Pháp luật ngày 09/05

Differences between international sales and domestic sales

1. Parties to the contract
2. Language in the sale contract
3. Movement of goods
4. Currency
5. Governing laws of the sale contract
6. Dispute settlement

I. Sources of law for contract of international sales of goods

1. International convention/ Treaty
- Definition: an agreement between countries governing a particular
matter.
- Bilateral Treaty (between 2 parties, countries)/ Multilateral Treaty
(signed among more than 2 parties, countries)
- Binding to the parties to contract?
+ Contracting members of Treaty
+ Not contracting members of a Treaty
United nation convention on contract for the international sales of goods
1980
- CISG 1980 (Công ước liên hợp quốc về hợp đồng mua bán hàng hóa qte)
- UNCITRAL (United Nation Commission in International Trade Law)
- More than 90 contracting members: America, Japan, China,...
- More than 2500 cases
Viena convention (CISG 1980)
- Consists of 101 articles
Reservation: vấn đề bảo lưu
Contractual issues excluded from the coverage of CISG
- CISG only deal with:
 The formation of the contract, and
 The remedies available to the buyer and seller
- CISG excluded questions about:
 The validity of the contract
 The capacity of the parties
 The rights of the third parties, and
 Liability for the death or personal injury
Appication of CSG:
Article 1 of CISG 1980
(1) This convention applies to contracts of sale of goods between
parties whose places of business are in different States:
(a) When the States are Contracting States; or
(b) When the rules of private international law lead to the
application of the law of a Contracting State.
Eg:
A contract signed between Seller (country A) and Buyer (country B)
Will the CISG apply to the contract if...?
a. Both country A and country B are members states of the CISG
b. Neither country A nor country B is member state of the CISG: it
depends bc 2 parties choose which law to be applicable law
c. Country A is a member state of the CISG whereas country B is
not a member state of the CISG: if they choose country B then
not applicable
=> Which case will CISG apply?
When will the treaty apply?
- When both parties come from contracting states of the treaty
- Choosen by both parties
- When parties agree to choose to the law of a contracting state of
the treaty to be applicable law.
- Choosen by Court/ Arbitration
How to apply treaty? (slide ảnh chụp lúc 8:15)
- For treaties
(Nếu có sự mâu thuẫn giữa luật và hợp đồng between 2 parties
 + Nếu tham gia k bảo lưu thì phải chấp nhận quy định của công ước
viên
+ Nếu tham gia có bảo lưu thì)

2. National law/ Domestic law:

When will national law apply?
- Chosen by the parties
(i) By the terms of the contract
(ii) By an appendix attached to the contract
- A Treaty or convention leads to the application of local law
- Chosen by courts or arbitration panels?
+ Laws of the most related or closely connected country
How to apply national law?
Rules on application of national law
- Specific law >< general law
=> When specific law conflicts with general law then specific law shall
prevail
Example: An international contract of sale stipulated that “ This contract
and any other matters arising out of this contract shall be gorverned by
Vietnamese law”
(Khi nói áp dụng luật VN trong hđ thì nghĩa là k áp dụng hết tất cả các
luật của VN mà chỉ áp dụng những luật có liên quan.)
Choice of the law clause:
- “This contract, and all questions realating to its information, validity,
interpretation or performance shall be governed by Vietnamese law”

3. Customary law/ Commercial practices

Requirements of a commercial practice
- An established and repeated practice
- Widely recognized in a region or worldwide
- Identifying the rights and obligations of the parties to contract.
When will customs apply?
- Chosen by the parties
- Governing convention leads to the application of customs
- Where the matters in questions are not addressed by laws nor agreed by
the parties.
How to choose applicable law?
- Law that is closely related to the contract
- Choose the law that protect your rights
- Choose the law that you know better
- Choose the law usually applied in business lines

Eg in the Singapore contract, which law is applicable to the contract?

Will be chosen by the court

11.05
II. Formation of contract
1. Fundamental principles of entering into contract
 Freedom of contract
Free to choose
 Voluntary agreement
All parties are willing to enter the contract without any force
 Equality
- All parties are equal
- If 1 party is acknowledge of the term then the contract will be invalid
 Honesty & good-faith
- The contract will be invalid if there is no honesty
- Good-faith in contract: support each other, create equality for each
other.
Eg: A did not answear the phone call from B => A is not in good-faith
since they create difficulty for the other side
2. Offer & acceptance in formation(chao hang va chap nhan chao
hang)
Offer
Definition of offer (Art 386 CC 2015): Offer to enter into a contract means
a clear expression by the offeror of its intention to enter into a contract
and to be bound by such offer made to another specific party or the public.
- An offer must be clear:
Eg: A-state agency announces a tender for the installation of a new
telephone network.
Case 1: A requires contractors to develop a technical and financial
proposal for the project.
Case 2: A specifies the technical proposal and states that it will accept a
tender that meet the technical requirements at the lowest price.
=> Which case is an offer?
To identify which case is an offer: Look at its intention
In case 1: A’s intention is not clear Case 2: A’s intetion is more clearer
that it have to meet the technical requirements.
=> case 2 is an offer.

Invitation to treat:
- The display of goods with a price tag attached in a shop window or on a
supermarket shelf.
- Advertisments, catalogues and brochures
- Company prospectuses
- Autions
- Tenders (dau thau)

Time-limt for effectiveness of offers

- The period of time within which the offeror is bound by his offer
(ng tra loi phai tra loi trong khoang tgian nay thi hop dong moi co tac
dung)
- The time-limit specified in the offer:
+ This offer is valid until 01/07/2009 or this offer is binding until
01/07//2009
+ This offer is valid in 30 days since the date of signature
+ This offer is binding within 30 days
- No specified time-limit: within a reasonable time?
- If the last day of the period falls on a n officials holiday?

Eg: A sent an offer to sell 1000MT steel to B, C, D. The offer is open for 7
days.
 After 9 days, B accepted the offer
 After 5 days, C accepted the offer
 After 3 days, D accepted the offer
Which contract has been established? Between A & D, A & C or A & B?
=> A & B: cannot since B accept the offer late
A &C:
When send an offer within a time-limit and all offer be accepted within
time-limit => create contract => if you cannot perform that offer then you
can be sued by the accepter
If A signed the contract with D and accept C but not perform contract with
C => A be sued by C.
The solution here can be that: after signing contract with D, A can close
the offer.

Withdraw/ Revoke an offer

Find relevant articles in Civil Code 2015 and CISG1980
1st March 2018: A send B an offer
7th March 2018: B received the offer
14th March 2018: B wrote and sent the letter of acceptance to A
  An offer can be withdraw prior to its reaching the offeree ( Art 15
CISG, Art 389 CC 2015)
 An offer can be revoked anytime before acceptance ( Art 16 CISG,
Art 390 CC 2015)

Ngày 16.05

Irrevocable offers:
- An offer cannot be revoked:
(a) If it indicates, whether by starting a fixed time for acceptance or
otherwise, that is irrevocable; or
(b) If it was reasonable for the offeree to rely on the offer as being irrevocable
and the offeree has acted in reliance on the offer.
(Art.16(2) CISG)

Termination of offer:
- By acceptance
- By rejection
- By modification/ withdraw/ revocation
- If the time limit of the offer has expired
(Art 391 CC 2015, Art 17 CISG)

Question:
On May 1 Seller delivered to Buyer an offer that stated: “I will hold this offer
open until June 1st”
On May 7th, Buyer delivered to Seller the following: “I cannot accept your
offer since the price is too high” but on May 10th he delivered to Seller the
following: “I hereby accept your offer of May 1st”
Is there a contract between them?
=> On May 7th the offer has already been terminated because of the rejection
from Buyer => There is no contract between them. (Art. 17 CISG)

Acceptance:
Definition:
- Acceptance of an offer to enter into a contract means a reply by the offeree
to the offeror accepting the entire contents of the offer. (Art 393 CC2015)
- A statement made by or other conduct of the offeree indicating assent to an
offer is an acceptance (Art. 18 CISG)
=> in CC2015 doesn’t mention the form of the acceptance whereas in CISG it
must be a statement. In CC2015, it accept ‘the entire contents’ while in CISG
doesn’t mention it.

- A contract comes into existance at the time the offer is accepted

- Form of acceptance:
+ Vnmese Commercial Law 2005? => In writing (Art.27)
+ CISG (Art. 18) => any kind
+ Does silence amount to acceptance? (Art. 18 CISG, Art. 393 CC 2015) =>
The silence shall not mean an acceptance of the offer to enter into the
contract.

Problem
On June 1st Seller sent Buyer an offer to sell a specifief type and quantity of
goods at a stated price, and added: “This is such an attractive offer tha I shall
assume that you accept unless I hear from you by June 15th”
Buyer did not reply
Seller shipped the goods on June 16th
=> No because there’s no acceptance (Art. 18 CISG, Art 393 CC 2015)

Silence
- The notification of receiving the offer is not sufficient to consitute an
acceptance.
- Silence or inaction is not acceptance
- Never state in the offer that if the offeree doesn’t reply, it shall be
considered as acceptance.
EX: I will consider that you accept my offer if I do not receive any
information from you.

Acceptance:
- Acceptance must be unconditional
 Mirror approach (CC 2015) => the offeree must accept the whole
content of the offer without any change or modification.
 Non – material modification approach (CISG Art.19) => Allow
modification unless it is non – material (Non-material Modification
means a change or amendment to the then current PRD other than a
Material Modification. Written agreement between the Parties that a
modification is a “Non-material Modification” hereunder as described
in Section 3.2 below shall be conclusive.)

What are material modification?

(Art 19.3 CISG) Additional or different terms relating, among other things, to
the price, payment, quality and quantity of the goods, place and time of
delivery, extent of one party's liability to the other or the settlement of
disputes are considered to alter the terms of the offer materially
- Acceptance must be received within the time period specified in the offer
(within the time – limit of acceptance)

Question:
Consider if the acceptance is valid under the CISG in the following cases:
1) When accepting orders of A to buy 100 cars, B announced that they
would accept that they wanted to be present at the car road-test.
 => Valid because “to be present at the car road-test” is non- material and it
is not under the material modification Art 19 of CISG.
2) When accepting orders of A, B requires to add a dispute clause by
arbitration.
=> Under the Art.19 CISG, “dispute clause” is consider as the settlement
of the dispute => the term is materially => Not valid
3) We accept the terms of your offer and promise to submit this offer to
the Board of Directors in the next 2 weeks.
=> Invalid, only the Board of Directors have the right to accept the offer
and make it valid, in the case they only accept to submit and present it to
the BoD.

Question:

=> ghi am trong may

In Art 386 CC 2015, “Offer to enter into a contract means a clear expression
by the offeror of its intention to enter into a contract and to be bound by such
offer made to another specific party or the public (hereinafter referred to as
the offeree)”. In this case, “sell cargo for... price” is considered as an offer
because it has clear intetion between offeror and offeree.
In Art 15 CISG, an offer becomes effective when it reaches the offeree.
We have 3 offer as above:
1. 12,000 pounds (6th June) offered by A to B: is valid because on 7th June,
B decline the offer.
(Art 391 CC 2015, Art 17 CISG) according to Art 391 CC 2015, an offer
is terminated when the offeree replies that the offer is not accepted and
according to Art 17 CISG, “An offer, even if it is irrevocable, is
terminated when a rejection reaches the offeror.”

2. 11,000 pounds (8th June) offered by A to B: is valid because B replied

they would agree to pay 10,000 pound which is a material modification
according to Art. 19 CISG, then the offer.
3. 10,000 pounds (9th June) When B make a modification then it become a
new offer. But in 27th June, A decline the offer of 10,000 pound.
Therefore, 10,000 pounds from B to A also become invalid
=> A can refuse to sell the cargo for 11,000 pounds to B because this offer
has been invalid seen B made a modification of 10,000 pounds.

Ngày 18.05

Question:
On April 22nd 2009. Petrolex (VN) sent a firm offer for sale of oil to PMI
(Singapore) in which there were 6 terms and conditions; delivery time was
in 6,7,8/ 2009. The offer was valid until 16h30 May 17th 2009 (which was
Sunday)
On 16h30 May 16' Petrolex drafted the revocation of the offer to send to
PMI because the following day would be Sunday. Yet, the person in charge
of sending it was off-work. Therefore, the revocation was sent on May 18 th
23h18' May 16, PMI sent an acceptance stating that: "We are happy to
accept your offer on April 22nd 2009 about delivery in 6.7,8/2009, and we
will come back to discuss with you about the loading of goods in details"
Petrolex alleged that the acceptance on late Saturday night was a late
acceptance and there was no contract between the parties, therefore,
Petrolex didn't deliver the goods.
PMI argued that the acceptance came to the offeror within the time-limit for
accepting the offer, therefore, a contract came into existence. Petrolex had
breached the contract.
PMI wished to terminate the contract and claimed for damages
Questions:
(i) If the parties did not choose the governing law for the contract,
what would be the applicable law?
=> The appilcable law will be CISG because Singapore and VN are a
member state of CISG (Art.1.1)
(ii) Under the above law, did a contract come into existence?
=> Cant come to existence because
 the revocation must reach the offeree before accpetance => the
revocation is not valid (Art. 16 CISG)
 the valid time for acceptance of the offer falls on holiday so the
period is extended until Monday 18th May 18 (Art. 20.2 CISG) =>
Acceptance on time-limit
But: Content of the accpetance: "We are happy to accept your offer on April
22nd 2009 about delivery in 6.7,8/2009, and we will come back to discuss
with you about the loading of goods in details"
=> PMI accept partially “We are happy to accept your offer on April 22nd
2009 about delivery in 6.7,8/2009,..”...(Ghi am trong may: Solution for
question)

Solution:
(i) The appilcable law will be CISG because Singapore and VN are a
member state of CISG (Art.1.1)
(ii)
 a. “On April 22nd 2009. Petrolex (VN) sent a firm offer for sale of
oil to PMI (Singapore)” and “The offer was valid until 16h30
May 17th 2009 (which was Sunday)”

“On 16h30 May 16' Petrolex drafted the revocation of the offer to send to
PMI because the following day would be Sunday. the revocation was sent on
May 18th “
“23h18' May 16, PMI sent an acceptance”
=> The revocation of Petrolex came after the PMI’s acceptance. Therefore,
the revocation is invalid according to Art.16 of CISG (the revocation must
reach the offeree before accpetance)
b. Then Petrolex claimed that the acceptance at 23h18’ May 16 from PMI
was a late acceptance and did not deliver the goods
=> This is wrong because in Art 20.2 CISG, “if a notice of acceptance cannot
be delivered at the address of the offeror on the last day of the period because
that day falls on an official holiday or a non-business day at the place of
business of the offeror, the period is extended until the first business day
which follows”. Therefore, the period is extended until Monday 18th May,
which mean PMI’s acceptance was on time-limit => acceptance valid.
c. But: Content of the accpetance: "We are happy to accept your offer
on April 22nd 2009 about delivery in 6.7,8/2009, and we will come back to
discuss with you about the loading of goods in details"
=> PMI did not agreed the whole content of the contract but want to negotiate
to make modifications.
=> According to Art 19 CISG, the modification is considered as are
considered to alter the terms of the offer materially => The contract is invalid
=> The contract did not come to existance

3. Essential elements for the validity of contracts

- Capacity of the parties to contracts
(i) If parties are individuals/ natural persons (Art. 16-23 CC2015)
Legal capacity: A person’s capability to have civil rights and civil obligations.
- All individuals shall have the same legal capacity
- The legal capacity (năng lực pháp luật)
=> năng lực pháp luật: mỗi cá nhân có quyền và nghĩa vụ nhân sự. Mỗi cá
nhân có năng lực pháp luật như nhau (đứa trẻ 6 tuổi = ông già 70 tuổi) và chỉ
biến mất khi ng đó chết đi (vd: Quyền công dân – quyền cta là gì...)
Capacity for civil conduct ( năng lực hành vi)
=> Pháp luật trao cho ta quyền và nghĩa vụ nhưng cta có thực hiện đc nó hat k
phụ thuộc vào :
- Age/mental status:
+ dưới 6 tuổi chưa có năng lực hành vi (đứa trẻ mẫu giáo được bố mẹ cho tiền
mua quà -> giao dịch đó invalid)
+ 6-18: chưa đầy đủ
+ > 18: đầy đủ năng lực hành vi => phải chịu mọi trách nhiệm với mọi hành
động của mình

=> Hợp đồng chỉ có hiệu lực khi ng tham gia phải có đầy đủ năng lực hành vi
(ii). If parties are legal entities:
Nhìn vào điều lệ cty để biết ng đại diện cho pháp luật của cty, thường là giám
đốc,... và nếu ng đó bận thì thường sẽ ủy quyền cho ng khác (thường phó
giám đốc) nên cta phải kiểm tra giấy ủy quyền thật kỹ (Tên, nội dung và
phạm vi ủy quyền của ng được ủy quyền)

- Contents of contracts ( anh trong may 10:31)

- Forms of contracts
 In writing
 Verbally
 By conducts
- CISG : can be made in any forms.
- VN’s commercial law 2005: must be in writing.
- Principle of complete voluntariness
Voluntarily enter the contract without any force but in some cases:
 Fraud
 Threat
 Mistake
=> Then the contract is invalid.

Mistake:
Article 126 of CC15: Invalidity of civil transactions due to
misunderstandings: "If there is a misunderstanding in a civil transaction that
make a party or the parties fails to meet the objectives of the transaction
establishment, the mistaken party shall have the right to request a court to
declare such transaction invalid'

Threat

Article 127 of CC15: Invalidity of civil transactions due to threat "Threat or

compulsion in a civil transaction means an intentional act of a party or a third
person which compels the other party conduct the civil transaction in order to
avoid danger to the life, health, honor, reputation, dignity and/or or that of its
relatives.

Fraud/ Deception:

Art. 127 of CC15: "Deception in a civil transaction means an intentional act

of a party or a third person for the purpose of misleading the other party as to
the subject, the nature of the entity or contents of the civil transaction which
has caused the other party to enter into such transaction.

Legal consequences of invalid contract:

- The parties are released from the rights and obligations of the contract from
the time the contract is entered into
- The parties shall return to each other what they have received under the
contract.
- The party at fault must pay compensation for any loss.

III- Performance of contract:

Duties of the parties

Seller Buyer
 Deliver the goods (place of  Pay the price (time of
delivery, time of delivery, payment, place of payment)
ensure the conformity of  Take delivery of the goods
goods) (Art 50,56 CL2005, Art 53, 60 CISG
 Hand over any documents CISG)
relating to the goods
(Art.34,35 CL2005, :30,31 CISG)

IV- Liability for breach of contract:

Basis of liability:
 Breach of contract:
- Non-performance
- Improper performance:
Who shall prove? => non-breaching party (in order to get compensation)
How to prove? Which document they must show to prove?
=>
 Eg: how a buyer prove that seller delivery late: Show the Contract, Bill
of Lading, Receipt.
 Eg: The deliver is lack of conformity : Come to the destination port and
inspect goods
  Damage suffered by the non-breaching party:
- Physical damage >< Spriritual damage
( In form of money, goods >< mental loss: loss of repution, etc)
(Can only physical damage can be make up because spriritual damage is hard
to measure and recover)
- Direct damage >< Indirect damage
(Hậu quả trực tiếp của hành vi vi phạm >< Hậu quả k trực tiếp của hvvp)
( Chỉ đòi được bồi thường của thiệt hại trực tiếp)

Which loss/ damage can be recover?

Art. 302 of Commercial Law 2005
"The value of damages covers the value of the material and direct loss
suffered hy the aggrieved party due to the breach of the breaching party and
the direct profit which the aggrieved party would have earned if such breach
had not been committed'
Art.74 of CISG:
Damages for breach of contract by one party consist of a sum equal to the
loss, including loss of profit, suffered by the other party as a consequence of
the breach
Ngày 23.5

 Proximate cause between breach and damage

Loss must be proximately caused by the wrongful conduct of the defendant
Example:
The buyer was late in requesting the carrier to receive cargo for 20 days. The
seller had to store the goods in the warehouse and suffered some loss.
- Cost of storage of goods in a warehouse
=> Can be recoverable since it’s direct cause because the seller was late
in delivery so he had to pay more for the cost of storage.
 - Goods got wet and mouldy because of a heavy rain during storage
period.
=>Cannot be recoverable since it’s indirect cause. Because the seller
did not keep the warehouse under good condition. => buyer have to pay
for those cost.
- Loss of goods caused by theft
Which loss is recoverable?
 Fault of the breaching party:
Fault: “the rule on presumption of fault”

Excuses for breach of contract:

(Nguyên tắc suy đoán lỗi: bất cứ ai vi phạm hđ cũng bị suy đoán lỗi và anh ta
phải chứng minh rằng anh ta k có lỗi nếu k muốn chịu trách nhiệm.)
- Force majeure (trường hợp bất khả kháng) (Art 79 CISG and Art. 156
CC 2015)
o Definition: an event of force majeure is an event whch occurs in
an objective manner which cannot be foreseen and which
cannot be remidied by all possible necessary and admissible
measures being taken.
 Occuring in a objective manner (xảy ra 1 cách khách
quan): happen beyond the control of the parties.
 Cant be foreseen
 The consequences of the event must have been
unpreventable
 o Fault of the non-breaching party:
 The non-breaching party committed a fault before the
breaching party breaches the contract (example anh trong
may)

o Obligation of the breaching party in the event of force majeure:

 Giving notice to the other party
 Providing the certification of the force majeure event and
providing the causation
A third party fault:
- A third party at fault

Is the seller exempt from liability to the buyer?

(Art. 79.2 CISG)
Seller will be exempt from liability for breach of the contract in case there is a
fault of the supplier if the following conditions are met:
The supplier’s non-delivery is a force majeure event to Seller
The supplier is also exempt from liability to Seller (i.e the supplier also
encounters force majeure event)

Art. 79 CISG:
(1) Force majeure
(2) Requirement for breaching party to be exempted ( vi phạm của ng thứ 3)
a. He encouter force majeure event, he cannot find a way to
perform the goods ( anh ta được miễn trách theo điều khoản phía
trên: điều 79.1, anh ta k thể lường trước được và k có cách nào
để giải cứu tình huống và k tìm đc hàng thay thế trên thị trường)
b. Trong trường hợp này, nhà sx đc miễn trách nhiệm với ng bán thì
ng bán mới được đc miễn trách nhiệm với ng mua ( 2 vế phải
đồng thời thỏa mãn: nhà sx được miễn => ng bán sẽ được miễn
và ngược lại)
Preceding paragraph: điều khoản phía trên
Ex:
Seller contracted to sell Buyer a machine to be built in accordance with
specifications supplied by Buyer. Seller...(anh trong may)
=> The Seller cannot forsee and fix the situation
(nếu đổi tình huống là nhà máy bị cháy thì mới được miễn trách nhiệm.
Nhưng trong TH trên thì là do quản lý yếu kém mới dẫn đến loss và sẽ k được
miễn trách nhiệm)
- Dirty hand (entire fault of the non-breaching party)

Remedies fot brecaching of contract (Chế tài cho việc vi phạm hđ)
Remedies for breach of contract under Vnese law:
1. Specific performance of contracts
2. Penalty
3. Damages
 4. Suspension of performance of contracts
5. Stoppage of performance of contracts
6. Cancellation of contracts
(Art 292 – commercial law 2005)

Ngày 30.5
If the buyer deliver the noncomforming goods, what will the
buyer do?

Remedies for breaching the contract: damages, suspension,

cancellation, (CISG1980)