What are the rights and obligations of the parties to contracts for purchase and sale of goods in Viet Nam?

Purchase and sale of goods is one of the most common activities of commerce. Every day, we easily encounter transactions in life, with small transaction values, we may not pay too much attention to the legal aspect but in commercial transactions between traders when the price of goods may reach more than tens or hundreds of millions of VND, so it is extremely necessary to pay attention to the legal provisions on the rights and obligations of the parties to contracts for purchase and sale of goods. Let’s join Lawyer X to find out about this issue through the following article: “Howdy Lawyer! In the near future, I have a plan to invest some capital in operating a private enterprise in Viet Nam to trade some household goods, I would like to find out about when my future enterprise enters into a sale of goods contract with partners, customers, then what rights and obligations does my enterprise have under current law? Thanks for your advice! “

Legal grounds

Viet Nam’s Commercial law

What are contracts for purchase and sale of goods?

Contracts for purchase and sale of goods mean agreements 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.

Contracts for sale and purchase of goods may be expressed in verbal or written form or established by specific acts. For types of contracts for purchase and sale of goods, which, as provided for by law, must be made in writing, such provisions must be complied with.

Rights and obligations of parties to contracts for purchase and sale of goods

Delivery of goods and goods-related documents

 The seller must deliver goods and relevant documents, as agreed in contracts on quantity, quality, packing and preservation modes and other contractual terms.  In cases where there is no specific agreement, the seller is obliged to deliver goods and relevant documents according to the provisions of Viet Nam’s Commercial law

Place of delivery of goods

– The seller is obliged to deliver goods at the agreed place. In cases where there is no agreement on place of goods delivery, such a place shall be specified as follows:

 + In cases where goods are things attached to land, the seller must deliver goods at the place where such goods exist;

+ In cases where the contract contains a provision on goods transportation, the seller is obliged to deliver goods to the first carrier;

+ In cases where the contract contains no provision on goods transportation, and at the time the contract is entered into, the parties know the location of the goods storage, the place of goods loading or the place of goods manufacture, the seller shall have to deliver the goods at such place;

 + In other cases, the seller shall have to deliver goods at his/her place of business, or his/her place of residence identified at the time the purchase and sale contract is entered into in cases he/she has no place of business.

Responsibilities upon delivery of goods where carriers are involved

 – Where goods are handed over to the carrier without being identified with specific signs or marks on them, accompanied with transportation documents or otherwise, the seller must notify the purchaser of the handover of goods to the carrier and clearly identify names and method of recognizing transported goods.

– Where the seller is obliged to arrange the goods transportation, the seller shall have to enter into necessary contracts for the transportation of goods to the destination by means of transportation suitable to specific circumstances and under normal conditions for such modes of transportation.

– Where the seller is not obliged to purchase insurance for the goods in the course of transportation and if requested by the purchaser, the seller must supply to the purchaser all necessary information on the goods and the transportation thereof to enable the purchaser to purchase insurance for the goods.

Time limit for delivery of goods

 – The seller must deliver goods at the time already agreed upon in the contract;

– Where only the time limit for delivery of goods is agreed upon without a specific time for delivery of goods, the seller may deliver goods at any time within such time limit and must notify the purchaser of the delivery in advance;

– Where there is no agreement on the time limit for delivery of goods, the seller must deliver goods within a reasonable time limit after the contract is entered into.

Obligation to assure the ownership right over goods

The seller must assure that:

– The ownership right of the purchaser over goods sold is not disputed by any third party;

– The goods are lawful;

– The handover of the goods is lawful.

Obligation to assure intellectual property rights over goods

– The seller must not sell goods infringing upon intellectual property rights. The seller shall be held responsible for any dispute related intellectual property rights over goods sold.

– Where the purchaser requests the seller to observe technical drawings, designs, formulas or specifications furnished by the purchaser, the purchaser shall be liable for complaints related to infringements of intellectual property rights which arise from the fact that the seller has complied with the request of the purchaser

Obligation of the seller in cases where goods are subject to measures of security for performance of civil obligations

Where the goods sold are subject to measures of security for performance of civil obligations, the seller must notify the purchaser of such security measures and must obtain the consent of the security beneficiary regarding the sale of such goods.

Obligation to provide warranty for goods

 – Where goods are purchased and sold under warranty, the seller shall have to provide warranty for such goods according to the agreed contents and duration.

 – The seller must fulfill the warranty obligation as soon as the practical situation permits.

– The seller must bear all warranty expenses unless otherwise agreed

Payment of goods

– The purchaser is obliged to pay for goods and receive goods as agreed upon.

– The purchaser must comply with the payment modes and make the payment according to the agreed order and procedures and the provisions of law.

 – The purchaser shall still have to pay for goods in cases where goods are lost or damaged after the time the risk is passed from the seller to the purchaser, except for cases where the loss or damage is caused due to the fault of the seller.

Determination of prices

 Where there is neither agreement on goods price or on the price-determining method nor other price indexes, the goods price shall be determined according to the price of such type of goods under similar conditions on mode of goods delivery, time of goods purchase and sale, geographical market, payment mode and other conditions which affect the prices.

Pass of risks

*Pass of risks in cases where there is a fixed place of delivery of goods

 Unless otherwise agreed, if the seller is obliged to deliver the goods to the purchaser at a particular place, the risk of goods loss or damage shall be passed to the purchaser as soon as the goods are delivered to the purchaser or the person authorized by the purchaser to receive the goods at such place, even in cases where the seller is authorized to retain the documents which establish the ownership rights over the goods

*Pass of risks in cases where there is no fixed place of delivery of goods

Unless otherwise agreed, if the contract contains provisions on the goods transportation and the seller is not obliged to deliver the goods at a given place, the risk of goods loss or damage shall be passed to the purchaser as soon as the goods are delivered to the first carrier.

*Pass of risks in cases where goods are handed over to a bailee that is not a carrier

Unless otherwise agreed, if the goods are being kept by a bailee that is not a carrier, the risks of goods loss or damage shall be passed to the purchaser in one of the following cases:

– Upon receipt by the purchaser of documents of title to the goods;

– Upon the confirmation by the bailee of the purchaser’s right to possession of the goods.

*Pass of risks in case of purchase and sale of goods in transportation

Unless otherwise agreed, if the subject matter of the contract is goods in transportation, the risk of goods loss or damage shall be passed to the purchaser as from the time the contract is entered into.

Time of transferring ownership of goods

Unless otherwise provided for by law or agreed upon by the parties, ownership of goods shall be passed from the seller to the purchaser as from the time of handover of the goods.

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