Laws of Vietnam

THE COMMERCIAL LAW

PREAMBLE

The Commercial Law shall constitute a legal basis for the development of a socialist-oriented multi-sector commodity economy driven by State-managed market mechanism, wherein the State economic sector plays the leading role and, together with the co-operative economic sector, forms the foundation of the national economy; for the development of the goods and commercial services market in all regions of the country; for the expansion of commercial exchanges with foreign countries; for contribution to boosting the production, and the improvement of the life of people, the protection of the legitimate interests of producers and consumers, and lawful interests of traders, helping to increase the accumulation aimed to promote a fast and sustainable growth of the entire economy along the direction of industrialization and modernization, and for the fulfilment of the objectives of a prosperous people, a powerful country and an equitable and civilized society;

Pursuant to the 1992 Constitution of the Socialist Republic of Vietnam;

This Law prescribes commercial activities in the Socialist Republic of Vietnam,

Chapter I

GENERAL PROVISIONS

Section 1. GOVERNING SCOPE OF AND SUBJECTS TO BE GOVERNED BY THE COMMERCIAL LAW

Article 1.- Governing scope of the Commercial Law

The Commercial Law shall govern commercial acts, determine the legal status of traders and provide for principles and standards for the commercial activities in the Socialist Republic of Vietnam.

Article 2.- Subjects to be governed by the Commercial Law

1. Subjects to be governed by the Commercial Law are traders conducting commercial activities in Vietnam.

2. As for hawkers and venders with little business capital, low turnover and incomes, the Government shall issue separate regulations in accordance with the basic principles of this Law.

Article 3.- Application of the Commercial Law and relevant laws

Commercial activities shall have to comply with the provisions of the Commercial Law and the relevant legislation.

Article 4.- Application of international treaties, foreign laws and international commercial practices in commercial activities with foreign countries

1. Where an international treaty which Vietnam has signed or acceded to provides for otherwise than this Law, the contracting parties shall apply the provisions of such international treaty.

2. Contracting parties shall be entitled to agree on the application of foreign laws if such laws are not contrary to Vietnamese laws or where international treaties which Vietnam has signed or acceded to stipulate the application of foreign laws.

3. Contracting parties shall be entitled to agree on the application of international commercial practices if such practices are not contrary to Vietnamese laws.

Article 5.- Interpretation of terms

In this Law the following terms shall be construed as follows:

1. A commercial act is an act of traders in commercial activities that gives rise to rights and obligations among traders, or between traders and concerned parties.

2. Commercial activity is the performance of one or more commercial acts by traders, including goods purchase and sale, provision of commercial services and commercial promotion activities for the purpose of profits or the execution of socio-economic policies;

3. Goods shall include machinery, equipment, raw materials, fuels, materials, consumer goods and other movables circulated on the market, and residential houses for business purpose in the forms of lease, purchase and sale;

4. Commercial services shall include services associated with the purchase and sale of goods;

5. Commercial promotion is an activity aimed at seeking and promoting opportunities for the purchase and sale of goods and the provision of commercial services;

6. Traders shall be individuals, legal persons, co-operatives, and family households having business registration for commercial activities which are carried out independently and regularly.

7. Commercial assets are all assets under the lawful ownership or use right of a trader to serve commercial activities such as offices, shops, warehouses, equipment, goods, trade names, signboards, trade marks, goods distribution and services provision networks.

Section 2. BASIC PRINCIPLES IN COMMERCIAL ACTIVITIES AND COMMERCIAL POLICIES

Article 6.- The right to conduct commercial activities

Individuals, legal persons, cooperatives, family households meeting conditions prescribed by laws shall be entitled to conduct commercial activities in the fields and geographical areas which are not prohibited by law.

In order to ensure the national interests, the State shall have exclusive right to conduct commercial activities in a number of fields and geographical areas with respect to certain types of goods and services as specified in the lists to be promulgated by the Government.

The State shall protect the right to conduct lawful commercial activities and shall create favorable conditions for traders in their commercial activities.

Article 7.- The right to equality before law and co-operation in commercial activities

The State shall ensure the right to equality before law of traders of all economic sectors in commercial activities.

Traders shall be entitled to co-operate with one another in commercial activities in the forms prescribed by law.

Article 8.- Competition in commerce

1. Traders shall be entitled to engage in lawful competition in commercial activities.

2. Any act of competition which is harmful to the national interests and the following acts shall be strictly prohibited:

a/ Speculation for the purpose of market manipulation;

b/ Dumping of goods for competition;

c/ Defamation of other traders;

d/ Obstructing, enticing, buying off or intimidating employees and/or customers of other traders;

e/ Infringing upon the trademark rights and other industrial property rights of other traders;

f/ Other acts of unlawful competition.

Article 9.- Protection of legitimate interests of producers and/or consumers

1. Traders are obliged to provide full and accurate information on the goods and services they shall provide.

2. Traders must ensure the legality of the goods they sell.

3. Traders are prohibited from:

a/ Increasing or reducing prices to the detriment of producers and/or consumers;

b/ Deceiving or misleading;

c/ Selling fake goods;

d/ Selling low-quality and off-standard goods together with registered goods;

e/ Making deceptive advertisements;

f/ Conducting unlawful commercial promotion.

4. Consumers are entitled to establish organizations to protect their legitimate interests under the provisions of law.

5. Where their interests are infringed upon, customers shall be entitled to lodge complaints against traders to a competent State body or take legal action against traders at a court in accordance with the provisions of law.

Article 10.- Policies toward State enterprises

The State shall invest finance, material and technical foundations and human resources in the development of the State enterprises which trade in essential commodities in order to ensure that the State enterprises play the leading role in commercial activities, and act as one of tools for the State to regulate supply and demand and stabilize prices in order to contribute to achieving socio-economic targets of the country.

The State shall adopt policies for the development of public service enterprises and enterprises operating in non-profit or low-profit fields where other economic sectors do not operate.

Article 11.- Policies toward co-operatives and other forms of co-operative economy in commerce

The State shall protect the ownership and other legitimate rights and interests of co-operatives and other forms of co-operative economy in commerce; shall adopt policies providing preferential treatment, support and favorable conditions for co-operatives and other forms of co-operative economy to renovate themselves and develop; and ensure that the State-run economy and co-operative economy shall serve as the cornerstone of the national economy.

Article 12.- Policies toward traders of private and capitalist economic sectors

The State shall protect the ownership and other lawful rights and interests of traders of the private and capitalist economic sectors in commerce; encourage and create favorable conditions for traders of such economic sectors to co-operate and form joint ventures or associations with State enterprises by establishing agents, State capitalist enterprises and other forms of joint ownership in order to bring into full play the potentials of all economic sectors, and generate internal resources for Vietnamese commercial enterprises to develop and expand the goods trading and commercial services.

Article 13.- Commercial policies toward rural areas

The State shall adopt policies for commercial development in the rural markets, and create conditions for the expansion and development of rural bazaars. State enterprises shall play a key role in performing together with co-operatives and other economic sectors the sale of agricultural supplies, industrial goods and the purchase of agricultural products in order to contribute to increasing the purchasing power of peasants and create a prerequisite for promoting the transformation of economic structure, developing the production of goods and carrying out the rural industrialization and modernization.

Article 14.- Commercial policies toward mountainous, island, deep-lying and remote areas

The State shall adopt policies for commercial development in mountainous, island, deep-lying and remote areas; policies for the sale of local products; and policies for tax and credit preferential treatment to traders trading in some essential goods; subsidization of prices and freightage for enterprises tasked to supply goods articles for the implementation of social policies; and policies for investment in building material foundations and infrastructure facilities in order to expand the economic exchange in those regions.

Article 15.- Policies for goods circulation and commercial services

The State shall encourage and facilitate the expansion of goods circulation, and the development of commercial services which are not restricted or prohibited by law.

Where necessary, the State may apply economic or administrative measures to intervene into the market in order to ensure the balance between supply and demand or to implement socio-economic policies.

It is prohibited to circulate goods and provide services, which are detrimental to the national defense and security, social order and security, and fine historic, cultural and moral traditions and customs of Vietnam, to the ecological environment, production and the health of people.

All acts of obstructing the lawful circulation of goods and provision of services on the market are prohibited.

The Government shall announce the lists of goods items banned from circulation and commercial services banned from provision and lists of goods and services subject to restricted or conditional business.

Article 16.- Foreign trade policies

The State shall exercise the unified management of foreign trade, adopt policies to expand goods exchange with foreign countries on the basis of respect for each other’s independence, sovereignty, equality, and mutual benefits along the direction of multilateralisation and diversification; encourage various economic sectors to manufacture goods for export and participate in export in accordance with the provisions of laws; policies of preferential treatment to step up the export, produce export goods of high competitiveness, increase the export of commercial services; and restrict the import of goods items which can be domestically produced and meet the local demand and reasonably protect the domestic production; give priority to the import of materials, equipment, high technology and modern techniques for the development of production thereby serving the national industrialization and modernization.

The Government shall define specific foreign trade policies for each period and policies toward overseas Vietnamese involving in the development of foreign trade.

Section 3. TRADERS

Article 17.- Conditions to become a trader

An individual being full 18 years of age or more and having full capacity for civil acts, a legal person, co-operative group, and family household satisfying conditions prescribed by law for conducting commercial business, if wishing to conduct commercial activities, shall be granted business registration certificates by the competent State agencies and become a trader.

Article 18.- Cases of non-recognition as traders

The following persons shall not be recognized as traders:

1. Persons who lack full civil act capacity, have lost capacity for civil acts, or have restricted capacity for civil acts;

2. Persons who are being examined for penal liability or are serving imprisonment sentences;

3. Persons who are being deprived of the profession-practicing right by the court for reason of having committed offences of smuggle, speculation, trading in banned goods, manufacturing and trading in fake goods, conducting illegal business activities, tax evasion, deception of customers or other offences as prescribed by law.

Article 19.- Business registration

Business registration shall be carried out at a competent State management agency as prescribed by law.

Article 20.- Contents of business registration

Contents of business registration include:

1. Names of a trader and name of authorized representative;

2. Trade name and signboard;

3. Official transaction address;

4. Business lines;

5. Statutory capital or initial investment capital;

6. Duration of operation;

7. Branches, shops, representative offices if any.

In the course of operation, the trader shall have to register changes to the registered contents, if any.

Article 21.- Granting business registration certificates

1. The agency in charge of business registration shall have to complete the business registration within 15 days from the date of receipt of full and valid dossier.

2. Where an application for a business registration certificate is refused, the agency in charge of business registration shall have to reply in writing and state clearly the reasons therefor to the applicant within the timelimit prescribed in Clause 1 of this Article.

3. Where an application for a business registration certificate is refused, the applicant shall have the right to lodge complaints to a competent State body or take a legal action at a court in accordance with the provisions of law.

Article 22.- Announcement of business registration contents

Traders shall have to make announcement of business registration contents on central and local newspapers as prescribed by the laws.

Article 23 .- Providing information on contents of business registration

Individuals, agencies and organizations shall be entitled to request the body in charge of business registration to provide information on business registration contents and to issue copies of business registration certificates or extracts thereof and shall have to pay fees.

Article 24.- Trade names and signboards

1. Traders must have their trade names and signboards.

Trade names can be accompanied by logos.

2. Trade names and signboards must not contravene the fine historical, cultural or moral traditions and customs of Vietnam.

3. Trade names and signboards must be written in Vietnamese language and may be additionally written in smaller-size foreign language(s).

4. Trade names and signboards must be stated in the invoices, vouchers and transaction papers of traders.

Article 25.- Books of accounts and the keeping of receipts, invoices, vouchers and relevant papers

1. Traders shall have to open books of accounts, keep records and keep books of account, invoices, receipts, vouchers and papers related to their commercial activities as prescribed by law.

2. Books of account, receipts, invoices, vouchers and papers related to commercial activities shall be destroyed in accordance with the procedures prescribed by law.

Article 26.- Tax registration, declaration and payment

Traders shall have to register, declare and pay tax.

Article 27.- Trader’ representative offices and branches

1. A trader shall be entitled to open branch(es) or representative office(s) inside and outside the country in accordance with the provisions of law.

2. The content and scope of operation of a branch or a representative office must be consistent with the contents of operation of the trader.

Article 28.- Opening and using bank accounts

A trader shall open and use bank accounts in accordance with the provisions of law.

Article 29.- Posting prices

A trader shall have to post selling and purchasing prices of goods and services at a place where goods or services are sold or purchased or where services are provided. The posting of prices must be clear and must not mislead customers.

Article 30.- Preparing invoices and vouchers

When selling goods or providing services, a trader shall have to prepare valid invoices and/or vouchers and provide a copy thereof to customers.

Article 31.- Managing commercial activities

1. Traders scan directly manage and run their commercial activities or hire other persons to do so.

The hiring of persons to manage or run commercial activities must be established in written contracts.

2. Traders shall have to be responsible for the commercial activities carried out by the persons they hire within the contents already agreed upon in the contracts.

3. The persons hired to manage or run the commercial activities shall be responsible to the traders under the contracts already signed with the traders.

Article 32.- Renting, leasing, and/or assigning commercial assets

A trader shall have the right to rent, lease, and/or assign commercial assets in accordance with the provisions of law.

Article 33.- Conducting commercial activities with foreign countries

Trader shall only be entitled to conduct commercial activities with foreign countries if they fully meets the conditions prescribed by the Government after making the registration with the competent State agency.

Article 34.- Temporary cessation of commercial activities

Where commercial activities temporarily cease, traders shall have to post the notices indicating the duration of temporary cessation at their official transaction addresses; if such temporary cessation lasts more than thirty days the traders shall, in addition to the posting of notices, have to notify the State agency competent to grant business registration certificates and tax office thereof.

Article 35.- Termination of commercial activities

1. Commercial activities of a trader shall be terminated in the following cases:

a/ The trader terminates his/her/its commercial activities by himself;

b/ The operational duration stated in the certificate of business registration expires;

c/ The trader is declared bankrupt or is dissolved;

d/ The competent state body issues a decision thereon;

e/ The trader being an individual dies without heirs or the heirs fail to continue the commercial activities.

2. The rights and obligations of a trader upon the termination of commercial activities shall comply with the laws.

Article 36.- Revocation of business registration

1. Traders shall have to follow procedures to revoke their business registration at the business registration agency no later than fifteen days after the termination of their activities.

2. In case of bankruptcy, traders shall have to follow procedures to revoke their business registration no later than fifteen days as from the date the court’s decision declaring bankruptcy becomes effective.

3. In case of dissolution, traders shall have to follow procedures to revoke their business registration no later than fifteen days from the date of the decision on dissolution

4. Where a trader being an individual dies without heirs, the business registration agency shall, within one month from the date of the trader’s death, revoke the business registration.

5. Where a trader terminates commercial activities by a decision of a competent State body, the trader shall have to complete the procedures to revoke his/her/its business registration within fifteen days from the date of receipt of such decision.

Section 4. FOREIGN TRADERS CONDUCTING COMMERCIAL ACTIVITIES IN VIETNAM

Article 37.- Forms of operation

Foreign traders satisfying the conditions prescribed by Vietnamese laws may establish representative offices and branches in Vietnam.

Article 38.- Representative offices

Representative offices of foreign traders in Vietnam shall, being subsidiary establishments of foreign traders, be established in accordance with the law of Vietnam for the promotion of commercial activities.

Foreign traders shall be responsible before the law of Vietnam for the operations of their representative offices in Vietnam.

Article 39.- Branches

Branches of foreign traders in Vietnam shall, being subsidiary establishments of foreign traders, be established and conduct commercial activities in Vietnam in accordance with decisions of the Government of Vietnam.

Foreign traders shall be responsible before the law of Vietnam for the operations of their branches in Vietnam.

Article 40.- Operations

The operations of representative offices and branches of foreign traders in Vietnam shall comply with the law of Vietnam and be consistent with the operations of the foreign traders.

Article 41.- Rights of representative offices

Representative offices of foreign traders in Vietnam shall have the following rights:

1. To operate in accordance with purposes, scope and duration prescribed in their licenses;

2. To rent offices and residential houses; lease or purchase equipment and facilities necessary for their operations;

3. To recruit Vietnamese and foreigners to work for representative office in accordance with the provisions of Vietnamese law;

4. To open accounts in foreign currency(ies) and accounts in Vietnamese Dong converted from foreign currency(ies) at banks which are licensed to operate in Vietnam; such accounts shall be used solely for the operations of representative offices;

5. To import facilities necessary for the operations of the representative offices and to pay duties as prescribed by the law of Vietnam;

6. To have their own seals bearing the names of the representative offices in accordance with the provisions of Vietnamese law.

Article 42.- Obligations of representative offices

Representative offices of foreign business entities in Vietnam shall have the following obligations:

1. To comply with the law of Vietnam;

2. To refrain from selling or purchasing goods or providing commercial services;

3. To refrain from entering into commercial contracts, except where they are legally authorized in writing by the foreign traders;

4. To pay tax, fees and charges in accordance with the provisions of Vietnamese law;

5. To report on their operations in accordance with the provisions of Vietnamese law.

Article 43.- Rights of branches

Branches of foreign traders in Vietnam shall have following rights:

1. To conduct commercial activities as prescribed in their licenses;

2. To rent offices and residential houses; lease or purchase equipment and facilities necessary the operations of branches;

3. To recruit Vietnamese and foreigners to work for the branches in accordance with the provisions of Vietnamese law;

4. To carry out transactions and enter into commercial contracts in Vietnam in accordance with the scope of operations prescribed in their licenses;

5. To open Vietnamese Dong and foreign currency accounts at banks which are licensed to operate in Vietnam;

6. To import facilities necessary for the operations of the branches and to pay duties in accordance with the provisions of Vietnamese law;

7. To remit profits abroad in accordance with the provisions of Vietnamese law;

8. To have their own seals bearing the names of the branches as prescribed by the law of Vietnam.

Article 44.- Obligations of branches

Branches of foreign traders in Vietnam shall have the following obligations:

1. To comply with the law of Vietnam;

2.To register, declare and pay tax, fees and charges in accordance with the provisions of Vietnamese law;

3. To adopt the accounting systems prescribed by the law of Vietnam; where it is necessary to apply a different commonly used accounting system, the approval of the Ministry of Finance of Vietnam must be obtained;

4. To report on the operations of the branches in accordance with the provisions of Vietnamese law.

Chapter II

COMMERCIAL ACTIVITIES

Section 1. TYPES OF COMMERCIAL ACT

Article 45.- Types of commercial act

Commercial acts under this Law shall comprise:

1. Sale and purchase of goods;

2. Representation of traders;

3. Commercial brokerage;

4. Sale and purchase of goods by authorized dealers;

5. Sale and purchase of goods by agents;

6. Commercial processing;

7. Auction of goods

8. Goods bidding;

9. Goods forwarding service;

10. Goods assessment service;

11. Trade promotion;

12. Commercial advertising;

13. Display of goods;

14. Trade fairs and exhibitions.

Section 2. SALE AND PURCHASE OF GOODS

Article 46.- Sale and purchase of goods

Sale and purchase of goods is a commercial act whereby the seller is obliged to deliver and transfer the ownership of goods to the purchaser and to receive payment; and the purchaser is obliged to pay the seller and receive the goods as agreed upon by the two parties.

Article 47.- Parties to goods sale and purchase transactions

The parties to goods sale and purchase transactions shall be traders or one party shall be a trader.

Article 48.- Subject matter of sale and purchase of goods

The subject matter of sale and purchase of goods shall be goods as prescribed in this Law.

Article 49.- Contracts for sale and purchase of goods

1. Sale and purchase of goods shall be carried out by way of contract.

2. Contracts for sale and purchase of goods shall be made in oral or written form or by specific conduct.

3. Where the law prescribes that a contract for sale and purchase of goods must be made in writing, such provision must be complied with; telegraphs, telexes, facsimiles, E-mails and other forms of electronic communication shall be considered to be in written form.

Article 50.- Principal contents of a contract for sale and purchase of goods

A contract for sale and purchase of goods must contain the following principal contents:

1. Name of goods;

2. Quantity;

3. Specifications, quality;

4. Price;

5. Mode of payment;

6. Location and time for delivery and receipt of goods.

In addition to the principal contents prescribed in this Article, parties may agree on other contents of the contract.

Article 51.- Offers and acceptance thereof.

1. An offer is a proposal to enter into a contract for sale and purchase of goods within a certain period of time, which is made to one or more designated persons and includes the principal contents of a contract for sale and purchase of goods as prescribed in Article 50 of this Law.

An offer includes an offer to sell and an offer to purchase goods.

2. Acceptance of an offer is a notice of the offeree sent the offeror about the acceptance of the entire contents of the offer.

Article 52.- Amendment or supplement to offers

1. The act of an offeree making an amendment or supplement to one of the principal contents of an offer is deemed to be a rejection of the offer and to constitute a new offer.

2. The act of an offeree making an amendment or supplement to the contents of an offer without altering one of its principal contents is deemed to be an acceptance of the offer, unless the offeror immediately rejects such amendment or supplement.

Article 53.- Liability periods for the offeror and the offer acceptor

1. The liability timelimit for the offeror commences from the time the offer is dispatched to the offeree until the expiry of the timelimit for acceptance of the offer.

Where the timelimit for acceptance of the offer is not specified, the liability period for the offeror shall be thirty days from the date the offer is dispatched to the offeree.

2. The liability for the acceptor of an offer commences from the time the acceptance of the offer is dispatched to the offeror.

Article 54.- Acceptance of offers after expiry of timelimit for acceptance

Where an offeror receives the acceptance of an offer after the expiry of the timelimit for its acceptance, the acceptance shall be invalid, except where the offeror immediately notifies the offeree of his/her/its acceptance.

Article 55.- Time for entering into contracts for sale and purchase of goods

A contract for sale and purchase of goods is deemed to be entered into as from the time it is signed by the parties present.

Where all parties are not present to sign the contract, a contract for sale and purchase of goods is deemed to be entered into as from the time the offeror receives, during the period of liability of the offeror, the notice of acceptance of all terms stated in the offer.

Article 56.- Validity of transactions and negotiations conducted before a contract for sale and purchase of goods is entered into

As from the time the contract is entered into, all previous transactions and negotiations in relation to the contract shall become invalid, unless otherwise agreed upon by the parties.

Article 57.- Amendment or supplement to or termination of contracts for sale and purchase of goods

Parties may agree to amend, supplement or terminate contracts for sale and purchase of goods

Article 58.- Time at which ownership over goods is transferred

The ownership over goods shall be transferred from the seller to the purchaser as from the time the seller delivers the goods to the purchaser, unless otherwise agreed upon by the two parties or stipulated by law.

Article 59.- Conditional transfer of ownership over goods

Where it is agreed in a contract for sale and purchase of goods on the condition which must be met before the seller can deliver the goods to the purchaser or the purchaser can receive the goods from the seller, the ownership over the goods shall be transferred from the seller to the purchaser only when such condition is met.

Article 60.- Obligation to deliver goods and relevant documents

1. A seller shall have to deliver goods in accordance with the quantity, quality, specifications and packaging and at the time as agreed in the contract.

2. Where the quality of goods is not specified in the contract, the seller shall have to deliver goods of the average quality of that type of goods in circulation on the market at the time of delivery.

3. Where the packaging of goods is not specified in the contract, the seller shall have to deliver goods in the packaging which is commonly used for that type of goods. Packaging must ensure safety of goods during transportation, allowing for the possibility of transshipment in normal loading and unloading conditions, and must be appropriate to the time and means of transportation.

4. A seller may authorize a third party to perform the obligation to deliver goods if it is so agreed by the purchaser. In this case, the seller remains responsible to the purchaser for the delivery of goods by the authorized person.

5. A seller may only deliver goods earlier than the agreed time or in instalments where it is so agreed in the contract or accepted by the purchaser.

6. A seller is obliged to deliver documents relating to the goods as agreed in the contract.

Article 61.- Examination of goods quality prior to delivery

Prior to delivery, a seller must examine the quality of goods, bear the costs of such examination and provide quality certificates in accordance with the conditions already agreed with the purchaser. In cases where there is no specific agreement on the examination, the seller must examine the quality of goods in accordance with the conditions normally applicable to that type of goods.

Article 62.- Participation by purchasers or representatives of purchaser in the examination of goods quality at place of goods delivery

1. When it is agreed in a sale and purchase contract to let the purchaser or his/her/its representative participate in the examination of goods quality prior to delivery, the seller must ensure that the purchaser or his/her/its representative participate in the examination.

2. Where the purchaser or his/her/its representative fails to participate in the examination of goods quality as agreed in the contract though having been so advised by the seller, the seller shall be entitled to deliver goods in accordance with the contract.

3. Irrespective of the participation by the purchaser or his/her/its representative in the examination of goods quality, the seller remains responsible for the quality of the goods.

Article 63.- The right to receive payment for goods

A seller shall receive payment as agreed in the contract for sale and purchase of goods. If the seller receives payment late or receives no payment at all due to the fault of the purchaser, the seller shall be entitled to take measures defined in Chapter IV of this Law in order to protect his/her/its legitimate interests.

Article 64.- Delivery of goods to carriers

A seller is deemed to have fulfilled his/her/its goods delivery obligation upon delivery of goods to a carrier in accordance with the terms of delivery agreed upon by the two parties.

Article 65.- Delivery of goods in excessive or insufficient quantity and delivery of goods of wrong type

1. Where a seller deliver goods in excess of the quantity agreed upon in the contract, the purchaser shall be entitled to refuse or accept the excessive quantity. In case of refusal by the purchaser, the seller must recover the excessive quantity and bear the costs therefor. Where the purchaser accepts the excessive quantity, the purchaser must pay for that quantity of goods at the price agreed upon by the two parties.

2. Where a seller fails to deliver goods in sufficient quantity as agreed upon, the purchaser shall be entitled to accept delivery and to pay for only the quantity of goods which is received or to take measures defined in Chapter IV of this Law in order to protect his/her/its legitimate interests.

3. Where a seller delivers, amongst other (goods), goods other than those agreed upon in the contract, the purchaser shall be entitled to refuse those goods.

4. The seller shall not be responsible for the delivery of goods in insufficient quantity or the delivery of goods mixed up with goods of wrong type and the purchaser shall not be responsible for receipt of excessive goods if, upon completion of delivery and receipt of goods, the parties do not lodge complaints as prescribed in Articles 75 and 241 of this Law.

Article 66.- Goods under warranty

Where goods for sale and purchase are under warranty, the seller must be responsible for the quality of goods within the period of warranty and bears the warranty cost, unless otherwise agreed upon by the parties.

Article 67.- The seller’s right to cease the delivery of goods

1. The seller shall have the right to cease the delivery of goods in the following cases:

a/ Where the purchaser breaches the terms of payment agreed upon in the contract, the seller shall be entitled to cease the delivery of goods until the purchaser completes payment;

b/ Where the purchaser is declared bankrupt or becomes insolvent before the delivery of goods, the seller shall have the right not to deliver the goods and be entitled to dispose of such goods.

2. Where the seller must retain and dispose of goods due to the fault of the purchaser under Clause 1 of this Article, the purchaser must bear the losses and relevant reasonable expenses.

Article 68.- The seller’s liability for goods which do not conform with contracts

The seller shall be liable for goods which do not conform with the contract, unless he/she/it can disprove its fault.

Where goods do not conform with the contract, the seller shall be liable for all damage caused, irrespective of whether the seller is aware of such damage or not.

Article 69.- Responsibility to guarantee the ownership over goods already sold

The seller shall have to guarantee the purchaser’s ownership over the already sold goods so that the purchaser shall not be involved in any dispute with a third party. After the transfer of the ownership, the seller must not perform any act which infringes upon the purchaser’s ownership over the goods.

Article 70.- Refund of payment for goods

Where a seller has received payment or an advance from a purchaser but fails to fulfil the goods delivery obligation, the seller shall have to refund to the purchaser such payment or advance even where its liability is relieved under Article 77 of this Law.

Article 71.- The purchaser’s obligation to receive goods and to make payment therefor

1. The purchaser shall have to perform tasks necessary for the seller to deliver goods, including providing guidances on transportation of goods.

2. The purchaser shall have to receive goods and make payment therefor as agreed upon in the contract.

3. The purchaser shall have to make payment for goods in cases where goods are lost or damaged after the ownership rights have been transferred from the seller to the purchaser, except for cases where the loss or damage is caused due to the fault of the seller.

Article 72.- The right to suspend payment for purchased goods

1. The purchaser shall be entitled to suspend goods purchase in whole or in part if, upon receipt of goods, the goods are found damaged or defective; and shall make payment only when the seller has made good such damage or defects, unless otherwise agreed in the contract.

2. Where there is evidence indicating that the seller has been deceptive or unable to deliver goods or that goods are the subject of a dispute between the seller and a third party, the purchaser shall be entitled to withhold his/her/its goods purchase payment in whole or in part until the above matters have been settled.

Article 73.- Timelimit for making goods purchase payment

The timelimit for the purchaser to make his/her/its goods purchase payment shall be agreed upon by both parties on the basis of the time and mode of goods delivery.

Article 74.- Examination of goods at destination

The purchaser shall be entitled to examine goods at the destination within a reasonable period of time suitable to the nature of each type of goods under the contract.

Article 75.- Notice of goods which do not conform with contracts

Where parties agree on the timelimit for notification of goods which do not conform with the contract, the purchaser shall have to notify the seller of such goods within the agreed timelimit; where the purchaser fails to notify the seller within such timelimit, the purchaser loses the right to complain.

Article 76.- Risks with respect to goods during transportation

The purchaser shall have to bear the risks with respect to goods during transportation as from the time the ownership over the goods is passed from the seller to the purchaser if the seller or carrier is not at fault.

Article 77.- Relief from liability for non-performance of contractual obligations

1. Parties shall be exempt from liability for non-performance of contractual obligations in whole or in part if it is so agreed upon in the contract.

2. Parties shall be exempt from liability for non-performance of contractual obligations in whole or in part if such non-performance is caused by force majeure events.

Force majeure events are unexpected events occurring after the contract is entered into, which are beyond the foresight and control of the parties.

3. The party which fails to perform its contractual obligations in whole or in part shall have to prove its circumstances for relief from liability.

Article 78.- Notification and certification of circumstances for relief from liability

1. The party which fails to perform its contractual obligations in whole or in part shall have to notify the other party immediately in writing of the circumstances for relief from liability and their possible consequences; to notify the other party immediately in writing when such circumstances come to an end; and if it fails to notify the other party or gives late notice, it shall have to compensate for damage, if any.

2. Force majeure events must be certified by competent bodies or organizations.

Article 79.- Extension of timelimits and refusal to perform contracts due to force majeure events

1. In case of a force majeure event, parties may agree to extend the timelimit for the performance of contractual obligations; if the parties fail to reach such agreement, the timelimit shall be extended by a period equal to the length of time during which the force majeure event subsists plus a reasonable period of time required to overcome (its) consequences provided that the extension does not exceed five months for the goods which the parties have agreed to deliver within twelve months, and does not exceed eight months for the goods which the parties have agreed to deliver within a period of more than twelve months, from the date on which the contract is entered into. Upon expiry of such timelimits, the parties shall be entitled to refuse to perform the contract and no party may claim damages from the other.

2. Where a party refuses to perform the contract, it must, within thirty days from the date of expiry of the timelimit prescribed in Clause 1 of this Article, notify the other party thereof prior to commencement by the other party of the performance of its contractual obligations.

3. The extension of timelimits for the performance of contractual obligations as provided for in Clause 1 of this Article shall not apply to contracts for sale and purchase of goods with a fixed delivery timelimit.

Article 80.- Contracts for sale and purchase of goods with foreign traders

A contract for sale and purchase of goods with a foreign trader is a contract for sale and purchase of goods entered into between one party being a Vietnamese trader and another party being a foreign trader.

Article 81.- Conditions for validity of contracts for sale and purchase of goods with foreign traders

A contract for sale and purchase of goods with a foreign trader shall be valid when all of the following conditions are met:

1. The contracting parties, being the seller and the purchase, must have full legal status.

The foreign party is trader and whose legal status is determined in accordance with the law of the country of which such trader bears the citizenship.

The Vietnamese party must be a trader which is permitted to conduct direct commercial activities with foreign traders;

2. The contracted goods are goods which are permitted to be sold and purchased under the laws of the countries of the seller and the purchaser respectively;

3. A contract for sale and purchase of goods with a foreign trader must include the principal contents of a contract for sale and purchase of goods prescribed in Article 50 of this Law;

4. A contract for sale and purchase of goods with a foreign trader must be made in writing.

Article 82.- Application of provisions relating to sale and purchase of goods to foreign traders

In addition to provisions in Articles 80 and 81 of this Law, contracts for sale and purchase of goods with foreign traders must comply with other provisions of this Law in relation to sale and purchase of goods.

Section 3. REPRESENTATION OF TRADERS

Article 83.- Representatives of traders and represented persons

1. A representative of a trader is a trader that is authorized by another trader to conduct commercial activities in the name and under the instructions of the latter for remuneration.

2. A represented person is the trader that authorizes another trader to act as his/her/its representative.

3. In cases where a trader nominates his/her/its personnel to act as his/her/its representative, the provisions of the Civil Code shall apply.

Article 84.- Scope of representation

Parties may agree that a representative shall be permitted to conduct part or all commercial activities within the scope of operation of the represented person.

Article 85.- Contracts for representation of traders

1. The representation of a trader must be established through a contract.

2. A contract for representation must be made in writing with the following principal contents:

a/ Names and addresses of parties;

b/ Scope of representation;

c/ Duration of representation;

d/ Remuneration;

e/ Agreement on restriction of competition.

Article 86.- Obligations of representatives

A representative of a trader shall have the following obligations:

1. To conduct commercial activities in the name and in the interests of the represented person;

2. To notify the represented person of the opportunities and the results of the implementation of authorized commercial activities;

3. To strictly follow the instructions of the represented person, except where such instructions breach the provisions of law or are inconsistent with the contract for representation;

4. To refrain from conducting commercial activities in his/her/its own name or in the name of a third party within the scope of representation;

5. To refrain from disclosing or supplying to other people confidential information relating to commercial activities of the represented person during the period of representation and within two years after termination of the contract for representation;

6. To maintain the assets and documents assigned for performing the activities of representation;

7. To compensate for damage he/she/it has caused to the represented person.

Article 87.- Obligations of represented persons

A represented person shall have the following obligations:

1. To notify the representative immediately of the signing of contracts negotiated by the representative, the performance of contracts entered into by the representative, and the acceptance or non-acceptance of contracts which have been entered into by the representative beyond his/her/its competence.

2. To supply the assets, documents and information necessary for the representative to perform the activities of representation;

3. To pay remuneration to the representative as agreed upon in the contract for representation;

4. To notify promptly the representative of the impossibility to enter into or perform the contracts within the scope of representation;

5. To compensate for damage he/she/it has caused to the representative if the representative can prove that the represented person has breached obligations prescribed in this Article.

Article 88.- The right to remuneration

1. Representatives shall be entitled to enjoy remuneration for contracts entered into within the scope of representation. The right to remuneration arises from the time agreed upon by the parties in the contract for representation.

2. The rate of remuneration shall be calculated in percentage(s) of the value of a contract entered into within the scope of representation or a certain amount agreed upon by the parties.

3. Where a represented person assigns the representative one or more obligations outside the signed contract for representation, the consent of the representative is required. In this case, the representative shall be entitled to require additional remuneration besides the remuneration prescribed in Clause 1 of this Article.

Article 89.- Payment of expenses

Unless otherwise agreed upon by the parties, a representative shall be entitled to claim for payment of reasonable expenses related to the performance of representation activities.

Article 90.- The right to retention

A representative shall be entitled to retain assigned assets and document as security for payment of remuneration and expenses which are due.

Article 91.- Restriction of competition

Parties may agree that representative shall not be allowed to conduct commercial activities in competition with the represented person and to act as the representative of the competitor(s) of the represented person.

Article 92.- Unilateral termination of contracts for representation

1. Where a contract for representation does not specify a definite duration, any party may unilaterally terminate the contract but must notify the other party within sixty days prior to the termination of the contract.

2. Where a represented person unilaterally terminates the contract for representation as prescribed in Clause 1 of this Article, the representative may require the represented person to pay an amount of remuneration for the signing by the represented person of contracts with clients, which were negotiated by the representative.

3. Where a representative unilaterally terminates the contract for representation, he/she/it forfeits the right to remuneration for the transactions which he/she/it would otherwise have been entitled to.

Section 4. COMMERCIAL BROKERAGE

Article 93.- Commercial brokers

A commercial broker is a trader that acts as an intermediary between parties selling and purchasing goods and providing commercial services during the course of negotiations and signing contracts for sale and purchase of goods or provision of commercial services and shall be entitled to a commission under a brokerage contract.

Article 94.- Brokerage contracts

1. Commercial brokerage must be established through contracts.

2. A brokerage contract must be made in writing with the following principal contents:

a/ Names and addresses of parties;

b/ Details of brokerage;

c/ Commission;

d/ Effective duration of the brokerage contract.

Article 95.- Obligations of brokers

A commercial broker shall have the following obligations:

1. To honestly carry out the brokerage activities;

2. To take care of samples of goods and documents assigned to him/her/it for the performance of brokerage activities and return them to the principal upon completion of brokerage activities;

3. Not to disclose or supply information to the detriment of the interests of the principal;

4. To compensate for damage he/she/it has caused to the principal;

5. To be responsible for the legal status, but not the capacity for payment, of the principal.

Article 96.- Performance of contracts between principals

Brokers shall not be entitled to participate in the performance of contracts between principals, except where they are so authorized by principals.

Article 97.- The right to enjoy commission

A broker’s right to enjoy commission arises from the time the principals enter into a contract.

Article 98.- Payment of expenses relating to brokerage activities

Brokers shall be entitled to claim from the principals payment of reasonable expenses relating to the brokerage activities, even where the brokerage activities fail to yield results for the principals.

Section 5. SALE AND PURCHASE OF GOODS BY MANDATED DEALERS

Article 99.- Sale and purchase of goods by mandated dealers

The sale and purchase of goods by a mandated dealer is a commercial act whereby the mandatory carries out the sale and purchase of goods in his/her/its (own) name under terms agreed upon with the mandator and is entitled to receive a commission.

Article 100.- Mandatories

A mandatory for sale and purchase of goods is a trader dealing in goods which are consistent with the mandated goods and carrying out the sale and purchase of goods on terms agreed upon with the mandator.

Article 101.- Mandators

A goods sale and purchase mandator may, or may not, be a trader that authorizes a mandatory to conduct the sale and purchase of goods at his/her request and pays a commission.

Article 102.- Mandated goods

Goods which are circulated may be the subject matter of a mandated sale and purchase.

Article 103.- Mandate commission

Commissions for mandated sale and purchase of goods shall be agreed upon in the contract by the two parties or defined by law.

Article 104.- Contracts of mandate for sale and purchase of goods

1. A goods sale and purchase mandate must be established through a contract.

2. A contract of mandate for goods sale and purchase must be made in writing with the following principal contents:

a/ Names and addresses of parties;

b/ Goods being the subject matter of mandated sale and purchase;

c/ Quantity, quality, specifications, price and other specific terms;

d/ Commission;

e/ Effective duration of the mandate contract.

Article 105.- Sub- mandate to a third party

A mandatory shall not be entitled to sub-mandate a third party to perform the signed contract for goods sale and purchase mandate without the written consent of the mandator.

Article 106.- Multilateral mandate

A mandatory dealer may accept the mandate for sale and purchase of goods from different mandators.

Article 107.- Obligations of mandatories

A good sale and purchase mandatory shall have the following obligations:

1. To conduct the sale and purchase of goods in accordance with the mandate contract;

2. To notify the mandator of matters relating to the performance of the mandate contract; where the mandator gives instructions in accordance with the mandate contract, the mandatory dealer shall have to follow those instructions;

3. To take care of assets and documents assigned to him/her/it for the performance of the mandate contract;

4. To keep the confidentiality of information relating to the performance of the mandate contract;

5. To pay money and deliver goods as agreed upon in the mandate contract.

Article 108.- Rights of mandatories

A mandatory shall have the following rights:

1. To request the mandator to provide necessary information and documents for the performance of the mandate contract;

2. To receive a mandate commission as agreed upon in the mandate contract;

3. Not to bear responsibility for goods which have been delivered to the mandator, except otherwise agreed upon by both parties;

4. To claim compensation from the mandator for damage caused by the latter.

Article 109.- Obligations of mandators

A mandator shall have the following obligations:

1. To provide necessary information, documents and facilities for the performance of the mandate contract;

2. To pay a mandate commission;

3. To bear responsibility for the performance of the mandate contract by a third party where the mandator has consented to the sub-mandate to such third party under Article 105 of this Law;

4. To pay money and deliver goods as agreed upon in the mandate contract.

Article 110.- Rights of mandators

A mandator shall have the following rights:

1. To request the mandatory to provide full information relating to the performance of the mandate contract;

2. To lodge complaints and claim compensation from the mandatory for damage caused by the latter.

Section 6. SALE AND PURCHASE AGENCY

Article 111.- Sale and purchase agency

Sale and purchase agency is a commercial act whereby the principal and the agent agree that the agent shall conduct the sale and purchase of goods on behalf of the principal for remuneration.

Good purchased and sold by agents must be in line with the business registration certificates of the parties.

Article 112.- Principals and agents

1. Principals are traders that deliver goods to agents for sale or provide money to agent for purchase of goods.

2. Agents are traders that receive goods to act as sale agents or receive money to act as purchase agents.

Article 113.- Agency remuneration

Agency remuneration is a sum of money paid by a principal to an agent in the form of a commission or price difference.

The remuneration level shall be agreed upon in the agency contract by the parties.

Article 114.- Purchase agency

Purchase agency is a relationship whereby the agent receives money from the principal to purchase goods at the request of the principal and is entitled to an amount of remuneration paid by the principal under a mutual agreement between the parties.

Article 115.- Sale agency

Sale agency is a relationship whereby the agent receives goods from the principal for sale and is entitled to an amount of remuneration paid by principal under a mutual agreement between the parties.

Article 116.- Forms of agency

1. Commission agency is a form of agency whereby the agent sells or purchases goods at the sale or purchase prices set by the principal in return for a commission. The rate of commission shall be calculated in percentage(s) of the sale and purchase prices as agreed upon by the parties.

2. Package agency is a form of agency whereby the agent sells or purchases a specific quantity of goods at a price (prices) set by the principal in return for remuneration. The level of remuneration which the agent is entitled to shall be the difference between the actual sale or purchase price and the price(s) set by the principal.

3. Exclusive agency is a form of agency whereby a sole agent is authorized by the principal to sell or purchase one or more items of goods within a certain region.

4. General sale and purchase agency is a form of agency whereby the agent organizes a network of sub-agents to sell or purchase goods for the principal.

The general agent represents the network of sub-agents. Sub-agents operate under the management and in the name of the general agent.

Article 117.- Ownership rights in sale and purchase agency

The principal is the owner of goods and money delivered to the agent(s).

Article 118.- Payments in agency

Payments for goods and payments of agency remuneration shall be made in separate installments after the agent has completed the sale or purchase of a certain quantity of goods, unless otherwise agreed upon by the parties.

Article 119.- Agency contracts

1. Sale and purchase agency must be established through contract(s).

2. Agency contracts must be made in writing with the following principal contents:

a/ Names and addresses of parties;

b/ Goods under agency;

c/ Form of agency;

d/ Agency remuneration;

e/ Effective duration of the agency contract.

Article 120.- Rights of principals

A principal shall have the following rights:

1. To select the agent and the form of agency;

2. To set the sale or purchase price(s) of the goods under agency;

3. To receive deposits or documents on mortgaged assets from the agent, if so agreed in the agency contract;

4. To request the agent to make payment or deliver goods in accordance with the agency contract;

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

6. To enjoy lawful rights and interests brought about by the agency activities.

Article 121.- Obligations of principals

A principal shall have the following obligations:

1. To provide guidances, information and conditions for the agent to perform the agency contract;

2. To comply strictly with the undertakings in the agency contract;

3. To bear responsibility for the specifications and quality of goods delivered to the sale agent or received from the purchase agent under the agency contract if the agent is not at fault;

4. To pay remuneration to the agent;

5. To return deposits or documents on mortgaged assets, if any, to the agent upon termination of the contract;

6. To be responsible before law for the selection and employment of the agent and be jointly responsible for any breach of law by the agent caused by the principal or for any intentional breach of law by the parties.

Article 122.- Rights of agents

An agent shall have the following rights:

1. To select and enter into agency contracts with one or more principals;

2. To request the principal to deliver money or goods in accordance with the agency contract; to recover from the principal deposits or documents on mortgaged assets, if any, upon termination of the agency contract;

3. To request the principal to provide guidances, information and other conditions for the performance the agency contract;

4. To enjoy remuneration as well as other legitimate rights and interests brought about by the agency activities.

Article 123.- Obligations of agents

An agent shall have the following obligations:

1. To sell and/or purchase goods at the prices agreed upon by the principal and the agent in the agency contract;

2. To comply strictly with the undertakings given to the principal in the agency contract with respect to the delivery or receipt of goods or money;

3. To pay a deposit or to mortgage assets, if any, to the principal as agreed upon in the agency contract;

4. To pay to the principal any proceeds from the sale of goods, in the case of a sale agent, or deliver the purchased goods, in the case of a purchase agent;

5. To post the trade name and signboard of the principal and the name of the goods under agency at the place where goods are purchased or sold;

6. To preserve goods and be responsible for the quantity, specifications and quality of goods after receipt thereof, for a sale agent, or prior to delivery thereof, for a purchase agent, in accordance with the agency contract;

7. To be subject to inspection and supervision by the principal and to report to the principal on the agency activities;

8. To be responsible to the principal and before law for the performance of the agency contract.

Article 124.- Amendments and supplements to agency contracts

Any amendment or supplement to a sale and purchase agency contract shall be valid only when it is made in writing and approved by the parties.

Article 125.- Transfer of rights and obligations to third parties

A party to an agency contract shall only be entitled to transfer its rights and obligations under the agency contract to a third party if it is approved by the other contracting party.

Article 126.- Termination of agency contracts

A sale and purchase agency contract shall terminate in the following cases:

1. The contract is fully performed or its term expires;

2. The parties agree in writing to terminate the contract prior to expiry of its term;

3. The contract is invalidated when its contents or its performance contravene the provisions of law;

4. A party unilaterally terminates the contract when a breach of the contract by the other party is a condition for terminating the contract as agreed upon by the parties;

5. Other cases prescribed by law.

Article 127.- Sale and purchase agency for foreign traders

The sale and purchase agency for foreign traders shall be stipulated by the Government.

Section 7. COMMERCIAL PROCESSING

Article 128.- Commercial processing

Commercial processing is a commercial act whereby the processor carries out the processing of goods at the request and with raw materials and materials of the processee in order to receive remuneration; and the processee receives processed goods for commercial purposes and must pay processing fees to the processor.

Article 129.- Processing activities

Commercial processing activities include the production, processing, creation, repair, re-production, assembly, classification and packaging of goods at the request and with raw materials and materials of the processee.

Article 130.- Processors and processees

1. A processor is the party that agrees to process goods in order to receive remuneration.

2. A processee is the party that hires the processor to process goods for commercial purposes.

Article 131.- Processing contracts

1. Commercial processing must be established through contract(s).

Commercial processing contracts must be made in writing between the processor and the processee.

2. The contents of commercial processing contracts and the rights and obligations of the processor and the processee shall comply with the provisions of the Civil Code regarding processing contracts.

Article 132.- Processing with foreign traders

Processing with foreign traders is a commercial processing activity whereby the processee and the processor are traders with their head offices or permanent residences in different countries provided that one party must be a trader conducting commercial activities in Vietnam.

Article 133.- Conditions on processing with foreign traders

Items of goods permitted to be processed and imported or exported machinery, equipment, raw materials and materials necessary for the processing with foreign traders shall comply with the provisions of Vietnamese law and international commercial practices if such practices are not contrary to the law of Vietnam.

Article 134.- Exportation and/or importation of machinery, equipment, raw materials, materials and goods items permitted to be processed

1. The processor shall be entitled to directly export or import machinery, equipment, raw materials and materials necessary for processing activities and processed goods in accordance with the economic and technical standards applicable to each kind of processed goods.

2. The exportation or importation defined in Clause 1 of this Article shall be carried out in accordance with the law of Vietnam.

Article 135.- Technology transfer in goods processing with foreign traders

Technology transfer in goods processing with foreign traders shall be carried out in accordance with the agreements stated in processing contracts and in accordance with the provisions of Vietnamese law.

Article 136.- Liability for industrial property rights with respect to processed goods

The processee must be responsible for the lawfulness of industrial property rights with respect to processed goods.

Article 137.- Inspection and supervision of processing

The processee shall be entitled to appoint representatives to inspect and supervise the processing activity at the place of processing as agreed upon by the parties.

Article 138.- Application of tax legislation to processing activities with foreign traders

Taxes levied on machinery, equipment, raw materials and materials necessary for processing activities and on processed product in accordance with economic and technical standards shall be applied in accordance with the tax legislation in Vietnam.

Section 8. AUCTION OF GOODS

Article 139.- Provision of goods auction services

Traders that are legal persons and satisfy the conditions prescribed by law shall be entitled to provide goods auction services.

Article 140.- Auction of goods

The provision of goods auction services by traders shall comply with the provisions of the Civil Code and the Regulations on Goods Auctions issued by the Government.

Section 9. GOODS BIDDING

Article 141.- Goods bidding

Goods bidding is the procurement of goods through bidding to select a trader that satisfies the term of price and economic and technical conditions set by a tenderer.

Article 142.- Tenderers

A tenderer is the owner of capital or the person authorized to use capital to purchase goods.

Article 143.- Bidders

Bidders are domestic or foreign traders that satisfy the conditions for participation in biddings as prescribed by the law of Vietnam.

Article 144.- Successful bidders

A successful bidder is a party selected to enter into and perform the contract with the tenderer.

Article 145.- Forms of bidding

1. Goods bidding shall include open bidding and restricted bidding.

Open bidding is a form of bidding whereby the tenderer does not limit the number of bidders and publicly announces on mass media the conditions for participation in the bidding.

Restricted bidding is a form of bidding whereby the tenderer invites only a limited number of bidders having the best conditions to participate in the bidding.

2. The selection of the form of open bidding or restricted bidding shall be decided by the tenderer. In cases where the goods bidding funded by the State capital, the head of the competent State body shall select the form of bidding.

Article 146.- Prequalification of bidders

1. Prequalification of bidders is a measure applied by a tenderer to complicated substantial contracts for procurement of goods in order to select bidders that are capable of satisfying the conditions set by the tenderer.

2. The prequalification order and procedures stipulated by the tenderer must conform with the conditions of bidding.

Article 147.- Conditions for trader to participate in biddings

Traders wishing to participate in biddings shall have to satisfy the following conditions:

1. Engaged in business lines which are consistent with the goods opened for bidding;

2. Being professionally and financially capable of participating in the bidding;

3. Having bid dossiers made in accordance with the regulations set by the tenderer.

Article 148.- Management of bid dossiers

The tenderer shall be responsible for managing bid dossiers.

Article 149.- Confidentiality of bidding information

1. The tenderer shall receive, enter into a registry, seal, manage and maintain the confidentiality of bid dossiers.

2. Organizations and individuals involved in the organization of bidding and the evaluation and selection of bids must maintain the confidentiality of relevant information during the entire bidding process.

Article 150.- Amendment of tendering dossiers

1. Bidders shall not be allowed to amend their bid dossiers after the bid opening.

During the process of evaluation and comparison of bid dossiers, the tenderer may request bidders to clarify matters relating to bid dossiers. All requests for clarification from the tenderer and replies from bidders must be made in writing.

2. Where the tenderer amends some contents of the tendering dossiers, it must send such written amendments to all bidders at least ten days before the deadline for submitting bid dossiers so that the bidders may complete their bid dossiers.

Article 151.- Tendering currency

The tendering currency shall be Vietnamese Dong or a convertible foreign currency stipulated by the tenderer in the tendering dossiers in accordance with the law of Vietnam. The exchange rate shall be the official rate announced by the State Bank of Vietnam at the time of bid opening.

Article 152.- Tendering dossiers

A tendering dossier shall comprise:

1. Tendering notice;

2. Bidding participation form;

3. Requirements in terms of quantity, quality, specifications and utility of goods;

4. Goods delivery conditions and schedules;

5. Financial and commercial conditions; mode of payment;

6. Bidding contract form;

7. Bid guarantee form;

8. Contract performance guarantee form;

9. Other instructions relating to the bidding.

The fees for dossiers provided to bidders shall be stipulated by the tenderer.

Article 153.- Tendering notice

1. A tendering notice must be consistent with the form of bidding.

2. A tendering notice shall comprises the following main contents:

a/ Name and address of the tenderer;

b/ Brief description of the quantity, quality, specifications and utility of goods opened for bidding;

c/ Bidding participation conditions;

d/ Timelimit, location and procedures for receipt of tendering dossier;

e/ Timelimit, location and procedures for submission of bid dossiers;

f/ Instructions for reading tendering dossiers.

Article 154.- Instructions to bidders

The tenderer shall have to provide instructions to bidders relating to the bidding conditions and the procedures applied during the bidding process and answer questions of the bidders.

Article 155.- Bid guaratees

Bidders shall have to pay a bid guarantee upon submission of their bids. The amount of bid guarantee shall be defined by the tenderer but shall not exceed three per cent of the total estimated value of the goods opened for bidding.

In some cases, the tenderer may set a uniform bid guarantee amount in order to ensure the confidentiality of the bid prices offered by bidders.

The tenderer shall determine the guarantee form and conditions and the bank for payment of bid guarantees. Bid guarantees shall be refunded to unsuccessful bidders within thirty days from the date of announcement of the bidding results.

Where a bid winner fails to sign a contract, refuses to implement the contract, or withdraws his/her/its bidding application after the bid closure he/she/it shall not be entitled to the reimbursement of the bid guarantee.

Article 156.- Contract performance guarantees

The successful bidder shall have to pay a guarantee for the performance of the contract. The amount of the contract performance guarantee shall be agreed upon by the two parties but shall not exceed ten per cent of the value of the contract. The contract performance guarantee shall be effective until the completion of the performance of the contract. The successful bidder shall be entitled to the reimbursement of the contract performance guarantee upon the disposal of the contract, unless otherwise agreed upon by the parties.

After the payment of the contract performance guarantee, the successful bidder shall be refunded with his/her/its bid guarantee.

Article 157.- Bid opening

1. Bid opening is the opening of bid dossiers at a fixed time. All bid dossiers submitted on time must be opened publicly by the tenderer. The bidders shall be entitled to attend the bid opening.

2. Bid dossiers which are not submitted on time shall be rejected and returned to bidders unopened.

Article 158.- Minutes of bid opening

Upon bid opening, the tenderer and the bidders that are present shall have to sign the minutes of bid opening.

The minutes of bid opening must clearly state the name of the bidding goods; date, time and location of the bid opening; names and addresses of bidders; bidding prices, bid guarantees; any written amendments or supplements, and other relevant details, if any.

Article 159.- Consideration of bid dossiers upon bid opening

The consideration of bid dossiers upon bid opening shall include:

1. Consideration of the validity of bid dossiers;

2. Examination of the bidders’ qualifications to participate in the bidding;

3. Requests by the tenderer for bidders to clarify certain contents of their bid dossiers; the requests and clarification shall be made in writing.

Article 160.- Evaluation and comparison of bid dossiers

1. Bid dossiers shall be evaluated and compared according to each criterion for an overall evaluation.

The criteria for evaluation comprise the quality, financial and professional capability of bidders, prices, schedule of implementation, technology transfer, training, and other necessary criteria.

2. The criteria prescribed in Clause 1 of this Article shall be evaluated according to the method of a score system or other method as determined prior to the bid opening.

Article 161.- Classification and selection of bidders

1. On the basis of the result of bid evaluation, the tenderer shall classify bidders according to the method already determined.

2. Where a Vietnamese bidder and a foreign bidder obtain equal scores and equally satisfy bidding conditions, priority shall be given to the Vietnamese bidder.

3. Where foreign bidders obtain equal scores and equally satisfy bidding conditions, priority shall be given to the foreign bidder that undertakes to enter into sub-contracts with Vietnamese sub-contractors.

4. Where a goods bidding is funded by the State capital, the selection of successful bidder must be approved by the head of the competent State body.

Article 162.- Re-organization of bidding

A bidding shall be re-organized in the following cases:

1. Where there is breach of the regulations on bidding;

2. Where all bidders fail to satisfy the bidding requirements.

Section 10. GOODS FORWARDING SERVICES

Article 163.- Goods forwarding services of traders

Goods forwarding service is a commercial act whereby the forwarder receives goods from the sender, arranges transportation and storage, and completes the paperwork and other related services for the delivery of goods to the recipient as authorized by the goods owner, the carrier or another forwarder (hereinafter referred to as the customer).

Article 164.- Forwarders

A forwarder is a trader having a business registration certificate for forwarding services.

Article 165.- Forwarding contracts

A forwarding contract is a contract entered into between a forwarder and a customer for the provision of forwarding services as prescribed in Article 163 of this Law.

Article 166.- Undertaking to transport goods

A forwarder undertaking to transport goods shall have to comply with the legislation governing transportation activities.

Article 167.- Rights and obligations of forwarders

A forwarder shall have the following rights and obligations:

1. To be entitled to remuneration and other reasonable income;

2. To fulfil all his/her/its obligations in accordance with the contract;

3. To depart from the instructions of the customer during the performance of the contract for a plausible reason and in the interests of the customer, provided that the customer must be notified thereof immediately;

4. To notify the customer immediately for further instructions of the cases where, after the contract has been signed, the instructions of the customer cannot be followed in whole or in part;

5. To perform his/her/its obligations within a reasonable period of time if there is in the contract no agreement on specific timelimit for the performance of the obligations to the customer.

Article 168.- Rights and obligations of customers

A customer shall have the following rights and obligations:

1. To select the forwarder that satisfies his/her/its requirements;

2. To guide, examine and supervise the performance of the contract;

3. To claim compensation if the forwarder breaches the contract;

4. To provide sufficient instructions to the forwarder;

5. To provide sufficient, detailed and accurate information on the goods to the forwarder;

6. To pack and mark the goods in accordance with the contract for sale and purchase of goods, except where the forwarder undertake to do such job;

7. To compensate for damage caused to, and pay any costs incurred by, the forwarder if he/she/it has strictly complied with the instructions of the customer or if the customer is at fault;

8. To pay the forwarder all amounts due.

Article 169.- Liability exemption

1. A forwarder shall not be liable for damage and loss caused in the following cases:

a/ Where the customer or his/her/its authorized person is at fault;

b/ Where it has strictly complied with the instructions of the customer or the person authorized by the customer;

c/ Where the customer wrongly packs and marks the goods;

d/ Where the customer or the person authorized by the customer loads and unloads the goods;

e/ Where the goods are defective;

f/ Where there is a strike;

g/ Where force majeure events occur.

2. A forwarder shall not be liable for the loss of profits which the customer should have earned if not for the delayed delivery or the delivery to the wrong address through no fault of the forwarder, unless otherwise provided for by law.

Article 170.- Limited liability

1. The liability of a forwarder shall, in any cases, not exceed the value of the goods, unless otherwise agreed upon by the parties in the contract.

2. A forwarder shall not be exempt from liability if he/she/it fails to disprove his/her/its fault for the loss, damage, or delayed delivery of goods.

3. Damages are calculated on the basis of the value of goods stated in invoices and other amounts substantiated by proper vouchers. If the value of goods is not stated in the invoices, damages shall be calculated on the basis of the market value of that type of goods at the time when and the location where the goods are delivered to the customer; if a market price is not available, the normal price of goods of the same type and quality shall apply.

4. A forwarder shall not be liable in the following cases:

a/ Where the forwarder does not receive any notice of complaint within fourteen days from the date of delivery of goods, excluding Sundays and public holidays;

b/ Where the forwarder does not receive any written notice of any lawsuit instituted at a court or an arbitration body within nine months from the date of delivery of goods.

Article 171.- The right to withhold and dispose of goods

1. A forwarder shall be entitled to withhold a certain quantity of goods and related documents in order to claim payment of a due debt from the customer and shall notify the customer thereof in writing immediately.

2. If the customer fails to pay the debt after forty five days from the date on which the goods and related documents are withheld, the forwarder shall be entitled to dispose of those goods or documents in accordance with the provisions of law and must notify the customer thereof in writing immediately; all costs relating to the withholding and disposal of such goods shall be borne by the customer.

3. A forwarder shall be entitled to use the proceeds from the disposal of goods to pay for the debt owed by the customer and the related expenses. Any balance must be returned to the customer. Thereafter, the forwarder shall no longer be responsible for the goods or documents disposed of.

4. Where there are indications of deterioration of goods, the forwarder’s right to dispose of the goods as prescribed in Clause 2 of this Article arises immediately upon the incurring of any debt by the customer provided that the forwarder has already notified.

Section 11. GOODS ASSESSMENT SERVICES

Article 172.- Goods assessment services

Goods assessment service is a commercial act conducted by an independent assessment organization in order to determine the actual condition of goods as required by an individual, an agency or an organization.

Article 173.- Goods assessment organizations

1. Only organizations satisfying all conditions prescribed by law and having business registration certificates for goods assessment services issued by a competent State body are permitted to provide assessment services and granted goods assessment certificates.

2. Foreign assessment organizations may provide goods assessment services in Vietnam only when they are so permitted by competent State bodies of Vietnam or when they are licensed to establish branches in Vietnam in accordance with the law of Vietnam.

Article 174.- Contents of goods assessment

Assessment of goods comprises the assessment of quantity, quality, specifications, packaging, value of goods, losses, safety, hygiene, and other aspects.

Article 175.- Assessment of goods at the parties’ request

Goods are assessed according to the agreement of the parties in the contract for sale and purchase of goods; in cases where such agreement is not stated in the contract, the parties shall be entitled to select the assessment organization.

Article 176.- Assessment of goods at the request of State bodies

A goods assessment organization shall have to assess goods at the request of a State body in accordance with its business lines and shall be paid assessment fees by the body that requests the assessment.

Article 177.- Rights and obligations of parties requesting goods assessment

The party requesting assessment of goods shall have the following rights and obligations:

1. To request the assessment organization to assess goods according to the agreed contents;

2. To request re-assessment if there is any doubt about the assessment results; and to demand a fine if the assessment organization issues an incorrect assessment certificate;

3. To provide promptly all necessary accurate documents to the assessment organization upon request;

4. To pay assessment fees as agreed upon.

Article 178.- Rights and obligations of goods assessment organization

A goods assessment organization shall have the following rights and obligations:

1. To assess goods independently, objectively, promptly and accurately;

2. To issue assessment certificates;

3. To receive assessment fees as agreed upon;

4. To pay fines for incorrect assessment as agreed upon by the two parties; fines shall not exceed ten times the assessment fees.

Article 179.- Authorized assessment of goods

Where parties to a contract for sale and purchase of goods agree to hire a foreign assessment organization to provide goods assessment services but that organization has not yet been permitted to operate in Vietnam, the foreign assessment organization may authorize an assessment organization which has already been permitted to operate in Vietnam to provide goods assessment services but the former shall have to be still responsible for the results of the assessment.

Section 12. TRADE PROMOTION

Article 180.- Trade promotion

Trade promotion is a commercial act conducted by traders in order to promote the sale of goods and the provision of services within their scope of business by offering certain benefits to customers.

Article 181.- Forms of trade promotion

1. Trade promotion can be conducted in any of the following forms:

a/ Giving free samples of goods to customers for trial use;

b/ Giving goods as gifts or providing free services to customers;

c/ Selling goods or providing services during the period of trade promotion at prices lower than previous normal prices;

d/ Selling goods or providing services together with coupons or other forms of voucher for winning prizes according to rules and prizes already announced;

e/ Selling goods or providing services together with contest forms for customers, so that the prize winners shall be selected according to the rules and prizes already announced;

f/ Selling goods or providing services together with lottery tickets for drawing prizes according to the rules and prizes already.

2. In addition to the forms of trade promotion prescribed in Clause 1 of this Article, traders may apply other forms of trade promotion if approved by the State management body in charge of commerce.

Article 182.- Goods used for trade promotion

Goods which are used by traders as gifts or prizes or samples for trial use by customers in promotion activities must be goods which are permitted to be circulated on the market.

Article 183.- Rights and obligations of traders organizing trade promotion activities

1. A trader that organizes trade promotion activities shall have the following rights:

a/ To select the form, time and location for trade promotion;

b/ To define specific benefits which customers shall be entitled to;

c/ To authorize his/her/its agents to conduct promotion activities.

2. A trader that organizes trade promotion activities shall have the following obligations:

a/ To inform in writing the time and form of promotion to the State body for the management of commerce of the province or city directly under the central Government where the trade promotion activities are conducted prior to their commencement;

Where the trade promotion form prescribed in Point f, Clause 1, Article 181 of this Law is applied, the approval of the competent State body is required;

b/ To announce publicly the form and time of trade promotion at the place where goods are sold and services are provided;

c/ To fulfil his/her/its commitments to customers.

Article 184.- Confidentiality of information relating to trade promotion programs and contents

Upon receiving notices on trade promotion activities organized by traders, the competent State management body shall have to maintain strictly the confidentiality of the promotion programs and contents; if any disclosure causes damage to a trader, the aggrieved party shall have the right to complain to the competent State body or institute court action in accordance with the provisions of law.

Article 185.- Prohibited trade promotion activities

The following trade promotion activities shall be prohibited:

1. Promotion for goods and/or services that are prohibited from business and goods which have not yet been permitted for circulation;

2. Untruthful or misleading promotions for goods and services so as to deceive customers;

3. Promotions for the purpose of selling low quality products, causing harms to production, the interests and health of people and to the environment or scenery;

4. Promotions at schools, hospitals and offices of agencies, organizations and units of the people’s armed forces;

5. Promotions of alcohol, beer and cigarettes targetted at children of under sixteen years of age;

6. Promises to grant gifts or prizes, which are not fulfilled or wrongly fulfilled.

Section 13. COMMERCIAL ADVERTISING

Article 186.- Commercial advertising

Commercial advertising is a commercial act conducted by traders aimed at introducing goods and services for trade promotion.

Article 187.- Right to conduct commercial advertising

Traders shall be entitled to make advertisements for their production activities, goods and services or to hire advertising service organizations to do so for them.

Article 188.- Commercial advertising services

1. Commercial advertising service is a commercial activity carried out by trader(s) in order to conduct commercial advertising for other traders.

2. Organizations and individuals satisfying all conditions prescribed by law and wishing to conduct advertising services shall be granted business registration certificates by the competent State body.

3. The Government shall define the conditions for conducting commercial advertising service activities.

Article 189.- Commercial advertising products

Commercial advertising products comprise information in the forms of visual images, sounds, letters and symbols which contain commercial advertising details.

Article 190.- Means of commercial advertising

Means of commercial advertising are the media used to display commercial advertising products.

Means of commercial advertising comprise:

1. Mass media;

2. Means of communication;

3. Publications of all kinds;

4. All kinds of boards, signs, banners, panels and posters;

5. Other means of commercial advertising.

Article 191.- Protection of lawful commercial advertising products and commercial advertising

1. Traders shall be entitled to register industrial property rights over the commercial advertising products which are created by them in accordance with the provisions of law and protected by the State.

2. The State shall protect and facilitate the lawful commercial advertising activities of traders.

Article 192.- Prohibited commercial advertisements

The prohibited commercial advertisements shall include:

1. Advertisements of goods and services which are banned from business or advertisement by the State;

2. Advertisements of goods and products which have not yet been permitted for circulation or services which have not yet been permitted for provision, by the time of advertising;

3. Advertisements which are made use of, thereby causing damage to the interests of the State, individuals and other traders;

4. Advertisements using images, actions, sounds, spoken or written languages, symbols, colors and lighting which contravene the fine historic, cultural and moral traditions, customs of Vietnam and contravene the provisions of law;

5. Advertisements comparing one’s own goods and services with goods services of the same type of other traders or imitating advertising products of another trader thereby misleading customers;

6. False advertisements of goods and services with respect to any of the following contents: specifications, quality, price, utility, design, type, packaging, service mode and warranty period.

Article 193.- Use of commercial advertising means

1. The use of the commercial advertising means prescribed in Article 190 of this Law shall have to comply with the regulations issued by competent State bodies of Vietnam.

2. The use of the commercial advertising means must satisfy the following conditions:

a/ Being in compliance with advertisement planning; causing no adverse impacts on the environment, scenery, traffic order and safety, and social security;

b/ Being in accordance with the degree, time duration and timing prescribed for each particular means of mass media.

Article 194.- Commercial advertising by foreign traders in Vietnam

1. Foreign traders that are permitted to conduct commercial activities in Vietnam shall be entitled to advertise their production activities, goods and services in Vietnam in accordance with the provisions of this Law.

2. Foreign traders that have not yet been permitted to conduct commercial activities in Vietnam and wish to advertise their production activities, goods and services in Vietnam shall have to hire Vietnamese commercial advertising service organizations to perform such work.

Article 195.- Commercial advertising service contracts

1. Commercial advertising service shall be hired by way of contract.

2. Commercial advertising service contracts must be made in writing with the following principal contents:

a/ Name and addresses of contracting parties;

b/ Commercial advertising products;

c/ Modes and means of commercial advertising;

d/ Time and scope of commercial advertising;

e/ Service charges and other related costs.

Article 196.- Rights and obligations of the commercial advertising service hirers

The commercial advertising service hirer shall have the following rights and obligations:

1. To select the form, content, means, scope and duration of commercial advertising;

2. To provide true and accurate information relating to commercial production activities, goods and services and to be responsible for that information;

3. To inspect and supervise the performance of the commercial advertising service contract;

4. To pay advertising service charges as agreed upon in the contract.

Article 197.- Rights and obligations of the commercial advertising service provider

The commercial advertising service provider shall have the following rights and obligations:

1. To enter into contracts with the commercial advertising service hirers in accordance with its business registration certificate or its license to use means of advertisement;

2. To request the commercial advertising service hirers to provide true and accurate information relating to the advertisement in accordance with the term of the contract;

3. To provide commercial advertising services as agreed upon in the contract;

4. To be permitted to import materials, raw materials and commercial advertising products which are necessary for its advertising service activities in accordance with the provisions of law;

5. To receive advertising service charges as agreed upon in the contract.

Section 14. DISPLAY OF GOODS

Article 198.- Display of goods

Display of goods is a commercial act conducted by traders using goods to introduce and advertise their products and goods to customers for commercial promotion purposes.

Article 199.- Forms of goods display

1. Opening showrooms to introduce goods;

2. Introducing goods in various forms at commercial centers and trade fairs and exhibitions or during the entertainment, sport, cultural or artistic activities;

3. Organizing conferences, workshops with display of goods.

Article 200.- Conditions for goods to be display

1. Displayed goods are sample goods representing goods of the trader, including goods already in circulation and newly produced goods permitted to be circulated on the market;

2. Displayed goods must meet quality and environmental standards and must not be detrimental to the social security and order and the fine historic, cultural and moral traditions and customs of Vietnam;

3. Displayed goods must bear labels indicating name of product, name of producer, place of manufacture, quality registration number, properties and instructions for the use of goods, production date, expiry date and warranty period, if any.

Article 201.- Conditions for goods produced overseas

In addition to the conditions prescribed in Article 200 of this Law, goods produced overseas and brought into Vietnam for display must meet the following conditions:

1. Being permitted to be imported into Vietnam;

2. For goods temporarily imported for display, they must be permitted by the competent State body of Vietnam with respect to their type, quantity, model, specifications and duration. Upon completion of the display, all temporarily imported goods and means must be re-exported. If they are sold in Vietnam, the approval of the Ministry of Trade must be obtained and the provisions of Vietnam law must be complied with.

Article 202.- Right to display goods and provide goods display services

1. Traders shall be entitled to display goods and select the appropriate form of display; and to display goods by themselves or to hire traders providing goods display services to do so.

2. Entertainment, sports, cultural and artistic establishments having suitable locations and facilities may be permitted by competent State bodies to lease out those locations and facilities for the display of goods; if they directly provide goods display services, they must register their business activities as applicable to goods display service providers.

Article 203.- Right of foreign traders to display goods

1. Foreign traders may import goods stipulated in Article 201 of this Law for display at trade fairs and exhibitions organized in Vietnam if they are so permitted by the competent State bodies of Vietnam.

2. Foreign traders wishing to display their goods in Vietnam may hire Vietnamese traders providing goods display service to do so.

Article 204.- Prohibited goods displays

Goods displays shall be prohibited in the following cases:

1. Display of goods which have not yet been permitted for circulation;

2. Display of goods or use of means of goods display, that causes adverse effects on public security and order, scenery, environment and human health;

3. Display of goods or use of forms and means of goods display, that contravene the fine historic cultural and moral traditions and customs of Vietnam;

4. Display of goods disclosing national secrets;

5. Display of goods of other persons to compare with one’s own goods;

6. Display of goods samples which are inconsistent with goods actually produced or traded with respect to specifications, quality, price, utility, design type, packaging, warranty period, and other standards.

Article 205.- Goods display service contracts

1. The hiring goods display services must be established through contracts.

2. Goods display service contracts must be made in writing with the following principal contents:

a/ Names and addresses of the service hirer and the goods display service provider;

b/ Goods to be displayed;

c/ Content, form, location and time of the goods display;

d/ Service charges and other expenses.

Article 206.- Rights and obligations of the goods display service hirers

A goods display service hirer shall have the following rights and obligations:

1. To request the goods display service provider to fulfil the agreements in the contract;

2. To inspect and supervise the performance of the goods display service contract;

3. To supply all goods to be displayed or facilities to the service provider as agreed upon in the contract;

4. To provide information relating to goods to be displayed and other necessary facilities as agreed upon in the contract;

5. To pay service charges and other costs in accordance with the contract.

Article 207.- Rights and obligations of the goods display service providers

A goods display service provider shall have the following rights and obligations:

1. To request the service hirers to supply goods to be displayed according to the timelimit agreed upon in the contract;

2. To request the service hirers to supply information relating to the to-be displayed goods and other necessary facilities as agreed upon;

3. To receive service charges and other fees in accordance with the contract;

4. To display goods as agreed upon in the contract;

5. To refrain from assigning or hiring other people to provide the services without the consent of the service hirer; to remain responsible to the goods display services hirer even if the obligation to perform the contract is assigned to another person;

6. To take care of the displayed goods, documents and facilities provided during the performance of the contract; to return all displayed goods, documents and facilities to the service hirer upon completion of the goods display and, if any damage is caused to the services hirer, to pay compensation.

Section 15. TRADE FAIRS AND EXHIBITIONS

Article 208.- Trade fairs and exhibitions

1. A trade fair is a commercial promotion activity concentrated at a location and for a certain period of time during which production and business organizations and individuals may display their goods for purposes of marketing or entering into contracts for sale and purchase of goods.

2. A trade exhibition is a commercial promotion activity which is aimed, through the display of goods and documents relating to goods, at introducing and advertising goods in order to expand and promote the sale of goods.

3. Trade fairs and exhibitions must specify the theme, scale, time, location, list of goods, documents on goods, and names and addresses of participating organizations and individuals.

Article 209.- Organization of trade fairs and exhibitions in Vietnam

All trade fairs and exhibitions organized in Vietnam, including trade fairs and exhibitions organized by foreign traders, must be permitted by the Ministry of Trade.

Article 210.- Right to organize or participate in trade fairs and exhibitions

1. Production and business organizations and individuals in Vietnam shall be entitled to organize and participate in both domestic and overseas trade fairs and exhibitions for the purpose of commercial promotion.

2. Organizations and individuals organizing domestic and overseas trade fairs and exhibitions shall have to establish organizational boards in accordance with the provisions of the licenses issued by the Ministry of Trade.

3. Production and business organizations and individuals in Vietnam may enter into contracts with traders providing trade fair and exhibition services for hiring the latter to organize trade fairs and exhibitions.

Article 211.- Organizations of and participation in overseas trade fairs and exhibitions

The organizations of and participation in overseas trade fairs and exhibitions by production and business organizations and individuals in Vietnam must be approved by the Ministry of Trade of Vietnam and comply with Vietnamese laws and the laws of the host country.

Article 212.- Goods prohibited from sale at trade fairs and exhibitions

Goods prohibited from sale at trade fairs and exhibitions are goods having no quality and trademark registration.

Article 213.- Registration of participation in trade fairs and exhibitions

Production and business organizations and individuals wishing to participate in a trade fair or exhibition shall have to register with the organizational board of such trade fair or exhibition.

Article 214.- Rights and obligations of organizations and individuals participating in trade fairs and exhibitions in Vietnam

Organizations and individuals participating in trade fairs and exhibitions in Vietnam shall have the following rights and obligations:

1. To display their goods and documents relating to goods at the trade fairs or exhibitions according to their registered lists;

2. To negotiate and enter into sale and purchase contracts in accordance with the provisions of law;

3. To sell goods at the trade fairs or exhibitions in accordance with the registration of participation in the trade fairs or exhibitions; to declare and pay tax after the sale of goods at the trade fairs or exhibitions as prescribed by law;

4. To comply with the regulations on the organization of trade fairs and exhibitions in Vietnam.

Article 215.- Rights and obligations of foreign traders participating in trade fairs and exhibitions in Vietnam

Foreign traders participating in trade fairs and exhibitions in Vietnam shall have the following rights and obligations:

1. To be entitled to temporarily import duty-free goods and documents thereon for display at trade fairs and exhibitions; such goods and documents must be re-exported within thirty days after the end of the trade fairs or exhibitions;

2. To comply with the regulations on the organization of trade fairs and exhibitions in Vietnam;

3. To complete customs procedures as prescribed by Vietnamese laws in respect of goods and documents thereon temporarily imported for participation in trade fairs and exhibitions;

4. To be entitled to sell goods displayed at trade fairs and exhibitions only when permitted by the Ministry of Trade of Vietnam and to pay tax as provided for by Vietnamese law;

5. When goods displayed at trade fairs and exhibitions are used a gifts, the approval of the Ministry of Trade of Vietnam shall be required and tax must be paid in accordance with the provisions of Vietnamese law.

Article 216.- Rights and obligations of production and business organizations and individuals in Vietnam organizing or participating in overseas trade fairs or exhibitions

Production and business organizations and individuals in Vietnam organizing or participating in overseas trade fairs or exhibitions shall have the following rights and obligations:

1. To be entitled to temporarily export duty-free goods and documents thereon for display at trade fairs or exhibitions;

2. To comply with the regulations on the organization of overseas trade fairs or exhibitions;

3. Where goods displayed at overseas trade fairs or exhibitions are sold, export duties must be declared and paid in accordance with the provisions of Vietnamese law;

4. Where goods displayed at trade fairs or exhibitions are used as gifts, the approval of the Ministry of Trade of Vietnam must be obtained and tax must be paid in accordance with provisions of Vietnamese law.

Article 217.- Provision of trade fairs and exhibitions services

1. The provision of trade fairs and exhibitions service is a commercial activity conducted by traders for the purpose of organizing trade fairs and exhibitions;

2. Organizations and individuals satisfying all conditions prescribed by law shall be granted business registration certificate for provision of trade fair and exhibition services;

3. The Government shall stipulate the conditions and procedures for granting business registration certificates of trade fair and exhibition service provision.

Article 218.- Rights and obligations of traders providing trade fair and exhibitions services

Traders providing trade fair and exhibition services shall have the following rights and obligations:

1. To request the service hirers to supply goods for participation in the trade fairs or exhibitions according to the time agreed upon in the contract;

2. To request the service hirers to provide information relating to goods displayed at the trade fairs or exhibitions and other necessary facilities as agreed upon;

3. To receive service charges and other fees in accordance with the contract;

4. To perform the trade fair and exhibition organization services as agreed upon in the contract;

5. Not to assign or hire other persons to provide the services without the consent of the service hirer; to remain responsible to the trade fair and exhibition service hirer even if the obligation to perform the contract is assigned to another person;

6. To take care of displayed goods and documents and facilities provided during the performance of the contract; to return all displayed goods, documents and facilities to the service hirer when the trade fair and exhibition end; and, if any damage is caused to the service hirer, to pay compensation.

Chapter III

NEGOTIABLE INSTRUMENTS

Article 219.- Negotiable instruments

1. A negotiable instrument is a written note recording the unconditional promise to pay a certain sum of money within a certain period of time.

2. Negotiable instruments under this Law comprise drafts and payment orders.

Article 220.- Right of traders to use negotiable instruments

Traders shall be entitled to use negotiable instruments in order to make payments in commercial activities.

Article 221.- Issuance, assignment, discounting, rediscounting and payment of negotiable instruments

Negotiable instruments shall be issued, assigned, discounted, rediscounted and paid in accordance with legislation on negotiable instruments and banking law.

Chapter IV

COMMERCIAL REMEDIES AND RESOLUTION OF COMMERCIAL DISPUTES

Section 1. COMMERCIAL REMEDIES

Article 222.- Types of commercial remedy

Commercial remedies shall include:

1. Specific performance;

2. Penalty for breach;

3. Compensation for damage;

4. Cancellation of contract.

Article 223.- Specific performance

1. Specific performance is a remedy whereby the aggrieved party requires the exact performance of the contract by the breaching party or applies other measures to cause the contract to be performed and the breaching party shall have to bear any costs incurred.

2. Where the breaching party fails to deliver all goods or to provide services under the contract, it shall have to deliver all goods or provide services in accordance with the contract. If the breaching party delivers poor-quality goods or fails to provide services under the contract, it shall have to rectify the defects of the goods or services or to deliver substitute goods or provide services in accordance with the contract; and shall not be entitled to use money or goods of other types or other services as substitutes without the consent of the aggrieved party.

3. Where the breaching party fails to comply with the provisions in Clause 2 of this Article, the aggrieved party shall be entitled to purchase goods or receive services of the type stated in the contract from other parties as substitutes and the breaching party shall have to pay the difference if any.

4. Where the aggrieved party rectifies by itself the defects of the goods or services, the breaching party shall have to pay the actual reasonable expenses.

5. The aggrieved party shall have to receive the goods or services and make payment therefor if the breaching party has discharged its obligations stipulated in Clause 2 of this Article.

Article 224.- Extension of timelimit for performance of obligations

The aggrieved party may extend the timelimit by a reasonable period so that the breaching party performs its obligations.

Article 225.- Relationship between specific performance and other remedies

1. Unless otherwise agreed, when the remedy of specific performance is being applied, the aggrieved party shall not be entitled to apply other remedies, including penalty for breach, compensation for damage or cancellation of contract.

2. Where the breaching party fails to carry out the specific performance within the prescribed timelimit, the aggrieved party may apply other remedies in order to protect its legitimate interests.

Article 226.- Penalty for breach

Penalty for breach is a remedy whereby the aggrieved party requests the breaching party to pay a certain penalty sum for breach of contract if it is so agreed in the contract or prescribed by law.

Article 227.- Grounds for claim of penalty

Penalty for breach arises on the following grounds:

1. Non-performance of the contract;

2. Improper performance of the contract.

Article 228.- Rate of penalty

The rate of penalty for one breach of contract or the total amount of penalty for more than one breach shall be agreed upon in the contract by the parties but shall not exceed eight per cent of the value of the obligation which is the subject of the breach.

Article 229.- Compensation for damage

1. Compensation for damage is a remedy whereby the aggrieved party requests the breaching party to pay damages as compensation for breach of contract.

2. The amount of damages covers the actual direct loss and the profit which the aggrieved party would have enjoyed if the breach had not been committed by the breaching party.

The amount of damages may not be higher than the amount of loss and the profit which would have been obtained.

Article 230.- Grounds for liability to compensate for damage

Liability to compensate for damage shall arise upon existence of all of the following elements:

1. Breach of contract;

2. Material loss;

3. Direct relationship between breach of contract and material loss;

4. Fault of the breaching party.

Article 231.- Obligation to prove loss

The party claiming the compensation for damage shall have to prove the loss and the amount of loss.

The breaching party is deemed to be at fault if it fails to disprove its fault.

Article 232.- Obligation to mitigate losses

The party claiming compensation for damage must take reasonable measures to mitigate losses, including the profits it would have enjoyed except for the breach of contract; if the party claiming compensation for damage fails to take such measures, the breaching party shall be entitled to request a reduction in damages equal to the amount of loss that could have been mitigated.

Article 233.- Right to claim interest on delayed payment

Where a breaching party delays making payment for goods or services or other fees, the other party shall be entitled to claim interest on such delayed payment for the period of delay at the interest rate applicable to overdue debts stipulated by the State Bank of Vietnam at the time of payment, unless otherwise agreed upon by the parties or prescribed by law.

Article 234.- Relationship between remedy of penalty for breach and remedy of compensation for damage

Unless otherwise agreed by the parties, the aggrieved party shall be entitled to choose either penalty for breach or compensation for damage as the remedy for a breach.

Article 235.- Cancellation of contract

The aggrieved party may declare cancellation of contract if the breach committed by the other party is a condition for cancellation of contract as agreed upon by the parties.

Article 236.- Notice of contract cancellation

The party cancelling the contract shall have to immediately notify the other party of the cancellation of the contract; if it fails to do so and thereby causes damage to the other party, it must pay compensation.

Article 237.- Consequences of cancellation of contract

1. Following the cancellation of the contract, the parties shall not have to continue the performance of the obligations agreed upon in the contract.

2. Each party shall have the right to claim restitution of any benefits resulted from its performance of any obligations under the contract; if both parties have indemnity obligations, such obligations must be performed concurrently.

3. The aggrieved party shall be entitled to request the other party to pay compensation.

Section 2. RESOLUTION OF COMMERCIAL DISPUTES

Article 238.- Commercial disputes

A commercial dispute is a dispute arising from the non-performance or improper performance of a contract in commercial activities.

Article 239.- Forms of resolution of disputes

1. Commercial disputes must be first resolved through negotiations between the parties.

2. Parties to a dispute may agree to choose a body, organization or individual as the conciliation mediator.

3. Where negotiation or conciliation fails, commercial disputes may be resolved by an arbitration body or a court. The procedures for resolution of commercial disputes by arbitration or a court shall be in accordance with the rules of the arbitration body or court chosen by the parties.

Article 240.- Competence to resolve commercial disputes with foreign traders

Commercial disputes with foreign trader shall be resolved by Vietnamese courts, unless otherwise agreed by the parties or prescribed by international treaties which the Socialist Republic of Vietnam has signed or acceded to.

Article 241.- Timelimit for lodging complaints

1. The timelimit for lodging complaints shall be the period during which the aggrieved party is entitled to lodge a complaint against the breaching party. After expiry of such timelimit, the aggrieved party shall lose its right to take legal action at the competent arbitration body or court.

2. The timelimit for lodging complaints shall be agreed upon in the contract by the parties; where there is no such agreement, the timelimit for lodging complaints shall be stipulated as follows:

a/ Three months from the date of delivery of goods for complaints about quantity of goods;

b/ Six months from date of delivery of goods for complaints about specifications or quality of goods; where goods are under warranty, the timelimit for complaints shall be three months from the expiry of the warranty period;

c/ Three months from the date on which the breaching party shall have to fulfil its contractual obligations for complaints about other commercial acts, except for the case prescribed in Clause 4, Article 170 of this Law.

Article 242.- Statute of limitation for litigation

The statute of limitation for litigation applicable to all commercial acts shall be two years commencing from the moment the right to lodge complaints arises

Article 243.- Enforcement of court judgements and decisions and arbitral awards and decisions

1. Court judgements and decisions shall be enforced in accordance with the legislation on enforcement of civil judgments.

2. Arbitral awards and decisions shall be enforced in accordance with law.

Chapter V

STATE MANAGEMENT OF COMMERCE

Section 1. CONTENT OF STATE MANAGEMENT OF COMMERCE

Article 244.- State management of commerce

The State uniformly manages commerce by means of laws, policies, strategies, planning and plans for commercial development.

The State regulates commercial activities principally by way of economic measures as well as pricing, financial and credit instruments.

Article 245.- Content of the State management of commerce

The State management of commerce shall include:

1. Promulgation of legal documents on commerce and formulating policies, strategies, planning and plans for commercial development;

2. Organization of commercial registration;

3. Organization of the collection, processing and supply of information; forecasting and orientation of domestic and overseas markets;

4. Provision of guidances for rational and economical consumption;

5. Regulation of goods circulation along the socio-economic development orientation of the State and in accordance with the provisions of law;

6. Control of quality of goods domestically circulated and goods imported and exported;

7. Organization and facilitation of commercial promotion activities;

8. Organization and management of commercial research work;

9. Training and building a contingent of cadres for commercial activities;

10. Signing or acceding to international treaties on trade;

11. Representation and management of Vietnam’s commercial activities overseas;

12. Guiding, inspection and examination of implementation of policies, planning and plans for commercial development and the observance of commercial legislation; dealing with breaches of commercial legislation; organization of fight against smuggling, trading of prohibited goods and fake goods, speculation for the purpose of market control, illegal trading activities, and other acts of violation of commercial legislation.

Article 246.- State bodies for the management of commerce

1. The Government shall exercise uniform State management of commerce

2. The Ministry of Trade shall be responsible to the Government for the exercise of the management of commerce.

3. Ministries, ministerial-level agencies and agencies attached to the Government shall, within their respective powers and duties, be responsible for exercising the State management of commerce in their assigned areas.

The Government shall specify the responsibilities of ministries, ministerial-level agencies and agencies attached to the Government for co-ordination with the Ministry of Trade in the exercise of the State management of commerce.

4. People’s Committees at all level shall exercise the State management of commerce within their respective localities as delegated by the Government.

Article 247.- System of State bodies for the management of commerce

The Government shall define the organizational structure, duties and powers of the State bodies for management of commerce.

Article 248.- Responsibilities for implementation of the Commercial Law

1. State bodies, political organizations, socio-political organizations, social organizations, socio-professional organizations and units of the people’s armed forces shall, within their respective functions, duties and powers, be responsible for supervising, in co-ordination with the State management body in charge of commerce, the implementation of this Law.

2. All organizations and individuals conducting commercial activities in Vietnam shall have to implement this Law.

Section 2. COMMERCIAL INSPECTORS

Article 249.- Commercial inspectors

Commercial inspectors are inspectors specialized in commerce.

The Government shall specify the organizational structure, duties and powers of specialized commercial inspectors.

Article 250.- Contents of commercial inspectors’ activities

The activities of the commercial inspectors:

1. Inspection of business registrations;

2. Inspection of the observance of commercial legislation;

3. Detection, prevention and handling within their authority, or recommendation to the competent State bodies for handling of breaches of commercial legislation;

4. Recommendation of measures ensuring the enforcement of the commercial legislation and the perfection of the commercial legislation.

Article 251.- Subject of commercial inspection

The subject of commercial inspection shall be commercial activities conducted by traders.

Article 252.- Powers of commercial inspectors

During the course of inspection, the commercial inspector shall have the following powers:

1. To request the inspected parties and relevant parties to supply documents, evidence and explanations with respect to necessary matters directly related to the inspection;

2. To request examination, if necessary;

3. To make record of the inspection and to recommend handling measures;

4. To apply preventive measures and to deal with breaches in accordance with law.

Article 253.- Responsibilities of commercial inspectors

During the course of inspection, the commercial inspector shall have the following responsibilities:

1. To present the inspection decision and inspector cards;

2. To comply with inspection procedures, not to hinder or interfere in normal commercial activities and not to cause harm to the legitimate interests of traders;

3. To report on inspection results to the competent body and to recommend handling measures;

4. To observe the law and to be responsible to the competent State body and before law for all their acts and decisions.

Article 254.- Rights of traders when commercial inspectors conduct inspections

When commercial inspectors conduct inspections, traders shall have the following rights:

1. To request inspectors to produce the inspection decision and their inspector cards and to comply with the legislation relating to inspection;

2. To make complaints or denunciations to, or take legal action at, the competent State bodies about inspection decisions, acts of inspectors, and inspection conclusions which they deem to be incorrect;

3. To claim compensation for damage caused by unlawful actions of inspectors.

Article 255.- Obligations of traders when commercial inspectors conduct inspections

When commercial inspectors conduct inspections, traders shall have the following obligations:

1. To comply with the requirements of inspectors with respect to the inspection;

2. To comply with handling decisions made by commercial inspectors.

Section 3. REWARDS AND DEALING WITH BREACHES

Article 256.- Rewards

Organizations and individuals achieving merits in commercial activities, contributing to the production development and the improvement of the life of the people shall be rewarded in accordance with law.

Article 257.- Act of breaching commercial legislation

Act of breaching commercial legislation shall include:

1. Conducting business activities without business registration certificates or in contravention of the terms of business registration certificates;

2. Conducting commercial activities which have been suspended or which the trader has been disentitled to conduct;

3. Not having commercial offices or shops; not having signboards or having signboards which are inconsistent with the content or form stated in business registration certificates;

4. Establishing representative offices or branches without licenses or operating representative offices or branches in contravention of licenses;

5. Trading in goods or providing services, which are prohibited from business by law;

6. Trading in goods or providing services the business of which is stipulated by law to be subject to certain conditions and such conditions are not satisfied;

7. Failing to comply with price frame and price limits set for certain kinds of goods by the State;

8. Failing to provide sufficient information on the properties and utility of goods thereby causing harm to the interests of consumers;

9. Failing to comply with the regulations on trade promotion, advertisement, display of goods, trade fairs and exhibitions;

10. Violating regulations on receipts and vouchers; failing to open books of account; failing to maintain or keep records accurately and correctly in books of account;

11. Defrauding and deceiving customers in sale and purchase of goods or provision of services; failing to provide warranty services in respect of goods or services to customers as agreed or as stipulated;

12. Violating State regulations on the management of import and export of goods;

13. Unlawful competition;

14. Obstructing commercial inspectors in the execution of their duties;

15. Other acts of breaching commercial legislation.

Article 258.- Forms of dealing with breaches

1. Depending on the nature, seriousness and consequences of the breach, a trader shall be subject to one of the following actions:

a/ Administrative sanction in accordance with the legislation on handling of administrative violations;

b/ Examination for penal liability in accordance with the provisions of law if the breach involves enough elements of an offense.

2. Where the breach causes harm to the interests of the State or agencies, organizations or individuals, compensation must be paid in accordance with law.

Article 259.- Competence to impose penalties

1. People’s Committees at all levels and the State bodies for the management of commerce shall have competence to impose sanctions against administrative violations in commercial activities.

2. Commercial inspectors shall have competence to impose sanctions against administrative violations in commercial activities.

The competence to impose sanctions against administrative violations in commercial activities are prescribed in the legislation on handling of administrative violations.

Article 260.- Execution of administrative sanction decisions

1. Traders subject to administrative sanctions shall have to execute the sanction decisions.

2. Traders that fail to voluntarily comply with administrative sanction decisions shall be forced to comply in accordance with the provisions of law.

Article 261.- Complaints and legal action against administrative sanction decisions and resolution of complaints

1. Traders subject to administrative sanctions shall be entitled to lodge complaints with the competent State body or institute court action against the administrative sanction decisions.

2. During the process of lodging complaints or instituting legal action, traders shall still have to execute the administrative sanction decisions. When the competent body has resolved the complaint or when the court has delivered its judgement or decision to resolve the complaint, that resolution, judgement or decision shall be complied with.

Article 262.- Dealing with breaches committed by State employees and officials in the management of commercial activities

State employees and officials who fail to fulfill their responsibilities, abuse their powers, cause trouble, hinder lawful commercial activities, or commit other breaches shall, depending on the nature and seriousness of the breach, be subject to disciplinary action or examination for penal liability; if damage is caused, they must pay compensation as prescribed by law.

Chapter VI

IMPLEMENTATION PROVISIONS

Article 263.- Effectiveness

All previous provisions which are inconsistent with this Law are hereby repealed.

Article 264.- Implementing guidances

The Government shall provide detailed guidances for the implementation of this Law.

NONG DUC MANH