GRADUATION THESIS FOR BACHELOR DEGREE IN LAW MAJOR BUSINESS LAW

1 MINISTRY OF EDUCATION AND TRAINING UNIVERSITY OF ECONOMICS HO CHI MINH CITY SCHOOL OF LAW NGUYEN HANH NGUYEN LEGAL ISSUES IN E-CONTRACTS: OF VIETNAM A CASE GRADUATION THESIS FOR BACHELOR DEGREE IN LAW MAJOR BUSINESS LAW HO CHI MINH CITY - 2017 MINISTRY OF EDUCATION AND TRAINING UNIVERSITY OF ECONOMICS HO CHI MINH CITY SCHOOL OF LAW NGUYEN HANH NGUYEN LEGAL ISSUES IN E-CONTRACTS: CASE OF VIETNAM A GRADUATION THESIS FOR BACHELOR DEGREE IN LAW Major Business Law – Code 52380101 Supervisor: Dr.Tran Van Long HO CHI MINH CITY - 2017 ACKNOWLEDGEMENTS  First of all, with an intense reverence, I would like to thank the School of Law, University of Economics, HCMC for affording me the un-imaginable opportunity to complete my study here, despite all challenges which had frustrated all my efforts And I will not forget to thank Dr.Tran Van Long, my supervisor, for guiding and helping me finish this paper Without his guidance and understanding, I wouldn’t have made it this far, especially with my dissertation In addition, I am extremely thankful to all the authors whose works I have consulted and quoted in this thesis I also express my thankfulness to all the members of my class for their kind support and encouragement Since this work could not have been completed without the guidance, assistance, and support from various quarters, I sincerely thank to all those who helped me in the completion of this thesis Thank you! DECLARATION  I hereby declare that this thesis entitled, ‘Legal issues in E-contract: A case ò Vietnam’, being submitted to School of Law, University of Economics, Ho Chi Minh city for Bachelor Degree in Law, is original and has not been submitted previously to this University or any other University/Institute for the award of any degree I also declare that any guidance for finishing this thesis is expressed in acknowledgements, and I have fully cited and referenced all materials and information that are not original to this paper as required by rules and conduct The researcher Nguyen Hanh Nguyen LIST OF FIGURES  Figure 1.2 – Process of contracting through websites Figure 2.1 – Submitting an order on odoo.com Figure 2.2 – Digital signature process LIST OF ABBREVIATION/ACRONYMS/CONSTRICTION  E-Commerce Electronic commerce E-Contract .Electronic contract E-Mail Electronic mail LOE Law on E-transaction 2005 UNCITRAL United Nations Commission on International Trade Law VECITA .Vietnam E-commerce and Information Technology Agency VECOM Vietnam E-commerce Association VNPTCA Vietnam Posts and Telecommunication Group Certification Authority TRƯỜNG ĐẠI HỌC KINH TẾ THÀNH PHỒ HỒ CHÍ MINH KHOA LUẬT -   - PHIẾU ĐÁNH GIÁ CỦA GIẢNG VIÊN HƯỚNG DẪN Sinh viên thực tập: NGUYỄN HẠNH NGUN MSSV:31121021673 Lớp: Luật kinh doanh Khóa: 39 Hệ: Chính quy Đơn vị thực tập: Công ty TNHH Việt liên kết Đề tài nghiên cứu: LEGAL ISSUES IN E-CONTRACTS : A CASE OF VIETNAM PHẦN ĐÁNH GIÁ KHÓA LUẬN Tiêu chí đánh giá A B C 10 11 Điểm trình Q trình (GVHD) Điểm hình thức khóa luận tài liệu tham khảo Hình thức khóa luận Tài liệu tham khảo Điểm nội dung khóa luận Tên đề tài - lý chọn đề tài – Tình hình nghiên cứu Mục tiêu câu hỏi nghiên cứu – kết cấu khóa luận Phương pháp phạm vi nghiên cứu Cơ sở lý luận lý thuyết nghiên cứu Thực trạng pháp luật Thực trạng thực tiễn thực pháp luật Nhận xét – Đánh giá – Đề xuất Phần kết luận Tổng điểm Điểm (Tối đa) Điểm đánh giá 0,5 0,5 0,5 0,5 0,5 1 0,5 10 Nhận xét & Kết luận GVHD Tp.HCM, ngày ……tháng … năm 2017 Người hướng dẫn viết khóa luận TRƯỜNG ĐẠI HỌC KINH TẾ THÀNH PHỒ HỒ CHÍ MINH 10 KHOA LUẬT -   - PHIẾU ĐÁNH GIÁ CỦA GIẢNG VIÊN CHẤM PHẢN BIỆN Sinh viên thực tập: NGUYỄN HẠNH NGUYÊN MSSV:31121021673 Lớp: Luật kinh doanh Khóa: 39 Hệ: Chính quy Đơn vị thực tập: Công ty TNHH Việt liên kết Đề tài nghiên cứu: LEGAL ISSUES IN E-CONTRACTS : A CASE OF VIETNAM PHẦN ĐÁNH GIÁ KHĨA LUẬN Tiêu chí đánh giá A B C 10 11 Điểm trình Quá trình (GVHD) Điểm hình thức khóa luận tài liệu tham khảo Hình thức khóa luận Tài liệu tham khảo Điểm nội dung khóa luận Tên đề tài - lý chọn đề tài – Tình hình nghiên cứu Mục tiêu câu hỏi nghiên cứu – kết cấu khóa luận Phương pháp phạm vi nghiên cứu Cơ sở lý luận lý thuyết nghiên cứu Thực trạng pháp luật Thực trạng thực tiễn thực pháp luật Nhận xét – Đánh giá – Đề xuất Phần kết luận Tổng điểm Điểm (Tối đa) Điểm đánh giá 0,5 0,5 0,5 0,5 0,5 1 0,5 10 Nhận xét & Kết luận GVPB Tp.HCM, ngày…… tháng … năm 2017 Người chấm phản biện 10 43 they can determine whether the choice of law may be suitable for solving their disputes Although, in Vietnam, there is no specific law regulated in international e-contracts, the recognition of the autonomy of the parties to choose the preferred applicable law is found in many current rules regarding international trade and conflict of laws Article about application of foreign laws of Commercial Law 2005 28 states that: ‘Parties to commercial transactions involving foreign elements may agree to apply foreign laws or international commercial practices ’ However, even as a exercise of freedom in contract, the free choice made by the parties of a foreign law as the law applicable to the contract will not pretend application of mandatory rules, which cannot be waived by any terms of an contract The contracting parties therefore cannot evade application of mandatory provisions that are naturally applied to the transaction because of its connection with related country, especially the law of the country where all of the elements of contract are placed Article of Decree No.52/2013/ND-CP states that Decree on E-Commerce applies to traders, organizations and individuals who are engaged in e-commerce activities in the territory of Vietnam, including: (i) (ii) (iii) Vietnamese traders, organizations and individuals; Foreign individuals residing in Vietnam; Foreign traders and organizations presenting in Vietnam through investment operation, establishment of branches and representative offices or websites with Vietnamese domain name It is also stated in Article of Commercial law 2005 that parties are not able to apply foreign law in such cases that provisions of foreign or international commercial laws are against to the fundamental principles of the Vietnamese law 28 Commercial Law issued on 15 Feb 2007, in force from 14 March 2007 [online source] http://www.moj.gov.vn/vbpq/en/lists/vn%20bn%20php%20lut/view_detail.aspx?itemid=4172 43 44 2.2.2.2 Law applicable to e-commerce in absence of agreement Despite the freedom of choice, the parties not always agree on the law applicable to the contract And the choice of law does not always express from the terms of the contract or the conditions of the case In that case, it is necessary to use a series of mandatory rules that will determine the applicable law However, to choose which law is applicable in the absence of agreement, it can be based on the kind of contracts which has been formed For instance, rules that are applied by reference to concept such as the place where a person resides or a place where the transaction has its closest connection These rules is stated in Civil Code 2015 that as following: (i) A contract for the sale of goods is governed by the law of the country where the seller resides or is established in term of sale (ii) contract;[Article 683(2)(a)] A services agreement is governed by the law of the country where the service provider resides or is established in term of service (iii) contract;[Article 683(2)(b)] A contract related to real estate is governed by the law of the country where the real estate is located [Article 683(2)(c)] But, in case of electronic contracts, the applicable law in the absence of agreement may be regulated by two rules stated below: (i) When dealing with a sale of goods, the applicable law will be that of the place of the country in which the seller resides or is (ii) established In such case the contracting parties are not able to determined the place of residence or establishment of the contracting party responsible for performing obligations, it is provided in Civil Code that the contract will be governed by‘the law of the country with which such contract closely associates shall apply’ As Internet is the place which knows no boundaries, application of different regulations may cause disputes between contracting parties In 44 45 such cases, traditional private national law rules on jurisdiction need to adapt or be replaced One of the deficiencies of Vietnamese regulations on electronic commerce is the lack of specific law on resolving disputes arising in international electronic contracts Contracting parties must use general commercial rules to apply on electronic contract in case of solving disputes between them As a general rule, the factor determining jurisdiction is the domicile of the defendant, regardless of its nationality This means that the plaintiff may sue its counterparty in the place of its domicile 2.3 Conclusion In this chapter, the researcher has dealt with those laws, rules and regulations, along with relevant provisions which have been made by Vietnam for governing e-contracts Concluding this chapter, the principles may be summarized as follows: General contractual principles which apply to traditional paper-based contracts can apply to electronic contracts There is no problem as to whether fundamental principles of contract law can be applicable in contracts made electronically However, not all principles will apply in the same way that they apply to traditional contracts This chapter also discusses about major legal issues that has to be addressed in electronic contracting, and the ways in which parties can allocate risks in the event of contract breach: (i) Authentication – parties mush be absolutely certain as to who (ii) they are dealing with when entering into a transaction Formation of legally binding obligations – this is to ensure that contracting parties can be bound in an binding and legally (iii) enforceable obligation in electronic transaction Security – this is crucial to encourage the use of electronic communications since if the users are not assured that their private information will be kept secure, they would have little confidence to enter into a contract 45 46 (iv) Jurisdiction – this is a major issue in cross-border transactions where different legal rules may apply to the same transactions From the foregoing discussion, it is quite evident that parties can use electronic signature, especially digital signature, to establish others’ identity and to prevent stealing private informations when join in an electronic transaction The parties can also avoid the conflict of laws by selecting the laws that would govern their legal obligations when negotiating their contract And, of course, comparison has also been made with those relevant provisions found in different laws Noticeably, the Vietnamese legal framework needs to be updated by issuing relevant laws to govern electronic commerce and electronic contracts, such as law on resolving disputes arising in international electronic contracts, law on electronic transactions involving foreign elements, and specific law on forming an electronic contract CHAPTER CONCLUSION AND SUGGESTIONS After presenting of the various aspects of e-contracts all through the different chapters of this research, in this chapter, the conclusion deduced from all the chapters is being demonstrated Then, the conclusion will be followed by some suggestions given by the researcher 3.1 Conclusion Chapter sketches out the current scenario of e-commerce in Vietnam and the significance of electronic contract Electronic contracts are 46 47 considered as the heart of development in e-commerce and electronic contracting may become the most common method of contracting However, when entering into an e-contract, there are many issues in relation to, such as ‘formation of e-contracts’, ‘legal validity of such contracts’, ‘general principles to e-contracts’, ‘jurisdictional issues relating to e-contracts’, etc These issues have induced me to pursue this research, in order to find the answers to them After providing a brief introduction to the topic, chapter outlines the ‘objectives of the study’, ‘limitation’ of the study, and ‘methodology’ used for the study The first chapter also concludes with a ‘literature review’ of some important research papers and articles Chapter deals with the general principles of e-contracts and the ways in which e-contracts can be formed In the modern world, electronic communication will change the traditional ways of contracting, and the electronic contract has to be valued in a similar manner as the handwritten contract All the tools of communication like the email, telephone or fax machine have been regulated under the laws and rules of contract Although e-contracts suffer different problems, not usually associated with hand-written contract, a contract formed in cyberspace and a contract formed in traditional way are equivalent in the eyes of law Chapter afterwards gives a brief view of the legal issues arising and how contracting parties create a binding obligation when entering into econtracts In this chapter, the researcher outlines the role and legal validity of electronic signature, especially digital signature Similar to the written signature, contracting parties are now using electronic signature to identify each other’s identities In addition to authentication, the conflict of laws in relation to transactions over the worldwide web seem to be controversial To eliminate conflict of laws, parties must ensure that they have inserted terms within the contract to deal with issues such as a choice of law, jurisdiction and other essential terms relating to the risks allocation 47 48 Chapter is the last chapter of this thesis In this chapter, this paper is demonstrating the conclusion drawn from all the previous chapters and also giving some suggestions and recommendations This chapter also provides the answer to various given research questions, how the existing Vietnamese laws have regulated and facilitated ecommerce, and have provided a legal framework for a smooth contract formation through electronic means Besides, this chapter also points out problems to which National Assembly should pay attention, and the chapter also gives some ideas on what is needed to improve upon the practice of electronic contracting for the future 3.2 Answers to the research questions As written above in chapter 1, there are several research questions which have to be answer through this paper At this juncture, I will summarize the answers to my research questions What is an e-contract? And what are the different ways that can be used to form e-contracts? An e-contract is a contract formed in electronic form, and is enacted, controlled, deployed by software system Theoretically, an e-contract is equivalent to traditional paper-based contract There are various ways to conclude an e-contract, as follows: i Contract formation through electronic communication (such as ii iii email, fax, telephone) Contract formation through electronic commerce sale websites Electronic contract can also be formed in other form through social media Whether or not an e-contract is a valid contract Article 11 of Law on E-transactions 2005 sets about the validity of econtracts It provides that ‘information in data messages shall not be declined its legal validity due to expression through electronic 48 49 communication methods’ Unless otherwise agreed by the parties, electronic contract shall not be denied legal effect, validity or enforceability merely because it is expressed in electronic form How contracting parties manage and coordinate the activities performed by different parties? It is evident that electronic contracts are valid contracts as they are legalized by the laws along with the decree, therefore, they could be made liable if there is any infringement with the terms and conditions An econtract is also managed in the same way like a contract concluded otherwise What are the statutes, regulations, etc in place regulating econtract? In Vietnam, an e-contract is governed primarily by the Law on Etransactions 2005 and Decree No.52/2013/ND-CP on E-Commerce Besides there, it has bearing with all those statutes and regulations with which any ordinary contract would have correlation, such as, Civil Code 2015, Commercial Law 2005, Decree No.26/2007/ND-CP, etc, for different purposes 3.3 Suggestions Nowadays, e-commerce and electronic communication is still regulated by the Law on E-transactions 2005 Since the communication is a very fastgrowing area, many definitions and concepts provided in this law become obsolesced Law on E-transactions 2005 was framed when there was no idea of the modern communications systems we have today Therefore, there is a need to empower the laws relating to electronic communications together with e-contract in order to complete the legal framework related to e-commerce Vietnamese current legal regime does not provide any specific laws on remedies and resolution of disputes arising from e-contract Decree No.52/2013/ND-CP only provides a provision about forms of resolution of 49 50 disputes that ‘disputes must be settled through negotiation between disputing parties, conciliation, arbitration or court according to current procedures and regulations on dispute settlement’, there is no specific provision on procedures for resolution by each form of disputes resolution or remedies application against breaches An important issue for contracting parties is to get their money back, or obtain compensation for their loss, so Vietnamese legislators should provide general e-contract laws which allow parties to seek remedies and know the legal consequences from a breach of contract In addition, attempts should be made to facilitate dispute resolution in e-commerce by providing specific law on forms of penalty, competence, order and procedure for resolving disputes.abc It is also mentioned in previous chapter that the question of jurisdiction is also very important as regards to e-contracts E-contracting raises the chances of businesses and individuals entering into electronic contracts by reducing geographical barriers between them However, this leads to a few issues Since countries tend to apply their own domestic laws on jurisdiction and application of laws, it will leads to the conflict of laws In such case of Vietnam, one suggestion would be to frame a law focusing on cross-border e-commerce transactions such as procedural aspects of econtracts , conditions to create a valid electronic contracts, application of laws and disputes resolution The government should also provide a portal for registration of customers from different countries and to make a complaint online The National Assembly should also take inspiration from the various international conventions and principles regarding contracts Particularly, the UNCITRAL model laws are very helpful in this regard Moreover, the success of e-commerce depends on the participation of governments in all economies The Government of Vietnam should enter into international co-operation agreements to approach to commercial environment of the participating countries By this way, Vietnam can promote the development of e-commerce by reducing jurisdictional barriers between participating countries 50 51 Lastly, this thesis has not provide a complete survey of all the aspects of electronic contracting because other relevant issues are beyond the range of this thesis There are many of issues which are not mentioned in this paper, such as customers protection, suppliers protection, payment, privacy, so on and so forth Therefore, I suggest that future research can further develop such ideas for better understanding of these aspects 3.4 The final observations On the whole, e-contracts may be governed essentially by the same traditional mandatory principles of contract law, but not all the principles will apply to electronic contracts in the same way that they apply to traditional contracts The previous chapters have addressed the differences presented in fundamental requirements of these contract formations by analysing the existing legal provisions Therefore, a separate and independent law on e-contracts would be necessary for regulating electronic contracts This thesis has also addressed the legal issues that arise in relation to econtracts from their formations and legal effect to a note on security protection in national and international transactions Since human is not infallible, it is not probable that all of legislative enactment can be flawless If cyberspace has been in its present form for a few decades, the legislators would not have to consolidate the laws relating to it Since cyberspace is a very dynamic and fast-changing environment, the legislators should have knowledge of the latest trends of cyberspace to empower the laws for regulating it The problems which it stands in the way to perfection will have to be dealt with calmly and carefully On that way, legislators will have learnt new lessons and to be aware of the new challenges to solve In the field of e-commerce and e-contracts, at the national level, an expert committee should be constituted to review all the laws related to various aspects of electronic contracts, and to make recommendations for 51 52 amendments in those laws so as to solve all the unsolved problems concerning e-contracts A lasting and effective e-commerce regulation can take place only by issuing suitable rules to regulate it Vietnamese legislators should appreciate that the development of cyberspace makes it imperative in the development of commerce Therefore, attempts in regulating it has to be urgent, only then can people achieve real regulation of e-commerce 52 53 REFERENCES A Legal documents: International legal documents: United Nations Commission on International Trade Law Model law Electronic Signatures in Global and National Commerce Act 2000 National legal documents: Civil Code 2015 Civil Procedure Code 2015 Commercial Law 2005 Law on E-transaction 2006 Decree No.26/2013/ND-CP detailing the implementation of the law on e-transactions of digital signatures and digital signature certification service Decree No.99/2011/ND-CP detailing and guiding a number of articles of the law on protection of consumer rights Decree No.106/2011/ND-CP amending and supplementing a number of articles of the government's decree no 26/2007/ndcp of february 15,2007, detailing the e-transaction law regarding 10 11 digital signatures and digital signature certification services Decree No.52/2013/ND-CP on E-commerce Decree No 170/2013/ND-CP amending and supplementing a number of articles of government’s decree no 26/2007/nd-cp dated february 15, 2007, detailing implementation of law on etransactions of digital signatures and digital signature certification service and government’s decree no 106/2011/ndcp dated november 23, 2011, amending and supplementing a number of articles of decree no 26/2007/nd-cp dated february 15, 2007 B Other materials: 53 54 English: Ravindra Kumar Singh 2015 Conception of contracts in the era of information technology a critical study and appraisal of the diverse aspects of the electronic contracts Gujarat University Ambika S.Patil 2015 Legal regulation of E contract In India an Indian perspective Gujarat University Praveen Gauravaram and Ernest Foo 2006 Security Issues in e- Contracting Japhet E Lawrence and Usman A Tar 2011 Barriers to ecommerce in developing countries Information, Society and Justice, Volume No Jeffrey Chan Wah Teck 2000 Legal issues in e-commerce and electronic contracting: The Singapore position Ayyappan Palanissamy 2013 Legal issues in e-Commerce and eContracting of initiatives in Malaysia International Journal of eEducation, e-Business, e-Management and e-Learning, Vol.3, No.2, April 2013 Andrew D.Murray 2002 Entering into contracts electronically: The Real W.W.W VECITA 2015 Vietnam E-Commerce Report 2015 Ministry of Industry and Trade VECITA 2014 Vietnam E-Commerce Report 2014 Ministry of 10 Industry and Trade Nuray Terziaa 2011 The impact of e-commerce on international 11 trade and employment Izwan Iskandar Ishak 2007 Going the dot com way The Edge 12 CyberSecurity Malaysia Thom Thi Mai Nguyen, Dzung Thi Thuy Nguyen 2012 E-Commerce in 13 AEC: Vietnam’s Regulatory Framework.Technology and Communications Samuil Angelov and Paul Grefen 2010 An Analysis of the B2B EContracting Domain - Paradigms and Required Technology Department of Technology Management, Eindhoven University of Technology 54 55 14 Samuil Angelov and Paul Grefen 2005 An Approach to the Construction of Flexible B2B E-Contracting Processes Computer 15 Science Dept University of Twente Paul Przemyslaw Polanski 2006 Convention on E-Contracting: The Rise of International Law of Electronic Commerce? Leon Kozminski 16 Academy of Entrepreneurship and Management, Poland Nguyen D.Linh 2006 Leon Kozminski Academy of Entrepreneurship 17 and Management, Poland Construction Innovation 2008 E-contracting – Security and Legal 18 issues Samtani Anil 2001 Leon Kozminski Academy of Entrepreneurship and Management, Poland International Journal of Law and 19 Information Technology Oxford University Press 2001 Sharon Christensen 2007 Formation of Contracts by Email – Is it 20 Just the Same as the Post? Avery Wiener Katz 2005 Is Electronic Contracting Different? 21 22 Contract Law in the Information Age Ivan John E.Uy 2008 Issues and doctrines on electronic contracting Taher Elgamal 2010 User Authentication In E-Commerce Available at: 23 http://www.darkreading.com/risk/user-authentication-in-e- commerce/d/d-id/1134457? Adam Fendelman 2016 What is MMS Picture Messaging? Definition of MMS Available at: https://www.lifewire.com/what-is-mmspicture-messaging-578671 Vietnamese: 24 Trần Văn Biên 2012 Hợp đồng điện tử theo pháp luật Viêt Nam Available at: http://luanan.nlv.gov.vn/luanan? 25 26 a=d&d=TTcFlGuwMOhC2012.1.3# Bùi Lê Duy 2016 Chữ ký điện tử vào đời sống Available at: http://www.pcworld.com.vn/articles/kinh-doanh/giaiphap/2016/04/1247997/chu-ky-dien-tu-dang-di-vao-doi-song/ Phương Quỳnh 2006 Thủ thuật rửa tiền Trần Quang Duy Việt Báo Available at: http://vietbao.vn/An-ninh-Phap-luat/Thu-thuatrua-tien-cua-Tran-Quang-Duy/70069711/218/ 55 56 27 Phương Dung 2016 Thương mại điện tử đặt mục tiêu 10 tỷ USD vào năm 2020 Available at: http://dantri.com.vn/kinhdoanh/thuong-mai-dien-tu-dat-muc-tieu-10-ty-usd-vao-nam-202020161029070529281.htm 56 57 57 ... relevant law in force 2.2 Creating binding and legally enforceable e-contracts E-contracts are an essential part of doing business in electronic and automated environment And, while entering into... is involved with the purchasing and selling of information, products and services through computers networks, usually, over the Internet It is a tool of businesses and individuals for transacting... University/Institute for the award of any degree I also declare that any guidance for finishing this thesis is expressed in acknowledgements, and I have fully cited and referenced all materials and information