealers

An authorized sale and purchase dealer is obliged to:

1. Conduct the sale and purchase of goods in accordance with the authorization contract;

2. Notify the principal of matters relating to the performance of the authorization contract; where the principal gives instructions in accordance with the authorization contract, the authorized dealer must follow those instructions;

3. Take care of assets and documents provided for the purpose of the performance of the authorization contract;

4. Maintain the confidentiality of information relating to the performance of the authorization contract;

5. Pay money and deliver goods as agreed in the authorization contract.

Article 108 Rights of Authorized Dealers

An authorized dealer has the right to:

1. Require the principal to provide necessary information and documents for the performance of the authorization contract;

2. Receive a commission as agreed in the authorization contract;

3. Bear no responsibility for goods which have been delivered to the principal, unless otherwise agreed by both parties;

4. Claim compensation from the principal for damage caused by the principal.

Article 109 Obligations of Principals

A principal is obliged to:

1. Provide necessary information, documents and facilities for the performance of the authorization contract;

2. Pay commissions;

3. Be responsible for the performance of the authorization contract by third parties where the principal has consented to the authorization of such third parties under article 105 of this Law;

4. Pay money and deliver goods as agreed in the authorization contract.

Article 110 Rights of Principals

A principal has the right to:

1. Require the authorized dealer to provide full information relating to the performance of the authorization contract;

2. Lodge complaints in order to recover compensation from the authorized dealer for damage caused by the authorized dealer.


SECTION 6

Sale and Purchase Agency

Article 111 Sale and Purchase Agency

Sale and purchase agency is a commercial act whereby the principal and the agent agree for the agent to conduct the sale or purchase of goods on behalf of the principal in return for remuneration.

Goods purchased and sold by agents must comply with the business registration certificates of the parties.

Article 112 Principals and Agents

1. Principals are business entities which deliver goods to agents for sale or provide money to agents for purchase of goods.

2. Agents are business entities which receive goods for agency sale or money for agency purchase.

Article 113 Remuneration of Agents

Remuneration of an agent is a sum of money paid by the principal to the agent in the form of a commission or price differential .

Remuneration of an agent shall be agreed by the parties to the agency contract.

Article 114 Purchase Agency

Purchase agency is a relationship whereby the agent receives money from the principal for the purpose of purchasing goods as required by the principal and is entitled to an amount of remuneration paid by the principal as agreed by the parties.

Article 115 Sale Agency

Sale agency is a relationship whereby the agent receives goods from the principal for the purpose of sale and is entitled to an amount of remuneration paid by the principal as agreed by the parties.

Article 116 Forms of Agency

1. Commission agency is a form of agency whereby the agent sells or purchases goods at the sale or purchase prices stipulated by the principal in return for a commission. The rate of commission is equal to a percentage of the sale and purchase prices as agreed by the parties.

2. Total sale and purchase agency is a form of agency whereby the agent sells or purchases a specific quantity of goods at a price stipulated by the principal in return for remuneration. The remuneration to which the agent is entitled is the difference between the actual sale or purchase price and the price stipulated by the principal.

3. Exclusive agency is a form of agency whereby a sole agent is authorized by the principal to sell or purchase one or more items of goods of the principal within a certain territory.

4. General sale and purchase agency is a form of agency whereby the agent organizes a network of sub-agents to sell or purchase goods on behalf of the principal.

The general agent represents the network of sub-agents. Sub-agents operate under the management and in the name of the general agent.

Article 117 Ownership Rights in Cases of Sale and Purchase Agency

The principal is the owner of goods and money delivered to the agent.

Article 118 Payments in Cases of Agency

Payments for goods and payments of remuneration of agents shall be made on each occasion that the agent has completed the sale or purchase of a certain quantity of goods, unless otherwise agreed by the parties.

Article 119 Agency Contracts

1. Sale and purchase agency must be established by way of contract.

2. Agency contracts must be made in writing with the following principal contents:

(a) Names and addresses of parties;

(b) Goods being the subject matter of agency;

(c) Form of agency;

(d) Remuneration of agents;

(e) Period of validity of agency contract.

Article 120 Rights of Principals

A principal has the right to:

1. Select the agent and the form of agency;

2. Stipulate the sale or purchase price of the goods under agency;

3. Receive a deposit from, or documentation of assets mortgaged by, the agent, if so provided for in the agency contract;

4. Require the agent to make payment or deliver goods in accordance with the agency contract;

5. Inspect and supervise the performance of the agency contract by the agent;

6. Exercise lawful rights and enjoy lawful benefits arising from the agency activities.

Article 121 Obligations of Principals

A principal is obliged to:

1. Provide guidelines and information for and facilitate the performance of the agency contract by the agent;

2. Comply strictly with the undertakings in the agency contract;

3. Be responsible for the specifications and quality of goods delivered, in the case of sale agency, and received, in the case of purchase agency, under the agency contract where the agent is not at fault;

4. Pay remuneration to the agent;

5. Return any deposit, or documentation of assets mortgaged, if any, to the agent upon termination of the [agency] contract;

6. Be responsible before the law for the selection and appointment of the agent and be jointly responsible for any breach of the law by the agent caused by the principal or for any intentional breach of the law by the parties.

Article 122 Rights of Agents

An agent has the right to:

1. Select and enter into agency contracts with one or more principals;

2. Require the principal to deliver money or goods in accordance with the agency contract; recover from the principal any deposit or documentation of mortgaged assets upon termination of the agency contract;

3. Require the principal to provide guidelines and information for and facilitate the performance of the agency contract;

4. Be paid remuneration and enjoy other legitimate rights and benefits arising from the agency activities.

Article 123 Obligations of Agents

An agent is obliged to:

1. Sell or purchase goods at the prices agreed by the principal and the agent in the agency contract;

2. Comply strictly with the undertakings given to the principal in the agency contract with respect to the delivery or receipt of goods or money;

3. Pay a deposit to, or mortgage assets, if any, in favour of, the principal in accordance with the agency contract;

4. Pay to the principal any proceeds from the sale of goods, in the case of a sale agent, or deliver the purchased goods, in the case of a purchase agent;

5. Post the trade name and signboard of the principal and the name of the goods under agency at the place where the sale and purchase takes place;

6. Take care of goods and be responsible for the quantity, specifications and quality of goods after receipt thereof, in the case of a sale agent, or prior to delivery thereof, in the case of a purchase agent, in accordance with the agency contract;

7. Be subject to inspection and supervision by the principal and report to the principal on the agency activities;

8. Be responsible to the principal and before the law for the performance of the agency contract.

Article 124 Amendment of and Addition to Agency Contracts

Any amendment of or addition to a sale and purchase agency contract shall be valid only when made in writing and approved by the parties.

Article 125 Assignment of Rights and Obligations to Third Parties

A party to an agency contract may only assign its rights and obligations under the agency contract to a third party with the approval of the other party.

Article 126 Termination of Agency Contracts

A sale and purchase agency contract terminates in the following circumstances:

1. The contract is fully performed or its term expires;

2. The parties agree in writing to terminate the contract prior to expiry of its term;

3. The contract is invalid as a result of the contents of the contract or its performance being in breach of the law;

4. A party unilaterally terminates the contract upon a breach of the contract by the other party which is agreed by the parties as a reason for termination of the contract;

5. Other circumstances stipulated by law.

Article 127 Sale and Purchase Agency for Foreign Business Entities

The Government shall provide for sale and purchase agency for foreign business entities.


SECTION 7

Commercial Processing

Article 128 Commercial Processing

Commercial processing is a commercial act whereby the processor carries out processing of goods as required by, and with raw materials and materials provided by, the supplier in return for processing fees; and the supplier receives processed goods for commercial purposes and must pay processing fees to the processor.

Article 129 Processing Activities

Commercial processing activities comprise production, processing, creation, repair, re-production, assembly, classification and packaging of goods as required by, and with raw materials and materials provided by, the supplier.

Article 130 Processors and Suppliers

1. A processor is the party which agrees to process goods in return for processing fees.

2. A supplier is the party which employs the processor in order to process goods for commercial purposes.

Article 131 Processing Contracts

1. Commercial processing must be provided for by way of contract.

Commercial processing contracts must be made in writing between the processor and the supplier.

2. The contents of commercial processing contracts and the rights and obligations of the processor and the supplier shall be in accordance with the provisions of the Civil Code in relation to processing contracts.

Article 132 Processing with Foreign Business Entities

Processing with foreign business entities is a commercial processing activity whereby the supplier and the processor are business entities with their head offices or permanent residences in different countries provided that one party must be a business entity conducting commercial activities in Vietnam.

Article 133 Conditions on Processing with Foreign Business Entities

Products which are permitted to be processed for, and imported or exported machinery, equipment, raw materials and materials necessary for processing with, foreign business entities shall be in accordance with the law of Vietnam and international commercial practices where such practices are not inconsistent with the law of Vietnam.

Article 134 Exportation or Importation of Machinery, Equipment, Raw Materials, Materials and Products Which Are Permitted To Be Processed

1. Processors may directly export or import machinery, equipment, raw materials and materials necessary for processing activities and processed products in accordance with the economic and technical standards applicable to each processed product.

2. The exportation or importation stipulated in clause 1 of this article shall be carried out in accordance with the law of Vietnam.

Article 135 Technology Transfer in Goods Processing with Foreign Business Entities

Technology transfer in goods processing with foreign business entities shall take place in accordance with the agreements contained in processing contracts and in accordance with the law of Vietnam.

Article 136 Responsibility for Industrial Property Rights With Respect to Processed Goods

The supplier must be responsible for the lawfulness of industrial property rights with respect to processed goods.

Article 137 Inspection and Supervision of Processing

The supplier is entitled to appoint representatives to inspect and supervise the processing activity at the place of processing as agreed by the parties.

Article 138 Application of Tax Legislation to Processing Activities with Foreign Business Entities

Taxes imposed on machinery, equipment, raw materials and materials necessary for processing activities and on processed products in accordance with economic and technical standards shall be applicable in accordance with the tax legislation of Vietnam.


SECTION 8

Auction of Goods

Article 139 Provision of Goods Auction Services

Business entities which are legal entities satisfying the conditions stipulated by law are permitted to provide goods auction services.

Article 140 Auction of Goods

Business entities shall provide goods auction services in accordance with the provisions of the Civil Code and the Regulations on Auctions of Goods issued by the Government.


SECTION 9

Tendering of Goods

Article 141 Tendering of Goods

Tendering of goods is the procurement of goods by way of tender for selection of tenderers which satisfy the terms of price and economic and technical conditions stipulated by the party calling for tenders.

Article 142 Party Calling For Tenders

A party calling for tenders is the owner of capital or the person authorized to use capital to purchase goods.

Article 143 Tenderers

Tenderers are domestic or foreign business entities which satisfy the conditions for participation in tendering stipulated by the law of Vietnam.

Article 144 Successful Tenderers

A successful tenderer is a tenderer selected to enter into and perform the contract with the party calling for tenders.

Article 145 Forms of Tendering

1. Tendering of goods may be in the form of open tendering or limited tendering.

Open tendering is a form of tendering whereby the party calling for tenders does not limit the number of tenderers and publicly announces by way of mass media the conditions for participation in tendering.

Limited tendering is a form of tendering whereby the party calling for tenders invites only a limited number of tenderers having the best conditions to participate in tendering.

2. The party calling for tenders shall select either open or limited tendering. In the case of tendering of goods funded by the State capital, the head of the competent State body shall select the form of tendering.

Article 146 Prequalification of Tenderers

1. Prequalification of tenderers is applied by a party calling for tenders in the case of contracts for procurement of sophisticated goods of high value in order to select tenderers which are capable of satisfying the conditions stipulated by the party calling for tenders.

2. The procedures and formalities of prequalification stipulated by the party calling for tenders must conform with the conditions of tendering.

Article 147 Conditions for Business Entities to Participate in Tendering

Business entities which participate in tendering must satisfy the following conditions:

1. Engaged in business activities which are consistent with the goods tendered;

2. Being professionally and financially capable of participation in tendering;

3. Having prepared tender documents in accordance with the requirements of the party calling for tenders.

Article 148 Management of Tender Documents

The party calling for tenders is responsible for managing tender documents.

Article 149 Confidentiality of Tendering Information

1. The party calling for tenders shall receive, enter into a registry, seal, manage and maintain the confidentiality of tender documents.

2. Organizations and individuals involved in the tendering process and tender evaluation must maintain the confidentiality of relevant information during the entire tendering process.

Article 150 Amendment of Tender Documents

1. Tenderers are not allowed to amend their tender documents after the tender opening.

During the process of evaluation and comparison of tender documents, the party calling for tenders may request tenderers to clarify matters relating to tender documents. All requests for clarification from the party calling for tenders and replies from tenderers must be made in writing.

2. Where the party calling for tenders amends the contents of tender documents, it must send such written amendments to all tenderers prior to the final time-limit for tender submission in order that tenderers may complete their tender documents.

Article 151 Tendering Currency

The tendering currency is the Vietnamese dong or a convertible foreign currency stipulated by the party calling for tenders in the tender invitation documents in accordance with the law of Vietnam. The exchange rate is the exchange rate published by the State Bank of Vietnam at the time of tender opening.

Article 152 Tender Invitation Documents

Tender invitation documents comprise:

1. Tender invitation letter;

2. Tender form;

3. Requirements in respect of quantity, quality, specifications and utility of goods;

4. Conditions and schedules of goods delivery;

5. Financial, commercial and payment conditions;

6. Tender contract form;

7. Tender guarantee form;

8. Contract performance guarantee form;

9. Other instructions relating to tendering.

The fees for documents provided to tenderers shall be stipulated by the party calling for tenders.

Article 153 Tender Invitation Letters

1. A tender invitation letter must be consistent with the form of tendering.

2. A tender invitation letter comprises the following main contents:

(a) Name and address of party calling for tenders;

(b) Brief description of quantity, quality, specifications and utility of goods tendered;

(c) Tender conditions;

(d) Time-limit, location and procedures for receipt of tender invitation documents;

(e) Time-limit, location and procedures for submission of tender documents;

(f) Instructions for reading tender invitation documents.

Article 154 Instructions to Tenderers

The party calling for tenders is responsible for providing instructions to tenderers relating to the tender conditions and the procedures applied during the tendering process and for answering questions of tenderers.

Article 155 Tender Guarantees

Tenderers must pay a tender guarantee upon submission of their tenders. The amount of tender guarantees is stipulated by the party calling for tenders but shall not exceed three per cent of the total value of the estimated price of the goods tendered.

In some cases, the same tender guarantee amount may be fixed by the party calling for tenders in order to ensure the confidentiality of the tender prices offered by tenderers.

The party calling for tenders shall stipulate the method, conditions and bank for payment of tender guarantees. Tender guarantees shall be refunded to unsuccessful tenderers no later than thirty (30) days after the date of announcement of the tendering results. Where a tenderer fails to sign a contract after being selected as the successful tenderer, refuses to implement the contract, or withdraws its tender documents after the tender closure, its tender guarantee is not refundable.

Article 156 Performance Guarantees

The successful tenderer must pay a performance guarantee as security for the performance of the contract. The amount of the performance guarantee is agreed by the two parties but shall not exceed ten (10) per cent of the total value of the contract. The performance guarantee is effective until the completion of the performance of the contract. The performance guarantee of the successful tenderer is refundable following the final audit of contract performance, unless otherwise agreed by the parties.

The tender guarantee of the successful tenderer is refundable upon payment of the performance guarantee.

Article 157 Tender Opening

1. Tender opening is the opening of tender documents at a fixed time. All tender documents submitted on time must be opened publicly by the party calling for tenders. Tenderers have the right to attend the tender opening.

2. Tender documents which are not submitted on time shall be rejected and returned to tenderers unopened.

Article 158 Minutes of Tender Opening

Upon tender opening, the party calling for tenders and tenderers in attendance must sign the minutes of tender opening.

The minutes of tender opening must specify the name of the goods tendered; date, time and location of the tender opening; names and addresses of tenderers; tender prices; tender guarantees; any written amendments or additions, and other relevant details, if any.

Article 159 Consideration of Tender Documents Upon Tender Opening

The consideration of tender documents upon tender opening includes:

1. Consideration of lawfulness of tender documents;

2. Examination of tendering conditions of tenderers;

3. Requests by the party calling for tenders for tenderers to clarify certain contents of tender documents, which requests and clarifications are recorded in writing.

Article 160 Evaluation and Comparison of Tender Documents

1. Tender documents are evaluated and compared with respect to each criterion prior to overall evaluation. The criteria for evaluation comprise the quality, financial standing and professional capability of tenderers, price, schedule of implementation, technology transfer, training, and other necessary criteria.

2. The criteria stipulated in clause 1 of this article are evaluated in accordance with a score system or otherwise as determined prior to the tender opening.

Article 161 Classification and Selection of Tenderers

1. On the basis of the evaluation of tender documents, the party calling for tenders classifies tenderers in accordance with the method which has been selected.

2. Where a Vietnamese tenderer and a foreign tenderer obtain equal scores and equally satisfy tender conditions, priority shall be given to the Vietnamese tenderer.

3. Where foreign tenderers obtain equal scores and equally satisfy tender conditions, priority shall be given to the foreign tenderer which undertakes to enter into sub-contracts with Vietnamese sub-contractors.

4. In the case of tendering of goods funded by the State Budget, the selection of successful tenderer must be approved by the head of the competent State body.

Article 162 Re-Organization of Tendering

Tendering shall be re-organized in the following cases:

1. Breach of the regulations on tendering;

2. Failure of all tenderers to satisfy the tendering requirements.


SECTION 10

Goods Delivery Services

Article 163 Goods Delivery Services of Business Entities

Goods delivery service is the commercial act whereby the goods delivery service provider receives goods from the sender, arranges transportation and storage, and completes the necessary paperwork and other related services for the purpose of delivery of goods to the recipient as authorized by the goods owner, the carrier or another delivery service provider (hereinafter referred to as the customer).

Article 164 Goods Delivery Service Providers

A goods delivery service provider is a business entity which holds a business registration certificate for goods delivery services.

Article 165 Goods Delivery Contracts

A goods delivery contract is a contract entered into between a goods delivery service provider and a customer for the purpose of provision of goods delivery services as stipulated in article 163 of this Law.

Article 166 Responsibility for Transportation of Goods

A goods delivery service provider which is responsible for transportation of goods must comply with the legislation governing transportation activities.

Article 167 Rights and Obligations of Goods Delivery Service Providers

A goods delivery service provider has the following rights and obligations:

1. To be entitled to wages and other reasonable income;

2. To fulfil all its obligations in accordance with the contract;

3. To depart from the instructions of the customer during the performance of the contract for a just reason and in the interests of the customer provided that the customer must be so notified immediately;

4. To notify the customer immediately for further instructions where, after the contract has been signed, it transpires that the instructions of the customer cannot be followed in whole or in part;

5. To perform its obligations within a reasonable period of time where no specific time-limit is stated in the contract for the performance of its obligations to the customer.

Article 168 Rights and Obligations of Customers

A customer has the following rights and obligations:

1. To select the goods delivery service provider which satisfies its requirements;

2. To guide, examine and supervise the performance of the contract;

3. To claim compensation where the goods delivery service provider breaches the contract;

4. To provide sufficient instructions to the goods delivery service provider;

5. To provide sufficient, detailed and accurate information in respect of the goods to the goods delivery service provider;

6. To pack and mark the goods in accordance with the contract for sale and purchase of goods, except where the goods delivery service provider is responsible for so doing;

7. To compensate for damage caused to, and pay any costs incurred by, the goods delivery service provider where the service provider has complied with the instructions of the customer or where the customer is at fault;

8. To pay to the goods delivery service provider all amounts due.

Article 169 Relief from Liability

1. A goods delivery service provider is not liable for damage and loss caused in the following circumstances:

(a) Through the fault of the customer or a person authorized by the customer;

(b) Where it has strictly complied with the instructions of the customer or the person authorized by the customer;

(c) Where the customer wrongly packs or marks the goods;

(d) Where the customer or the person authorized by the customer loads and unloads the goods;

(e) Where the goods are defective;

(f) Upon occurrence of a strike;

(g) Upon occurrence of events of force majeure.

2. A goods delivery service provider is not responsible for the loss of profits which the customer would have earned if not for delayed delivery or delivery to the wrong address through no fault of the service provider, unless otherwise stipulated by law.

Article 170 Limited Liability

1. The liability of a goods delivery service provider in any event shall not exceed the value of the goods, unless otherwise agreed by the contracting parties.

2. A goods delivery service provider shall not be discharged from liability if it fails to disprove its fault for the loss, damage, or delayed delivery of goods.

3. Damages are calculated on the basis of the value of goods stated in receipts and other amounts substantiated by proper documents. Where the value of goods is not stated in receipts, damages are calculated on the basis of the market value of that type of goods at the time when and location where the goods are delivered to the customer; where a market price is not available, the normal price of goods of the same type and quality applies.

4. A goods delivery service provider is not liable in the following cases:

(a) The goods delivery service provider does not receive any written complaint within fourteen (14) days from the date of delivery of goods, excluding Sundays and public holidays;

(b) The goods delivery service provider does not receive any written notice of any action instituted at a court or an arbitration body within nine months from the date of delivery of goods.

Article 171 Right to Withhold and Dispose of Goods

1. A goods delivery service provider may withhold a certain quantity of goods and related documents in order to claim payment of a due debt from the customer and shall notify the customer in writing immediately thereof.

2. Where the customer fails to pay the debt after forty five (45) days from the date on which the goods and related documents are withheld, the goods delivery service provider has the right to dispose of those goods or documents in accordance with law and must notify the customer in writing immediately; all costs relating to the withholding and disposing of such goods shall be borne by the customer.

3. A goods delivery service provider is entitled to use the proceeds earned from the disposal of goods to pay for the debt owed by the customer and the related expenses. Any balance must be returned to the customer. Thereafter, the goods delivery service provider is no longer responsible for the goods or documents disposed of.

4. Where there are indications of deterioration of goods, the right of the goods delivery service provider to dispose of the goods under clause 2 of this article arises immediately upon the incurring of any debt by the customer provided that the goods delivery service provider notifies the customer of the disposal of the goods.


SECTION 11

Goods Assessment Services

Article 172 Goods Assessment Services

Goods assessment service is a commercial act conducted by an independent assessment organization in order to determine the actual condition of goods as required by an individual, a body or an organization.

Article 173 Goods Assessment Organizations

1. Only organizations satisfying all conditions stipulated by law and having business registration certificates for goods assessment services issued by an competent State body are permitted to provide assessment services and issue goods assessment certificates.

2. Foreign assessment organizations may provide goods assessment services in Vietnam only when they are permitted by competent State bodies of Vietnam to do so or when they are licensed to establish branches in Vietnam in accordance with the law of Vietnam.

Article 174 Assessment of Goods

Assessment of goods comprises assessment of quantity, quality, specifications, packaging, value of goods, losses, safety, hygiene, and other aspects.

Article 175 Assessment of Goods as Required by Parties

Goods are assessed in accordance with the agreement of the parties to the contract for sale and purchase of goods; in the absence of an agreement in the contract, the parties are entitled to select the assessment organization.

Article 176 Assessment of Goods Required by State Bodies

A goods assessment organization is obliged to assess goods at the request of a State body in accordance with its business activities and shall be paid assessment fees by the body which requests the assessment.

Article 177 Rights and Obligations of Parties Requesting Assessment of Goods

The party requesting assessment of goods has the following rights and obligations:

1. To request the assessment organization to assess goods in accordance with the agreement;

2. To request re-assessment where there is any doubt in respect of the assessment results; and to demand monetary penalties where the assessment organization issues an incorrect assessment certificate;

3. To provide promptly all necessary accurate documents to the assessment organization upon request;

4. To pay assessment fees as agreed.

Article 178 Rights and Obligations of Goods Assessment Organizations

A goods assessment organization has the following rights and obligations:

1. To assess goods independently, objectively, promptly and accurately;

2. To issue assessment certificates;

3. To be entitled to assessment fees as agreed;

4. To pay fines for incorrect assessment as agreed by the two parties; fines shall not exceed ten (10) times the assessment fees.

Article 179 Authorized Assessment of Goods

Where parties to a contract for sale and purchase of goods agree to employ a foreign assessment organization to provide goods assessment services but that foreign assessment organization has not been permitted to operate in Vietnam, the foreign assessment organization may authorize an assessment organization which has been permitted to operate in Vietnam to provide goods assessment services but the former must remain responsible for the results of the assessment.


SECTION 12

Promotions

Article 180 Promotions

Promotion is a commercial act conducted by business entities in order to enhance sales of goods and provision of services within their scope of business whereby certain benefits are given to customers.

Article 181 Forms of Promotion

1. Promotion can be conducted in any of the following forms:

(a) Giving free samples to customers for trial use;

(b) Giving gifts or providing free services to customers;

(c) Selling goods or providing services during the period of promotion at prices lower than previously normal prices;

(d) Selling goods or providing services together with coupons or other forms of voucher for winning prizes in accordance with procedures as announced;

(e) Selling goods or providing services together with contest forms for customers, from amongst which the winners shall be selected in accordance with procedures and for prizes as announced;

(f) Selling goods or providing services together with lottery tickets for drawing prizes in accordance with procedures as announced.

2. In addition to the forms of promotion stipulated in clause 1 of this article, business entities may apply other forms of promotion if approved by the State administrative body in charge of commerce.

Article 182 Goods Used for Promotions

Goods which are used by business entities as gifts or prizes or samples for trial use by customers in promotion activities must be goods which are permitted to be circulated in the market.

Article 183 Rights and Obligations of Business Entities Organizing Promotion Activities

1. A business entity which organizes promotion activities has the following rights:

(a) To select the form, time and location of promotion;

(b) To stipulate specific benefits to which customers are entitled;

(c) To authorize its agents to conduct promotion activities.

2. A business entity which organizes promotion activities has the following obligations:

(a) To inform in writing the time and form of promotion to the State administrative body in charge of commerce of the province or city under central authority in which the promotion activities are conducted prior to their commencement;

Where promotion is conducted in the form stipulated in sub-clause 181.1(e) of this Law, the approval of the competent State body must be obtained;

(b) To announce publicly the form and time of promotion at the place where goods are sold and services are provided;

(c) To honour its undertakings to customers.

Article 184 Confidentiality of Information Relating to Promotion Programmes and Details Thereof

The competent State administrative body receiving notices in relation to promotion activities organized by business entities must maintain strictly the confidentiality of the promotion programmes and details thereof. In case of any breach of confidentiality causing damage to a business entity, the aggrieved party has the right to complain to the competent State body or institute court action in accordance with law.

Article 185 Prohibited Promotion Activities

The following promotion activities are prohibited:

1. Promotions in respect of goods, the distribution of which is yet to be licensed, and services, the business of which is prohibited;

2. Deceptive or misleading promotions of goods and services for the purpose of deceiving customers;

3. Promotions for the purpose of selling low quality products which are detrimental to production or the interests and health of the people or affect the environment or scenery;

4. Promotions taking place at schools, hospitals and offices of bodies, organizations and units of the people's armed forces;

5. Promotions of alcohol, beer and cigarettes targeted at children of less than sixteen (16) years of age;

6. Promises to grant gifts or prizes which are not performed in part or fully.


SECTION 13

Commercial Advertising

Article 186 Commercial Advertising

Commercial advertising is a commercial act conducted by business entities aimed at introducing goods and services for promotion purposes.

Article 187 Right to Conduct Commercial Advertising

Business entities have the right to conduct advertising in respect of their production activities, goods and services or to employ advertising service businesses to do so on their behalf.

Article 188 Commercial Advertising Services

1. Commercial advertising service is a commercial activity carried out by business entities conducting commercial advertising on behalf of other business entities.

2. Organizations and individuals satisfying all conditions stipulated by law and wishing to conduct advertising services shall be issued business registration certificates by the competent State body.

3. The Government shall stipulate the conditions for conducting commercial advertising service activities.

Article 189 Commercial Advertising Products

Commercial advertising products comprise information in graphic, audio, written and symbolic forms containing commercial advertising details.

Article 190 Means of Commercial Advertising

Means of commercial advertising are the media which are used to display commercial advertising products.

Means of commercial advertising comprise:

1. Means of mass media;

2. Means of communication;

3. All kinds of publications;

4. All kinds of boards, signs, banners, panels and posters;

5. Other means of commercial advertising.

Article 191 Protection of Lawful Commercial Advertising Products and Commercial Advertising Activities

1. Business entities may register industrial property rights with respect to commercial advertising products which are created by them in accordance with law and shall be protected by the State.

2. The State shall protect and facilitate the lawful commercial advertising activities of business entities.

Article 192 Prohibited Commercial Advertisements

The following commercial advertisements are prohibited:

1. Advertisements of goods and services, the business or advertisement of which is prohibited by the State;

2. Advertisement of goods and products, the distribution of which is yet to be licensed, or services, the provision of which is yet to be licensed, at the time of advertising;

3. Advertisements which are used to infringe upon the interests of the State and other business entities and individuals;

4. Advertisements using images, actions, sounds, spoken or written languages, symbols, colours and lighting which offend the historical, cultural and ethical traditions and fine customs of Vietnam and contravene the law;

5. Advertisements comparing goods and services with goods and services of the same type of another business entity or imitating advertising products of another business entity thereby misleading customers;

6. False advertisements of goods and services with respect to any of the following matters: specifications, quality, price, utility, model, style, packaging, service method and warranty period.

Article 193 Use of Means of Commercial Advertising

1. The use of the means of commercial advertising stipulated in article 190 of this Law must comply with the regulations issued by competent Vietnamese State bodies.

2. The use of means of commercial advertising must comply with the following conditions:

(a) Being in compliance with advertisement planning; causing no adverse effect on the environment, scenery, traffic order and safety, and social security;

(b) Being in accordance with the degree, time duration and timing stipulated for each particular means of mass media.

Article 194 Commercial Advertising by Foreign Business Entities in Vietnam

1. Foreign business entities which are permitted to conduct commercial activities are permitted to advertise their production activities, goods and services in Vietnam in accordance with the provisions of this Law.

2. Foreign business entities which are not permitted to conduct commercial activities in Vietnam must hire Vietnamese commercial advertising service businesses to conduct any advertisement that they wish to be conducted in Vietnam in respect of their production activities, goods and services.

Article 195 Commercial Advertising Service Contracts

1. Commercial advertising services are hired by way of contract.

2. Commercial advertising service contracts must be made in writing and contain the following principal items :

(a) Names and addresses of contracting parties;

(b) Commercial advertising products;

(c) Methods and means of commercial advertising;

(d) Time duration and area of commercial advertising;

(e) Service fees and other related fees.

Article 196 Rights and Obligations of Party Hiring Commercial Advertising Services

A party hiring commercial advertising services has the following rights and obligations:

1. To choose the method, content, means, area and time duration of commercial advertising;

2. To provide true and accurate information relating to commercial production activities, goods and services and to be responsible for that information;

3. To inspect and supervise the performance of the commercial advertising service contract;

4. To pay fees for advertising services as agreed in the contract.

Article 197 Rights and Obligations of Party Providing Commercial Advertising Services

A party providing commercial advertising services has the following rights and obligations:

1. To enter into contracts with parties hiring commercial advertising services in accordance with its business registration certificate or its licence to use means of advertisement;

2. To require the party hiring commercial advertising services to provide true and accurate information relating to the advertisement in accordance with the terms of the contract;

3. To provide commercial advertising services as agreed in the contract;

4. To be permitted to import materials, raw materials and commercial advertising products required for its advertising service activities in accordance with law;

5. To receive fees for advertising services as agreed in the contract.


SECTION 14

Display of Goods

Article 198 Display of Goods

Display of goods is a commercial act conducted by business entities using goods in order to introduce and advertise their products and goods to customers for commercial promotion purposes.

Article 199 Forms of Display of Goods

1. Opening showrooms displaying goods;

2. Introducing goods in any form at commercial centres and trade fairs or in entertainment, sports, cultural or artistic activities;

3. Organizing seminars and conferences involving display of goods.

Article 200 Conditions for Goods To Be Displayed

1. Displayed goods are sample goods representing goods of the business entity, including goods already in distribution and newly produced goods permitted to be distributed in the market.

2. Displayed goods must meet quality and environmental standards and must not be detrimental to the social security and order and the historical, cultural and ethical traditions and fine customs of Vietnam.

3. Displayed goods must bear labels indicating name of product, name of producer, place of production, quality registration number, properties and application instructions of the goods, production date, use-by date and warranty period (if any).

Article 201 Conditions for Goods Produced Overseas

In addition to the conditions stipulated in article 200 of this Law, goods produced overseas and displayed in Vietnam must meet the following conditions:

1. Being permitted to be imported into Vietnam;

2. Where the goods are temporarily imported for display, a permit from the competent Vietnamese State body must be obtained with respect to the type of goods, quantity, model, specification and duration. Upon completion of the display, all temporarily-imported goods and means must be re-exported. Where they are sold in Vietnam, the approval of the Ministry of Trade must be obtained and Vietnamese regulations must be complied with.

Article 202 Right to Display Goods and Provide Goods Display Services

1. Business entities have the right to display goods and choose the appropriate form of display; and to display goods by themselves or to employ business entities providing goods display services to do so.

2. Entertainment, sports, cultural and artistic establishments having suitable locations and facilities may be authorized by competent State bodies to lease out those locations and facilities for the purpose of display of goods. Where they directly provide goods display services, they must register their business activities as applicable to business entities providing goods display services.

Article 203 Right of Foreign Business Entities to Display Goods

1. Foreign business entities may import goods stipulated in article 201 of this Law for display at trade fairs and exhibitions organized in Vietnam if they are so permitted by competent Vietnamese State bodies.

2. Foreign business entities wishing to display their goods in Vietnam may employ Vietnamese business entities providing goods display services to do so.

Article 204 Prohibited Displays of Goods

Display of goods is prohibited in the following cases:

1. Display of goods, the distribution of which is yet to be licensed;

2. Display of goods or use of media to display goods which causes adverse effects on public security and order, scenery, environment and human health;

3. Display of goods or use of media to display goods which offend the historical, cultural and ethical traditions and fine customs of Vietnam;

4. Display of goods disclosing national secrets;

5. Display of goods of other persons in contrast to the goods of the displayer;

6. Display of sample goods which are inconsistent with goods actually produced or traded with respect to specifications, quality, price, utility, model, style, packaging, warranty period, and other matters.

Article 205 Goods Display Service Contracts

1. Goods display services are employed by way of contract.

2. Goods display service contracts must be made in writing and contain the following principal items :

(a) Names and addresses of party employing, and of party providing, goods display services;

(b) Goods to be displayed;

(c) Methods, form, location and time of display of goods;

(d) Service fees and other fees.

Article 206 Rights and Obligations of Parties Employing Goods Display Services

A party employing goods display services has the following rights and obligations:

1. To require the party providing goods display services to perform the agreements in the contract;

2. To inspect and supervise the performance of the goods display service contract;

3. To supply all goods to be displayed and facilities to the party providing services as agreed in the contract;

4. To provide information relating to goods to be displayed and other necessary facilities as agreed in the contract;

5. To pay service fees and other fees in accordance with the contract.

Article 207 Rights and Obligations of Parties Providing Goods Display Services

A party providing goods display services has the following rights and obligations:

1. To require the party employing services to supply goods to be displayed within the time period agreed in the contract;

2. To require the party employing services to supply information relating to the displayed goods and other necessary facilities as agreed;

3. To receive service fees and other fees in accordance with the contract;

4. To display goods as agreed in the contract;

5. To restrain from assigning [the contract] or employing other persons to provide the services without the approval of the party employing services; to remain responsible to the party employing the goods display services where the obligation to perform the contract is assigned to another person;

6. To take care of the displayed goods and the documents and facilities provided during the term of the contract; to return all displayed goods, documents and facilities to the party employing services upon completion of display of goods and, if any damage is caused to the party employing services, to pay compensation.


SECTION 15

Trade Fairs and Exhibitions

Article 208 Trade Fairs and Exhibitions

1. A trade fair is a commercial promotion activity concentrated at a location and for a certain period of time during which production and business organizations and individuals may display their goods for purposes of marketing or entering into contracts for sale and purchase of goods.

2. A trade exhibition is a commercial promotion activity which is aimed, by displaying goods and documents relating to goods, at introducing and advertising goods in order to expand and expedite goods consumption.

3. Trade fairs and exhibitions must specify the theme, scope, period of time, location, list of goods, documents of goods, and names and addresses of participating organizations and individuals.

Article 209 Organization of Trade Fairs and Exhibitions in Vietnam

All trade fairs and exhibitions organized in Vietnam, including trade fairs and exhibitions organized by foreign business entities, must be licensed by the Ministry of Trade.

Article 210 Right to Organize or Participate in Trade Fairs and Exhibitions

1. Organizations and individuals conducting production or business activities in Vietnam have the right to organize and participate in both domestic and overseas trade fairs and exhibitions for the purpose of commercial promotion.

2. Organizations and individuals organizing domestic and overseas trade fairs and exhibitions must establish organizational boards in accordance with the provisions of the licences issued by the Ministry of Trade.

3. Organizations and individuals conducting production and business activities in Vietnam may enter into contracts with business entities providing trade fair and exhibition services for the employment of the latter to organize trade fairs and exhibitions.

Article 211 Organization of and Participation in Overseas Trade Fairs and Exhibitions

In order to organize or participate in overseas trade fairs and exhibitions, organizations and individuals conducting business and production activities in Vietnam must obtain the approval of the Ministry of Trade in Vietnam and must comply with Vietnamese laws and the laws of the host country.

Article 212 Goods Prohibited from Sale at Trade Fairs and Exhibitions

Goods prohibited from sale at trade fairs and exhibitions are goods lacking quality or trademark registration.

Article 213 Registration of Participation in Trade Fairs and Exhibitions

In order to participate in any trade fair or exhibition, production and business organizations and individuals must register with the organizational board of the relevant trade fair or exhibition.

Article 214 Rights and Obligations of Organizations and Individuals Participating in Trade Fairs and Exhibitions in Vietnam

Organizations and individuals participating in trade fairs and exhibitions in Vietnam have the following rights and obligations:

1. To display their goods and documents relating to goods at the trade fair or exhibition at which they have registered for participation;

2. To negotiate and enter into sale and purchase contracts in accordance with law;

3. To sell goods at the trade fair or exhibition in accordance with the registration of participation in the trade fair or exhibition; following the sale of goods at the trade fair or exhibition, tax must be declared and paid in accordance with law;

4. To comply with the regulations relating to the organization of trade fairs and exhibitions in Vietnam.

Article 215 Rights and Obligations of Foreign Business Entities Participating in Trade Fairs and Exhibitions in Vietnam

Foreign business entities participating in trade fairs and exhibitions in Vietnam have the following rights and obligations:

1. To be permitted to import temporarily and free of duties goods and documents relating to goods for display at trade fairs and exhibitions; such goods and documents relating to goods must be re-exported no later than thirty (30) days after completion of the trade fair or exhibition;

2. To comply with the regulations relating to the organization of trade fairs and exhibitions in Vietnam;

3. To complete customs formalities required by the law of Vietnam in respect of goods and documents relating to goods temporarily imported for participation in trade fairs and exhibitions;

4. To sell goods displayed at trade fairs and exhibitions only when permitted by the Ministry of Trade of Vietnam and to pay tax as required by the law of Vietnam;

5. Where goods displayed at trade fairs and exhibitions are used as gifts, the approval of the Ministry of Trade of Vietnam must be obtained and tax must be paid in accordance with the law of Vietnam.

Article 216 Rights and Obligations of Organizations and Individuals Conducting Business and Production Activities in Vietnam when Organizing or Participating in Overseas Trade Fairs or Exhibitions

Organizations and individuals conducting business and production activities in Vietnam when organizing or participating in overseas trade fairs or exhibitions have the following rights and obligations:

1. To be permitted to export temporarily and free of duties goods and documents relating to goods for the purpose of display at trade fairs or exhibitions;

2. To comply with the regulations relating to the organization of overseas trade fairs or exhibitions;

3. Where goods displayed at overseas trade fairs or exhibitions are sold, export duties must be declared and paid in accordance with the law of Vietnam;

4. Where goods displayed at trade fairs and exhibitions are used as gifts, the approval of the Ministry of Trade of Vietnam must be obtained and tax must be paid in accordance with the law of Vietnam.

Article 217 Trade Fair and Exhibition Organization Services

1. Trade fair and exhibition organization service is a commercial activity conducted by business entities for the purpose of organizing trade fairs and exhibitions.

2. Organizations and individuals satisfying all conditions stipulated by law shall be issued with business registration certificates for provision of trade fair and exhibition organization services.

3. The Government shall stipulate the conditions and formalities for the issuance of business registration certificates for provision of trade fair and exhibition organization services.

Article 218 Rights and Obligations of Business Entities Providing Trade Fair and Exhibition Organization Services

Business entities providing trade fair and exhibition organization services have the following rights and obligations:

1. To require the party employing services to supply goods for participation in the trade fair or exhibition at the time agreed in the contract;

2. To require the party employing services to provide information relating to goods displayed at the trade fair or exhibition and other necessary facilities as agreed;

3. To receive service fees and other fees in accordance with the contract;

4. To provide the trade fair and exhibition organization services as agreed in the contract;

5. To restrain from assigning [the contract] or employing other persons to provide the services without the consent of the party employing services; to remain responsible to the party employing trade fair and exhibition organization services where the obligation to perform the contract is assigned to another person;

6. To take care of displayed goods and documents and facilities provided during the term of the contract; to return all displayed goods, documents and facilities to the party employing services upon completion of the display of goods and, if any damage is caused to the party employing services, to pay compensation.

CHAPTER III

NEGOTIABLE INSTRUMENTS

Article 219 Negotiable Instruments

1. A negotiable instrument is a written note recording the unconditional promise to pay a certain sum of money within a certain period of time.

2. Negotiable instruments under this Law comprise drafts and payment orders.

Article 220 Right of Business Entities to Use Negotiable Instruments

Business entities are permitted to use negotiable instruments in order to make payments for their commercial transactions.

Article 221 Issuance, Assignment, Discounting, Rediscounting and Payment of Negotiable Instruments

Negotiable instruments shall be issued, assigned, discounted, rediscounted and paid in accordance with the law in relation to negotiable instruments and banking law.



CHAPTER IV

COMMERCIAL REMEDIES AND
RESOLUTION OF COMMERCIAL DISPUTES

SECTION 1

Commercial Remedies

Article 222 Types of Commercial Remedy

Commercial remedies comprise:

1. Specific performance;

2. Penalty for breach;

3. Damages;

4. Termination of contract.

Article 223 Specific Performance

1. Specific performance is a remedy whereby the aggrieved party requires the defaulting party to perform specifically the contract, or to otherwise cause the contract to be performed, and the defaulting party must bear any costs incurred.

2. Where the defaulting party fails to deliver all goods or to provide services in accordance with the contract, it is obliged to deliver all goods or provide services in accordance with the contract. Where the defaulting party delivers faulty goods or fails to provide services in accordance with the contract, it is obliged to rectify the defects of the goods or services or to deliver substitute goods or provide services in accordance with the contract. It may not use money or goods of other types or other services as substitutes without the consent of the aggrieved party.

3. Where the defaulting party fails to comply with clause 2 of this article, the aggrieved party has the right to purchase goods or services of the type stated in the contract from other parties as substitutes and the defaulting party is liable to pay any [price] difference.
4. Where the aggrieved party rectifies by itself the defects of the goods or services, the defaulting party must pay the actual reasonable expenses.

5. The aggrieved party must receive the goods or services and make payment therefor if the defaulting party has discharged its obligations stipulated in clause 2 of this article.

Article 224 Extension of Time-Limits for Performance of Obligations

The aggrieved party may extend the time-limit by a reasonable period in order for the defaulting party to perform its obligations.

Article 225 Relationship Between Specific Performance and Other Remedies

1. Unless otherwise agreed, when the remedy of specific performance is being applied, the aggrieved party may not apply other remedies, including penalty for breach, damages or termination of contract.

2. Where the defaulting party fails to carry out the specific performance within the fixed period of time, the aggrieved party may apply other remedies in order to protect its legitimate interests.

Article 226 Penalty for Breach

Penalty for breach is a remedy whereby the aggrieved party requires the defaulting party to pay a certain penalty sum for breach of contract where it is so stipulated by law or provided for in the contract.

Article 227 Grounds for Claim of Penalty

Penalty for breach arises on the following grounds:

1. Non-performance of the contract;

2. Defective performance of the contract.

Article 228 Rate of Penalty

The rate of penalty in respect of one breach of contract or the total amount of penalty in respect of more than one breach is agreed by the contracting parties but shall not exceed eight per cent of the value of the obligation which is the subject of the breach.

Article 229 Damages

1. Damages is a remedy whereby the aggrieved party requires the defaulting party to pay damages as compensation for breach of contract.

2. The amount of damages covers the actual direct loss and the profit which the aggrieved party would have enjoyed except for the breach committed by the defaulting party.

The amount of damages may not be higher than the amount of loss and the profit otherwise obtained.

Article 230 Grounds for Liability to Pay Damages

Liability to pay damages arises upon existence of all of the following elements:

1. Breach of contract;

2. Physical loss;

3. Direct connection between breach of contract and physical loss;

4. Fault of defaulting party.

Article 231 Burden of Proof of Loss

The party claiming damages bears the burden of proof of loss and the amount of loss.

The defaulting party is deemed to be at fault if it fails to disprove its fault.

Article 232 Obligation to Mitigate Losses

The party claiming damages must take reasonable action to mitigate losses, including [the loss of] the profits it would have enjoyed except for the breach of contract. Where the party claiming damages fails to take such action, the defaulting party has the right to require a reduction in damages equal to the amount of loss that could have been mitigated.

Article 233 Right to Claim Interest on Delayed Payment

Where a defaulting party delays making payment for goods or services or otherwise, the other party has the right to claim interest on the delayed payment for the period of delay at the interest rate applicable to overdue debts stipulated by the State Bank of Vietnam at the time of payment, unless otherwise agreed by the parties or stipulated by law.

Article 234 Relationship Between Remedy of Penalty for Breach and Remedy of Damages

Unless otherwise agreed by the parties, the aggrieved party has the choice between either penalty for breach or damages as the remedy for a breach.

Article 235 Termination of Contract

The aggrieved party may declare termination of contract if the parties have agreed that the breach committed by the other party is a condition for termination of contract.

Article 236 Notice of Termination of Contract

The party terminating the contract must immediately notify the other party of the termination of the contract. Where it fails to do so and thereby causes damage to the other party, it must pay compensation.

Article 237 Consequences of Termination of Contract

1. Following termination of the contract, the parties are relieved from the performance of the obligations agreed in the contract.

2. Each party has the right to claim restitution of any benefits accrued as a result of its performance of any obligations under the contract. Where both parties have indemnity obligations, such obligations must be performed concurrently.

3. The aggrieved party is entitled to require the other party to pay compensation.

SECTION 2

Resolution of Commercial Disputes

Article 238 Commercial Disputes

A commercial dispute is a dispute arising from the non-performance or defective performance of a contract in the course of commercial transactions.

Article 239 Forms of Resolution of Disputes

1. Commercial disputes must be first resolved through negotiations between the parties.

2. Parties to a dispute may agree to choose a body, organization or individual as the conciliation mediator.

3. Where negotiation or conciliation fails, commercial disputes may be resolved by an arbitration body or a court. The procedures for resolution of commercial disputes by arbitration or a court shall be in accordance with the rules of the arbitration body or court chosen by the parties.

Article 240 Authority to Resolve Commercial Disputes with Foreign Business Entities

Commercial disputes with foreign business entities shall be resolved by Vietnamese courts, unless otherwise agreed by the parties or provided by international treaties to which the Socialist Republic of Vietnam is a party or signatory.

Article 241 Limitation Periods for Complaints

1. The limitation period for complaints is the period within which the aggrieved party may lodge a complaint against the defaulting party. After expiry of the limitation period, the aggrieved party is barred from lodging complaints with the competent arbitration body or court.

2. Limitation periods for complaints are agreed by the contracting parties. In the absence of such agreement, the limitation periods for complaints are as follows:

(a) In respect of complaints relating to quantity of goods, three months from the date of delivery of goods;

(b) In respect of complaints relating to specification and quality of goods, six months from the date of delivery of goods; where goods are under warranty, the limitation period for complaints is three months from the expiry of the warranty period;

(c) In respect of complaints relating to other commercial activities, three months from the date on which the obligation of the defaulting party falls due, except for the case stipulated in article 170.4 of this Law.

Article 242 Limitation of Actions

The limitation period applicable to all commercial activities is two years commencing from the time when the cause of action arises.

Article 243 Enforcement of Court Judgements and Decisions and Arbitral Awards and Decisions

1. Court judgements and decisions are enforceable in accordance with the legislation on enforcement of civil judgments.

2. Arbitral awards and decisions are enforceable in accordance with law.


CHAPTER V

STATE ADMINISTRATION OF COMMERCE

SECTION 1

Content of State Administration of Commerce

Article 244 State Administration of Commerce

The State uniformly administers commerce by means of laws, policies, strategies and plans in relation to commercial development.

The State regulates commercial activities principally by way of economic measures and pricing, credit and financial mechanisms.

Article 245 Content of State Administration of Commerce

State administration of commerce includes:

1. Promulgation of legislation relating to commerce and formulating policies, strategies and plans relating to commercial development;

2. Registration of commercial activities;

3. Collection, processing and supply of information; forecasting and orientation of domestic and overseas markets;

4. Provision of guidelines for rational and economical consumption;

5. Regulation of distribution of goods in accordance with social and economic development orientation of the State and in accordance with law;

6. Control of quality of goods domestically distributed and goods imported and exported;

7. Organization and facilitation of commercial promotion activities;

8. Organization and management of commercial research work;

9. Training and support of personnel working in the commercial area;

10. Signing or acceding to international treaties on trade;

11. Representation and management of Vietnamese commercial activities taking place overseas;

12. Guiding, inspection and examination of implementation of policies and plans for commercial development and compliance with legislation relating to commercial activities; dealing with breaches of legislation relating to commerce; organization of action against smuggling, trading of prohibited goods and imitation goods, speculation for the purpose of market control, illegal trading activities, and other acts in breach of legislation relating to commerce.

Article 246 State Administrative Body in Charge of Commerce

1. The Government shall exercise uniform State administration of commerce.

2. The Ministry of Trade is responsible to the Government for the exercise of State administration of commerce.

3. Ministries, ministerial equivalent bodies, and Government bodies are, within their respective powers and duties, responsible for exercising State administration of commerce in their assigned areas.

The Government shall stipulate the responsibilities of ministries, ministerial equivalent bodies and bodies of the Government for co-ordination with the Ministry of Trade in the exercise of State administration of commerce.

4. People's committees at all levels exercise State administration of commerce within their respective localities as delegated by the Government.

Article 247 Organizational Structure of State administration of Commerce

The Government shall stipulate the organizational structure, duties and powers of the State administrative body in charge of commerce.

Article 248 Responsibilities for Implementation of the Commercial Law

1. State bodies, political organizations, socio-political organizations, social organizations, socio-professional bodies and units of the people's armed forces are, within their respective functions, duties and powers, responsible for supervising, in co-ordination with the State administrative body in charge of commerce, the implementation of this Law.

2. All organizations and individuals conducting commercial activities in Vietnam are responsible for the implementation of this Law.


SECTION 2

Commercial Inspectors

Article 249 Commercial Inspectors

Commercial inspectors are inspectors specialized in commerce.

The Government shall stipulate the organizational structure, duties and powers of specialized commercial inspectors.

Article 250 Activities of Commercial Inspectors

Activities of commercial inspectors comprise:

1. Inspection of business registrations;

2. Inspection of compliance with commercial legislation;

3. Identification and prevention of, dealing within their authority with, or recommendation to the competent State bodies to deal with, breaches of commercial legislation;

4. Recommendation of measures ensuring compliance with the commercial legislation and improvement of commercial legislation.

Article 251 Subject of Commercial Inspection

The subject of commercial inspection is commercial activities conducted by business entities.

Article 252 Powers of Commercial Inspectors

During the course of inspection, commercial inspectors have the following powers:

1. To require the inspected parties and [other] relevant parties to supply documents, evidence and explanations with respect to necessary matters directly related to the inspection;

2. To require assessment, if necessary;

3. To prepare inspection statements and to recommend appropriate action;

4. To apply preventive measures and to deal with breaches in accordance with law.

Article 253 Responsibilities of Commercial Inspectors

During the course of inspection, commercial inspectors have the following responsibilities:

1. To present the inspection decision and their inspector cards;

2. To comply with inspection procedures, not to hinder or interfere in normal commercial activities and not to cause harm to the legitimate interests of business entities;

3. To report on inspection results to the competent body and to recommend necessary action;

4. To comply with the law and to be responsible to the competent State body and before the law for all their acts and decisions.

Article 254 Rights of Business Entities When Commercial Inspectors Conduct Inspections

When commercial inspectors conduct inspections, business entities have the following rights:

1. To require inspectors to present the inspection decision and their inspector cards and to comply with the laws relating to inspection;

2. To make complaints or denunciations to, or take action at, the competent State bodies in respect of inspection decisions, acts of inspectors, and inspection results which they deem to be incorrect;

3. To claim compensation for damage caused by unlawful actions of inspectors.

Article 255 Obligations of Business Entities When Commercial Inspectors Conduct Inspections

When commercial inspectors conduct inspections, business entities have the following obligations:

1. To comply with the requirements of inspectors with respect to the inspection;

2. To comply with decisions made by commercial inspectors.

SECTION 3

Rewards and Dealing with Breaches

Article 256 Rewards

Organizations and individuals achieving merits in commercial activities, contributing to production development and improving the life of the people shall be rewarded in accordance with law.

Article 257 Acts in Breach of Commercial Legislation

Acts in breach of commercial legislation comprise:

1. Conducting business activities without business registration certificates or in contravention of the terms of business registration certificates;

2. Conducting commercial activities which have been suspended or which the business entity has been disentitled to conduct;

3. Not having commercial offices or shops; not having signboards or having signboards which are inconsistent in form or substance with the terms of business registration certificates;

4. Establishing representative offices or branches without licences or operating representative offices or branches in contravention of licences;

5. Trading goods or providing services the business of which is prohibited by law;

6. Trading goods or providing services the business of which is stipulated by law to be subject to certain conditions and such conditions are not satisfied;

7. Failing to comply with price scales and price limits stipulated by the State in respect of certain goods; failing to display clearly the prices of goods and services;

8. Failing to provide sufficient information in relation to the utility of goods thereby causing harm to the interests of consumers;

9. Failing to comply with the regulations relating to commercial promotion, advertisement, display of goods, trade fairs and exhibitions;

10. Infringing legislation relating to receipts and source documents; failing to open books of account; failing to maintain, or keep records accurately and correctly in, books of account;

11. Deceiving and defrauding customers in the process of the sale of goods or provision of services; failing to provide warranty services in respect of goods or services to customers as agreed or as stipulated;

12. Infringing State regulations relating to administration of import and export of goods;

13. Unlawful competition;

14. Obstructing commercial inspectors in the execution of their duties;

15. Other acts in breach of commercial legislation.

Article 258 Dealing with Breaches

1. Depending on the nature, seriousness and consequences of the breach, the business entity may be subject to one of the following actions:

(a) Administrative penalty in accordance with the legislation relating to administrative penalty;

(b) Where the act of breach amounts to an offence, prosecution for criminal liability in accordance with law.

2. Where the act of breach causes harm to the interests of the State or bodies, organizations or individuals, compensation must be paid in accordance with law.

Article 259 Authority to Impose Penalties

1. People's committees at all levels and the State administrative body in charge of commerce are authorized to impose penalties for administrative breaches in commercial activities.

2. Commercial inspectors are authorized to impose penalties for administrative breaches in commercial activities.

The authority to impose administrative penalties in commercial activities is stipulated in the legislation relating to administrative penalties.

Article 260 Execution of Administrative Penalty Decisions

1. Business entities which are given administrative penalties are obliged to comply with the penalty decision.

2. Business entities which do not voluntarily comply with administrative penalty decisions shall be forced to comply in accordance with law.

Article 261 Complaints and Action Against Administrative Penalty Decisions and Resolution of Complaints

1. Business entities which are given administrative penalties are entitled to lodge complaints with the competent State body or institute court action in respect of the administrative penalty decisions.

2. During the process of lodging complaints or instituting action, business entities must still comply with the administrative penalty decisions. When the competent body has resolved the complaint or when the court has delivered its judgement or decision to resolve the complaint, that resolution, judgement or decision shall be complied with.

Article 262 Dealing with Breaches Committed by State Employees and Officials in Exercise of Administration of Commerce

State employees and officials who fail to fulfil their responsibilities, abuse their powers, cause trouble, hinder lawful commercial activities, or commit other breaches shall, depending on the nature and seriousness of the breach, be subject to disciplinary action or prosecution for criminal liability. Where damage is caused, they must pay compensation in accordance with law.


CHAPTER VI

IMPLEMENTATION PROVISIONS

Article 263 Effectiveness

This Law shall be effective as of 1 January 1998.

All previous provisions which are inconsistent with this Law are hereby repealed.

Article 264 Implementing Guidelines

The Government shall provide detailed guidelines for the implementation of this Law.


This Law was passed by Legislature IX of the National Assembly of the Socialist Republic of Vietnam at its 11th session on 10 May 1997.


Chairman of the National Assembly


NONG DUC MANH

STATE PRESIDENT SOCIALIST REPUBLIC OF VIETNAM
Independence - Freedom - Happiness
No. 58 L-CTN
Hanoi, 23 May 1997


ORDER


The President of the Socialist Republic of Vietnam

Pursuant to articles 103 and 106 of the 1992 Constitution of the Socialist Republic of Vietnam;

Pursuant to article 78 of the Law on the Organization of the National Assembly;

Hereby Promulgates:


The Commercial Law which was passed by Legislature IX of the National Assembly of the Socialist Republic of Vietnam at its 11th session on 10 May 1997.


The President of the Socialist Republic of Vietnam


LE DUC ANH