The purpose of the deposit is to secure the performance of the obligation. So in the case of a deposit; but the obligor is in breach, according to regulations, how will compensation be made when breaching the deposit contract? In this regard, Ms. H asked the following question:
Hello Lawyer! Mr. KH and I signed a contract to buy and sell a piece of land that has not yet been settled for 500 million; and Mr. KH has deposited 30 million dong; but then he said that for economic reasons, he couldn’t buy anymore; I hope you understand and return the money. I decide not to pay and consider the amount as compensation for breach of deposit contract, is it correct? Thank you!
Here, Lawyer X will answer the above questions through the article below! Invites you to read the track!
Legal grounds
- Civil Code 2015
- Law on Notarization 2014
What is a deposit contract?
Pursuant to Clause 1, Article 328 of the 2015 Civil Code, stipulates:
Deposit means the fact that one party (hereinafter referred to as the depositor) hands over to the other party (hereinafter referred to as the deposit recipient) a sum of money or precious metals; gems or other valuables (hereinafter collectively referred to as deposit properties) for a period of time to secure the conclusion or performance of a contract.
So, deposit contract is also an agreement between the depositor and the deposit receiving party about a sum of money or precious metals; gems or other valuables (hereinafter collectively referred to as deposit properties) for a period of time to secure the conclusion or performance of a contract.
What assets are used for deposit?
Deposit property is not only money but also other valuable assets; assets subject to registration of ownership such as cars, motorcycles, etc. and these are also assets of great value, so when used for deposit, it is necessary to be notarized in writing; agency certification; a competent organization or must be registered for security transactions if the security objects are required to be registered for security transactions as prescribed by law.
Does the deposit contract need to be notarized?
First of all, based on the provisions of the Law on Notary 2014; The contract must be notarized in the following two cases:
As agreed by both parties;
Notarization is required by law.
Besides that; A deposit contract can be understood as a form of “backup” contract for a later time to perform another transaction. At this time, the following cases may occur according to the provisions of Clause 2, Article 328 of the 2015 Civil Code:
Case 1: Where the contract is entered into; contract performance;
Case 2: Where the depositor refuses to enter into and perform the contract;
Case 3: In case the deposit recipient refuses to enter into and perform the contract.
Thus, according to the provisions of current law; The deposit contract is not required to be notarized. However; to ensure legality as well as prevent disputes from occurring; We should notarize the deposit contract based on the agreement of the two parties.
Compensation for damage when breaching the deposit contract
When is compensation for breach of deposit contract set?
As prescribed by law, in case a contract is entered into; If the deposit is performed, the deposited property shall be returned to the depositor or deducted to fulfill the payment obligation; if the depositor refuses to enter into the contract; performance of the contract, the deposit property belongs to the party receiving the deposit; if the deposit recipient refuses to enter into the contract; contract performance; must pay the depositor of the deposit property and an amount equivalent to the value of the deposited property; unless otherwise agreed.
So; the compensation for the deposit contract will also apply the provisions of the current 2015 Civil Code; enough 03 bases:
There is a violation,
Actual damage,
The cause-and-effect relationship between the act and the damage is compensated for damages like any other breach of contract.
Compensation for breach of deposit contract
The compensation for damage to the deposit contract must still comply with the following principles:
Actual damage must be fully and promptly compensated. The parties may agree on the level of compensation; form of compensation in cash; in kind or performing a job, the mode of compensation once or many times; unless otherwise provided by law.
The person responsible for compensation may be entitled to a reduction in compensation if there is no fault or inadvertent fault and the damage is too great for his or her economic ability.
When the level of compensation is no longer consistent with reality; then the aggrieved party or the damage-causing party has the right to request the court or other competent state agency to change the compensation level.
When the aggrieved party is at fault in causing the damage; shall not be compensated for the damage caused by their fault.
The obligee; infringed interests are not compensated if the damage occurs due to the failure to apply necessary measures; reasonable to prevent or limit damage to yourself.
Thus, the violating parties need to have the burden of proof to ensure their rights. The parties can agree on the amount of compensation or based on the fault of the violator to determine a specific penalty according to the regulations on deposit.
Compensation for breach of deposit contract
According to the provisions of Clause 2, Article 328, Civil Code 2015; There will be two cases:
– The depositor (buyer) violates: that is, the depositor does not buy, the depositor will lose the deposit
– The party receiving the deposit (the seller) violates: this is what we have to discuss, the violation is understood as not selling or selling to another person. There will be minor cases as follows:
Negotiate the fine amount clearly: the contract will state a penalty of 03 times the deposit amount and return the deposit. Deposit 30 million; then the amount to be returned is 120 million (30 million deposit + 90 million deposit penalty);
The agreement does not stipulate the amount of the deposit penalty: in practice, the judgments show that there is no fixed answer. In some cases, the plaintiff requested a fine of a deposit and returned the deposit ie a deposit of 30 million; the defendant must return 60 million (30 million deposit and 30 million deposit penalty). The court agreed, but in some cases it did not.
Agreement to fine n times the deposit: this is also a thing that does not have a correct answer.
Therefore, when making a deposit for sales contracts, it is necessary to clearly agree on compensation when the parties violate; especially, the seller must clearly specify if the seller violates, how many times the deposit penalty must be paid together with the return of the deposit.
Related articles
- Contract for garment processing in Vietnam
- Contract for sale/lease-purchase of individual houses in Vietnam
- Settlement of deposit contract disputes when buying land in Vietnam
Services of LSX
Prestigious professional services: Firstly, the team of consultants and consultants for many years in the field of civil status, and customer support.
On-time: Certainly, with the motto “Get your lawyer right at your fingertips”, we ensure the service always performs on time. The rights and interests of customers always come first.
Cost: Besides, Lawyer X’s service costs are highly competitive; depending on the nature of the particular case. So, we want our guests to have the best possible service experience. Therefore, costs guaranteed to be the most suitable and economical for customers.
Confidentiality of client information: Finally, all brand information of client LSX will be 100% confidential.
Please contact us immediately if you have any questions about “Compensation for damage when breaching the deposit contract in Vietnam”
Contact LSX
Finally, hope this article is useful for you to answer the question about “Compensation for damage when breaching the deposit contract in Vietnam”. If you need any further information, please contact LSX Law firm: at +84846175333 or Email: [email protected]
Frequently asked questions
Deposit property is not only money but also other valuable assets; assets subject to registration of ownership such as cars, motorcycles, etc. and these are also assets of great value, so when used for deposit, it is necessary to be notarized in writing; agency certification; a competent organization or must be registered for security transactions if the security objects are required to be registered for security transactions as prescribed by law.
Petition;
Documents and proofs such as deposit contract; …
– ID card/CCCD; Household; temporary residence book (certified or notarized); if the petitioner is an individual;
Business license; business registration certificate; decide to establish an enterprise; operating charter; the decision to appoint or appoint a representative of the enterprise (certified copy); if it is a legal person;
A list of documents submitted together with the petition (specify the number of originals and copies).
Conclusion: So the above is Compensation for damage when breaching the deposit contract in Vietnam. Hopefully with this article can help you in life, please always follow and read our good articles on the website: lsxlawfirm.com
