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VIETNAM ACADEMY OF SOCIAL SCIENCES GRADUATE ACADEMY OF SOCIAL SCIENCES NGUYEN THI HUYEN GENERAL TRADING CONDITIONS UNDER CARGO INSURANCE CONTRACTS IN VIETNAM Major: Economic law Code : 38 01 07 DISSERTATION DOCTOR OF PHILOSOPHY HA NOI, 2022 Thesis was completed at: GRADUATE ACADEMY OF SOCIAL SCIENCES Science instructor: Assoc Prof PhD Tang Van Nghia Dr Nguyen Am Hieu Reviewer 1: Assoc Prof PhD Nguyen Duc Minh Reviewer 2: Assoc Prof PhD Nguyen Thị Thuong Huyen Reviewer 3: PhD Pham Sy Chung The thesis will be defended in front of the Academy level doctoral thesis grading committee held at… At … date … month … year 202 The thesis can be found at: - National library; - Library of Graduate Academy of Social Sciences INTRODUCTION The imperative need of the topic In modern economy, it is undeniable that application of general trading conditions is a popular phenomenon The birth of general trading conditions is completely objective, which is along with the development of standardized mass production The utility of general trading conditions for all transactions enable enterprises to reduce negotiation expenses, legal risks and social expenses In cargo insurance contract, Insurance companies draft general trading conditions in advance Therefore, if the customers agree to sign insure contracts, they will have to agree all contract contents provided by the insurance companies Passively accepting the contracts, customers will be unable to freely negotiate contract contents and will face risks during the time of contract execution Therefore, it is necessary to form a prompt resolution and control carefully general trading conditions used by insurance companies This will help Vietnamese enterprises to take advantages of general trading conditions and protect rights of customers at the same time In terms of legislation, there is a small number of regulations directly regulating the general trading conditions such as Law on protection of consumers’ rights 2010, civil code 2015 and other specialized laws, which requires a unified control measure During the implementation process, the control is not really effective, consequently affecting negatively rights of non-drafting parties, failing to meet the requirements of modern business and to balance the right of parities of contracts As a result, there is no consistence among understandings and applying the general trading conditions, no effective application in practice There is a pivotal to clearly clarify legal issues regulating general trading conditions, which will satisfy actual requirements of use of general trading conditions nowadays From the above analysis, the researcher choose topic “General trading conditions under cargo insurance contract in Vietnam” as the topic of this dissertation 2 Aims and objectives 2.1 Aims of research The purpose of this thesis is to clarify, supplement legal theories regarding general trading conditions under cargo insurance contract On the basis of analysis and clarification current situation of legal regulations in this filed as well as comparison with regulations of other countries, this paper proposes necessary suggestions to complete regulations regulating general trading conditions and to improve the effectiveness of using these conditions, which will balance the interests of parities of the contracts 2.2 Research objectives - Provide literature review in Vietnam and other countries about general trading conditions and these conditions under cargo insurance contract; - Clarify general information regarding general trading conditions, such as: the definition; characteristics, advantages and disadvantages of these conditions; origin; free right of parities to enter into contracts and requirements to control general trading conditions; - Research definition and characteristics of general trading conditions under cargo insurance contract, practical contribution of these conditions to cargo insurance contract and some limitations of these conditions under cargo insurance contracts; - Analyze legal issues regarding general trading conditions under cargo insurance contract such as definition, effective conditions, explanation and control mechanism of these conditions; - Analyze current Vietnamese legal situation regarding general trading conditions and international experiences; then evaluate practical application of general trading conditions under cargo insurance contract, propose suggestions for Vietnamese legislation concerning this area; - Propose suggestions to complete laws regulating general trading conditions; other measures to improve the effectiveness of application of general trading conditions under general contracts and under cargo insurance contracts Subjects and scope of the research 3.1 Subjects of the research This dissertation focuses on general trading conditions, general trading conditions under cargo insurance contracts, laws of Vietnam and other countries regulating general trading conditions, practical application of general trading conditions under cargo insurance contract 3.2 Scope of the research Contents: In order to achieve research aims and objectives, the researcher focuses on basic theoretical issues concerning general trading conditions under general contract and under cargo insurance contract specifically; legal issues regarding these conditions; practical application of legislation regulating general trading conditions under cargo insurance contract; laws regulating general trading conditions of some countries to give suggestions to complete Vietnamese laws in this field Within the scope of this dissertation, the researcher mainly focuses on practical application of regulations on general trading conditions under cargo insurance contracts Space research: The dissertation focuses on legislations of Vietnam, Australia and some European countries such as German, England, on general trading conditions The rationale to choose these aforementioned countries is that these countries are well-developed countries with the early appearance of general trading conditions and long experiences in constructing, enacting laws regulating general trading conditions It is undeniable that from experiences of these countries, this dissertation is able to provide suggestions to complete Vietnamese regulations in this field Time limit: The dissertation studies legislations since the time when Law on Insurance Business was enacted (2000) till now because this is the document creating favourable legal environment for the development of insurance business, including cargo insurance Research methods - Marx's methods of dialectical materialism, historical materialism - Method of receiving, colleting materials - Method of analyzing - Method of summarizing - Method of comparing laws - History method New scientific contributions of the dissertation - The dissertation construct scientific base regarding general trading conditions under cargo insurance contract – a pivotal foundation of merchandise and services transactions in the modern economy; supplement knowledge of contract formation, of general trading conditions used in forming general contracts and specific cargo insurance contracts - The dissertation analyzes, evaluates practical application of legislations regulating general trading conditions under cargo insurance contracts, point out the inadequacies of the laws on general trading conditions under cargo insurance contracts - The dissertation proposes measures to complete laws on general trading conditions under general contracts and cargo insurance contracts specifically At the same time, the dissertation proposes measures to improve the effectiveness of practical application of legislations on general trading conditions on the basis of balancing interests, rights of parties entering into the cargo insurance contracts The theoretical and practical significance of the dissertation On the basis of studying general trading conditions under cargo insurance contracts, it is undeniable that the topic chosen diversifies theories and practices of general trading conditions under general contracts and under cargo insurance contracts specifically At the same time, the dissertation also contributes to the completion of legislations regulating general trading conditions under general contracts and under cargo insurance contracts specifically Suggestions of the dissertation not only contribute to the completion of legislations regulating general trading conditions under cargo insurance contracts but also contribute the effectiveness of practical application of laws on general trading conditions in Vietnam Suggestions provided based on scientific and practical basis, which is important to constructing and enacting Vietnamese legislations regarding general trading conditions The dissertation is expected to become an effective reference material serving for the theoretical and practical research of general trading conditions, teaching material for major in Economic law and business law Structure of the dissertation Addition to Introduction, conclusion, list of references, the dissertation includes chapters: Chapter 1: Overview and theoretical foundation of the research Chapter 2: General theoretical issues of laws regulating general trading conditions under cargo insurance contracts Chapter 3: Practical application of general trading conditions under cargo insurance contracts Chapter 4: Suggestions to complete laws on general trading conditions under cargo insurance contracts CHAPTER 1: OVERVIEW OF PREVIOUS STUDIES AND THEORETICAL FOUNDATION OF THE RESEARCH 1.1 Overview of previous studies 1.1.1 Domestic and foreign studies Based on domestic and foreign papers, previous materials regarding general trading conditions collected by the researcher, the researcher categorizes these materials into issue groups, including: materials specializing in theoretical issues of general trading conditions, materials specializing in general trading conditions in insurance business and practical application of general trading conditions in the contracts; materials specializing in control mechanism of general trading conditions, … Although previous materials specializing in general trading conditions collected by the researcher is limited in number but in general, collected materials enable the researcher to conclude the current situation of studies about general trading conditions under cargo insurance contracts as well as under general contracts Domestic and foreign research papers collected by the researcher analyzed theories and practical application of general trading conditions such as definition, characteristics, advantages and disadvantages, legal value, origin and development process, using trend, legal effect, control mechanism of general trading conditions, … This is the foundation for the researcher to continuously analyze theoretical foundation of general trading conditions under cargo insurance contracts, analyze characteristics of these conditions under cargo insurance contracts, and then propose measures to complete laws regulating general trading conditions under general contracts and cargo insurance contracts specifically The researcher categorizes issues into the following groups: Regarding definition of general trading conditions, despite of different approach, different terms such as general conditions or general trading conditions, sample terms or sample contracts, accession contracts, … all terms refer to terms and conditions, rules drafted by one party in advance applied to different customers who participate in the same type of transaction without negotiation of the contract In terms of advantages, disadvantages and the validity of general trading conditions, these conditions enable enterprises to meet the mass number of customers, save time, transportation costs, avoid legal risks stemming from the contracts General trading conditions are applied equally to all customers, which not only allow enterprises to achieve effective selling purpose but also be a time, energy saving method for parties in negotiation process Nevertheless, there are certain limitations when general trading conditions are applied as these conditions restrict the free contract right, forcing non-drafting parties to enter the contracts without other options Regarding origin and using trend of general trading conditions, all previous research papers showed that general trading conditions appeared since the middle of 19 century in order to create a favourable environment for forming and executing contracts Currently, globalization promotes business activities, which drives enterprises to form standardized, accurate and stable transactions Therefore, using general trading conditions is inevitable trend nowadays and is popular in business specializing in insurance, construction, finance, banking, transportation, communication, … In terms of free right to enter the contracts, previous research papers analyzed deeply into free right to enter contracts and limitation of this right From analysis, research papers concluded that drafting general trading conditions in advance, drafting party violates freedom of will principle, which may cause adverse effects for non-drafting parties when it comes into effect Regarding the information asymmetry between the parties in the contract, previous research papers pointed out that there is information asymmetry between parties in the contract, the weakness of the party passively enter into transactions and the strength of the party drafting general trading conditions Moreover, there is necessary to have a control mechanism of general trading conditions and complete legislations regulating general trading conditions, to protect the interest of non-drafting parties For suggestions for complete general trading conditions under cargo insurance contracts, some research papers proposed that it is required to construct legal basis to regulate general trading conditions such as responsibility of drafting parties (ensuring freedom of will regulated under Civil code); disclosure of general trading conditions to customers; issuing process of thresearch papers are fundamental foundation, abundant theoretical source for researching general trading conditions This is also a precious source of information, which enables the researcher to construct basic theoretical foundation of general trading conditions under general contracts and under cargo insurance contracts in Vietnam 1.1.2 To-be-resolved issues that require continuous research Firstly, there are different terms for general trading conditions used in legal documents Sample contracts, general trading conditions, accession contracts, sample clauses, … have the same nature as general trading conditions Although there are two different articles in Law on protection of consumers’ rights 2010 and Civil code 2015 regulate sample contracts and general trading conditions, these articles not distinguish clearly sample contracts and general trading conditions Hence, the dissertation will analyze and clearly distinguish this issue Secondly, there is a requirement for a control mechanism supervising general trading conditions to protect customers’ rights There were previous papers which proposed regulations to raise the awareness of enterprises, customers, … However, to ensure that proposed suggestions have high potential application, the researcher will analyze, evaluate current situation, dispute settlement process regarding general trading conditions under cargo insurance contracts After that, the researcher proposes specific, appropriate measures to enhance the responsibility of competent authorities, associations, insurance enterprises issuing general trading conditions and responsibility of insurance customers Thirdly, there is a lack in previous research paper in terms of general trading conditions under cargo insurance contracts For example, there is no previous research paper defines general trading conditions under cargo insurance contracts; points out general trading conditions under cargo 11 whole contract or typical clauses of the contract such as disclaimer clauses, arbitration clauses, … 2.1.2 Characteristics of general trading conditions Firstly, general trading conditions are conditions drafted by a party in advance, which are used for contracts concluded without negotiation, rights of non-drafting parties to revise these conditions Secondly, general trading conditions are stable, applied in mass scale and repeated for a group of customers Thirdly, general trading conditions benefit drafting parties Fourthly, language used in general trading conditions are standardized Fifthly, formats of general trading conditions are diversified 2.1.3 Advantages and disadvantages of general trading conditions 2.1.3.1 Advantages of general trading conditions - Shorten negotiation time, save transaction costs, enable parties to enter contract effectively - Concretize contract law in transactions - Standardize, stabilize language used - Enable contracting parties to predict and prevent possible situations arising from the contracts 2.1.3.2 Disadvantages of general trading conditions - Restrict freedom of contract - Provide information unequally among contracting parties - Enable drafting parties to take advantage of general trading conditions to disclaim responsibility, pass the risk to the other party - Apply languages that are difficult to understand - Tend to be more outdated than business in practice 2.1.4 Freedom of contract and requirement for a balance control mechanism of general trading conditions According to international practice, freedom of contract is one of the basic principles of contract law Contracts must be the result of voluntary negotiation, of true expression of the will of the parties, of freedom to determine clauses of the contract However, with the appearance 12 of mass production, provision for numerous customers, regulations on contract relationship between professional business entities and consumers are excluded from general contract law The artificial equality among contracting parties (actually there is a huge difference between contracting parties in terms of position as well as economic ability) is the reason underlying this situation Non-drafting parties are not allowed to negotiate clauses of contracts, are restricted in terms of freedom of contract, are put into a situation without refusal other than entering into contracts, especially contracts for goods, services supply of monopolistic enterprises As a result, there are requirements for competent authorities to control, supervise general trading conditions drafted by one party to protect rights of nondrafting parties as well as to balance interests of parties 2.1.5 History of formation and development of general trading conditions The appearance of mass production with repeated transactions motivates producers, business entities to eliminate risks arising from business process by creating a new type of contract based on previous experiences with conditions drafted in advance, applying these conditions for all transactions falling into the same type of goods and services The popular use of clauses drafted in advance enables enterprises to reduce transaction costs, negotiation costs and to execute transactions in mass scale Thanks to this, prices of goods are reduced, social benefits are increased, risks of business entities are also decreased There were many previous researches which pointed out that general trading conditions were commonly used in 19th century, which satisfied demands of a mass production and exchange 2.2 General theories of general trading conditions under cargo insurance contracts 2.2.1 Definitions, characteristics of cargo insurance contracts Cargo insurance contract is an agreement between parties, in which insurance entities have responsibility and obligations to compensate for damage of goods of insurance buyers when the insured situations occurred, insurance buyers have obligations to pay insurance fees according to negotiation or regulations 13 Cargo insurance contracts have the following characteristics: - Cargo insurance contracts are bilateral, compensated contracts; - Cargo insurance contracts are drafted by one party, based on sample contracts; - Language used in cargo insurance contract is complicated, difficult to understand; - Cargo insurance contract is a contract which only identifies benefits of one party, not benefits of customers participating in the contract; - Cargo insurance contract is a contract with high probability of risk To save time, effort, cost, insurance businesses draft clauses of cargo insurance contracts in advance based on sample contracts Therefore, insurance buyers only have two options: agree all clauses of contracts or refuse all clauses otherwise Except special events when parties are able to discuss and create appendix, main clauses also follow negotiated appendix Due to complicated nature of insurance clauses which are difficult for customers with common knowledge to understand; diversity of insurance products; contract formation through intermediary parties or insurance agencies,… insurance contracts, which are sample contracts including general trading conditions drafted by insurance businesses in advance, are suitable 2.2.2 General trading conditions under cargo insurance contracts 2.2.2.1 Definition and characteristics of general trading conditions under cargo insurance contracts General trading conditions under cargo insurance contracts are stable clauses drafted by insurance businesses and are commonly used for concluding cargo insurance contracts with numerous customers who are unable to revise these clauses General trading conditions under cargo insurance contracts have the following specific characteristics: - General trading conditions are stable clauses drafted in advance; - General trading conditions are drafted to bring benefits and prevent risks for insurance businesses; 14 - General trading conditions are suitable for characteristics of insurance sector; - General trading conditions are approved by competent authorities 2.2.2.2 General trading conditions commonly used under cargo insurance contracts - General principles; - Scope of insurance; - Disclaimer of insurance responsibilities; - Duration of insurance; - Insurance procedure; - Obligations of insurance buyers when damages occurred; - Damages determination; - Calculation and compensation of damages; - Complaints and dispute resolution 2.2.3 Practical meaning of general trading conditions under cargo insurance contract General trading conditions are stable clauses drafted in advance to use for numerous customers without re-negotiation, which enable parties to enhance business effectiveness in consideration of parties’ rights Therefore, general trading conditions have the following practical meanings: Firstly, general trading conditions boost transaction process, satisfy a huge number of customers, reduce transaction costs for both parties, especially, enable insurance businesses carry out mass transactions, ensure stable service quality Constantly drafting same terms and conditions for each transaction, insurance businesses and customer are required to invest a huge amount of efforts, energy to explain, negotiate, identify potential issues arising from the contracts Secondly, general trading conditions enable parties predict and avoid disputes Thirdly, language used are standardized, clearly identifies rights and obligations of parties Use of specific, accurate words allows parties to comply with contents of contracts, avoid disputes and prevents insurance 15 businesses from taking advantages of the contracts to eliminate obligations prescribed under the contract Fourthly, general trading conditions enable insurance businesses to build reputation, earn trust from insurance customers Publishing general trading conditions, insurance businesses disclose rights and obligations of parties of the contracts, which entitles customers to compare rights and obligations under contracts of insurance providers, thereby choosing the most suitable insurance business for customers’ benefits and entering the contracts without time consuming Moreover, through general trading conditions, insurance businesses form specific rules, build reputation and earn trust from customers, thereby being competitive in the market Fifthly, general trading conditions are optimal measures for insurance businesses There is requirement from practice in which transactions are required to be short in time by using sample insurance contracts drafted in advance Without general trading conditions drafted based on experiences in the past, insurance businesses are unable to predict potential risks arising from practical application because in the modern business environment, insurance customers not hesitate to use tricks to take advantage from insurance If there are no general trading conditions, insurance businesses are required to spend time and effort to negotiate with each insurance customer and passively respond to requirements from insurance customers 2.2.4 Disadvantages of general trading conditions under cargo insurance contracts Firstly, general trading conditions limit the freedom of negotiation General trading conditions used by insurance businesses force customers to approve all clauses of the contracts without re-negotiation, which violates freedom of contract stipulated in the Civil Code Secondly, there is information asymmetry Parties providing general trading conditions are those who spent time on thorough research on business sector including relevant regulations Enterprises carefully choose general trading conditions, even prediction of potential events causing negative effects, prevention of information provided to insurance 16 customers Being in a passive position, customers have to approve general trading conditions to enter into the contracts, which may pose a threat during contract execution process Thirdly, there is an abuse of general trading conditions to disclaim responsibilities Drafting general trading conditions, insurance businesses are in active position while customers are in position of a higher risk compared to insurance businesses From this advantage, insurance businesses benefit from information provided, be active in negotiation process, require customers to follow contents provided in insurance contracts Insurance businesses are able to reduce obligations, potential risks, even create legal pitfalls posed on insurance customers Therefore, there is a demand for competent authorities to intervene, resolve this issue Fourthly, language used is complicated, difficult to understand 2.3 Legal issues of general trading conditions under cargo insurance contracts 2.3.1 Definitions and scope of general trading conditions Pursuant to Article 406 Civil Code, general trading conditions are stable terms announced by a party to apply to the offeree; if the offeree accepts the contract is then deemed to accept these terms General trading conditions shall ensure the equality between parties, be effective only with the parties as long as these conditions have been publicly in order for the parties to know or should know them If the general trading conditions contain provisions on discharge of liability from the party giving the general trading conditions, increase of responsibility or removal of the legitimate interests of the other party, these provisions not take effect, unless otherwise agreed The Law on Insurance business does not directly regulate general trading conditions Regulations on general trading conditions are still scattered in many different legal documents, lack of detailed information, have loopholes causing negative effects for the weak side, mainly the customers 2.3.2 Validity conditions of general trading conditions under cargo insurance contracts 17 General trading conditions under cargo insurance contracts are become effective if these conditions meet the two following conditions of the Civil Code, which are: (i) General trading conditions are disclosed; (ii) There are equality between parties of the contract General trading conditions are considered as inequality if these conditions contain clauses disclaiming responsibility of insurance businesses or increase responsibilities or exclude rights of insurance buyers unreasonably General trading conditions under cargo insurance contracts are invalid if the content is detrimental to the party accepting general trading conditions (insurance buyers) However, the question is whether the validity of contract is affected if general trading conditions are invalid This issue has not been clarified by Vietnamese legislators If general trading conditions are invalid, only these parts are invalid without affecting the validity of the cargo insurance contracts 2.3.3 Responsibility to provide information of general trading conditions under cargo insurance contract Before entering into insurance contracts, insurance businesses are liable for releasing general trading conditions regarding insurance contracts, explaining clearly all general trading conditions, emphasizing potential adverse conditions to insurance customers without misled information However, the procedure, format to disclose these conditions are still not received enough attention from legislators 2.3.4 Explanation of general trading conditions under cargo insurance contracts Entering into cargo insurance contracts including general trading conditions drafted solely by insurance businesses, insurance buyers barely take a chance to negotiate, revise the contents according to freedom of will Therefore, there is a requirement to ensure that these conditions are explained in a way that protect party approving general trading conditions (insurance buyers) If the terms of the contract are understood in more than one sense, the contract will be interpreted in terms that are more favorable to the insurance buyers 2.3.5 Clauses disclaiming responsibility under cargo insurance contracts 18 These clauses are drafted to protect benefits of insurance businesses, enable insurance businesses to refuse compensation or pay insurance in case insurance buyers intend to take advantages from insurance benefits Insurance businesses are not liable for insurance obligations if insurance businesses are able to demonstrate that there are intended activities from customers aiming to take advantage from buying insurance 2.3.6 Registration, appraisal, approval, control mechanism of general trading conditions under cargo insurance contracts In order to supervise general trading conditions, principles, clauses, price quotations, commissions, there are requirements for insurance businesses to submit and receive approval from Ministry of Finance for these conditions CHAPTER PRACTICAL APPLICATION OF LEGISLATIONS REGARDING GENERAL TRADING CONDITIONS UNDER CARGO INSURANCE CONTRACTS AND PRACTICE APPLICATION OF THESE CONDITIONS 3.1 Practical application legislations regarding general trading conditions under cargo insurance contracts 3.1.1 Validity conditions of general trading conditions under cargo insurance contracts General trading conditions are considered valid if: (i) these conditions are disclosed so the offeree knows or must know about these conditions; (ii) these conditions ensure the equality of parties in the contracts However, there are no regulations stipulating methods to release information, ways to explain these conditions, criteria used to determine the equality between parties of contracts, validity of cargo insurance contract in case general trading conditions are invalid As a result, during application process, general trading conditions under cargo insurance contracts of many insurance businesses not meet the equality requirement, contain clauses disclaiming or restricting rights of insurance buyers, thereby insurance businesses are able to abuse these conditions to optimize rights 3.1.2 Disclosure, explanation of general trading conditions 19 According to information given on websites of insurance businesses, a small number of insurance companies disclose information of general trading conditions such as Bao Minh Insurance, Pjico, … The search takes a lot of time, which proves that insurance companies not really pay attention to publicly announcing cargo insurance terms and conditions Pursuant to Law on Insurance business, in case there are unclear clauses, these clauses are interpreted in a way that protects rights of insurance customers The Civil Code also regulates that in case there are unclear clauses, these clauses are interpreted not only based on words of the contracts, but also based on the will of parties illustrated before, at the time, after conclusion of the contracts In practice, Courts also use this way to interpret these conditions The way to release information of general trading conditions (via document or via website, or both? Position of the information to be considered as seeable? Responsibility to interpret these conditions?) and the validity of these cargo insurance contract in case the insurance businesses not release these conditions are still highly questionable 3.1.3 Disclaimer of insurance obligations Because of no regulations under Law on Insurance business, insurance companies easily abuse these loopholes to disclaim insurance obligations when damages occurred, which cause negative effects for insurance buyers in this case 3.1.4 Registration, assessment, approval, control mechanism of general trading conditions For cargo insurance contracts, insurance companies are given the right to actively construct rules, clauses, price quotation, insurance commissions without prior registration of sample contracts and general trading conditions There are requirements for insurance businesses to submit and receive approval from Ministry of Finance for these conditions before exploiting insurance products There are issues arising from this practice: Human resources and qualifications of person in charge of controlling, supervising these 20 conditions? Quality of assessment of these conditions? These issues still are questioned because there are no clear regulations under Vietnamese laws stipulating them 3.1.5 Language and format of general trading conditions under cargo insurance contracts There are similar insurance rules of insurance companies, which are attached to any insurance contracts within territory of Vietnam However, not all customers are able to read or understand these conditions due to small font size, color printing and legal terms 3.2 Practical application of general trading conditions under cargo insurance contracts With the appearance of clauses drafted in advance, insurance companies not need to negotiate clause-by-clause with each customer or with the same customer in each transaction Using general trading conditions, insurance businesses are able to build a professional insurance contract with stable, standardized clauses and avoid potential risks in case of disputes occurred Therefore, the use of general trading conditions drafted in advance is a useful method for insurance business when entering into insurance contracts with customers 3.3 Loopholes of regulations stipulating general trading conditions under cargo insurance contracts There are loopholes of regulations stipulating general trading conditions under cargo insurance contracts, which cause inequality of rights for parties entering into cargo insurance contracts: i) Laws on general trading conditions are not adequate These is no consensus on the content and regulations are scattered in many legal documents ii) There is no strict control mechanism of general trading conditions under cargo insurance contract iii) There is no clear limitation of clauses disclaiming insurance responsibility 21 iv) There is no punishment applied to violation of insurance businesses in case those businesses not release information, interpret general trading conditions v) There are no clauses stipulating format and requirements for general trading conditions in order to ensure the approach ability of customers entering into cargo insurance contracts vi) Technology is not applied effectively in insurance business activity; the qualifications of specialists are still limited These loopholes require amendment of the law to supplement regulations regarding general trading conditions to ensure the consistency and harmonization of relevant legal provisions as well as to limit the abuse of general trading conditions under general contracts and specifically cargo insurance contracts CHAPTER 4: SUGGESTIONS TO COMPLETE LAWS ON GENERAL TRADING CONDITIONS UNDER CARGO INSURANCE CONTRACTS 4.1 Directions to complete regulations regarding general trading conditions under cargo insurance contracts 4.1.1 Continuously complete Vietnamese regulations regarding general trading conditions under contracts 4.1.2 Complete Vietnamese regulations regarding general trading conditions with construction of market economy and globalization 4.2 Suggestions to complete Vietnamese legislations regulating general trading conditions under cargo insurance contracts 4.2.1 Complete regulations regulating general trading conditions under Civil Code - Amendments, supplements to the clauses stipulating validity conditions of general trading conditions These clauses should clearly regulate ways of releasing general trading conditions so the offeree knows about these conditions or these conditions are not a part of contract otherwise 22 - Supplements of clauses regulating inequality Unequal general trading conditions are conditions causing adverse effects for customers, opposing freedom of contract, honesty Therefore, there should be clauses in Civil Code determining the invalidity of these conditions in case of inequality - Supplements of clauses regulating situations in which general trading conditions are invalid It is necessary to supplement a list of situations in which general trading conditions are considered as invalid, which enables parties to realize unequal clauses and to decide whether or not enter into the contract 4.2.2 Supplement clauses regulating general trading conditions under Law on Insurance business As a general legal document, the Civil Code is unable to cover all characteristics of each type of specific contract Therefore, there are following suggestions that should be implemented into Law on Insurance business: - Supplement clauses regulating that general trading conditions are a part of contracts, interpretation of these conditions, unequal clauses, lists of invalid general trading conditions, responsibility to register general trading conditions of insurance companies, responsibility of competent authority, authority of courts to supplement lists of invalid general trading conditions… - Amend, supplement clauses disclaiming responsibility in a way to determine clearly situations when responsibility is eliminated From this, insurance companies are not able to abuse conditions drafted in advance to limit responsibility and transfer risks to insurance customers - Clearly regulate clauses concerning Registration, assessment, approval, supervision of sample contracts and general trading conditions Insurance companies are responsible for submitting these conditions to competent authorities to receive assessment, approval of the content If the competent authorities realize that these conditions violate laws or are unequal for insurance customers, competent authorities have the right to 23 require insurance companies to revise these conditions to ensure the consistence - Enhance responsibility, knowledge of person in charge of assessing general trading conditions - Regulate examination, supervision activities of the use of general trading conditions of insurance businesses - Supplement regulations stipulating specific requirements for general trading conditions under cargo insurance contracts such as language, font size, color, … 4.2.3 Suggestions to complete regulations regarding general trading conditions under Laws on protection of consumers’ rights - Give rights to Courts to supplement inequality clauses - Supplement clauses regulating situations of invalid general trading conditions - Supplement clauses regulating ways of releasing and interpreting general trading conditions of enterprises before concluding contracts If enterprises not explain clearly these conditions, customers are not bound by general trading conditions 4.3 Other relevant suggestions 4.3.1 Suggestions for competent authorities - Enhance control mechanism of competent authorities for insurance businesses - Strengthen examination, supervision of competent authorities - Propagandize, disseminate laws on general trading conditions - Provide professional training for specialists in insurance sector 4.3.2 Suggestions for insurance businesses - Limit the abuse of insurance business position - Limit information asymmetry between parties in the contracts - Make information of general trading conditions transparent - Standardize insurance selling procedure - Respect and protect rights of insurance consumers - Provide training and professional development for human resource 24 - Increase application of technology - Comply with requirements regarding drafting general trading conditions 4.3.3 Suggestions for insurance consumers - Raise awareness when purchasing cargo insurance contract - Read carefully clauses of insurance contracts before entering into contracts - Equip basic knowledge of laws regulating insurance and relevant regulations CONCLUSION General trading conditions are conditions, selling rules drafted in advance by a party of the contract, which are used for numerous different customers, who are only able to approve or refuse entering into contract instead of being able to negotiate, revise the contents In the context of the development of a market economy and the trend of international integration, the application of general trading conditions becomes more and more popular, which helps enterprises to carry out mass production and transaction Insurance businesses benefit from using general trading conditions such as time and cost saving, standardized language, content which are suitable for high demanding contracts However, apart from advantages, there are disadvantages of these conditions such as abuse of drafting parties to force customers entering into contracts without any other options, to avoid risks and to transfer risks to insurance customers Practical application of general trading conditions under cargo insurance contract shows benefits from using these conditions Even though there are lacks of unified, complete legal regulations, laws on general trading conditions are formed to protect rights and interests of non-drafting parties Therefore, it is necessary to complete laws on general trading conditions, which requires unified measures to eliminate loopholes in law regulating this field LIST OF PUBLICATIONS RELATED TO THE DISSERTATION Tang Van Nghia, Nguyen Thi Huyen (2017), “General trading conditions – Some legal issues”, Law and Development, No 11&12/2017 Nguyen Thi Huyen (2018), “General trading conditions under cargo insurance contracts”, International Economics, No 107/2018 Nguyen Thi Huyen (2020), “Laws on consumers in Australia and unequal general trading conditions and suggestions for Vietnam”, Laws and Democracy, No (334)/2020 Nguyen Thi Huyen (2020), “Laws on general trading conditions in German, England and Vietnam”, Industry and Trade, No 01/2020 ... Sy Chung The thesis will be defended in front of the Academy level doctoral thesis grading committee held at… At … date … month … year 202 The thesis can be found at: - National library; - Library... dissertation focuses on legislations of Vietnam, Australia and some European countries such as German, England, on general trading conditions The rationale to choose these aforementioned countries is... parties in the contract, the weakness of the party passively enter into transactions and the strength of the party drafting general trading conditions Moreover, there is necessary to have a control