What are rights and obligations of parties to mandate contracts in Viet Nam?

Purchase and sale of good by mandated dealers is one of the commercial intermediary activities that enables traders to cooperate with other traders to help them purchase and sale of goods in certain cases. Let’s join Lawyer X to learn about the legal provisions on purchase and sale of goods by mandated dealers through the following situation: “Hello, lawyer! My company wants to import a large amount of herbal ingredients from China to Viet Nam for production. But my company is specialized in manufacturing not importing and exporting goods, I want to find a company specializing in importing these herbal ingredients to mandate the purchase and sale of goods. If my company enter into mandate contracts, how are the rights and obligations of the parties protected by law? Thank you, lawyer! “

Legal grounds

Commercial Law 2005

What is purchase and sale of goods by mandated dealers?

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.

Sale and purchase of goods transaction can be carried out by 2 methods: direct sale and purchase of goods between the seller and the buyer; and transaction through 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, purchase and sale of goods by mandated dealers, and commercial agency.

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 by mandated dealers mean commercial activities whereby the mandatory conducts the purchase and sale of goods in his/her/its own name under terms agreed upon with the mandator and is entitled to receive mandate commission.  waterfall. All goods which are lawfully circulated may become the subject matter of a mandated sale and purchase.

Parties to mandate contracts

Mandate contracts for purchase and sale of goods must be made in writing or in other forms of equivalent legal validity. Parties to mandate contracts include:

– Mandatories: A mandatory for purchase and sale of goods is a trader dealing in goods which are consistent with the mandated goods and conducting the purchase and sale of goods under terms agreed upon with the mandator.

– Mandators : A mandator of purchase and sale of goods may, or may not, be a trader that authorizes a mandatory to conduct the purchase and sale of goods at his/her/its request and pays a commission.

A mandatory shall not be allowed to sub-mandate a third party to perform the signed mandate contract for purchase and sale of goods, except where it is so approved in writing by the mandator. A mandatory may accept the mandate for purchase and sale of goods from different mandators.

Rights and obligations of parties to mandate contracts

* Rights of mandators

Unless otherwise agreed, mandators shall have the following rights:

– To request mandatories to supply adequate information on the performance of mandate contracts; The mandators’ full notification of the performance of the contract will help mandatories clearly understand how the mandated purchase are being carried out. From there, it is possible to better protect the legitimate rights and interests of mandators and quickly find a solution in case the mandated transaction goes wrong like in the shipping process. The goods are found to be defective or have fraud from the seller, the carrier or it may also be difficult to perform administrative procedures related to the purchase, sale or transport of goods.

– Not to bear responsibility in cases where mandatories commit law violations, except for cases specified in Clause 4, Article 163 of Commercial law: “To bear joint responsibility in cases where mandatories commit law violations which are attributable to acts of mandators or intentional law-breaking acts of the parties.” The fact that mandators are entitled to not bear responsibility because mandatories violate the law clearly shows the fairness of the law, avoiding the situation when a party that is not at fault is still unjustly borne responsibility for violations of mandatories which is out of the mandatory will.

*Obligations of mandatories

Unless otherwise agreed, mandators shall have the following obligations:

– To provide information, documents and means necessary for the performance of mandate contracts;

– To pay mandate commissions and other reasonable expenses to mandatories;

– To hand over money and goods as agreed upon;

– To bear joint responsibility in cases where mandatories commit law violations which are attributable to acts of mandators or intentional law-breaking acts of the parties.

*Rights of mandatorie

Unless otherwise agreed, mandatories shall have the following rights:

 – To request mandators to provide information and documents necessary for the performance of mandate contracts;

– To receive mandate commissions;

– Not to bear responsibility for goods handed over to mandators strictly under agreement

*Obligations of mandatories

 Unless otherwise agreed, mandatories shall have the following obligations:

– To conduct the purchase and sale of goods as agreed upon;

– To notify mandators of matters related to the performance of mandate contracts;

– To follow instructions of mandators as agreed upon;

– To preserve assets and documents assigned to them for the performance of mandate contracts;

– To keep secret information related to the performance of mandate contracts;

– To hand over money and goods as agreed upon;

– To bear joint responsibility for law violation acts of mandators, in cases where such law violation acts are partially attributable to their own faults

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