Intention to create Legal relations 282.1.5, Capacity 292.2 The provisions in Vietnamese law regarding the Requirements for aValid Contracts 313.2.1 Conditions on subject competence 312.
THEORETICAL ISSUES OF THE FORMATION The validity issue of the contract includes and relates to many complexfurther study of the following parts of the thesis, this chapter provides an overview of conditions for the contract to be valid, including the following contents: general conception of contracts, definition, characteristics, classification and signification of Requirements for a valid contract
1.1 General conception of the contract
For survival and growth, both individuals and organizations must engage in various relationships Among these, parties establish relationships to exchange material benefits to meet the needs of the parties One of the fundamental methods of benefit exchange in society is through agreements between parties, based on principles of freedom, voluntariness, equality, and under legal protection This phenomenon is legally termed as: a Contract,
A contract is an agreement, either wnitten or spoken, between two or more parties that creates a legal obligation The terms of a contract are enforceable by law, with clearly defined penalties and remedies should the contract be breached,
However, the transfer of these material benefits is not naturally formed bby assets (which are already the embodiment of material benefits) coming together to establish relationships Property relationships are formed only through the willful actions of the parties Philosopher Karl Marx said: "Goods camnot move to the environment and exchange with each other on their own.
For those objects to exchange with each other, those who hold them must treat each other as individuals whose will lies within those objects" On the other hand, if only one party expresses will without being accepted by the other, a contractual relationship cannot be formed Therefore, only when there is a
" manifestation and agreement of will among the parties can a contractual relationship be established*
Contracts are still concluded on basic principles such as freedom, voluntariness, commitment, agreement and equality Based on these principles, it can be seen that individuals and legal entities have the right to self- determination on all issues related to the contract that they will participate in such as the type of contract, the partner establishing the contract, the content of the contract, the form of the contract This is fully consistent with the concept of "mutually occurring civil affairs" that has existed for a long time in civil legal science, and is consistent with the nature of a contract as "an agreement between the parties on the establishment, change or termination of civil rights and obligations" $
‘When entering into contracts, the subjects always want to make the best choices to be able to achieve maximum benefits for themselves that the other party must comply with However, the expression of the will of the parties can only become a contract when there is agreement with each other - ie the parties have reached a consensus regarding the issues to be resolved in the contract During the process of contracting, to maximize their benefits, parties not only present demands to control the interests of the other party but also, in many cases, engage in agreements that may infinge upon the interests of the state, public interests, rights, and interests of other parties in pursuit of their own interests This is unacceptable because the freedom of agreement of one party cannot encroach upon the freedom of another According to the philosopher Montesquieu's viewpoint: "Freedom is the right to do all that the law permits If every citizen does what is contrary to the law, he will not be
Associate Professor Dr Dash Vin Thea, Dr Nguyen Mh Tom (Ed) 2019), Teubook of Ficramese hi Za, Beno Lee Uruvrsty, People's Đo Publishing House, VoL p 109,110.
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Thus, freedom of agreement is an important principle of establishing civil law relations in general, and contractual relations in particular But any agreement must be within certain limits, which are the rights and interests of other subjects This limitation is specifically expressed: "The establishment, exercise, and termination of the right to civil obligations must not infringe upon the national interests, public interests, legitimate rights and interests of others"? To ensure that the conclusion of contracts complies with this principle, The 2015 Civil Code and related legal documents set out regulations to guide the agreement of subjects according to a certain limit, forcing them to comply When entering into a contract where the parties do not comply with these provisions, the agreement will not be recognized and of course, the contract will not be signed Thus, "in addition to the principle of respecting the freetlom of agreement of the parties in the transaction, the law also sets several minimum requirements that the subjects must comply with - that is,
Hong Than: Dem, The Sot of Lav (Monesqe), Bhuaton Publishing House, Hanoip 99.
“Assocatt Professor Dr Dak Van Thanh, Dr Nguyen Mai Tuan (Ea) G019), Tenbook of iemumese i Tan, Beno Lave Unaverity, People's bli Secaray Pobihing Howse, vol 1p 1)
1.2 Definition, characteristics, and classification of Requirements of a valid contract
1.2.1 Definition of requirements of a valid contract
In terms of the English legal system English Contract Lawis the body of law that govems legally binding agreements in England and Wales With its roots in the lex mercatoria and the active work of the judiciary during the industrial revolution, it shares a heritage with countries in the Commonwealth (such as Australia, Canada, and India), from its membership in the European Union, to continued membership in the Unidroit Any agreement that can be enforced in court is contractual,
In the UK, contract law is the tem commonly used to describe the content of the rules that apply to the formation, execution, and termination of agreements agreed upon by private parties The concept of a contract is "A contract is a legally binding promise (spoken or written) by one person to fulfill an obligation to another person to be considered? A contract is a voluntary obligation, as opposed to an obligation not to violate the rights of others when subjected to torture or ill-gotten rich English law values maling sure people agree to agreements that bind them in court, as long as they abide by statutes and human rights The conditions for a contract to be valid in the UK include four elements: offer, acceptance, consideration, intent to create legal relations, and capacity."
In terms of the Vietnamese legal system, the contitions for the validity of a contract can be likened to the "breath" or "soul" for the existence of the contract, alsin to the importance of breath or soul for human life A contract lacking validity means that there exists no contractual relationship between the parties
In the Dictionary that explains the term Jurisprudence, it is explained that the concept of “validity of civil contracts" is “compulsory value for
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4 entities entering into contractsTM Although brief, this definition also reflects the essence of the concept of conditions for the contract to be valid However, the content of this definition is still incomplete, and if explained clearly, it is also somewhat inaccurate Because the condition for the contract to be valid, understood in its true nature, is not only “compulsory value" but also includes the creation of the rights and obligations of the parties to the contract The enforceable value is also a common feature of many other types of legal transactions, rather than a specific characteristic of the conditions for the contract to be valid On the other hand, in this definition, using the phrase "for contracting entities" is somewhat inaccurate Understood in its true essence, it encompasses not only the "compulsory enforcement" but also the creation of rights and obligations for the participating entities in the contract Here, if it change the phrase to "the entity who participates in the establishment and performance of the contract", it will be clearer.
Up to now, there has not been a legal document that has introduced the concept of effective conditions of transactions in general, and effective conditions of contracts in particular However, based on the above analysis, the effective conditions of the contract can be judged as follow:
“Requirements for a valid contract are legal provisions that create rights and obligations for the participating parties, limiting freedom of agreement by setting minimum requirements that contracting parties must adhere to for the contract to be legally effective."
‘Dish Van Thanh & Nguyen Minh Tom (Es), Cail Lae Temainology, in th Dictionary of Krigrdnce
12.2 Characteristics of Requirements for a Valid contract 1.2.2 In terms of the English legal system:
The contract laws of the Anglo-American countries in general and the UK in particular do not discriminate between transactions and contracts
Contracts are understood in a broad sense, including unilateral transactions and contracts in the traditional understanding of the continental European legal family.
COMPARISION OF REQUIREMENTS FOR A VALID CONTRACT IN ENGLISH AND VIETNAMESE LEGAL SYSTEMSThere are five elements which is taken together and make a contract valid: Offer, Acceptance, Consideration; Intention to create legal relation; and
2.1.1 Offer An offer is a promise to enter into a contract on certain terms, where one party promises to do something in exchange for another party's performance The offer requires some act that allows another person to create a contractual relationship between the parties Consequently, the other party has the power of acceptance An offer must be specific, complete, capable of acceptance, and intention be bound.
In most cases, an offer is made to a specific person, but there are cases where an offeris made to the public at large For example, the owner ofa dog might offer everyone a reward for finding a stray dog
An offer to enter into a contract cannot be valid forever but is calculated according to the following cases:
(1) The offer to enter into ts valid for a specified pertod of time made by the requester
(2) The offer to enter mto is vaitd for a reasonable pertod of time This period 1s determined based on the way im which the parties to the contract contact each other G)In case the ofBror makes an offer to enter into a contract with a certain condition, when that condition does not occur, the offer will no longer be valid:
A) The offer to enter mto a contract ts valid witil rejected by the
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24 offeree (6) The offer to enter tnto will exptre if the offeree again makes an offer to enter into anew contract:
(6) The offer to enter into a contract will expire when 1 of the 2 parties 1o the proposal dies, espectally jor proposals that need to be made by the offeror hamself
(7) The offer will expire if the requestor withdrenrs the offer (however. this withdrawal also needs to be accompanted by some conditions) 7"
2.1.2 Acceptance Acceptance of an offer forms the ‘agreement’ — the contract — between the parties Failure to adhere to the terms agreed upon can lead to legal consequences, including a breach of contract.
The following requirements are needed for acceptance to be valid:
(1) The off must remain open This means that acceptance of the offer must happen while the offer is still open for acceptance One cannot accept an offer that is no longer open.
(2)Mnrer the offer One cannot accept an offer which is different from the original offer made For example, ifan offer was made and the offeree varied the terms, they could not then accept the original offer This is because the original offer has become a counter-offer Acceptance must mirror the exact tems of the original offer
(3) Be unequivocal This means that there cannot be doubt that the offer has been accepted.
The acceptance cannot be subject to a further condition being satisfied © Associate refssor, Doctor Nguyen Thi Anh Van, Seoetay: Master Dang Thi Heng Thy G01), Compara sm of general provisions in conract laf some cotdri in te world, ta citi topic at school evel, Hawi
(4) Must be communicated to the offeror The offeror must know that their offer has been accepted Usually, acceptance is made known by words or writing Or, acceptance could be made known by the conduct of the parties.
Other communications — voice, letter, email, SMS message, or text message — are all valid forms of acceptance.
Note that silence is very rarely accepted as acceptance For silence to be considered acceptance, there are usually previous dealings which demonstrate that it is usual for both parties to treat silence as acceptance Altematively, silence may be deemed as acceptance if both parties have agreed that is possible.
(5) Comply with the conditions of acceptance in the offer An offer can be accepted through any way of acceptance, such as vocally, written, or by conduct It does not have to be communicated in a certain way unless stated in the offer For example, ¡fan offer says acceptance must be communicated by email, email will be the only sufficient mode of acceptance lế
Other points to note: An invitation to treat is not an offer, meaning they camnot be accepted A definite offer capable of acceptance has not been made An example of an invitation to treat is an advert in a shop window.
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2.1.3 Consideration Consideration is another component of a contract Consideration is a form of payment or other benefit, and both parties must consider to form a legally binding contract.
The only way a contract without consideration will be enforceable is ifa contract is made by deed - which is a written document executed with the necessary formality Examples of consideration include in a B2B relationship, where one business supplies goods or services in exchange for money
(1) Consideration is a promise, or a promise not to act This means that some value must pass from each party to the other for the agreement to become a legally binding agreement.
(2)Need not be adequate, but must be sufficient The value of the consideration is not relevant For example, a contract could agree to sell a Bentley car for £1 Although the value of £1 seems far too small, the courts will not take this into account This is because consideration
‘was given by both parties, making it valid
(8) Must not be historte Consideration must not be historic, ie the performance of a pre- existing obligation cannot be a good consideration unless the party does more than what was originally contracted,
However, where the performance of a pre-existing duty provides a practical commercial benefit to the promisor, such as saving time or inconvenience in securing replacement performance, it can be a valid consideration.
"Hla Hots & Ave] Pesuer,“Biropeen Contract Law”, Voll - Frat, VI ty and Content of Comat. a
IMPLICATIONS TO IMPROVE PROVISIONS ONREQUIREMENTS FOR A VALID CONTRACT 3.1 Principles of research orientation
Through studying the regulations on requirements for a valid contract under the legal systems of Vietnam and the UK, it can be seen that the provisions of the law on requirements for an effective contract still have some limitations that need to be completed and supplemented, to be more specific.
The current Civil Code 2015 stipulates the conditions of the effective contract, according to which the contract only arises when satisfying the conditions (1) the subject's capacity to participate in the contract, (2) the content of the contract must be legal, (3) the contracting entity must be voluntary and the parties are selected to express the contract This provision of the Civil Code 2015 shares many similarities with the legal system of the United Kingdom, however, the provisions regarding the requirements for a valid contract according to the Civil Code have not been effectively enforced and are inconsistent Therefore, it is necessary to ensure the uniformity and consistency of provisions regarding the requirements for a valid contract by specifically regulating the legal requirements for a valid contract.
The completion of relevant Legal provisions on capacity is not clear,leading to various misunderstandings and conflicting provisions related to the civil act capacity of individuals participating in contracts in the Civil CodeThe 2015 Civil Code does not provide for the definition of voluntary, and also specific cases in which the conclusion of a contract is considered a voluntary violation
3.2 Some proposals to improve the law on the Requirements for a valid contract
3.2.1 Conditions on the capacity of the subject to enter into the contract:
Regulations related to conditions on the capacity of contracting subjects at Point a, Clause 1, Article 117 are not clear, so they may lead to two different interpretations The first interpretation is that the parties to the contract must have the legal capacity and the capacity to act in accordance with the contract established The second interpretation is that the parties directly involved in the negotiation, agreement, and formation of the contract must have the legal capacity and the capacity to act in accordance with the established contract In the author's view, whether the parties to the contract directly or indirectly enter into the contract, both of them must meet the legal capacity requirements ~ meaning that they have the right to directly establish the contract or have the authority to represent others in establishing the contract According to the provisions on the civil capacity for acts of individuals, it is entirely possible to determine that the person directly establishing the contract must have appropriate civil capacity for acts3*
However, the provision: "parties with civil capacity for acts appropriate to the transaction established” refers to the party to the contract or the person directly establishing the contract In practice, the person directly establishing the contract may also be the party to the contract or maybe two different individuals To ensure consistency in the understanding of this condition, the author proposes amending Point a, Clause 1 of Article 117 of the Civil Code 2015 as follows: "The subject establishing the transaction has legal capacity for civil acts, and has civil capacity for acts appropriate to the transaction established"
Studying the provisions related to the civil act capacity of the individual entering into the contract, it can be found that the contradiction between the mm. ® provisions on the civil act capacity of the individual and the provisions at Point a, Clause 1, Article 117 of the 2015 Civil Code, and the provisions on exceptions in Clause 2, Article 125 of the Civil Code 2015 This contradiction is reflected in the fact that according to the provisions of Clause 2, Article 21 and Clause 2, Article 22 of the 2015 Civil Code, all contracts of persons under
6 years old and people who have lost their civil act capacity must be established and performed by their representatives without any exceptions However, Clause 2, Article 125 of the 2015 Civil Code provides up to three exceptions for contracts that these entities can establish and perform by themselves but are still valid, regardless of whether the representative agrees or not Which mean it can be indirectly acknowledged that a person without civil act capacity can still establish a contract Although these exceptions, in the author's opinion, serve the purpose of specifying the effective conditions of the contract, it is evident that, in form, this has created an inconsistency among the provisions In order to ensure the conformity between these provisions, the author proposes to add at the end of Clause 2, Article 21 and at the end of Clause 2, Article 22 the phrase "unless otherwise provided for by this Code or other relevant laws"
3.2.2 Some proposals to improve the law on the subject's will
‘Through the periods of amendment and supplementation, up to the Civil Code 2015, the regulations related to the voluntariness of subjects when entering into contracts have many advances in accordance with legal practice, typically, in the case of transaction established by mistake In both the 2005 Civil Code and the 2015 Civil Code, there is no provision for the concept of
‘what confusion is, but it is one of the conditions that make a contract invalid,
‘making the application of the law into practice not clear The 2015 Civil Code, it is mainly concemed with the consequence that it does not achieve the purpose of establishing the transaction to request a declaration of invalidity, realizing that it is not enough to care only about the consequences of the epidemic Compared to Article 131 of the 2005 Civil Code, itis found that up to Article 126 of the 2015 Civil Code, the part "the right to request the other party to change the content of that transaction’ has been removed and specifically requests the Court to declare it null and void Omitting this content has shortened the legal procedure but lost the self-agreement —a factor that is always upheld in civil®S
Related to the content of Article 127 of the Civil Code of 2015 is the replacement of the phrase "parents, spouse, children" in Article 131 of the Civil Code of 2005 with "close relatives," providing a broader scope rather than limiting it to five specific individuals However, the law does not define in detail who these close relatives are In Article | of Article 51 of the Civil Code of 2015, it is stipulated that "the close relatives of the ward are the spouse, parents, and children of the ward; if none of these, the close relatives ofthe ward are the grandparents, siblings, aunts, uncles of the ward; ifnone of these, the close relatives of the ward are the patemal aunts, patemal uncles, matemal aunts, matemal uncles of the ward" This can be considered a standard for the concept of close relatives or used in cases of close relatives in
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Article 127, but there is no clear regulation on this This can create difficulties in determining the parties involved when conducting court proceedings
Therefore, Article 127 of the Civil Code of 2015 may list the parties as in Article 132 of the Civil Code of 2005 or add detailed provisions on close relatives for general application.
3.2.3 Some proposals to improve the law on the purpose and content of the contract
Contracts that serve a purpose and contain provisions violating the law or societal ethics are deemed void Here, the term "violation of the law" refers to Legal grounds stipulated in legal documents ranging from general to specific laws Therefore, determining whether a contract violates the law is relatively straightforward due to clear regulations However, regarding societal ethics as defined in Article 123 of the Civil Code of 2015, ethics are abstract and immutable, heavily influenced by individual subjective perceptions Hence, in practice, identifying contracts that violate societal ethics is not simple
Standards and ethics evolve over time with human consciousness and vary across regions Therefore, determining whether a contract breaches societal ethics is complex and can lead to contradictions To simplify this process, itis advisable to legislate cases considered to be against societal ethics.
3.2.4 Some proposals to improve the law on the form of the contract The Civil Code 2015 replaced the phrase "The form of civil transaction is a condition for the effectiveness of a transaction in cases where the law provides" in the Civil Code 2005 with "The form of civil transaction is a condition for the effectiveness of a civil transaction in cases where the law provides." By narrowing the scope from "law" to "bylaw," it relaxed some provisions regarding the conditions for the effectiveness of contracts regarding form The 2015 Civil Code has added some exceptions when a contract violates the condition of validity in a form that wall not be declared effective
The 2015 Civil Code added some exceptions when a contract that violates the condition of validity in form will not be declared invalid However, in practice, the determination of "performing at least two-thirds of the obligations in the transaction” is difficult to quantify in many cases because the subject matter of the contract is very rich, be it money, material, or work Therefore, the grounds for establishing two-thirds of the obligations in the transaction are not simple and can even be abused during the determination Therefore, it is recommended to add an explanation or calculation of two-thirds of the obligation in the transaction,
In addition, in Clause 2, Article 129 of the 2015 Civil Code, it is stipulated that "A civil transaction that has been established in writing but violates the mandatory provisions on notarization and attestation, if one party or parties has performed at least two-thirds of its obligations in the transaction, at the request of each party or parties, The court issues a decision recognizing the validity of such a transaction In this case, the parties do not have to perform notarization or authentication." Thus, transactions can still be valid without notarization and authentication procedures, although it is mandatory to do this procedure This catries high legal risks as well as circumventing the Jaw to evade the civil obligations of some entities Therefore, when regulating should be specific in specific cases with specific conditions met
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