Laws of Vietnam

DECREES:

Article 1.- To promulgate together with this Decree the Regulation on Goods Selling and Buying Agency.

Article 2.- This Decree takes effect from the date of its signing. The earlier stipulations which are contrary to this Decree are now annulled.

Article 3.- The Minister of Trade shall have to guide the implementation of this Decree.

Article 4.- The Ministers, the Heads of the ministerial-level agencies, the Heads of the agencies attached to the Government, the Presidents of the People’s Committees of the provinces and cities directly under the Central Government shall have to implement this Decree.

Chapter I

GENERAL PROVISIONS

Article 1.- This Regulation shall apply to the activities in goods selling and buing agency of Vietnamese legal persons and individuals in Vietnam.

Article 2.- Goods selling and buying agency is a mode of goods selling or purchasing in which the consignee agent undertakes the sale (or purchase) of goods on behalf of the consignor for payment.

Article 3.- In this Regulation the following terms shall be construed as follows:

1. Consignor is the party that consigns goods (for a sale agent) or money for the purchase of goods (for a purchase agent) to an agent together with concrete conditions and requirements on the prices, standards, quality...of goods.

2. Agent is the party that receives goods ( for a sale agent) or money for the purchase of goods (for a purchase agent) to be sold or bought in accordance with the consignor’s concrete conditions and requirements on the prices, standards, quality...of goods.

3. Remuneration is the amount of money to which the agent is entitled for the sale or purchase of goods on behalf of the consignor. The remuneration may be a commission or the difference between the consignment and the selling prices; the exact percentage of the remuneration is to be agreed upon by the two parties in the contract.

4. Objects of agency are tangible goods.

5. Purchase agent is the form of agency in which the consignor hands over its money for the purchase of goods, in accordance with the consignor’s requirements and conditions, and for a remuneration agreed upon by the two parties.

6. Sale agent is the form of agency in which the consignor delivers its goods (with the certified trade marks, standards and quality) for sale for a remuneration agreed upon by the two parties.

7. Commission agency is a form in which the agent sells or purchases goods at the selling or buying prices set by the consignor and is entitled to a remuneration in the form of a commission paid by the consignor. The commission shall represent a percentage of the actual selling or buying prices agreed upon by the two parties.

8. Wholesale sale agency or wholesale purchase agency is the form of agency for package sale or purchase of a given quantity of goods at the minimum prices (for a sale agent) or maximum prices (for a purchase agent) set by the consignor. The remuneration to the agent is the difference between the actual selling or purchasing prices and the selling or purchasing prices set by the consignor.

9. Exclusive agent is the sole agent in a given area entrusted by the consignor to conduct the sale or purchase of one or several kinds of its goods.

10. General trade agency is a system of agents to sell and purchase goods for the consignor.

General agent is the direct partner of the consignor and shall represent the rights and obligations of its agency network. The agents attached to the general agent shall operate, exercise their rights and perform their obligations directly to the general agent, and through the general agent, exercise their rights and perform obligations to the consignor.

Article 4.- The consignor is the owner of goods and money delivered to the agent for the sale or purchase of goods; it shall exercise its rights and perform its obligations towards those goods and money in the whole process of the implementation of the agency contract.

Article 5.- The consignor and the agent must be legal persons or individuals having already registered their businesses.

Article 6.- The objects of the purchase or sale agency must be goods which both the consignor and the agent are allowed to trade in. Agency activities must be conducted in accordance with the regulation on goods for conditional businesses on domestic markets.

Article 7.- The settlement between the consignor and the agent regarding goods, money and remuneration shall be conducted phase by phase, corresponding to the moment when the agent completes selling or purchasing a volume of goods, or in accordance with a specific mode of settlement agreed upon by the two parties in the agency contract.

Article 8.- The consignor and the agent may agree on the mortgage and escrow by the agent for the consignor if it deems necessary.

Article 9.- Relations between the consignor and the agent shall be reflected in the agency contract.

The agency contract shall take effect right after its signing, or after a period of time agreed upon by the consignor and the agent.

Chapter II

RIGHTS AND OBLIGATIONS OF THE PARTIES

Article 10.- The consignor shall have the following rights:

1. To choose, decide the agent, form of agent and sign agency contracts, based on its specific demand and business capability.

2. To set selling or buying prices (depending on the form and objects of agency)

3. To receive escrow deposit or mortgaged property of the agent if so agreed upon in the agency contract.

4. To request the agent to pay money (for a sale agent) or hand over goods (for a purchase agent) according to the agency contract.

5. To inspect and supervise the performance of the contract by the agent.

6. To be entitled to enjoy the legitimate rights and interests brought about by the agency activities in accordance with law.

Article 11.- The consignor shall have to perform the following obligations:

1. To provide guidance and necessary information on trade agency activities, creating favorable conditions for the agent to perform the agency contract.

2. To strictly observe all commitments in the contract with the agent on the delivery and receipt of money or goods.

3. To be responsible for the standards and quality of delivered goods (for a sale agent) and the standard and quality of the received goods (for a purchase agent) as stated in the agency contract.

4. To pay a remuneration to the agent in accordance with the agreement in the contract.

5. To return to the agent its escrow or morgaged property upon fulfilment of the contract if it is so agreed upon in the contract.

6. To take joint responsibility before law if the agent violates the law due to the consignor’s mistake or if both parties deliberately act against the law.

7. To be subject to the inspection and supervision of competent State agencies and perform all obligations towards the State in accordance with the prescriptions of law.

Article 12.- The agent shall have the following rights:

1. To choose and sign agency contract(s) with one or many consignors, depending on its demand and business capability as well as form of agency.

2. To request the consignor to deliver money or goods in accordance with the contract and retrieve from the consignor its escrow or mortgaged property upon fulfilment of the contract (if any).

3. To request the consignor to provide guidances, information and other related conditions for the performance of the agency contract.

4. To be eligible for remuneration and other legitimate rights and interests brought about by its agency activities as provided for by law.

Article 13.- The agent shall have the following obligations:

1. To purchase or sell goods in accordance with the requirements of the consignor.

2. To strictly observe all commitments in the agency contract with the consignor on the receipt or delivery of money or goods.

3. To hand over the escrow or mortgage to the consignor as agreed upon in the agency contract (if any).

4. To pay the sales (for a sale agent) or hand over goods (for a purchase agent) to the consignor in accordance with the agency contract.

5. To post up at its place of business (head-office, shop) the name, trade mark and logo (if any) of the consignor, names of goods sold or purchased by the agent and the prices thereof as prescribed.

6. To preserve the goods, take responsibility for their volume, standard and quality upon their receipt (for a sale agent) or before delivery (for a purchase agent) as stated in the agency contract.

7. To be subject to the inspection and supervision by the consignor, to observe the regime of reporting on the agency activities to the consignor.

8. To take responsibility before the consignor and law for any contravention of the agency contract or law (if any).

9. To be subject to the inspection and supervision by the competent State agencies and to perform all the obligations towards the State as prescribed by law.

Article 14.- In addition to the provisions on their rights and obligations prescribed in Articles 10, 11, 12 and 13, Chapter II, the agent and the consignor may agree and make additional commitment concerning other rights and obligations not contrary to the current law.

Chapter III

AGENCY CONTRACT

Article 15.- An agency contract must be made in writing.

Article 16.- An agency contract includes the following main contents:

1. Full names and registered addresses of the parties signing the contract (the agent and the consignor).

2. Goods;

- Names of goods

- Standards and quality

- Quantity and volume

3. Time schedule, mode and place of goods delivery:

- Time schedule for the delivery of goods to the consignor (for a purchase agent).

- Time schedule for the delivery of goods to the agent (for a sale agent).

- Mode of the delivery or receipt of goods.

- Place of goods delivery (warehouses, work places of the consignor and the agent).

4. Prices:

- The maximum and minimum selling prices (for a sale agent).

- The maximum and minimum buying prices (for a purchase agent).

5. Commission rate and expenses.

6. Mode and time of payment:

- Payment of the sales as stated in the sale agency contract.

- Payment of the purchase as stated in the purchase agency contract.

- Payment of the commission ( or remuneration) and other expenses.

- Repayment of the escrow and return of the pledged or mortgaged property.

7. The regime of reward, sanction and compensation for damage.

8. The valid time limit of the contract:

- The valid time limit of the contract.

- Date of termination of the contract.

Besides, the two parties may agree on additional contents or provisions, such as guaranty, technical and material support for the agent to organize advertisement and marketing activities..., but not in contravention of law.

Article 17.- Any amendments or supplements to the agency contract shall be legally valid only if they are accepted by both parties and made in writing.

Article 18.- A party to an agency contract may transfer its contractual rights and obligations to the third party if it is so agreed by the other party.

Article 19.- The parties shall have the responsibility to strictly and fully observe the commitments stated in the contract. Any party which breaches the contract shall be held responsible for the material losses caused by its failure to perform or wrong performance of the contract. Unless otherwise stated in the agency contract, the sanction against breaches of contract and compensation for damage shall abide by the current law.

Article 20.- The agency contract shall terminate in the following cases:

1. Upon its expiry:

The parties to the agency contract shall liquidate the contract when it was already performed or its validity duration expired without agreement on extension.

2. By mutual ageement:

The agency contract may terminate before the expiry of its valid time limit if it is so agreed in writting by the two contracting parties.

3. Invalidation of an agency contract:

An agency contract shall be invalidated under current legislation on the invalidation of economic contracts.

4. Unilateral termination of the contract:

- One party shall be entitled to unilaterally terminate the performance of an agency contract if such performance does not bring it profit. In this case, the party which decides the termination shall have to pay compensation to the other party for damage caused by the termination.

- One party shall be entitled to terminate the performance of the contract if the other party breaches the contract to the extent that there is no alternative. The party that breaches the contract shall have to compensate for damage.

Chapter IV

INSPECTION AND HANDLING OF VIOLATIONS

Article 21.- The competent State agencies in charge of the State management of trade shall have the right to inspect and supervise the parties in their agency activities (with regard to legal procedures, business licenses, goods quality...) so as to discover and handle in time violations of law.

Article 22.- Each party involved in agency activities shall take responsibility before the other party and before law for all its activities and commitments in the contract.

Article 23.- Any party to the sale or purchase agency contract, which acts contrarily to these provisions, thus affecting the market’s situation and harming interests of the State, organizations and citizens shall, depending on the extent of damage, be subject to administrative sanctions or examined for penal liability.

Chapter V

IMPLEMENTATION PROVISIONS

Article 24.- This Regulation takes effect from June 1st, 1996 and shall replace the earlier regulations on goods selling and buying agency.

Article 25.- The Minister of Trade shall have to guide, organize and supervise the implementation of this Regulation.

Article 26.- The Ministers, the Heads of the ministerial-level agencies, the Heads of the agencies attached to the Government, the Presidents of the People’s Committees of the provinces and cities directly under the Central Government, and organizations, individuals involved in agency activities shall have to implement this Regulation.