Slide thuyết trình TACN2 Topic: Provisions concerning the status of the contract

This is the most common way for a contract to end • By Termination: When either party pursuant to a power created by agreement or law puts an end to the contract otherwise than for its

Mai Thái Ninh Hoàng Duy Thái Phạm Đức Nam Phạm Thế Vinh

Nguyễn Mạnh Đức Trung

PROVISIONS CONCERNING THE STATUS

OF THE CONTRACT

The first one is:

If a contract was signed a year ago, does it still exist now?

Or has its life ended?

The second one is:

If a contract exists in several languages, which one is the real contract,

which language is considered as authentic?

Problems

• Normally, a contract comes to an end when the last duty under this contract is performed or in the simpler terms a contract’s life ends when the work is complete

But not every contract ends as planned There are a number of ways in

which a contract can end

• By performance: When the parties have performed all that is required of

them under the contract This is the most common way for a contract to end

• By Termination: When either party pursuant to a power created by

agreement or law puts an end to the contract otherwise than for its breach.

• By Cancellation: It occurs when either party puts an end to the

contract for breach

• By Rescission: When both parties agree to end the contract 

• By Impossibility and Frustration: When the contract cannot

continue for some reasons ( for example: it is impossible or totally pointless to continue with it) or when neither party is at fault

• The authentic contract language will be decided by the parties

• In international practice, a contract often exists in 2 or more language, each side believes it understands the contract – but what happens if there are contradictions between the 2 versions?

Whose language prevails?

The lifetime of the Contract

Discharge by Performance

A contract is discharged by performance:

• Where a promise has been given upon an excuted

consideration, and is performed by the promisor

• Where one promise has been given inconsideration of

another, and both are performed

• If one party does not fully perform the contract this will amount to a breach

of contract and the other party may have a claim for damages unless the contract has been frustrated

• If the non-performance amounts to a repudiatory breach (breach of condition) the other party will be released from their obligations.

•  Where a contract is one where the price is payable on completion, then completion is generally required in order to discharge the contract This is often expressed in the terms of being a condition precedent Completion triggers the requirement of payment: no completion, no payment

Divisible/Severable contracts

• The rule relating to discharge through full performance applies where there exists an entire contract Where it is possible to divide a contract into separate parts, eg if a sum is agreed to be payable per week or hour, then the courts can award a sum for the separate parts of the contract which have been completed

Substantial performance

• A further exception exists where a court is satisfied that substantial performance is present The court may then award the contractually agreed price and deduct sums to reflect the amount not performed If however, the performance is not held to amount to substantial performance the claimant

is entitled to nothing. Difficulty arises as to what amounts to substantial performance There is no precise limit set down but is to be determined on the facts of individual cases

Where one party freely agrees to accept partial performance, then a sum

is payable for the work completed The main focus is on free acceptance

Acceptance of partial performance

Tender of performance

• Where a party is willing to perform and tries to tender performance but the other party does not accept the performance then the party seeking to tender performance is discharged from the contract and the non accepting party is liable in damages for non acceptance

Performance prevented by the promisee

• Where the promisee prevents completion of the performance then the promisor is entitled to payment for the work which has been

completed

Termination of Contract

• Two major types of terminations

Termination for default

• Under termination for default, a contractor may not recover its costs

on undelivered work and must repay any progress or advance payments applicable

• the contractor is liable to the government for any excess costs for supplies and services procured similar to those terminated and for any other damages The government may elect to take all or any part of the completed supplies and manufacturing materials involved for which the contractor is paid

• Other terminations for default : Termination for Default Upheld, Termination for Default Overruled

Termination for convenience

• Termination for convenience of the government is of far greater frequency than termination for default Contractors dealing with the government should be prepared at all times for such an occurrence files should be well documented, accounting systems should be compatible with termination to insure maximum recovery and a termination co-ordinator should be available to monitor the claim in the various company divisions affected, including the proper handling of termination inventory and preparation of the necessary forms Before accepting a government contract or subcontract, the termination clause should be scrutinized closely and rejected if not appropriate

• The discharge of the Contract by any other right arising from the applicable law or any other source is deemed to be “cancellation” of the Contract

•Impossibility and Frustration

• Termination and cancellation are both one-sided procedures

• The word ”rescission” comes form the word “recind” which means to cancel or annul

Contract rescission is available under the following circumstances

• Occionally a contract is discharged because it is impossible or totally pointless to continue with it

• But the courts are reluciant to allow this contracts are signed to be kept, not to be broken

To summarize, the contract becomes impossible of

performance or is frustrated in any of the following cases

• Where the subject matter of the contract ceases to exist

• Where circumstances arise which make the performance of the contract impossible

• Where object contemplated by the parties or the event contemplated

• Where enactment of legislation or Government interference prevents the performance of the contract

• Where act becomes unlawful

The language of the Contract

Legal language is characterized by distinctive features

not commonly found in everyday language

• Some of them may be the cause of problems to the comprehension and translation of legal texts

• In order to fully understand the content of commercial contracts, learnes must first have an insight into how English commercial contracts are structured and worded

• Whenever versions of a single document exist in two languages, there are conflicts: no translation is ever perfect

• Ideally, the parties should agree on a contract language, making it clear that translations do not have the same authority as the original version in the contract-language

For example, makes the authority of the

English-language version clear.

• Language

This agreement is written in English and Vietnamese In the event of a

discrepancy, the English-language version shall prevail.

What happens though if the parties cannot

agree?

 There are two roads:

a The parties say nothing at all-in a dispute, the judge decides which

version to trust

b The parties make two (or more) versions equally authoritative,

again, the judge decides which version to favor

• An example:

This agreement is made in both Vietnamese and English The Vietnamese and English versions have equal legal status

• Another point: a provision on the language of the contract documents, of correspondence, and of documentation to be delivered under the contract is often useful This provision is often quite detailed.

• A final point: measurements Most of the world uses the metric system exclusively, but some countries, notably the United States, uses metric and other systems side by side To avoid problems many contracts specify which measurement system (normally metric) applies Of the greatest importance in this connection are trade usages Expensive disputes frequently arise from the use of deviant units of measurement

• E-V Translation

• V-E Translation

There are some conditions under which a contract can be legally terminated before the contractual duties have been fulfilled This is known as “Termination of contract” and may occur for many different reasons.

• Có một số điều kiện mà theo đó, một hợp đồng có thể bị kết thúc một cách hợp pháp trước khi những nghĩa vụ của hợp đồng được hoàn thành Điều này được hiểu là “Sự chấm dứt của hợp đồng” và có thể xảy ra bởi rất nhiều lý do

The delivery of goods under this contract may be terminated by the buyer in accordance with this clause in whole, or it part, whenever the Buyer shall determine that such termination is in his best interest Any such termination shall be effected by delivery to the Seller of a Notice

of Termination specifying the extent to which supply of Goods under the contract is terminated, and the date upon which such termination becomes effective

• Việc giao hàng theo hợp đồng này có thể bị người mua chấm dứt theo quy định của một phần hoặc toàn bộ điều khoản, khi mà người mua xác định rằng, sự chấm dứt này là vì quyền lợi lớn nhất của anh ta Bất

kì một sự chấm dứt nào cũng phải được thực hiện bằng cách người mua gửi cho người bán thông báo chấm dứt, trong đó ghi rõ khối lượng hang được chấm dứt giao và ngày mà việc chấm dứt bắt đầu có hiệu lực

All Transaction, contact between two parties including notice, request, agreement, offer or requirement shall be in English or Vietnamese All technical drawing and description, reports or other documents shall be edited

in English Contract is made in English and Vietnamese with copies of same legal force, if any disparity between English and Vietnamese folds then Vietnamese one shall prevail/ be standard

• Tất cả giao dịch, liên lạc giữa hai bên bao gồm thông báo, yêu cầu, thỏa thuận, chào hàng hay đề nghị sẽ được thực hiện bằng tiếng Anh hoặc tiếng Việt Tất cả các bản vẽ và mô tả kỹ thuật, báo cáo hay các tài liệu khác sẽ được soạn thảo bằng tiếng Anh Hợp đồng được lập  bằng  cả tiếng Anh và Tiếng Việt và có giá trị pháp lý như nhau, nếu có sự khác biệt giữa tiếng Anh và tiếng Việt thì bản tiếng Việt sẽ được sử dụng làm chuẩn

Bất kỳ một sự sửa đổi hay bổ sung hợp đồng sẽ chỉ có giá trị nếu như được đại diện có thẩm quyền của hai bên ký vào văn bản sửa đổi, bổ sung Văn bản sửa đổi, bổ sung này sẽ là một phần không tách rời của hợp đồng.Tiếng Anh và Tiếng Việt sẽ được sử dụng trong tất cả các giao dịch, thông tin liên lạc giữa hai bên.

• Any amendment or modification of this contract shall be valid only if competent representatives of parties sign in amendment or modification writing Such writing shall be an integral part of this contract, English and Vietnamese  are language of all transactions and information exchange between two parties.

Thank you!