Regulations on performance of obligations according to Vietnam Civil Code

In obligation relations, whether parties attain their purposes, it depends a lot on performance of obligations. Let’s find out this issue with Lawyer X through the following situation: “Dear Lawyer! I want to ask what are bases for giving rise to and subject matter of obligations? Where are places for performing obligations according to Vietnam legal regulations? What are regulations on performance of obligations in certain circumstances? Thanks for answering me!”

Legal grounds

2015 Vietnam Civil Code

Bases for giving rise to and subject matter of obligations

Obligations means acts whereby one or more entities (hereinafter referred to as obligors) must transfer objects, transfer rights, pay money or provide valuable papers, perform other acts or refrain from performing certain acts in the interests of one or more other subjects (hereinafter referred to as obligees).

Obligations arise from the following bases: Contracts; Unilateral legal acts; Unauthorized performance of act; Unlawful possession or use of or receipt of benefits from property; Causing damage through unlawful acts; Other bases as provided by law.

The subject matter of an obligation may be property or acts which must be performed or acts which must not be performed. The subject matter of an obligation must be defined precisely.

Places for performing obligations

– The place for performing an obligation shall be agreed by the parties.

– Where the parties do not have an agreement, the place for performance of the obligation shall be:

+ The location of the immoveable property, if the subject matter of the obligation is immoveable property;

+ The place of residence or head office of the obligee, if the subject matter of the obligation is not immoveable property.

Where the obligee changes its place of residence or head office, it must notify the obligor of the change and must bear any increase in expenses resulting from the change in residence or head office, unless otherwise agreed.

Time limits for performing obligations

– The time limit for performing an obligation shall be as agreed by the parties or as provided by law.

– The obligor must perform the obligation strictly in accordance with the relevant time limit, unless otherwise prescribed by 2015 Vietnam Civil Code or relevant laws.

If the obligor performs the obligation prior to the time limit and the obligee accepts such performance, the obligation shall be deemed to have been fulfilled on time.

– Where the parties do not have an agreement and the time limit for the performance of a civil obligation is not identifiable prescribed in Clause 1 of Article 278, a party may fulfill the obligation or demand the fulfillment of the obligation as the case may be at any time, but must give reasonable prior notice to the other party.

Performance of obligations to deliver objects

– A person having the obligation to deliver an object must take care of and preserve the object until the time of delivery.

– Where an object to be delivered is a distinctive object, the obligor must deliver that particular object in the same condition as agreed. If the object is a fungible object, it must be delivered in accordance with the quality and quantity agreed. If there is no agreement as to the quality, the object delivered must be of average quality. If the object is an integrated object, the whole integrated object must be delivered.

– An obligor must bear all expenses related to the delivery of an object, unless otherwise agreed.

Performance of obligations to pay money

– An obligation to pay money shall be performed in full, strictly on time, at the place and by the method as agreed.

– The obligation to pay money shall include the payment of interest on principal, unless otherwise agreed.

Performance of obligations to perform acts or not to perform acts

– Obligation to perform an act means an obligation whereby the obligor must perform that particular act.

– Obligation not to perform an act means an obligation whereby the obligor must not perform that particular act.

Performance of obligations in stages

An obligation may be performed in stages if so agreed or so provided by law or pursuant to a decision of a competent authority.

The late performance of one stage of an obligation shall be deemed to be late performance of the obligation.

Performance of obligations through third parties

With the consent of the obligee, an obligor may authorize a third person to perform an obligation on behalf of the obligor provided that the obligor shall be liable to the obligee if the third person fails to perform or performs incorrectly the obligation.

Conditional performance of obligations

– Where the parties have agreed on conditions for the performance of a civil obligation or where the law provides certain conditions for the performance of an obligation, the obligor must perform the obligation when such conditions are satisfied.

– If the conditions do not occur or occur resulting from the influence of a party, Clause 2 Article 120 of 2015 Vietnam Civil Code shall apply.

Performance of obligations having optional subject matters

– Obligation having an optional subject matter means an obligation the subject matter of which is one of several different items of property or acts from which the obligor may select at its discretion, except where it is agreed or provided by law that the right to select is reserved to the obligee.

– The obligor must notify the obligee of the property or act selected in order to perform the obligation. In the case where the obligee has fixed a time limit for performance of the obligation with a selected subject matter, the obligor must fulfill the obligation on time.

– Where there remains only one property or one act to select, the obligor must deliver that particular property or perform that particular act.

Performance of substitutable civil obligations

Substitutable obligation means an obligation whereby if the obligor fails to perform the original obligation, it may perform a different obligation as agreed by the obligee as a substitute for the original obligation.

Performance of severable obligations

Where more than one person jointly performs an obligation and each person has a clearly defined share of the obligation which is severable from that of the other person, each person must perform only its own share of the obligation.

Performance of joint obligations

• Joint obligation means an obligation which must be performed by more than one person and which the obligee may request any one of the obligors to perform in its entirety.
• When one person has performed an obligation in its entirety, such person may require the other joint obligors to make payment for their respective shares of the joint obligation to such person.
• Where an obligee designates one person from amongst the joint obligors to perform an entire obligation and later releases that person, the other obligors shall also be released from performing the obligation.
• Where an obligee releases one of the joint obligors from its share of the joint obligation, the other obligors must, nevertheless, perform jointly their respective shares of the obligation.

Performance of obligations for joint obligees

• Civil obligation for joint obligees means an obligation whereby each joint obligee may require the obligor to perform the obligation in its entirety.
• An obligor may perform its obligation with respect to any one of the joint obligees.
• Where one of the joint obligees releases the obligor from performing the share of the obligation owed to such joint obligee, the obligor must, nevertheless, perform the remaining shares of the obligation owed to the other joint obligees.

Performance of divisible obligations

• Divisible obligation means an obligation the subject matter of which is a divisible object or an act which is able to be divided into portions for the purpose of performance.
• An obligor may perform the obligation in stages, unless otherwise agreed.

Performance of indivisible obligations

• Indivisible obligation means an obligation the subject matter of which is an indivisible object or an act which must be performed in its entirety at the one time.
• Where several persons must perform an indivisible obligation, they must perform the obligation in its entirety at the same time.

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