What are rights and obligations of parties to contracts for representation of traders in Viet Nam?

In many cases, traders conducting commercial activities do not by themselves perform all the activities but they may  delegate another trader to perform on their behalf within the scope of their authorized representatives. This helps traders to partially reduce the workload while taking advantage of the specialization of the work so that other traders are able to perform well commercial activities for them. Join Lawyer X to learn more about contracts for representation of traders through the following situation: “Hello, lawyer! My business specializes in providing strategic marketing services for companies. There is a drinking water company that not only wants to use my consulting services but also wants my company to represent them for their commercial activities related to marketing. If my company enters into contracts for representation of traders with their company, what are the rights and obligations of the parties in accordance with the law? Thank you for the answer! ”

Legal grounds

Viet Nam’s Commercial law

What does representation of traders mean under Viet Nam’s law?

Commercial activities mean activities for the purpose of generating profits, including: sale and purchase of goods, provision of services, investment, commercial promotion and other activities for the profit purpose. Of which, purchase and sale of goods mean commercial activities whereby the seller is obliged to deliver goods, transfer ownership of goods to the purchaser and receive payment; the purchaser is obliged to pay to the seller and receive goods and the ownership thereof as agreed.

Goods include: All types of movables, including those to be formed in the future; Things attached to land; Origin of goods means a country or a territory where all the goods are turned out or where the last stage of substantial processing of goods is performed in cases where many countries or territories join in the process of producing such goods.

Purchase and sale of goods transactions can be concluded by 2 methods: direct purchase and sale of goods between sellers and buyers; and transaction through commercial intermediaries.

Commercial intermediary activities mean activities carried out by a trader to effect commercial transactions for one or several identified traders, including representation for traders, commercial brokerage, goods sale or purchase entrustment, and commercial agency.

Representation of traders means an activity whereby a trader (representative) is authorized by another trader (nominator) to conduct commercial activities in the name and under the instructions of the latter for remuneration.  Where a trader nominates his/her/its personnel to act as his/her/its representative, the provisions of the Civil Code shall apply.

Contracts for representation of traders must be made in writing or in other forms of equivalent legal validity. Parties may agree that the representative may conduct part or all of commercial activities within the scope of operation of the nominator.

Rights and obligations of parties to contracts for representation of traders

Obligations of representatives

Unless otherwise agreed, a representative shall have the following obligations:

– To conduct commercial activities in the name and for the interest of the nominator;

– To notify the nominator of opportunities and results of performance of authorized commercial activities;

– To follow instructions of the nominator if such instructions do not violate the provisions of law;

– To refrain from conducting commercial activities in his/her/its own name or in the name of a third party within the scope of representation;

– To refrain from disclosing or supplying to other people secrets related to commercial activities of the nominator during the period of representation and within two years after the termination of the representation contract;

– To preserve assets and documents assigned for performing activities of representation.

Obligations of nominators

Unless otherwise agreed, a nominator shall have the following obligations:

– 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 non-acceptance of activities conducted by the representative outside the scope of representation;

– To supply assets, documents and information necessary for the representative to perform activities of representation;

– To pay remuneration and other reasonable expenses to the representative;

– To notify promptly the representative of the impossibility of entering into or performing the contract within the scope of representation.

Right to enjoy representation remuneration

– Representatives shall enjoy remunerations for contracts entered into within the scope of representation. The right to enjoy remunerations arises from the time agreed upon by the parties in representation contracts.

– Where it is not agreed upon, the remuneration rate for the representative shall be determined according to Article 86 of Commercial law.

– Payment of incurred expenses Unless otherwise agreed, representatives shall have the right to claim the payment of reasonable expenses incurred for the performance of representation activities.

Lien

Lien means a right to keep possession of property belonging to another person until a debt owed by that person is discharged.

Unless otherwise agreed, representatives shall have lien over assets and documents assigned to them to secure the payment of remunerations and expenses which are due.

Duration of representation of traders

– The duration of representation is agreed upon by the parties.

– Where no agreement is reached, the duration of representation shall expire when the nominator notifies the representative of the termination of the representation contract, or the representative notifies the nominator of the termination of the contract.

– Unless otherwise agreed, if the nominator unilaterally notifies the termination of the representation contract according to Clause 2 of this Article, the representative may request the nominator to pay an amount of remuneration for the signing by the nominator of contracts with customers with whom the representative has negotiated and to pay other remunerations which the representative would otherwise have been entitled to.

– Where the duration of representation expires at the request of the representative, the representative shall forfeit the right to remuneration for transactions which he/she/it would otherwise have been entitled to unless otherwise agreed upon by the parties.

Services of Lawyer X

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 which guaranteed to be the most suitable and economical for customers.

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