Entrusted purchase and sale of goods according to the provisions of Vietnamese law
The market economy is increasingly developing; Consequently, business activities, goods purchases,s and sales of the subjects increased significantly. In order for this commercial activity to be highly efficient and profitable; Entities, including businesses, always have to find for themselves the most suitable and least risky business methods. One of the methods that businesses focus on is the entrustment of goods purchased and sold. So what is an entrustment to buy and sell goods? Is there any law in our country regarding this activity? Today, LSX Lawfirm will give you an article about “Entrusted purchase and sale of goods according to the provisions of Vietnamese law”, as follows:
Legal grounds
Commercial Law 2005
What is a Commodity Sales Entrustment?
According to the provisions of Article 155 of the Commercial Law 2005: “Entrustment for the purchase and sale of goods is a commercial activity whereby the entrusting party performs the purchase and sale of goods in his/her name according to the agreed conditions. with the entrusting party and receive entrustment remuneration”.
Thus, entrustment for the purchase and sale of goods as prescribed in the Commercial Law is a commercial activity in which the entrusting party – being a trader – performs the purchase and sale of goods in his/her name under the conditions specified in Clause 1 of this Article. negotiate with the entrusting party and receive entrustment remuneration through the form of a written contract mainly. In essence, the act of entrusting the purchase and sale of goods can be considered a specific civil transaction related to the purchase and sale of goods.
Features of goods purchase and sale entrustment
Commodity purchase and sale entrustment relationship
- Firstly, The entrustment relationship for the purchase and sale of goods is established between the entrusting party and the entrusting party. The entrusting party must be a trader trading in goods suitable for the entrusted goods, and carry out the purchase and sale of goods under the terms agreed upon with the entrusting party.
- Secondly, Entrusted traders can receive entrustment to buy and sell goods for many different entrusting parties; This issue is specified in Article 161 of the Commercial Law 2005.
- Thirdly, Entrusting party is the party that assigns the entrusting party to carry out the purchase and sale of goods at its request, and not necessarily a merchant status. A fiduciary relationship can include an entrustment to purchase and an entrustment to sell goods.
- Finally, Different from the representative relationship of traders; the trustee when dealing with a third party will act on his own behalf, and the acts of the trustee will bring legal consequences for themselves.
Contents of goods purchase and sale entrustment activities
- Firstly, the Contents of the goods purchase and sale entrustment relationship include the signing; performing the entrustment contract between the entrusting parties and the entrusting party; concluding and performing goods sale and purchase contracts between the entrusting party and a third party at the request of the entrusting party.
- Secondly, The content of the activities of entrustment to buy and sell goods is narrower than that of the activities of representing traders. The entrusting party is only authorized by the entrusting party to buy and sell, or sell certain goods to third parties.
- Thirdly, Commodity trading is also very different from commercial brokerage activities. The commercial broker does not enter into a contract for the sale of goods; or commercial service provision contract; These contracts are entered into directly by the brokerage parties. The entrusting party directly concludes and performs a purchase and sale contract with a third party.
Form of entrustment relationship for purchase and sale of goods
- The entrustment for the purchase and sale of goods must establish by contract. The goods purchase and sale entrustment contract must be made in writing or in other forms with equivalent legal validity.
- An entrustment contract for goods purchase and sale is entered into between the entrusting party and the entrusting party. The entrusting party can be an organization or an individual wishing to purchase and sell goods. The entrusting party must be a trader trading in goods suitable for the entrusted goods.
- An entrustment contract for the sale of goods is a type of service contract. Therefore, the subject matter of the contract of entrustment for the sale of goods is the sale and purchase of goods carried out by the entrusting party under the authorization of the entrusting party.
- Goods purchased and sold at the request of the entrusting party are the subject of the contract of sale entered into between the trustee and a third party, not the subject matter of the entrustment contract.
- When entering into an entrustment contract for the purchase and sale of goods; the parties may agree and write in the contract the following terms: Commodities entrusted to buy and sell; quantity, quality, specification, price, and other specific conditions; entrustment remuneration; the term of performance of the entrustment contract.
- Depending on each specific case, the parties may agree and write in the contract other contents such as measures to secure contract performance; responsibility to settle complaints with customers; property liability of the parties when breaching the contract; dispute settlement procedures; cases of disclaimer,…
Rights and obligations of the parties in the entrustment relationship of goods purchase and sale
Rights and obligations of the entrusting party towards the entrusting party
The rights of the trustee are specified in Article 164 of the Commercial Law 2005; Unless otherwise agreed, the trustee has the following rights:
- Firstly, To request the entrusting party to provide necessary information and documents for the performance of the entrustment contract;
- Secondly, Receiving commission remuneration and other reasonable expenses;
- Thirdly, Not responsible for the goods handed over as agreed upon to the entrusting party.
Obligations of the trustee are specified in Article 165 of the 2005 Commercial Law; Unless otherwise agreed, the trustee has the following obligations:
- Carry out the purchase and sale of goods according to the agreement;
- Notify the entrusting party of issues related to the performance of the entrustment contract;
- Carry out the instructions of the entrusting party in accordance with the agreement;
- Preserve assets and documents assigned to perform the entrustment contract;
- Keep confidential information related to the performance of the entrustment contract;
- Delivery of money and goods according to the agreement;
- Jointly responsible for the entrusting party’s violation of the law, if the cause of such law violation is partly due to his/her own fault.
Rights and obligations of the entrusting party towards the trustee
The entrusting party’s rights in a commercial trust contract are specified in Article 162 of the 2005 Commercial Law; Unless otherwise agreed, the entrusting party has the following rights:
- To request the entrusting party to notify fully about the performance of the entrustment contract;
- Not taking responsibility in case the trustee violates the law, except for the case specified in Clause 4, Article 163 of this Law.
Obligations of the entrusting party are specified in Article 163 of the 2005 Commercial Law; Unless otherwise agreed, the entrusting party has the following obligations.
- Firstly, Provide information, documents, and means necessary for the performance of the entrustment contract;
- Secondly, To pay entrustment remuneration and other reasonable expenses to the trustee;
- Thirdly, Delivery of money and goods according to the agreement; Jointly responsible in case the entrusting party violates the law caused by the entrusting party or the parties intentionally violate the law.
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Related questions
Accordingly to the provisions of Clause 1, Article 167 of the 2005 Commercial Law; A principal is a trader who delivers goods to a selling agent or delivers money for the purchase of goods to a purchasing agent, or a trader authorizes the performance of services for a service-providing agent.
Accordingly to the provisions of Article 166 of the Commercial Law 2005; a Commercial agency is a commercial activity whereby the principal and the agent agree that the principal buys and sell goods to the principal or provides services of the principal to customers for remuneration.
Accordingly to the provisions of Article 150 of the Commercial Law 2005; Representation of a trader is when a trader receives authorization (referred to as representative) of another trader (referred to as principal) to carry out commercial activities in the name of, under the direction of the trader. the individual and shall be entitled to remuneration for representation.
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