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MINISTRY OF EDUCATION AND MINISTRY OF JUSTICE TRAINING HANOI LAW UNIVERSITY HA THI THUY HÀ THỊ THÚY INTERPRETATION OF CONTRACTS IN ACCORDANCE WITH VIETNAMESE LAW REGULATIONS Specialization: Civil Law and Civil Procedure Code: 38 01 02 SUMMARY OF LAW DISSERTATION Hanoi – 2019 The dissertation is completed at:TRƯỜNG ĐẠI HỌC LUẬT HÀ NỘIHANOI HA HANOI LAW UNIVERSITY Academic Supervisor: Assoc.Prof Dr Bui Đang Hieu AAGS TS Bùi Đăng Hiếu Reviewer 1: Dr Hoang Thi Thuy Hang Reviewer 2: Assoc.Prof Dr Phan Huu Thu Reviewer 3: Dr Dinh Trung Tung Dissertation will be examined by the Council of Dissertation Evaluation at Hanoi Law University on Dissertation is available at:) Thư viện Quốc gia; 1) National Library; 2) Library of Hanoi Law University 2) Thư viện Trường Đại học Luật Hà Nội , 2019 A INTRODUCTION Implication of the dissertation Interpretation of contracts is not a new regime in civil law in general and contract law in particular From B.C, Roman lawyers laid the foundation for the establishment of a contract interpretation Studying legal concepts, establishing principles, explanatory methods as well as explanatory bases will create a solid rationale for legislators to consider, receive and reflect them into legislations to improve the legal provisions on contract interpretation However, in Vietnam today, there is almost no scientific work to systematically study theoretical and practical issues about the contract interpretation In practical terms, for many reasons the contracts may have ambiguous, confusing, too general, or contradictory terms which made other people hard to understand or understand in different meanings The contract interpretation regime is designed to provide a legal basis for resolving disputes that occur between the parties, as well as avoiding arbitrary discretion of the competent subject when interpreting the contract However, the grounds for interpreting the contract specified in the Civil Code are not sufficient that make the subject settle the dispute on the interpretation of contract lacking a legal basis for resolution, leading to arbitrary discretion in applying the law Therefore, the study to improve the regime of contract interpretation aims to create an objective and sufficial legal basis, contributing to protecting the rights and legitimate interests of the parties in the contract, promoting the develop and keeping stable for civil exchanges The market economy and the globalization trend have led to an increasing number of contracts The requirement of interpreting the contract is increasing, that makes the regime of contract interpretation play an important role in keeping the contract relationship stable, and creating a legal basis for dispute resolution For all those reasons, it is necessary to study the topic "Interpretation of contracts in accordance with Vietnamese law regulations" to meet the requirements of improving the law as well as contributing to the theoretical and practical basis for the contract interpretation 2 Research objectives and study mission The dissertation systematized the theoretical issues of contract interpretation, studied the status of Vietnamese law on the interpretation of contracts and practice of the contract interpretation in Vietnam as well as modern views on the contract interpretation in the world From which, the dissertation aimed to provide solutions to improve the provisions of law on contract interpretation and improve the effectiveness of the contract interpretation in Vietnam To achieve the above objectives, the dissertation needs to fulfill the following tasks: - Clarifying the theoretical issues of the contract interpretation - Studying the current legal status of the contract interpretation and the practice of the contract interpretation in Vietnam - Studying the viewpoints of the contract interpretation in the law of some typical countries in the world and the practice of contracting and implementing contracts in Vietnam - Proposing recommendations on the regime of contract interpretation in the Civil Code, amendment and supplement to the principles and bases for the contracts interpretation as well as giving specific recommendations to increase the effectiveness of applying legal provisions on the contract interpretation in Vietnam Subject and Scope of the Research Research subbjects of the dissertation including: - Theoretical issues of contracts, interpretation of contracts, interpretations of wills and interpretation of civil transactions; - Regulations on the contract interpretation of the Civil Codes through periods and some related legal documents on contract interpretation in Vietnam, including Commercial Law and Consumer Protection Law - Practice of the contract interpretation in Vietnam Scope of the research: The dissertation concentrated on researching the theoretical, legal and practical issues of interpretation of civil contracts and commercial business contracts In terms of time, the dissertation studied the provisions of Vietnamese law on the contract interpretation in the Civil Codes from the French colonial period to Civil Code 1995, Civil Code 2005, and Civil Code 2015, and mainly researched the contract interpretation in the Civil Code 2015 Regarding the practice of the contract interpretation, the dissertation focused on the practice of contract interpretation of competent subjects from the Civil Code 1995 comes into effect up to now Research Methodology The dissertation used the methodology of dialectical materialism and historical materialism on the basis of views, objectives and lines of the Party and the State on the issues of economics, politics, culture and society The dissertation used a combination of different research methods, including the method of researching social science and humanities in general and the method of scientific law research for each specific content to achieve the desired goals The new contributions of the dissertation The dissertation was the first scientific work at the level of doctoral dissertation studying comprehensively and systematically the theoretical and practical issues of interpretation of civil contract in Vietnam The dissertation had some new contributions as follows: The first, the dissertation systematically built the theoretical issues of contract interpretation, including building a concept of the contract interpretation, identifying the legal nature of the contract interpretation and discriminating the contract interpretation with other related activities, determining the neccesity of the contract interpretation, the subject of the contract interpretation, the scope of the contract interpretation, the principle of the contract interpretation and the legal consequences of the contract interpretation The second, the dissertation analyzed and evaluated objectively and comprehensively the bases of the contract interpretation in accordance with current Vietnamese laws and practical interpretation of civil contract in Vietnam Specifically, the dissertation concentrated on analyzing the basis of the contract interpretation comparing with the reality of the contract interpretation through a number of typical judgments and decisions Since then, the dissertation pointed out inadequacies in the interpretation of contract in Vietnamese law and offered orientations to apply the bases of the contract interpretation in Vietnam The third, the dissertation analyzed both theories on the contract interpretation in the world and modern views on the contract interpretation of international countries The fourth, the dissertation also pointed out the bases of the contract interpretation which need to be supplimented to the law on contract interpretation of Vietnam on the basis of acquiring foreign laws, as well as compliance with the theories and realities of the contract interpretation in Vietnam The fifth, on the basis of pointing out the shortcomings that need to be overcome in the regimes of the contract interpretation in Vietnam, the dissertation has proposed solutions to improve the Vietnamese law on the contract interpretation, including proposals on the changing position of the contract interpretation regimes in Civil Code of Vietnam, proposals on the order of application of the bases for contract interpretation in Vietnam and proposals on constructing the regimes of the contract interpretation in the Civil Code which composing 16 Articles stipulating cases of interpretation of contract, principles of contract interpretation, bases of contract interpretation and legal consequences of uninterpretd contract cases The last, the dissertation proposed solutions to improve the effectiveness of the application of law on the contract interpretation of Vietnam, including two groups of solutions: solutions for subjects interpreting the contract and solutions for parties in the contract Theoretical and practical meanings of the dissertation The first, the dissertation has a scientific contribution in providing a system of theoretical and practical issues on the interpretation of contracts From which, a lawmakers have a basis to study and reflect them into the provisions of law At the same time, it is also the basis for competent subjects understanding the base of contract interpretation to effectively perform the contract interpretation The second, the dissertation has a significant meaning in completing the current contract law in Vietnam in order to meet the requirements of the market economy in the period of globalization The third, the dissertation is also a reference source for lawyers in researching, applying or teaching contract law in research, training and teaching law institutions Structure of the dissertation In addition to the introduction, overview of the research, conclusion, references, the content of the dissertation consists of chapters B OVERVIEW OF STUDIES RELATED TO RESEARCH TOPIC Overview of studies related to the research topic 1.1 Overview of studies related to theoretical issues of contract 1.1.1 International Researches Contract is always one of the most important legal regimes of the private legal system in any country Up to now, there are a lot of legal works researching the contracts in the world In general, these researches concentrated on studying a general study of contracts or an in-depth aspect of contracts and are considered as a theoretical foundation for the dissertation to study the contract interpretation 1.1.2 Domestic Researches The scientific researches on the contracts in Vietnam so far have a very large number in comparision with other researches on legal science Each period of development history of contract regime in Vietnam, there are many typical researches, especially from the mid-90s of the twentieth century, the regime of contracts had a significant role, so the researches on contracts in Vietnam increased very fast in terms of quantity and research content 1.2 Researches on the contract interpretation 1.2.1 International Researches Regarding the interpretation of contract, there are many scientific researches in foreign countries, namely some typical reseaches: monographs: “Толкование права и договора” written by Черданщев А Ф., Yuniti – daha, Москва, in 2003; “Введение в cравнительное правоведение в сфере частного права”, Международные отношения, Москва, 1998 by Konard Zweigert Hein Kotz, translated into Russian; “Толкование договора судом”, проспест, Москва, 2008 of Сошуро Л В; “Толькование гражданско – правового договора: проблемы теории и практики., Научная Мысль, Москва, 2014, by Степанюк Н В; “Elements of contract interpretation” by Steven J Burton, Oxford Publisher, 2009; The Interpretation of Contracts, Lewison K., Sweet and Maxwell, London, 2011; “Толькование договора” by Жученко С П In the book «Практика применения общих положений об обязательствах», Status, Москва, 2011, doctoral thesis, “Толкование договора как вид юридического толкования” by Березина Е А., National Law Academy Uran, Ekateburg, 2001; Doctoral thesis “Толькование гражданско – правового договора” of Степанюк Н В., in 2008 1.2.2 Domestic Researches At the general level, there are some researches such as: Monograph: "Vietnam 's jurisprudence law" by Dr Vu Van Mau, Ministry of National Education Publishing, Saigon, 1963, "Law on contracts", National Political Publishing House, Hanoi, 1995 by Dr Nguyen Manh Bach; "The regime of contracts in Vietnamese Civil Code" by author Nguyen Ngoc Khanh, Justice Publishing House, 2007; "Vietnamese contract law: judgment and commentary", Episode 2, by Assoc Prof Dr Do Van Dai, Hanoi National Political Publishing House, 2014; textbook "Contract Law - General Part", Hanoi National University Publishing House, 2013 by author Assoc.Prof Dr Ngo Huy Cuong; textbook “Law on contracts and liability for compensation”, Ho Chi Minh City University of Law, Hong Duc Publishing House, 2014 Regarding the articles, there are: "Interpretation of civil contracts: Foreign comparison and Article 408 of Civil Code" by Dr Nguyen Ngoc Khanh, Journal of Legislative Studies, No 10/2004; "Discussing the regime of the contract interpretation in the Draft of Civil Code (amended)", State and Law Journal, March 2015 by two authors Assoc.Prof Dr Ha Thi Mai Hien and Ma Ha Thi Thuy; "The regime of interpreting civil transactions in the draft of Civil Code (amended)", by Assoc Prof Dr Nguyen Quoc Suu, Electronic Communist Review, March 23, 2015; The presentation "The regime of contracting in the draft of Civil Code 2005 (amended)” of Dr Nguyen Bich Thao at the workshop "Assigning assets, obligations and contracts in the draft of Civil Code (amended)" coordinated by Hanoi National University Evaluate the research results of scientific researches related to the dissertation In international aspect, there are a number of elaborate researches on the contract interpretation, but studying the law regulation and practices of foreign countries In Vietnam, there are a lot of researches related to contract in general, but not researching the theoretical and practical issues of the contract interpretation in Vietnam However, these domestic and foreign researches have studied several aspects of teh contract interpretation in Vietnam The evaluation of these researches provides the author with an overview of the research situation related to the topic, then, giving the research orientation to the topic Research orientation of the dissertation 3.1 Issues the dissertation continues to acquire and develop On the basis of research and evaluation of researches related to the topic, the dissertation acquired and continued to develop the issues: the first is the basic theory of the contract interpretation that have been developed by scientists; the second is the theory of the contract interpretation which was built by lawyers from the time of Rome, such as the will theory, the doctrine of expressing will and the doctrine of the middle; The third is the results of researches on the contract interpretation regime of some countries in the world; the last is that the dissertation continued to use traditional research methods in legal science that other scholars used 3.2 New orientations of the dissertation The hypothesis set out in the dissertation is: Firstly, the regime of the contract interpretation in Civil Code 2015 has not been built on a solid and systematic basis Secondly, the reality of the contract interpretation of competent subject got many difficulties, and there have not been yet a solid legal basis due to inadequate principles and interpretations of contracts in the Civil Code; some interpretations are not feasible and suitable with the practice of the contract interpretation in Vietnam The research orientation of the dissertation are: Firstly, building a rationale for development of the regime of the contract interpretation and for the interpretation of contract of the competent subject in Vietnam Secondly, analyzing the principles and basis of the interpretation of contracts in current Vietnamese laws and the practice of the contract interpretation in Vietnam, indicating the rational and irrational points of the principles and bases in accordance with theoretical and verifiable basis Thirdly, studying the views on contract interpretation of countries in the world to apply, study and propose some additional interpretations of the contract on the regime of the contract interpretation in Vietnam Finally, on the basis of the theoretical, practical and personal views of the researcher, the dissertation proposes recommendations to improve the law on contract interpretation in Vietnam and the effect of the contract interpretation in Vietnam today Conclusion The study of the contract interpretation has been concerned and mentioned in different aspects and scopes However, there has not been an intensive, comprehensive and systematic research about 11 subject, the basis and the principles of the interpretation or adjustment of the contract 1.4 Competent subjects interpret the contract The contract must be interpreted when the parties to the contract not agree on how to understand a certain content or clause of the contract, resulting in a dispute So the nature of the dispute on contract interpretation is a kind of contract dispute Therefore, the competent subject with the authority to interpret the contract is the Court or the arbitration The interpretation of the contract by the parties themselves is not a proper interpretation because the parties are not bound to interpret under any mandatory process, rule, or base As a result of this interpretation, the parties may make new provisions for the contract, or change some terms in the original contract 1.5 Scope of the contract interpretation The scope of the contract interpretation will be determined in the following cases: Firstly, resolving a contract dispute in which contains unclear contents and terms leads to the parties' disagreement on how to understand the contract This is considered as interpreting the content of the contract The competent subject will have to perform the contract interpretation even if the parties not require an interpretation, but the terms of the contract are unclear, and the interpretation is necessary to resolve contract disputes Secondly, the contract interpretation is to determine the nature of the contract that has been concluded, even if the contract is named by the parties - an interpretation of the identity 1.6 Principles of the contract interpretation 1.6.1 The principle of interpretation respects the will of the parties rather than the words of the contract 1.6.2 The principle of interpretation must not alter the content of the contract 1.6.3 The principle of interpretation in the direction of priority makes the contract effectively 1.6.4 The principle of interpretation in a fair and reasonable way 1.6.5 The principle of interpretation in a way that benefits the 12 contractor of a sample contract 1.7 Legal consequences of the contract interpretation The interpretation of the contract is that the subject has the authority to clarify the unclear content of the contract based on rules and legal grounds The nature of the contract interpretation is that the competent subject is to resolve the contract dispute when the parties in the contract cannot agree on how to understand one or some of the contents of the contract Therefore, the result of the contract interpretation is a judgment or decision of the jurisdiction The judgment or decision of a competent subject has the mandatory value for the parties Conclusion of chapter Chapter of the dissertation has built a system of theoretical issues about the interpretation of the contracts to identify the contract interpretation, distinguishing the contract interpretation with other legal issues, determining reasons, cases, scope, subject as well as the principles of the contract interpretation The research results in chapter will create a basis for researching and evaluating the provisions of law on interpretation of contracts and a theoretical foundation for the dissertation to propose solutions to improve the law on interpretation of contracts in Vietnam CHAPTER 2: THE BASIS OF THE CONTRACT INTERPRETATION IN ACCORDANCE WITH VIETNAMESE LAWS AND REALITY OF THE CONTRACT INTERPRETATION IN VIETNAM 2.1 Concept of the basis of the contract interpretation Interpreting the contract is a work In order to interpret the contract, competent subjects must be used tools to interpret It is possible to understand that the basis of the contract interpretation are tools or factors that the subjects use to interpret the contract The basis of the contract interpretation is different from the principle of contract interpretation If the basis of the contract interpretation is the explanatory instrument of the competent subject, the principle of the 13 contract interpretation is the way to use that tool The regime of the contract interpretation stipulates the bases for interpreting the contract to create a legal basis for the competent subject to perform the interpretation work The interpretation principles will guide the interpretation activities, thereby ensuring the objectivity, accuracy, and suitablity of the interpretation 2.2 The contract interpretation based on will and expression of will Viet Nam's contract interpretation regime is based on the doctrine of middle-mindedness - the doctrine of harmony between willpower theory and the doctrine of expressing will Therefore, the will and expression of will are the bases to interpret the contract The reality of interpreting the contract of Vietnam, the interpreting subject still interprets the contract based on both will and expressing will However, clause of Article 404 of the Civil Code 2015, when providing this interpretation base, still exists some shortcomings: Firstly, the way specified in Clause 1, Article 404 of the Civil Code 2015, leads to the interpretation by the subject when the award is appropriate It is difficult to distinguish the common will of the parties in the contract as a basis to interpret the contract or the purpose of the contract interpretation Secondly, Item 1, Article 404 of the Civil Code does not specify the expression of will will also be a basis for interpretation of the contract 2.3 The contract interpretation based on purpose and nature of the contract According to Vietnamese lawmakers, "The purpose of a contract is legitimate interests which the parties wish to achieve at the time when they enter into a contract." (Article 118 Civil Code 2015) The purpose of the contract is always a legal issue The purpose of the contract is different from the motive of the contract Nature of the contract is the internal characteristics of the contract to distinguish this contract with another The purpose and nature of the contract are basis for interpretation of the contract In reality of the contract interpretation , the purpose of the contract is considered as a basis for interpreting 14 the content of the contract Meanwhile, the nature of the contract is considered as a basis for interpreting the contract identifier 2.4 The contract interpretation based on will of parties before entering a contract (pre-contract information) Pre-contract period is the period starting from the time a party makes a negotiated offer Paragraph 1, Article 404 of Civil Code 2015 allows the use of all acts containing the will of the parties before entering a contract as a basis for interpretation of the contract In the process of applying the pre-contract information, the competent subjects of the contract interpretation are only focus on information showing their final will during the negotiation process of the contract In the process of interpreting the contract, one or more parties have the right to cite the pre-contract information as a basis for interpreting the contract However, which party citing, they must prove that it is the final will of parties If the general will of the parties cannot be determined, the party citing the pre-contract information needs to prove that with such information how an ordinary person in the same situation understand to determine the content of the contract 2.5 The contract interpretation based on customs Not all customs are considered a source of law and are used as a basis for interpretation of contracts A custom to be considered as a basis for interpreting a contract if it satisfies the following conditions: Firstly, customs must have clear content to clarify the unclear content of the contract Secondly, customs must be formed and repeated many times in a long period Thirdly, customs must be recognized and widely applied in a community of people or a civil field Fourthly, customs is not contrary to the basic principles of civil law Customs is differ from manner, habit, and behavior Current Vietnamese law only states that customs is a basis for interpreting contracts without recognizing habits (or practices), manner, or behavior to interpret contracts However, in the trial practice of the Court, the Court still leads the practice as a basis to interpret the contract If there is a conflict between different types of customs, a 15 common customs, or customs that the parties know or are forced to know in the smallest area is used to interpret contracts to create equality between the ethnic groups as well as localities and also to ensure the principle of goodwill of law on contrac If there is a contradiction between parties, the custom at the place of contract signing will be used as a basis for interpretation of the contract Contracting place is the place of residence or office of the party who made the first contract proposal, unless otherwise agreed by the parties 2.6 The contract interpretation based on correlation between the terms of the contract It is reasonable to interpret contracts based on the correlation between the terms of the contract, due to the systematic nature of the contract And the fact of contract interpretation in the Court is not uncommon in case the Court interprets the contract based on the relationship between the terms of the contract to interpret In principle, the terms of the contract all have the same role in the contract, regardless of the order in which they appear in the contract, unless the parties agree on that priority hierarchy in the contract Therefore there is no priority order in determining the terms used as a basis for the contract interpretation However, the use of interpretation bases needs to be in conformity with the principles of contract interpretation, and usually the specific provisions are preferred over the general nature of the terms If there is a contradiction between the amendment and addition of the contract, the interpretation rule is that the legal contract showing the final will of the parties will be prioritized for use as a basis of interpreting the contract 2.7 The contract interpretation based on interests of the party in a weak position In the interpretation of the contract, Vietnamese law is based on the interpretation in favor of the party accepting the contract according to the form in Clause of Article 404 of Civil Code 2015 The reality of interpretation of contracts in Vietnam is not difficult to find ruling to interpret the contract in a way that benefits the party in a weak position However, the provisions on interpretation of 16 contracts based on the interests of the party in a weak position still exist some unreasonable points: Firstly, Civil Code 2015 uses the term "editor" is unreasonable Secondly, there is a contradiction between Clause of Article 404 and Clause of Article 405, Clause of Article 406 of Civil Code 2015 Thirdly, Civil Code 2015 has not yet provided a way to interpret the contract in the case of a contract using a sample term which conflicts with the terms negotiated by the parties themselves Finally, the practice of interpreting the current contract in court, the scope of the party in a weak position is determined quite broadly, not only includes the party accepting the model contract but also the buyer in the contract, insurance buyers in insurance contracts, consumers in consumer contracts, etc Conclusion of Chapter Chapter of the dissertation analyzed and evaluated objectively and comprehensively the current legal regulations on interpretation of contracts and practices of contract interpretation in Vietnam to point out reasonable and unreasonable points of law on contract interpretation in Vietnam today The research results in Chapter showed that the law on interpretation of contracts under Civil Code 2015 has more progressive points than Civil Code 2005 but there are still many unreasonable points These research results are the basis for the author to propose some solutions to improve the law on contract interpretation in Vietnam CHAPTER 3: MODERN VIEWPOINTS ON THE BASIS OF INTERPRETATION OF CONTRACTS AND THE SUPPLEMENT SOME BASES OF CONTRACT INTERPRETATION INTO VIETNAMESE LAW 3.1 Modern viewpoints on the basis of contract interpretation are used by some countries Laws of countries have two tendencies to build a regime of contract interpretation: under an objective point of view and a subjective point of view The tendency of a subjective point of view interprets contract base on the true common will of the parties in the contract The 17 objective trend interprets the contract base on the understanding of an ordinary person in the same situation as the parties in the contract are interpreted However, currently laws of these countries have a combination of subjective and objective interpretations trend 3.2 The necessity of supplement the bases of contract interpretation The necessity of supplement the basis for interpretation of contracts starts from the following reasons: Firstly, the grounds for interpreting contracts under current law are incomplete Secondly, in many cases, the interpretation of the competent subject is lack of a legal basis due to a lack of interpreting grounds Thirdly, the contract base list is a closed list so the competent subject does not promote activeness Meanwhile, the demand for interpretation of contracts is increasing with the increase in the number of contracts signed and the complexity of these contracts 3.3 The bases for interpretation of contracts may be considered and supplemented into the legal regime on contract interpretation of Vietnam 3.3.1 Interpretation of contracts based on actual circumstances at the time of contract signing The supplement of a basis for interpreting contract comes from the fact that each contract always exists in connection with a certain situation Based on the actual circumstances at the time of entering into and performing the contract, it is possible to determine the will of the parties in that contract On the other hand, court practice when interpreting contracts is also often based on actual circumstances at the time of contract conclusion, but this interpretation has no legal basis Laws of a country in the world also stipulate the interpretation of contracts based on these external factors 3.3.2 Interpretation of contracts based on bahavior of parties after contracting Behavior of a party is an expression of the party's will to the content of the contract Therefore, the law of many countries around the world stipulating the conduct of the parties after the contract is concluded is the basis for explanation of the contract The behavior 18 of the parties after the contract is used as a basis for explanation of the contract may be the behavior expressed in the form of actions, for example tax payment or declaration of procedures receiving land use rights, acts of establishing transactions related to property are subject to the contract, but can also be expressed in the form of inaction, for example acts against objectionable use by the other party use of property, no objection to the other party's tax payment or declaration of procedures for registration of ownership of property, etc 3.3.3 Interpretation of contracts based on habits formed between the parties Civil Code 2015 does not recognize the habit formed between the parties as a basis for interpretation of a contract However, laws of many countries recognize the habit formed between the parties as a basis for interpretation of the contract, for example the Russian Federal Civil Code or the UNIDROIT Code of Conduct on international trade contracts In fact in Vietnam, the court used the habit formed between the parties to interpret the contract However, the application of the basis for interpreting this contract has no legal basis The habit to be used as a basis for interpretation of contracts must meet the following conditions: First, the habit must be a clear and existent rule Second, the habit must be formed on the basis of the consent of the parties in the same type of contract Third, the habits must be repeated for a long period between parties in previous contracts Fourth, that habit must not be contrary to the basic principles of Civil Code Conclusion of Chapter Chapter of the dissertation studied two different viewpoints on the contract interpretation are subjective and objective viewpoints, assessing the pros and cons of each point of view to determine the point of interpretation of contracts in Vietnam It is necessary to add the bases to interpret the contract to the contract interpretation regime Chapter suggests the bases for interpretation of contracts may be added to Vietnamese contract interpretation regime CHAPTER 4: RECOMMENDATIONS TO IMPROVE 19 VIETNAMESE LAW ON CONTRACT INTERPRETATION AND THE EFFICIENCY OF APPLICATION OF LAW ON CONTRACT INTERPRETATION 4.1 Inadequacies need to be overcome in Vietnamese contract interpretation regime Firstly, inadequacies of the correlation between the general provisions on interpretation of civil transaction and specific provisions on contract interpretation Secondly, Civil Code 2015 stipulates cases of interpretations corresponding to explanatory grounds that lead to duplication and problems of determining the priority order of bases Thirdly, Civil Code 2015 has not yet made clear the principles of contract interpretation Fourthly, the bases for contract interpretation listed in Civil Code are still incomplete Fifthly, the provisions on interpretation of contracts in the direction of disadvantage for the drafting party are not reasonable Sixthly, it has not solved the problem of determining the priority order to apply the bases for interpretation of contracts Seventh, it is necessary to interpret the contract when the words and expressions are clear or not Eightly, there are no legal consequences of uninterpreted contracts 4.2 Proposals on the arrangement of contract interpretation in Civil Code The regime of contract interpretation should be arranged into two specified groups, the first is the general provisions in the law on interpretation of civil transactions, the second is specific provisions in the General provisions of contracts In order to complete the regime of contract interpretation, it is necessary to arrange the contract interpretation regime into a subsection in Section 7, Chapter XV, the General Regulations in Part Three of Obligations and Contracts to specifies the competent subject has an authority to interpret contracts, principles and basis for interpretation of contracts This subsection is arranged immediately after the sub-section on 20 contracting When interpreting contracts, the group of subjective basis should be prioritized first, then to the objective base group and finally the internal base group of the contract However, this division is only relative Therefore, for each base of the contract interpretation, the competent subject need to consider all relevant evidence and facts Each evidence should be considered in an assessment that is consistent with the various grounds of contract interpretation to find a reasonable interpretation for the contract interpretation dispute 4.3 Specific recommendations to improve Civil Code 2015 provisions on the contract interpretation Subsection … - Interpretation of contracts Article 404.1 – Interpretation of contracts When the contract contains unclear or conflicting contents that the parties cannot agree on understanding the contract, it is necessary to interpret the contract The interpretation of the contract must be based on the grounds set forth from Articles 404.3 to 404.15 of this Code and other relevant regulations Article 404.2 – Competent subject of interpretation of contracts The competent subject to interpret the contract is a court or commercial arbitration Article 404.3 – Principles of interpretation of contracts If the contract has unclear contents or terms, the interpretation of contract must be based on the common will of the parties rather than the literal meaning of the words and expressions Do not interpret the contract to distort the content of the contract that has been concluded between the parties Terms of the contract must be interpreted to make all provisions have more effective than making one or more terms of the contract ineffective In case the contract is prepared in multiple versions, each version is in a different language, and these versions are equal validity, the interpretation based on the original version is prioritized Article 404.4 - Interpretation of contracts based on common will of parties The contract must first be interpreted based on the true 21 common will of the parties If there is a conflict between the mutual will of the parties and words and expressions of the contract, the contract must be interpreted based on the true common will of the parties Article 404.5 - Interpretation of contracts based on precontract information When interpreting contracts, it is necessary to base on precontract exchange information, including exchange letters, results of preliminary negotiations, and other similar evidences Article 404.6 - Interpretation of contracts based on behavior of the parties in implimenting contract The contract should be interpreted in accordance with the behavior of the parties in the process of contract performance Article 404.7 - Interpretation of contracts based on habits formed between the parties If there is a habit formed between the parties, the interpretation of the contract is based on those habits Article 404.8 - Interpretation of contracts based on customs The contract can be interpreted based on the custom at the contracting place Article 404.9 - Interpretation of contracts based on actual circumstances at the time of contracting The contract is interpreted in accordance with the actual circumstances at the time of contracting Article 404.10 - Interpretation of contracts based on other provisions of the contract Terms of the contract must be interpreted in relation to each other, and be consistent with the content and meaning of the entire contract If there is a contradiction between the main contract and the amendments and supplements to the contract, the contract is interpreted according to the meaning of the contract amendment and supplement Article 404.11 - Interpretation of contracts based on legal purpose and legal nature of the contract When interpreting a contract, it must be based on the legal purpose and legal nature of the contract Article 404.12 - Interpretation of contracts based on the 22 usual meaning of words and expressions used in contracts The contract is interpreted based on the usual meaning of words and expressions used by the parties in the contract Article 404.13 - Interpretation of contracts based on the nature of the model contract and general transaction conditions In case of a model contract, general transaction conditions with unclear content or terms, the interpretation must be in a direction that is detrimental to the party making the model contract and general transaction conditions Article 404.14 - Interpretation of contracts based on international practice International trade contracts are interpreted based on international practices Article 404.15 – Other bases on interpretation of contracts One or more parties may cite the grounds for interpreting other contracts but the party must prove that is the common will of the parties Article 404.16 - Resolving consequences in case the contract cannot be interpreted In case the contracts are not interpreted: a) If the uninterpreted clause is a basic clause, the contract is not yet concluded; b) If the uninterpreted clause is a non-basic clause, the corresponding provisions of law apply Subjects with errors that make the contract unexplainable must compensate for damage, if any Determining the subject with an error that makes the contract unexplainable is defined as follows: a) If the contract cannot be explained as a mutual agreement, each party has the same error; b) If the unexplained contract is a model contract, the contractgiving party is the one with the error Abandoning paragraph of Article 405 on explanation of model contracts because this content has been stipulated in Article 404 on explanation of contracts Supplement regulations on the interpretation of general trading 23 conditions in the direction of disadvantage for the party that gives general trading conditions, which are beneficial for the counterparty In addition, it is necessary to supplement the case when the general transaction conditions and terms agreed by the parties must be based on the terms agreed by the parties to explain the contract 4.4 Solutions to improve the effectiveness of the application of legal provisions on the contract interpretation 4.4.1 For the interpreting subject - Combining methods of interpretation; - Applying accurate and reasonable bases and explanatory principles; - Actively and flexibly applying the interpretation bases; - Only considering the facts without distorting the content of the contract 4.4.2 For the parties in the contract - Drafting the contract clearly - Interpreting contract in case of using unclear terms - Improving legal knowledge - Regulating the grounds for interpretation for their own contracts - Keeping and providing evidence and prove in accordance with legal basis Conclusion of chapter On the basis of analyzing the inadequacies of Vietnamese law on contract interpretation, Chapter of the dissertation has proposed solutions to improve Vietnamese law on contract interpretation in terms of location, structure and content of relevant legal provisions in Civil Code However, the interpretation of contract requires the initiative and flexibility of the subject in the interpretation process Therefore, the interpretation subject needs to apply properly and flexibly, and combine methods of interpretations as well as interpretation principles D CONCLUSION OF THE DISSERTATION 24 The regime of contract interpretation is an important legal regime in law on contracts in particular and Civil Law in general The dissertation focuses on building and systematizing general theoretical issues on interpretation of contracts, legal status on contract interpretation, viewpoints on contract interpretation and making recommendations to improve law on interpretation of contracts In terms of theory, on the basis of analyzing the reasons for interpretation of contracts, cases of the contract interpretation, the dissertation clarifies the concept of contract interpretation in relation to other similar legal activities in the field of civil law From which determining the relevant legal issues in determining the subject of interpretation, scope of interpretation, principle of contract interpretation In terms of the law, the dissertation focuses on analyzing and clarifying contents as well as inadequacies on the grounds for interpretation of contracts according to current law In order to make specific recommendations to improve the law on contract interpretation, the dissertation also studies modern viewpoints on interpretation of contracts, thereby proposing some additional interpretations of contracts and finals, giving a view on the arrangement of the regime to interpret the contract and rebuilding the regime to interpret the contract in a more complete and systematic way Disputes on interpretation of contracts are now very popular, requiring the subject to interpret as well as the parties in the contract to understand not only the current legal provisions on interpretation of contracts but also to firmly grasp the rationale of contract interpretation The application of the provisions of the law on interpretation of contracts requires a great deal of initiative and creativity of the subject to interpret to avoid using too rigid or too arbitrary bases of interpretation In particular, for the parties in the contractual relationship, when entering into a contract, it is necessary to anticipate risks as well as to provide solutions to prevent risks, including the risk of developing an appropriate dispute Thus, the contractual relationship will form and operate in a stable, efficient way and benefit for the parties themselves CANDIDATE’S PUBLICATIONS RELATED TO THE CONTENT OF THE DISSERTATION Assoc.Prof Dr Ha Thi Mai Hien, Ha Thi Thuy, Discussing the regime of contract interpretation in the Draft of Civil Code (amended), State and Law Journal, (323), p 42 - 48, followed by p.55; Ha Thi Thuy, Theories of interpretation of contracts in the world and the application of the contract interpretation regime in Vietnam, Democracy and Law Journal, No (303), June 2017, p 11 –16 Ha Thi Thuy, Interpretation of model contracts, General transaction conditions - Some inadequacies and complete solutions, Jurisprudence Journal, No 10 (209) October 2017, p 48 - 57 Ha Thi Thuy, Comment on the regime of contract interpretation in Civil Code 2015, State and Law Journal, No (357) 2018, p 23 31 ... systematized the theoretical issues of contract interpretation, studied the status of Vietnamese law on the interpretation of contracts and practice of the contract interpretation in Vietnam as well... Vietnam, including Commercial Law and Consumer Protection Law - Practice of the contract interpretation in Vietnam Scope of the research: The dissertation concentrated on researching the theoretical,... the theoretical and practical issues of interpretation of civil contract in Vietnam The dissertation had some new contributions as follows: The first, the dissertation systematically built the theoretical