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US law also provides for exceptions when acontract does not comply with the written form but still has legal effect.Article 401 of the 2005 Civil Code of Vietnam stipulates that a contra
lOMoARcPSD|38362288 BỘ TƯ PHÁP TRƯỜNG ĐẠI HỌC LUẬT HÀ NỘI BÀI TẬP HỌC KỲ MÔN: TIẾNG ANH PHÁP LÝ ĐỀ BÀI: PROCESS OF CREATING A NEW LAW IN VIETNAM NHÓM : LỚP : Hà Nội, 2022 Downloaded by chat tailieu (chattailieu@gmail.com) lOMoARcPSD|38362288 A, INFORMATION SECTION - Topic : - Group : - Class : N12.TL2 - Group member/ role: Vũ Hạnh Linh 462434 : Leader , 462438 : Member Trần Ngọc Minh 46243 : Member , 46243 : Member Nguyễn Thị Thùy Linh , Phạm Khánh Linh , PREMABLE In the era of industrialization and modernization, between enterprises in many different areas exist business relationships expressed through contracts, from which contract law performs as a means of guaranteeing fairness to all parties involved in this relationship The law, in both Vietnam and the USA, has developed principles that determine when a legally enforceable contract is present, law then dictates whether terms of a contract are enforceable In this paper, our goal, while understanding the apparent similarity, is to distinguish between Vietnam and the USA’s contract law, and determine whether these differences affect the respective countries’s enterprises Downloaded by chat tailieu (chattailieu@gmail.com) lOMoARcPSD|38362288 B, CONTENT I Definition of contract law Definition: A contract is a voluntary agreement between two parties, based upon the exchange of promises or actions, that is enforceable by law More specifically, in Vietnam, a contract is defined as “an agreement between parties to create, modify, or extinguish a civil right or duty.”1 Contract law is the body of law that relates to making and enforcing agreements, this area of law governs making contracts, carrying them out and fashioning a fair remedy when there’s a breach A variety of our activities require contract law, for example when we purchase groceries or seek employment; both companies and consumers can participate in a contract A contract makes sure there's no misunderstanding between two parties and contract law guarantees fairness for all parties when the contract is carried out II Comparison of Vietnamese and American contract law Similarities Each country will have its own legal system, comes from different conditions in each country which means that there will be differences in each set of laws and regulations And contract law is not the exception Regardless of the legal lineage, it matters concept of the contract of the United States and Vietnam They all have the following things in common: First, yes agreement (or commitment) between the parties join the relationship The first essential element of a contract is a mutual agreement A 1Article 385 of 2015 Civil Code Downloaded by chat tailieu (chattailieu@gmail.com) lOMoARcPSD|38362288 mutual agreement must be made at the parties’ free will or otherwise it will not be an agreement It is not possible for a person who has no ability to make a reasonable decision to understand terms of a contract and then communicate his or her intention to agree to these terms Therefore, in order to make a valid, enforceable contract, both parties must be regarded as having capacity in law to enter into such an agreement Second, the agreement (or commitment) of the parties giving rise to the legally binding (legal obligation) Third, capacity for civil acts, as a person’s ability to create, exercise civil rights and perform civil duties Capacity for civil acts is subject to the categories of age and mental development Under both Vietnamese and US contract law, an adult is entitled to the presumption of full competence to contract unless there is sufficient evidence to rebut such a presumption, such as mental defects or intoxication.2 An adult means a person who is at the age of majority In most states of the US, the age of majority is 18.3 Under Vietnamese law, the age of majority is also 18 Differences a Form of contract The form of a contract is a means of recording the legal rights and obligations agreed upon by the parties According to US law, the form of a contract is determined by the parties themselves The provisions on the written form of the contract only protect the necessary public interests and avoid the phenomena of fraud and fraud The court only intervenes to force the obligee to fulfill its commitments themselves, if the “An adult shall have full capacity for civil acts except for the cases provided in Article 22, 23, and 24 of this Code.” (Article 20.2 of 2015 Civil Code of Vietnam) See Claude D Rohwer & Anthony M Skrocki, Contracts in a Nutshell, West Group, St Paul, Minn., 2000, at 275 Under Alabama law, a person who is unmarried and has not reached the age of 19 years is deemed to be a minor Downloaded by chat tailieu (chattailieu@gmail.com) lOMoARcPSD|38362288 formalities have been observed US law also provides for exceptions when a contract does not comply with the written form but still has legal effect Article 401 of the 2005 Civil Code of Vietnam stipulates that a contract can be entered into in writing, orally or in conduct, if the law does not require a certain form Where the law stipulates that a contract must be notarized, authenticated, registered or licensed, it is mandatory to comply with this requirement Thus, basically, both the US and Vietnamese laws allow entering into a contract of any kind, if there is no statutory requirement on the written form The difference is that: First, the United States generalizes the cases where it is mandatory to make a contract, while Vietnam only generally stipulates that the law will stipulate the type of contract that must be entered into by form certain consciousness Second, if in the United States, the types of contracts that are required to be signed in writing are specifically listed in a state law to combat fraudulent acts, then in Vietnam, the written form of Contracts are regulated by specialized legal documents in each specific field Therefore, in Vietnam, it is difficult to determine in general what types of contracts must be signed in writing, for each type of contract, it is necessary to find provisions in specialized legal documents Third, in the United States, a violation of the form makes the contract unenforceable, that is, the court will not intervene to enforce the contract; In Vietnam, violation of form can lead to the effect of making the contract void if so provided for by law The practice of resolving contract disputes in the past has shown that the courts have declared many contracts invalid due to violations of form (for example, house sale and purchase contracts are not validly notarized or authenticated) b Conditions of validity Downloaded by chat tailieu (chattailieu@gmail.com) lOMoARcPSD|38362288 Under USA case law, a contract is valid when the following conditions are met: There is an agreement and unification of the will of the parties voluntarily The parties have the capacity to sign the contract; Have reciprocal obligations, except for some exceptional cases The purpose of the contract must be lawful or not contrary to public policy; The form of the contract must be in accordance with the provisions of law In Vietnam, the valid conditions of civil transactions in general and contracts in particular are specified in Article 122 of the Civil Code, according to which, a transaction becomes effective when The participants in the transaction have civil act capacity The purpose and content of the transaction not violate the prohibition of the law, not violate social ethics; participants are completely voluntary If the law stipulates that the form of a contract is a condition for the contract to be valid, this provision must also be complied with Thus, basically, except for the condition of reciprocal obligations, the effective contract conditions of the US and Vietnam are quite similar Regarding non-enforceable contracts, US law divides them into types: void, voidable and unenforceable contracts US case law stipulates competent people signing the contract is a person of full age (18), have the freedom to choose (i.e not beforced or unduly influenced) and have a clear mind at the time of entering into the contract Downloaded by chat tailieu (chattailieu@gmail.com) lOMoARcPSD|38362288 A voidable contract is a contract that is considered non-existent, not recognized by the court and not enforced (this type of contract is similar to an absolute void contract according to the concept of legal science in Vietnam) A contract that can be voided is a contract in which one party has the option to terminate the contract, for example a contract signed in a wrong way (this type of contract is the same as an absolutely void contract in Vietnam) An unenforceable contract is a contract in which neither party can enforce its contractual obligations, for example in the United States, some types of contracts are required to be signed in writing, if the parties not comply with the provisions The contract is deemed unenforceable The 2005 Civil Code of Vietnam also introduced for the first time the basis of an invalid contract due to an object that could not be performed (Article 411) However, with the way provided in Article 411, "In the event that right from the moment of signing, the object of the contract cannot be performed due to objective reasons, this contract is void", this phrasing may create misunderstanding, is that in all cases, when there is an objective reason that makes the object of the contract impossible to perform, the contract will be considered void For example: A signed a contract to buy B's goods, but unfortunately, this goods caught fire and was completely destroyed Obviously the subject matter of this contract is unenforceable, but it cannot be said that the contract is void The contract is still valid, the seller violates the contract (cannot deliver the goods to the buyer) but due to force majeure, he is exempt from contract liability c Procedure of entering into a contract Like Vietnam, the procedure for entering into a contract in the United States consists of two steps: proposing and accepting the offer to enter into a contract Downloaded by chat tailieu (chattailieu@gmail.com) lOMoARcPSD|38362288 Firstly, difference is in the way they determine when to enter into a contract In Vietnam, consider the contract to be formed at the time the offeror receives the offer to enter into the contract The United States follows the mail box theory, which considers the time of entering into a contract to be the time when the party accepting the offer enters into a contract and accepts the offer For example, on November 1, 2022, A submitted an offer to sell a shipment to B On 7/11/2022 B sent a letter agreeing to buy the shipment by post 10/11/2022 A received the letter of acceptance Under US law, the contract ends on 7/11 but according to Vietnamese law, it's 11/10 Due to the different conceptions of the time of contract formation, in international business practice between the two countries, if the parties not have an agreement on the applicable law, it is difficult to determine where the contract was entered into Thereby determining which country's jurisdiction has jurisdiction to settle contract disputes Secondly, the laws of the United States and Vietnam both have provisions on amending or withdrawing an offer to enter into a contract The difference is that: in Vietnam's civil code stipulates that an offer to enter into a contract may be changed or withdrawn if the notice of change or withdrawal comes at the same time or before the time of receipt of the request This provision applies to all offers to enter into a contract, regardless of the time-limited or no-time-limited offer Meanwhile, in the United States, the offer to enter into a contract can be modified or withdrawn at any time before being accepted by the other party Thirdly, the issue of the invalidity of the offer to enter into a contract Vietnam law restricts the right to freely withdraw or cancel an offer before it is accepted of the requester Meanwhile, the issue of validity of an offer to enter into a contract under US law concerns the right to freely withdraw or cancel an offer before it is accepted Other cases leading to invalidation of the offer under US law such as the main object related to the offer to enter into a contract is no longer Downloaded by chat tailieu (chattailieu@gmail.com) lOMoARcPSD|38362288 available, the content of the offer is illegal, the offeror is dead or incapacitated before the offer is accepted except in the case of an option contract Fourthly, the law of Vietnam and the law of the United States basically have something in common about the requirement to accept the offer to enter into a contract, which is to accept the entire content of the offer and the notification of acceptance answer sent on time but comes from different conditions in each country that have different specific regulations US law has a concept of "counter offer," meaning that it is not considered an acceptance of an offer to enter into a contract but a way of canceling the offer There is no exception under US law for late notice to be considered acceptance of an offer to enter into a contract as required by Vietnam law The last, withdraw the notice of acceptance of the offer to enter into a contract The law of Vietnam allows the offeree the right to withdraw the notice of acceptance to enter into the contract before it takes effect, and the law of the United States has never raised the issue of withdrawing the notice of acceptance of the contract coin once it has been sent d Liability for breach of contract Vietnamese law prescribes the following sanctions for breach of contract: Forcing the correct performance of the contract Pursuant to Clause 1, Article 297 of the 2005 Commercial Law, which stipulates that the contract must be performed correctly: The fact that the aggrieved party requires the breaching party to properly perform the contract or use other measures to make the contract perform, and the aggrieved party must bear the costs incurred Downloaded by chat tailieu (chattailieu@gmail.com) lOMoARcPSD|38362288 According to this provision, the violating party will have to strictly comply with the terms committed in the contract; use other means to remedy and perform the contract The cost of these remedies shall be borne by the offending party Contract penalties Article 300 of the Commercial Law 2005 provides: Contract penalties means that the aggrieved party requests the violating party to pay a fine for breach of contract if so agreed in the contract, except for the cases of liability exemption specified in Article 294 of this Law Based on the above provisions, the penalty for breach of contract is only applied when there is an agreement in the contract This means that only when there is an agreement on penalty for breach of contract, the aggrieved party can apply the penalty for breach of this contract And the application of this remedy is not based on whether or not the aggrieved party has suffered damage Forcible compensation for damage Compensation for damages is a commonly used remedy for breach of contract According to Clause 1, Article 302 of the Commercial Law: Indemnification means the breaching party's compensation for the loss caused by the breach of contract to the aggrieved party Suspension of contract performance Suspension of contract performance is the temporary failure of one party to perform its obligations in the contract When a commercial contract is suspended, the contract is still valid Downloaded by chat tailieu (chattailieu@gmail.com) lOMoARcPSD|38362288 Stoppage of contract performance Stoppage of contract performance means the termination of the performance of a contract by one party When the performance of a commercial contract is suspended, the contract shall cease to be effective from the time when one party receives the notice of suspension The parties are not required to continue to perform their contractual obligations The party that has performed the obligation has the right to request the other party to pay or perform the reciprocal obligation Cancellation of the contract Cancellation includes the cancellation of the entire contract and partial cancellation of the contract Cancellation of the entire contract is the complete abolition of the performance of all contractual obligations with respect to the entire contract Cancellation of a part of a contract means the cancellation of a part of a contractual obligation; The remainder of the contract is still in effect Other measures agreed by the parties that are not contrary to basic principles of Vietnamese law, international treaties to which the Socialist Republic of Vietnam is a signatory and international trade practices United States law provides for the following sanctions for breach of contract: Compensation for damage: When a contract is breached, the aggrieved party has the right to claim compensation for damage This is the primary remedy in the United States for breach of contract Expected damages: The court assesses the amount of money to restore the economic benefits that the aggrieved party is expected to gain when the contract is performed This is the most common way of determining damage known as the Downloaded by chat tailieu (chattailieu@gmail.com) lOMoARcPSD|38362288 “expectation measure” This calculation of damage is equivalent to compensation for lost damage under Vietnamese law (Article 302 of Commercial Law 2005) Damage due to trust: The breaching party will have to compensate for costs and losses arising from believing that the contract will be performed This type of compensation is only applicable when the expected loss cannot be demonstrated and the amount of compensation cannot exceed the expected profit Fixed damages: When entering into a contract, the parties can pre-determine a fixed amount of compensation when the contract is breached, based on the calculation of the expected or actual damage It can be said that in terms of form, the fixed compensation is similar to the contract penalty under Vietnamese law, but in essence, it is different In the United States, this form of indemnity is only applicable if it is for the purpose of estimating probable damages in the event that the damage is difficult to prove, but it is void if used as a punitive measure The party breaches the contract when the amount is too large and unreasonable compared to the possible damage In Vietnam, the contract penalty is a deterrent, meant to prevent and punish if the contract is breached This is a big difference in the legal thinking of the two legal systems Request for correct performance of the contract: The aggrieved party may require the breaching party to perform part or all of its committed obligations However, in the event that both parties have performed their obligations and the breaching party only has the obligation to settle for the other party, this sanction shall not be applied The violating party also has the right to claim the aggrieved party performance of the remainder of the contract in excess of the damage caused by the breaching party to the other party Downloaded by chat tailieu (chattailieu@gmail.com) lOMoARcPSD|38362288 This remedy is restricted to the United States, only to be used if indemnification with money just doesn't make sense Meanwhile, in Vietnam, forced performance of a contract is a fairly common sanction, which is specified in Article 297 of the 2005 Commercial Law Cancellation of the contract: For a fundamental breach of a contractual obligation, the aggrieved party has a choice: either to demand performance of the contract and claim damages, or to demand cancellation of the contract and compensation damages For non- fundamental violations, the aggrieved party is not entitled to request cancellation of the contract, but can only claim damages This provision is quite similar to Article 425 of the Civil Code and Article 312 of the 2005 Commercial Law of Vietnam Vietnamese law also stipulates one more case where the contract can be canceled when the parties have agreed in advance the cancellation conditions in the contract Thus, if in Vietnam there are many sanctions applied to breach of contract, in the United States there are only three sanctions, of which the main sanction is compensation for damage Even though the form of contract penalty is quite common in Vietnam, the United States does not have this concept, the form of compensation according to the fixed level, although similar to the contract penalty of Vietnam, is different in the purpose of application , even if applied for the purpose of punishment for breach of contract - the main purpose when this sanction is applied in Vietnam, in the United States, this sanction will be null and void Due to separate regulations on penalties for violations and compensation for damage, the Commercial Law of Vietnam also allows the simultaneous application of these two sanctions, if the contract contains provisions on penalties for violations (Article 307) Downloaded by chat tailieu (chattailieu@gmail.com) lOMoARcPSD|38362288 C, CONCLUSION In both Vietnam and the US’ jurisdictions, contract law is an interesting area of law that continues to grow and develop in relation to the changing world of business and commerce The key difference between them stems from Vietnam’s socialism, which is essentially a branch of civil law in comparison to the US’ common law, therefore they are distinct in contract regulation However, these differences by no means interfere with the benefit and equality people are entitled to, they merely represent the characteristics of their respective law systems These differences prove that each country’s jurisdictions had adjusted their respective contract law in response to the constantly changing world of business and commerce in their country, necessary to our growth, particularly Vietnam and the US and global economy as whole CITATIONS AND PREFERENCES, IN ORDER OF USE Downloaded by chat tailieu (chattailieu@gmail.com)