The passing of risk under the cisg 1980, incoterms 2010 and vietnamese commercial law

MINISTRY OF EDUCATION AND TRAINING HO CHI MINH CITY UNIVERSITY OF LAW -*** THE MANAGING BOARD OF SPECIAL TRAINING PROGRAM HO MY KY TAN THE PASSING OF RISK UNDER THE CISG 1980, INCOTERMS 2010 AND VIETNAMESE COMMERCIAL LAW BACHELOR THESIS MAJOR IN INTERNATIONAL LAW Year: 2013 - 2017 Scientific instructor: LLM Nguyen Thi Lan Huong Author: Ho My Ky Tan Code: 1353801015244 Class: CLC38B HO CHI MINH CITY 2017 DECLARATION I hereby declare that the thesis entitled ‘The passing of risk under the CISG 1980, Incoterms 2010 and Vietnamese Commercial Law’ is my own work and has not been submitted for any other degree or professional qualification I would like to thank LLM Nguyen Thi Lan Huong, my instructor, for supporting this thesis and encouraging me Ho My Ky Tan Ho Chi Minh City, 2017 TABLE OF CONTENTS INTRODUCTION CHAPTER 1: GENERAL OVERVIEW ON THE CISG 1980, INCOTERMS 2010 AND VIETNAMESE COMMERCIAL LAW – PASSING OF RISK IN INTERNATIONAL SALE OF GOODS 1.1 General overview on the CISG 1980, Incoterms 2010 and Vietnamese Commercial Law 1.2 Passing of risk in international sale of goods 1.2.1 Terms 1.2.2 Consequence of the passing of risk 1.2.3 The significance of the rules on passing of risk to international sale contract 1.2.4 Theories on the passing of risk 10 CHAPTER 2: PASSING OF RISK UNDER THE CISG 1980, INCOTERMS 2010 AND VIETNAMESE COMMERCIAL LAW 12 2.1 Passing of risk associated with the conclusion of sale contract 12 2.1.1 Under the CISG 1980 12 2.1.2 Under the Incoterms 2010 15 2.1.3 Under Vietnamese Commercial Law 15 2.2 Passing of risk associated with the transfer of property right 16 2.2.1 Under the CISG 1980 17 2.2.2 Under the Incoterms 2010 18 2.2.3 Under Vietnamese Commercial Law 18 2.3 Passing of risk associated with the delivery of the goods 21 2.3.1 Under the CISG 1980 21 2.3.2 Under the Incoterms 2010 29 2.3.3 Under Vietnamese Commercial Law 35 CHAPTER 3: EVALUATION OF THE RULES ON THE PASSING OF RISK – RECOMMENDATIONS FOR VIETNAMESE COMMERCIAL LAW 38 3.1 Evaluation of the rules on the passing of risk of the CISG 1980, Incoterms 2010 and Vietnamese Commercial Law 38 3.1.1 The CISG 1980 38 3.1.2 The Incoterms 2010 39 3.1.3 Vietnamese Commercial Law 41 3.2 Recommendations for Vietnamese Commercial Law 42 CONCLUSION 45 INDEX OF ABBREVIATION CISG The 1980 United Nations Convention on Contracts for International Sale of Goods Incoterms The International Chamber of Commerce’s standard trade terms THE PASSING OF RISK UNDER THE CISG 1980, INCOTERMS 2010 AND VIETNAMESE COMMERCIAL LAW INTRODUCTION Rationales of research The passing of risk is an issue of great importance in sale contracts since it determines when and where the risk of loss or damage transfers from a seller to a buyer Because of its peculiar nature, there are chances of unfair consequences where the buyer is obliged to pay for commodities even if they are lost or damaged during the transit Many laws and rules on risk allocation have been made in the attempt of avoiding misunderstandings as well as protecting legal rights and benefits of the parties For instance, the CISG 1980 unifies the substantive laws governing the passing of risk in international sale contracts and establishes a legal system for international trade The CISG is applicable when the parties to an international sale contract have their place of business in different contracting states or if the rules of private international law lead to the application of the law of a contracting state However, parties may exclude the application of the CISG by including Incoterms in their contract The Incoterms are three-letter trade terms pertaining to common contractual sale practices They contain regulations on the distribution of the parties’ duties, costs and transfer of risk in the transit and delivery of goods The CISG is currently effective in Vietnam and Incoterms are popular among both international and Vietnamese traders Upon the increase in sale contracts signed by Vietnamese enterprises and foreign parties in recent years, there is a need to examine the rules on risk transfer in the CISG, Incoterms and Vietnamese Commercial Law and make a comparative analysis between the three regimes Based on the comparison, there would be some proposals for the development of Vietnamese law regarding this matter, which are useful for Vietnamese Commercial Law to govern not only international sale contracts but also sale contracts between domestic traders in Vietnam’s territory These are the rationales for conducting a research on ‘The passing of risk under the CISG 1980, Incoterms 2010 and Vietnamese Commercial Law’ Research purpose This thesis shall simultaneously analyze the rules concerning the passing of risk in international sale contracts under the CISG 1980, Incoterms 2010 and Vietnamese Commercial Law and compare the three regimes in accordance with the three theories on the passing of risk In light of this analysis, the author shall figure out the strong points and weak points of each regime Finally, there will be a section for some recommendations regarding the regulations on the passing of risk in the Vietnamese Commercial Law Object and scope of researching The object of this thesis is the issue of risk transfer in the international sale of goods The author shall focus on the rules governing this matter in the CISG 1980, Incoterms 2010 (the latest version) and Vietnamese Commercial Law 2005 Literature review On a national level, the issue of the passing of risk in sale contracts is mentioned in several studies, namely:  Nguyen Quang Viet (2004), Thoi diem chuyen quyen so huu hang hoa va di chuyen rui ro hop dong mua ban hang hoa quoc te (The time of transfer of ownership right and the time of risk transfer in international contracts for the sale and purchase of goods), student’s scientific research, Ho Chi Minh City University of Law  Ho My Ngoc Chan (2006), Thoi diem chuyen dich rui ro doi voi hang hoa theo quy dinh cua Luat Thuong Mai 2005 (The time of risk transfer for goods under the provisions of Vietnamese Commercial Law 2005), Bachelor Thesis, Ho Chi Minh City University of Law  Phan Van Manh (2012), Xac dinh thoi diem chuyen quyen so huu va chuyen rui ro doi voi hang hoa hop dong mua ban hang hoa (Determining the time of transfer of ownership right and the time of risk transfer for commodities in the contract for sale and purchase of goods), Master Thesis, Ho Chi Minh City University of Law  Lu Dinh Hong Yen (2010), Van de chuyen rui ro hop dong mua ban hang hoa quoc te theo CISG 1980, Incoterms 2000 va phap luat Viet Nam (The issue of passing of risk in the international sale contract under CISG 1980, Incoterms 2000 and Vietnamese law), Bachelor’s Thesis, Ho Chi Minh City University of Law  Bui Huyen (2013), ‘Cac truong hop chuyen rui ro hop dong mua ban hang hoa theo Luat thuong mai nam 2005’ (Cases of risk transfer in the sale and purchase of goods contracts under Commercial Law 2005), Democracy and Law, (11), p 38-40 On an international level, there are some theses and articles relating to the passing of risk in international sale of goods, including:  Neil Gary Oberman (1997), Transfer of risk from seller to buyer in international commercial contracts: A comparative analysis of risk allocation under the CISG, UCC and Incoterms, Master Thesis, University of Montreal  Zoi Valioti (2003), Passing of Risk in international sale contracts: A comparative examination of the rules on risk under the United Nations Convention on Contracts for the International Sale of Goods (Vienna 1980) and INCOTERMS 2000, Master Thesis, Kent University  Michiel Buydaert (2013), The Passing of Risk in the International Sale of Goods – A comparison between the CISG and the Incoterms 2010, Master Thesis, Ghent University According to the author’s examination, this topic has been researched by many scholars Especially, in the two researches which have the closest contents, Lu Dinh Hong Yen made a comparative analysis of the rules on the passing of risk under the CISG 1980, Incoterms 2000 and Vietnamese law and Michiel Buydaert conducted a comparison between the CISG and Incoterms 2010 regarding this issue Nevertheless, there is no research analyzing the similarities and differences of the three legal systems based on the existing theories on the risk transfer Research Methodology On the basis of the object and sphere researching, several methods are applied, in which the most notable ones are:  Description method: applied mainly in Chapter and Chapter to illustrate the rules on the passing of risk in the CISG 1980, the Incoterms 2010 and Vietnamese Commercial Law  Comparative method: this method is used mostly in Chapter to figure out the similarities and differences between the CISG’s, the Incoterms 2010’s and the Vietnamese Commercial Law’s regulations on risk allocation and used in other scattered parts of the thesis  Synthetic method: this is an effective method which helps to assemble the information from different sources like regulations, books, theses, journal articles, etc in order to give an overview as well as analyze the reasons for the problems  Analytical method: using logical arguments remarkably in Chapter 3, the author shall represent the strong points and weak points of the three legal regimes in order to give some recommendations for Vietnamese Commercial Law when governing the issue of risk transfer CHAPTER 1: GENERAL OVERVIEW ON THE CISG 1980, INCOTERMS 2010 AND VIETNAMESE COMMERCIAL LAW – PASSING OF RISK IN INTERNATIONAL SALE OF GOODS 1.1 General overview on the CISG 1980, Incoterms 2010 and Vietnamese Commercial Law First of all, there is a need to provide some general remarks on the history and governing scope of the three legal regimes before mentioning about their rules on the passing of risk in the international sale of goods The first legal framework that should be mentioned is the CISG 1980, which is a well-known treaty concerning the international sale of goods The CISG 1980 was drafted by the United Nations Commission on International Trade Law (UNCITRAL) and came into force on January 1988 At the current time, the CISG has 84 members (as of 29 December 2015) and governs over two-thirds of international trade With respect to the scope of application, according to Article 1(1) of the CISG, the Convention shall apply to the sale of goods contracts between parties whose place of business are in different states when these states are contracting states or when the rules of private international law refer to the application of a contracting state of the CISG However, the application of the Convention can be excluded or limited in the cases provided by articles 2, and 95 of the CISG Accordingly, the CISG does not govern the sale of goods ‘bought for personal, family or household use, unless the seller, at any time before or at the conclusion of the contract, neither knew nor ought to have known that the goods were bought for any such use; by auction; on execution or otherwise by authority of law; of stocks, shares, investment securities, negotiable instruments or money; of ships, vessels, hovercraft or aircraft; of electricity’ Moreover, the parties in a sale contract may exclude the application of the Convention or derogate from or vary the effect of any of its regulations Another reason for the impossibility of the CISG’s application might be the state’s declaration ‘at the time of the deposit of its 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’ By virtue of Article 58, the time of risk transfer is the time when the seller delivers the goods to the first carrier It is easy to acknowledge that Article 58 of Vietnamese Commercial Law is similar to Article 67(1) first sentence of the CISG, which means that the interpretation of the concept ‘the first carrier’ in the CISG can also be applied in this regulation For the Incoterms 2010, this legal regime does not have any rule that corresponds to those rules of Vietnamese Commercial Law and the CISG Passing of risk in case where there is a fixed place of delivery – Article 57 With respect to the passing of risk in case where there is a fixed place of delivery, Article 57 of Vietnamese Commercial Law regulates that: ‘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’ According to this provision, the time of risk transfer shall be the time when the goods are delivered to the buyer or another person authorized by the buyer at a designated place of delivery In the light of the rule provided by Article 57 of Vietnamese Commercial Law, it should be noted that this provision and Article 69 of the CISG both refer to the situation of the non-carriage sale contract Indeed, the obligation of taking delivery is fulfilled by the buyer (or the person authorized by the buyer) without the participation of any third party According to Phan Van Manh, Vietnamese Commercial Law, unlike the CISG, only regulates about the time of risk transfer when the goods are delivered to the buyer but not anticipates the circumstances where the buyer intentionally delays the risk transfer by rejecting 36 or delaying the receipt of the goods.58 In the author’s view, however, Vietnamese Commercial Law has governed this issue in Article 61(1), namely when the buyer commits a breach of sale contract by rejecting the goods However, the CISG seems to be more specific when solving this matter In particular, besides two aforementioned cases, Article 69(2) also regulates that if the delivery place is a place other than the seller’s premises, the risk passes to the buyer when the delivery is due and the buyer is aware of the fact that the goods are placed at his disposal Apart from that, Article 57 of Vietnamese Commercial Law and Article 67(1) second sentence share the same rule that the seller’s retention of documents establishing the ownership rights over the goods does not affect the transfer of risk from the seller to the buyer This illustrates the united thought of both texts that the passing of risk does not link with the passing of the ownership rights Breach of contract by the buyer – Article 61(1) As mentioned before, having knowledge about the potential problems while applying Article 57 in a sale contract, Article 61(1) of Vietnamese Commercial Law anticipates the case where the seller delivers the goods at the right place in a right time but the buyer does not fulfill his obligation of taking delivery In fact, there are cases where the buyer intentionally delays the taking over of the goods, leading to the risk remaining under the seller’s responsibility Article 61(1) creates an exception to the rules provided in articles 57, 58 and 59, which is the breach of contract conducted by the buyer In particular, the risk of loss or damage to the goods passes to the buyer from the moment when the goods are placed at the disposal of the buyer and the buyer commits a breach of contract by rejecting the goods This provision is quite similar to Article 69(1) of the CISG Identification of the goods – Article 61(2) ‘Risk of goods loss or damage is not to be passed to the purchaser if the goods are neither clearly identified by their signs, codes or bills of transportation, 58 Phan Van Manh, supra note 19, p 51-52 37 nor notified to the purchaser, nor identified by any means’ As discussed in section 2.3.1, identification of the goods is an important obligation of the seller in a sale contract, especially for the sale of goods contracts If the seller fails to identify the goods that he intends to sell to the buyer, the risk stays with the seller until they are identified to the sale contract This rule is recorded in Vietnamese Commercial Law, the CISG and the Incoterms 2010 as well However, the point that worth discussing is that this rule is only provided in Article 61(2) of Vietnamese Commercial Law while it is widely applied in almost every rule of the CISG and the Incoterms 2010 Consequently, it is not groundless to suggest that Vietnamese Commercial Law should put more attention on the issue of the identification of the goods CHAPTER 3: EVALUATION OF THE RULES ON THE PASSING OF RISK – RECOMMENDATIONS FOR VIETNAMESE COMMERCIAL LAW 3.1 Evaluation of the rules on the passing of risk of the CISG 1980, Incoterms 2010 and Vietnamese Commercial Law 3.1.1 The CISG 1980 In general, the CISG has relatively detailed, understandable and systematic regulations concerning the issue of the passing of risk in international sale contracts In particular, the time and the place of risk transfer depend on specific situations, namely the case where the sale contract involves carriage of goods (Article 67(1)), the case where the goods are sold during transit (Article 68), the case where there is no carriage of goods involved in sale contract (Article 69) and the exception of the previous cases when the seller commits a fundamental breach of contract (Article 70) When analyzing the details, there are some strong points of the CISG’s legal framework that should be mentioned Firstly, the CISG covers the passing of risk in case of contract breaches conducted by either the seller or the buyer (Article 69 and Article 70), which are not covered by Vietnamese law or covered by Vietnamese 38 law but not that detailed Apart from that, the CISG also put the priority for the seller’s obligation to identify the goods in sale contract before letting the risk pass to the buyer Article 67(2) and Article 69(3) state that if the goods are not clearly identified to the contract by markings on the goods, shipping documents or giving notice to the buyer, the buyer shall not bear the risk of loss or damage to the goods As mentioned before, the CISG aimed to avoid the unjustifiable enrichment of the seller in case the goods are lost or damaged and the seller claims that he sold those goods to the buyer although he did not ascertain the goods for the transaction The fact is that although the CISG does not regulate about the identification of the goods in the provision relating to the seller’s obligations, the seller must be aware that he has the responsibility to ascertain as to which goods are to be sold to which buyer However, it would be a mistake if not pointing out the shortcomings of the CISG concerning the issue of the passing of risk Firstly, in the situation of sale contract involving carriage of goods at a particular place of delivery, Article 67(1) second sentence does not define the exact moment when the goods are considered handed over to the carrier Secondly, the CISG does not focus on the obligations of the buyer during the delivery process, especially in cases when the buyer does not notify the seller of information as to the time or place of delivery, the carrier, etc., or fails to notify such information in due time In these cases, chances are that the goods could be damaged when waiting for the delivery and the risk still remains to the seller 3.1.2 The Incoterms 2010 With respect to the strong points of the Incoterms 2010, the first notable thing is that, like the CISG, the Incoterms 2010 covers the seller’s delivery obligation, the buyer’s taking delivery obligation as well as the transfer of risk from the seller to the buyer in specific sections of each Incoterm, which are in sections A4, A5, B4 and B5 These rules are presented in a brief and understandable way, which is convenient for the traders to follow and apply Incoterms in their own sale 39 contracts Secondly, as discussed in section 2.3, the Incoterms 2010 only governs the passing of risk associated with the delivery of the goods and does not regulate about the passing of risk that connected with the conclusion of the contract or the transfer of property right Due to the fact that the scope of the Incoterms is limited, the contents as to the delivery and risk transfer are very detailed and go into the issue In particular, the Incoterms 2010 attaches great importance to the identification of the goods and the notice obligations of the parties in almost every rule For example, one of the conditions for the transfer of risk is the seller’s responsibility to identify the goods to the sale contract Besides, the seller who fails to send sufficient notice about the goods that have been properly delivered to the buyer shall bear all the risks of loss or damage to the goods In contrast, the buyer has particular obligations depending on the Incoterms’ rule applied in the sale contract Generally, the buyer must give the seller sufficient notice of the mode of transport, the place and time for delivering the goods In the case involving the carriage of the goods under the FCA, the buyer is also on the duty of notifying the carrier for the delivery of the goods In the case of sea and inland waterway transport, there must be a notice of the vessel name, loading point or the port of destination Regarding the weak points of the Incoterms 2010, although the Incoterms 2010 regulates about the identification of the goods to sale contract, unlike the CISG or Vietnamese Commercial Law, the Incoterms 2010 does not give any example of how the goods are identified In addition, the EXW, DAT, DAP and DDP Incoterms merely necessitate the seller’s obligation to place the goods at the disposal of the buyer in order to let the risk pass to the buyer irrespective of whether the buyer is aware of the delivery or not Apart from that, although the Incoterms 2010 provides detailed obligations of the parties and the consequences of their failure to fulfill such obligations, the Incoterms seem to have no rule regulating about the fundamental breach of the seller, which is relatively important to the passing of risk in international sale of goods 40 3.1.3 Vietnamese Commercial Law For Vietnamese Commercial Law, it is recognizable that Vietnamese Commercial Law inherited many good points from the CISG’s legal framework In particular, the passing of risk associated with the conclusion of the sale contract and the passing of risk associated with the delivery of the goods are covered by both legal regimes Furthermore, the Commercial Law and the CISG divide the matter into different categories, including the passing of risk in case where there is a fixed delivery place, the passing of risk in case where there is no fixed delivery place, the passing of risk when the goods are in transit and the passing of risk in other cases The Commercial Law, like the CISG, also regulates about the seller’s obligation of identification of the goods in Article 61(2) However, there are a number of weaknesses in the regulations of Vietnamese Commercial Law Firstly, the Vietnamese regulation on the risk transfer relating to the conclusion of the sale contract shows some ambiguities and faults in the concept of ‘the bailee that is not a carrier’ and the seller’s breach of the contract by not notifying the loss or damage of the goods to the buyer when entering into the contract Secondly, Article 59 of Vietnamese Commercial Law regarding the passing of risk associated with the transfer of property right is proved to be unnecessary when governing the international sale of goods contracts Thirdly, on the issue the transfer of risk associated with the delivery of the goods, as has been noted, the seller’s obligation to identify the goods to sale contract is only provided in Article 61(2) of Vietnamese Commercial Law, which governs the cases not indicated in articles 57, 58, 59 and 60 This can be understood that in the situations like passing of risk in case where there is a fixed place of delivery or no fixed place of delivery, passing of risk in case where the goods are handed over to a bailee that is not a carrier and passing of risk in case of sale and purchase of goods in transportation, the seller does not have the duty of identifying the goods to the sale 41 contract 59 Consequently, the identification of the goods under Vietnamese Commercial Law is less important than under the CISG or the Incoterms 2010 Fourthly, Vietnamese Commercial Law, unlike the Incoterms 2010, does not have comprehensive regulations concerning the specific obligations of the parties In other words, the provisions in Vietnamese Commercial Law are quite general and not as specific as those of the two international legal regimes in terms of the parties’ obligations, such as the buyer’s obligation to notify the seller of the time and place of delivery or the seller’s obligation to notify the buyer of the goods that are ready to be taken over Finally, the Vietnamese Commercial Law only refers to the breach of sale contract conducted by the buyer in Article 61(1) whereas there is no fundamental breach of contract conducted by the seller in its regulations In fact, there are cases where the seller does not fulfill his obligations, which partially or totally result in the loss or damage of the goods or prevent the buyer from protecting their own benefits For example, the seller might intentionally fail to send notice of the due delivery to the buyer, which leads to the fact that the buyer is not aware of the due delivery and could not take delivery in due time Therefore, the legislation of the seller’s fundamental breach in Vietnamese Commercial Law’s provisions is a necessary step to avoid the unfairness when solving the disputes as to the passing of risk between the parties in a sale contract 3.2 Recommendations for Vietnamese Commercial Law In light of the comparative analysis of the CISG 1980, Incoterms 2010 and Vietnamese Commercial Law, the author shall hereby put forward some recommendations concerning the passing of risk for the provisions of Vietnamese Commercial Law as follow: Firstly, although the international Convention and the international trade terms not clearly impose the responsibility of identifying the goods to the sale 59 Lu Dinh Hong Yen (2010), Van de chuyen rui ro hop dong mua ban hang hoa quoc te theo CISG 1980, Incoterms 2000 va phap luat Viet Nam, Bachelor’s Thesis, Ho Chi Minh City University of Law, p 59 42 contract on the seller, these two legal regimes put great attention on this responsibility in their rules In addition, the CISG and Incoterms 2010 also show the effectiveness when regulating about other specific obligations of both parties in the sale contract Thus, the author personally think that Vietnamese Commercial Law should learn from the strong points of them In particular, because of the importance of the identification of the goods to the risk transfer, Vietnamese Commercial Law should regulate about the identification of the goods in each provision or in an independent provision, or change the rule illustrated in Article 61 in order not to result in the misunderstandings about this matter The content of the rule shall be similar to Article 61(2): ‘Risk of goods loss or damage is not to be passed to the purchaser if the goods are neither clearly identified by their signs, codes or bills of transportation, nor notified to the purchaser, nor identified by any means’ Moreover, Vietnamese Commercial Law should also regulate about the buyer’s obligation to notify the seller about the named carrier (if any), the time and place for delivering the goods, etc as well as the consequences of his failure to fulfill such obligations For instance, if the buyer does not notify such information to the seller or notifies such information not within the agreed period, the risk of loss or damage to the goods shall pass to the buyer Secondly, Article 59 of Vietnamese Commercial Law concerning the passing of risk in case where the goods are handed over to a bailee that is not a carrier should be eliminated because this provision is unnecessary Thirdly, in the case of the sale and purchase of goods that are in transit, Article 60 of Vietnamese Commercial Law should add the seller’s responsibility to disclose the loss or damage to the goods prior to or at the time of concluding the contract if he knew or ought to have known such loss or damage and therefore, regulate about the consequence of the breach of contract by the seller Finally, Vietnamese Commercial Law should also provide a provision for the fundamental breach of the seller This provision can be learned from Article 70 of 43 the CISG, which states that if the seller has committed a fundamental breach of contract, other articles not impair the remedies available to the buyer on account of the breach 44 CONCLUSION In light of the comparative analysis concerning the passing of risk under the CISG 1980, Incoterms 2010 and Vietnamese Commercial Law, it is worth being aware that the risk transfer is an important and complicated matter in the international sale of goods Moreover, the three legal regimes’ application of the theories pertaining to the passing of risk is varied For the CISG 1980, which is the unification of different legal systems regarding the international sale contracts, its legal framework mainly applies the theories that the passing of risk is associated with the conclusion of the sale contract and the passing of risk is associated with the delivery of the goods The Incoterms 2010 is the attempt to unify the interpretation of different commercial practices all over the world, which is the reason for its limited application of the theory that the passing of risk is related to the delivery of the goods The Vietnamese Commercial Law, however, applies not only the two mentioned theories but also the theory in which the passing of risk is associated with the transfer of property right When governing such issue, the three mentioned legal documents also have significant similarities as well as differences with each other Through this comparative study, the enterprises might understand thoroughly about the nature of each regulation in each legal regime and know how to apply the rules on risk allocation properly In addition, the author made an evaluation of the rules on the risk allocation under these legal regimes in order to point out the strong points and weak points in their regulations, which served as a basis for putting forward some recommendations for Vietnamese Commercial Law Especially for the case of the Vietnamese law, which governs not only the international sale of goods contracts but also the sale of goods contracts between the domestic traders in Vietnam’s territory, considering the recommendations regarding the issue of the passing of risk might also help Vietnamese Commercial Law governs the domestic sale contracts more effectively In particular, Vietnamese Commercial Law should learn from the CISG’s 1980 regulations on the issues of the identification of the goods and the 45 seller’s obligation to disclose the goods loss or damage which he knew or was supposed to know at the time entering into the contract Apart from that, Vietnamese Commercial Law should also regulate such specific obligations of the buyer like sending notice as to the carrier, the time and place for the delivery Finally, the Vietnamese law should eliminate the rule provided in Article 59 regarding the passing of risk associated with the transfer of property right in order to avoid the ambiguousness and problems arising from this provision 46 BIBLIOGRAPHY PRIMARY SOURCES United Nations Convention on Contracts for the International Sale of Goods, Vienna 1980, 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