Regulations on representation under Vietnam Civil Code

Representation can help one person perform his/her right and obligations through behavior of another person within the scope of representation. Let’s find out this issue with Lawyer X through the following situation: “Dear Lawyer! I want to ask what does representation mean in Vietnam? What are basis for establishment of representation rights? Thanks for answering me!”

Legal grounds

• 2015 Vietnam Civil Code

What is representation?

• Representation means a person (hereinafter referred to as the representative) acting in the name and for the benefit of another person (hereinafter referred to as the principal) enters into and performs a civil transaction within the scope of representation.
• Each natural or juridical person may enter into and/or perform civil transactions through a representative. A natural person may not allow another person to represent him/her; if the law provides for that they must personally enter into and perform such transaction.
• The representative, if required by law, must have legal personality and/or legal capacity in accordance with the transactions that he/she enters into and performs.

Basis for establishment of representation rights

Representation rights shall be established according to a power of attorney between a principal and a representative (hereinafter referred to as authorized representation); according to a decision of a competent authority, a charter of a juridical person or as prescribed by law (hereinafter referred to as legal representation).

Legal representatives of natural persons

• The father and/or mother with respect to a minor.
• The guardian with respect to a ward. The guardian of a person with limited cognition and behavior control is a legal representative if appointed by a court.
• The person appointed by a court in case where it is not able to determine the representative prescribed in Clause 1 and Clause 2 of Article 136
• The person appointed by a court with respect to a person with limited legal capacity.

Legal representatives of juridical persons

– Legal representatives of juridical persons include:

• The person appointed by the juridical person according to its charter;
• The person competent to represent as prescribed by law;
• The person appointed by a court during the proceedings at the court.

– Each juridical person may have multiple legal representatives and each representative is entitled to represent the juridical person as prescribed in Articles 140 and 141 of Civil Code.

Regulations on authorized representatives

• Each natural or juridical person may authorize another natural or juridical person to enter into and perform a civil transaction.
• Members of a household, co-operative group or a non-juridical person may agree to authorize another natural or juridical person to enter into and perform a civil transaction related to their common property.
• A person aged from fifteen years to below eighteen years may be an authorized representative, except where the law provides for that the civil transaction must be entered into and performed by a person who has reached eighteen years of age.

Legal consequences of representative acts

• A civil transaction entered into and performed with a third person by a representative in accordance with his/her scope of authorization shall give rise to rights and obligations of the principal.
• The representative is entitled to enter into and/or perform necessary acts to attain the objectives of the authorization.
• In case where a representative still enters into or performs a civil transaction although he/she knew or should know the establishment of authorization due to misunderstanding, deception, threat or compulsion, such civil transaction shall not give rise to rights and obligations of the principal, except for the case that the principal knew or should know such misunderstanding, deception, threat or compulsion without any objection.

Regulations on term of representation

– The term of representation shall be determined according to a power of attorney, a decision of a competent authority, and a charter of a juridical person or as prescribed by law.

– If it fails to determine the term of representation prescribed in Clause 1 of Article 140, the term of representation shall be determined as follows:

• If the representation right is determined according to a specific civil transaction, the time limit for representation shall be determined until the time of termination of such civil transaction;
• If the representation right is not determined according to a specific civil transaction, the term of representation is 1 year, from the time of arising representation right.

– The authorized representation shall terminate in any of the following cases:

• Upon an agreement;
• Upon expiry of the term of authorization;
• Upon completion of the authorized tasks;
• The principal or the representative unilaterally revokes the authorization;
• The principal or the representative being natural person dies; the principal or the representative being juridical person ceases to exist;
• The representative does not meet the conditions prescribed in Clause 3 Article 134 of Civil Code;
• Upon another basis that causes the failure of the representation.

– The legal representation shall terminate in any of the following cases:

• The principal being natural person becomes an adult or has his/her legal capacity restored;
• The principal being person dies;
• The principal being juridical person ceases to exist;
• Upon another basis as prescribed in Civil Code and relevant laws.

Scope of representation

– Each representative may only enter into and/or perform civil transactions within his/her scope of representation according to any of the following bases:

• The decision of the competent authority;
• The charter of the juridical person;
• Contents of authorization;
• Other regulations as prescribed by law.

– If it fails to determine the specific scope authorization prescribed in Clause 1 of Article 141, the legal representative has the right to enter into and perform all civil transactions in the interests of the principal, unless otherwise prescribed by law.

– A natural or juridical person may represent multiple natural or juridical persons but he/she/it may not, on behalf of the principal, enter into and perform a civil transaction with him/her/it or with a third party that he/she/it also acts as a representative therefor, unless otherwise prescribed by law.

– The representative must inform the parties of the scope of his/her representation.

Consequences of civil transactions entered into and performed by unauthorized persons

– A civil transaction entered into and performed by an unauthorized person representative shall not give rise to rights and obligations of the principal, except for any of the following cases:

• The principal recognizes the transaction;
• The principal knows it without any objection within an appropriate time limit;
• It is the principal’s fault that the other party does not know or is not able to know that the person entering into and performing the civil transaction therewith was unauthorized.

– If a civil transaction entered into and performed by an unauthorized person does not give rise to rights and obligations with respect to the principal, the unauthorized person must fulfill the obligations to the person with which he/she transacted, unless such person knew or should have known that the representative was unauthorized.

– A person having transacted with an unauthorized person has the right to terminate unilaterally the performance of or to terminate the civil transaction entered into and to demand compensation for any damage, except where such person knew or should have known that the representative was unauthorized or the case prescribed in Point a Clause 1 of Article 14-

– If the unauthorized person and the other party in a civil transaction deliberately enter into and perform such transaction and thereby cause damage to the principal, they must jointly compensate for the damage.

Consequences of civil transactions entered into and performed by representatives beyond scope of representation

– A civil transaction entered into and performed by a representative beyond his or her scope of representation shall not give rise to rights and obligations of the principal with respect to that part of the transaction which exceeded the scope of representation, except for any of the following cases:

• The principal gives consent;
• The principal knows it without any objection within an appropriate time limit;
• It is the principal’s fault that the other party does not know or is not able to know that the person entering into and performing the civil transaction therewith was beyond his/her scope of representation.

– If a civil transaction entered into and performed by a representative beyond his/her scope of representation does not give rise to rights and obligations of the principal with respect to that part of the transaction, the representative must fulfill the obligations owning to the person with which he/she transacted in respect of the part of transaction which is beyond the scope of representation, unless such person knew or should have known that the scope of representation was exceeded.

– A person having transacted with such representative has the right to terminate unilaterally the performance of or to terminate the civil transaction with respect to that part which is beyond the scope of representation or with respect to the entire transaction and to demand compensation for any damage, except where such person knew or should have known that the scope of representation was exceeded or the case prescribed in Point a Clause 1 of Article 143

– Where a person and a representative enter into and perform a civil transaction deliberately beyond the scope of representation of the representative and thereby cause damage to the principal, they shall be jointly liable to compensate for the damage.

Please see more:

• Instructions for exclusive registration of company logos in Vietnam
• Service of changing the legal representative of Vietnamese enterprises

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