International Sales Contracts Overview

Chapter 3: Law on International Contract of Sale I. Contract Definition * VN: Art 385 - Civil Code 2015: A contract is an agreement between parties to establish, change, or terminate civil rights and obligations. * France: Art 1101 Civil Code: The contract as "an agreement of wills between two or more persons intended to create, modify, transmit or extinguish obligations." * US: § 1-201 UCC: “Contract", as distinguished from "agreement", means the total legal obligation that results from the parties agreement as determined by the Uniform Commercial Code (Bộ luật thương mại thống nhất) as supplemented by any other applicable laws. Subject * Individual * Legal entity (Pháp nhân) * Other subject * Special subject - State/Gov Purpose Ensure the interests of all parties Form * Written Form: Contracts that are documented and signed by the parties (e.g., real estate contracts). * Oral Form: Verbal agreements that are legally binding in many cases, though harder to enforce. * Hành vi (?) Form: Agreements inferred from the conduct of the parties. Content Terms / Clauses (Agreement between parties) Feature Contract = Law Commercial * Black’s Law Dictionary, 2nd Edition: Relating to / connected with trade and traffic / commerce in general * Article 3 section I _ CCL 2005: Commercial activities mean activities for the purpose of generating profits, including: * sale & purchase of goods * provision of services * investment * commercial promotion * other activities for profit Aspect Civil Contract Commercial Contract Subject * Involve individuals or private persons * Include family matters, property ownership, personal services * Involve merchants, corporations, or business entities * Involves goods, services, or financial exchanges in a commercial setting Purpose * Fulfill obligations of a personal or non-business nature. * Satisfy individual or societal needs (e.g., gift, lease, or personal loans). * Facilitate trade, profit-making, or business activities. * Ensure economic efficiency and smooth business transactions. The governing law Civil law, including general rules of obligations and contracts. Commercial law, including laws specific to business transactions (trade codes or regulations) Traders Article 6 - Law on Commerce 2005: Individuals or organizations conducting commercial activities independently and regularly and having lawful business registration. Traders: có thể là individuals / organizations nhưng indi vs orga chưa chắc là traders Áp dụng: Luật riêng (Thoả thuận trong hợp đồng) → (Nếu luật riêng kco) Luật chung II. Sources of Law governing International Sale Contracts 1. Convention / Treaty (Công ước / Hiệp ước) 1.1. Definition an agreement between countries governing a particular matter * Bilateral treaty/ multilateral treaty * Countries is binding to the parties to contract when they are: * Contracting members of a Treaty * Not Contracting members of a Treaty (chọn Công ước làm luật điều chỉnh) Example of treaties/ conventions: * The treaty on European Union * ASEAN Framework Agreement on visa exemption * Bilateral Trade Agreement between Vietnam and the US (After this, Vietnam can export and get tax incentives) 1.2. United nation convention on contracts for the international sale of goods 1980 (CISG 1980) * Prepared by UNCITRAL (United Nation Commission on International Trade Law) * More than 90 contracting members: America, Japan, China, Germany, France, Singapore, Vietnam,…) * Map of CISG Contracting States CISG@40 | United Nations Commission On International Trade Law Vienna Convention (CISG 1980) 101 articles (4 parts) * Part I: (Art. 1-13) Scope of application and general provisions * Part II (14-24) Formation of the contract * Part III (25-88) Sales of goods: implementation, obligations of the parties, remedies for breach of contract, passing of risk * Part IV (89-101) Final provision: ratification, acceptance approval, reservation CISG Case Law: * CLOUT (Case Law on Uncitral Texts) * PACE * UNILEX * Digest of Case Law on the CISG Contractual issues excluded from the coverage of CISG?? * CISG only deals with: * The formation of the contract and * The remedies available to the buyer and the seller * CISG excludes questions about: * The validity of the contract * The capacity of the parties * The rights of third parties * The liability for death and personal injury 1.3. Application of CISG Article 1 (1) This Convention applies to contracts of sale of goods between parties whose places of business are in different States: (a) when the States are Contracting States; or (b) when the rules of private international law lead to the application of the law of a Contracting State. Ex: A contract is signed between Seller ( Country A) and Buyer (Country B). Will the CISG apply to the contract if...? a. Both country A and country B are member states of the CISG → Yes (Explain: Article 1a CISG) b. Neither country A nor country B is member state of the CISG → Depend. If both parties in 2 countries agree on applying CISG. (Explain: Article 1b CISG) c. Country A is a member state of the CISG, country B is not. → Depend. If both parties in 2 countries agree on choosing CISG (or country A’s law) as a governing law (Yes). If they agree on applying other law (country B or 3rd country) (No) (Explain: Article 1b CISG) 2. National law / Domestic law 2.1. When will national/ domestic law apply? * Chosen by the parties (i) By the terms of the contract (Applicable law: any disputes arising will be settled by VN commercial law) (ii) By an appendix attached to the contract * A treaty or convention leads to the application of local law * Chosen by courts or arbitration panels. (Law of the most related or closely connected country, for example where the contract is signed, where the contract is performed) 2.2. How to apply local law? Rules on application of local law: 1. Specific law – luật đặc thù (VN commercial law) => applied this first 2. General law (Civil code) Ex: An international contract of sale stipulated that “This contract and any other matters arising out of this contract shall be governed by Vietnamese law” ⇒ Áp dụng luật chuyên ngành trước, luật chung sau. Nếu có sự mâu thuẫn => ưu tiên luật chuyên ngành (được quy định trong Luật thương mại Commercial Law) Which national laws? Reality? Seller Buyer Applicable Singapore VN English (common law), Singapore ⇒ bất lợi cho d/n VN = lý do vì sao VN tham gia công ước Viên => đỡ rủi ro hơn South Korea VN French, Korean, Singapore Switzerland VN Singaporean England VN English China VN VN Thailand, UEA VN English Japan VN Singaporean, Japanese VN Hongkong Singaporean, Vnese America VN Singaporean Germany VN Swiss, Singaporean ⇒ Singapore law is commonly used because: * In English (#VN - luật VN tiếng Anh được dịch trên mạng, không đc kiểm chứng, China (even large economy) - language) → Easy to understand, no conflict * Documents are easy to find on websites * Singapore is a hub of transport, arbitrage (trọng tài) → professional → many countries choose it as a place to solve a dispute Ex: An international contract sale of goods between a French company (the Seller) and a Singapore company (the Buyer) * Case 1: The contract agrees that the applicable law is French law. (= Domestic Law + CISG) ⇒ CISG is prioritized when having dispute * Case 2: The contract agrees that the applicable law is Singapore law ⇒ Singapore law is applied → Bc mem of CISG, nc lớn → Prioritized) * Case 3: The contract discusses the choice of English law ⇒ English law is applied (England kp mem CISG - ngầm hiểu 2 bên muốn loại CISG) * Case 4: The contract does not stipulate the applicable law. ⇒ CISG will be applied automatically (Article I.I.a CISG - France & Singapore are contracting mem) 3. Customary law / Commercial practices (Tập quán TMQT) 3.1. Requirements of a commercial practice * An established and repeated practice * Widely recognized in a region or worldwide * An explicit meaning * Identifying the rights and obligations of the parties to contract 3.2. When practices apply? * Chosen by the parties * Governing convention leads to the application of customs * Where the matters in questions are not addressed by laws nor agreed by the parties 4. Case law Source of Common law Apply when: * Parties agree to choose the law of a common law country * Chosen by Court/ Arbitration Panel (Normally similar case law) How to choose applicable laws? * Law that is closely related to the contract * Choose the law that protect your rights * Choose the law that you know better * Choose the laws usually applied in business lines (Thường dùng English law khi vchuyen đường biển) 5. Conflict of law * Conflict of laws signifies the difference between the laws of 2 or more jurisdictions that are applicable to a dispute in question. The results of the case depend upon the selection of the law to resolve the dispute. * Nếu 2 bên tranh chấp ko chọn đc luật chung ⇒ Hội đồng trọng tài dựa vào International private law. Example: An US Co. entered into a written contract w/ a Chinese Co. contacted by phone to discuss additional term CNese comp didn’t comply additional agreement US comp alleged (cáo buộc) that CNese Co. had broken the contractual obligation >< Chinese Co. argued that additional agreement was not their obligation, not valid. Khi có xung đột, dùng luật của nước người bán. Nếu người bán là VN, additional term không có hiệu lực, vì term đc chấp nhận là đc thêm vào dựa trên written contract. Nhưng nếu người bán là US, additional term có hiệu lực, CN vi phạm obligation. How to overcome? (Applying Conflict of laws rules) * Create uniform rules on the matter (Signing treaties) * Apply conflict of laws rules (Áp dụng các quy phạm xung đột) Art 683 CC2015 → Nếu VN là ng bán thì áp dụng luật VN 1. Parties in a contractual relationship may agree to choose the law applicable to the contract, except in the cases provided in clauses 4, 5 and 6 of this article. In case the contracting parties fail to agree the applied law, the law of the country with which such contract closely associates shall apply … 4. If the object of a contract is an immovable property, the law applied to transfer of its ownership rights and/ or other property-related rights, lease of immovable property or using the immovable property as the guarantee for performance of obligations shall be the law of the country where the immovable property is located. 6. Choice of law clause * “This contract, and all questions relating to its formation, validity, interpretation or performance shall be governed by Vietnamese law" * Applicable law: “The validity and performance of this purchase shall be governed by the laws of the state shown on Buyer's address on this order" * "The contract between the parties is made, governed by, and shall be construed in accordance with the laws of Canada applicable therein, which shall be deemed to be the proper law hereof…” III. Formation of contract 1. Fundamental principles of entering into a contract * Freedom of contract (free to choose the goods, the price, quantity – if they are not illegal) * Voluntary agreement (willing to enter the contract) * Equality (the parties are equal) * Honesty & Good-faith (Trung thực - Parties must display all information that relating to the contract; Thiện chí – Parties must not create difficulties to the other side, must support each other to fulfill the contract) 2. Offer & acceptance in formation of contract 2.1. Offer a. Definition An offer to enter into a contract = a clear expression by the offeror of its intention to enter into a contract and to be bound by such offer made to another specific party or the public (hereinafter referred to as the offeree). (Art 386 CC 2015) A proposal for concluding a contract addressed to one or more specific persons constitutes an offer if it is sufficiently definite and indicates the intention of the offeror to be bound in case of acceptance. (Art 14 CISG) * Differences bw CC vs CISG Offer must be a clear expression vs sufficiently definite to be bound by such offer made to another specific party or the public vs to be bound in case of acceptance to one or more specific persons “A clear expression” Article 398. Contents of contracts 1. The contracting parties may agree on the contents of a contract. 2. A contract may have the following contents: a) Subject matter of the contract; b) Quantity and quality; c) Price and method of payment; d) Time-limit, place and method of performing the contract; dd) Rights and obligations of the parties; e) Liability for breach of contract; b. OFFER >< AN INVITATION TO TREAT (Lời mời chào hàng) Ex: Cửa hàng chào hàng => an invitation to offer/ treat Khách vào cửa hàng và muốn mua => offer * An offer is a proposal while an invitation to offer/ treat is inviting someone to make a proposal. → So, in an invitation to treat, the offeror does not make an offer, rather invites other parties to make an offer. * An offer becomes an agreement when accepted. On the other hand, an invitation to offer becomes an offer when someone responds to it. Examples of invitation to treat: * The display of goods with a price tag attached in a shop window or on a supermarket shelf * Advertisements, catalogues and brochures * Company prospectuses: A company invites applications from the public to subscribe for its share. * Auctions * Tenders An offer must be clear and definite Ex: A state agency announces a tender for the installation of a new telephone network Case 1: A requires contractors to develop a technical and financial proposal for the project Is A's intention clear or not? → Not clear, not state the technical requirements, the price Case 2: A specifies the technical proposal and states that it will accept a tender that meet the technical requirements at the lowest price → Is an offer because it is clear: state the technical requirements and the price, the intention to enter into a contract Tender: a written or formal offer to supply goods or do a job for an agreed price (mời đấu thầu) Case: Carlill v Carbolic Smoke Ball Company [1893] 2 QB 256 A company advertised that their new drug, the carbolic smoke ball would cure influenza and if it did not, the buyer would receive $1000. → Offer: * When sued, Carbolic argued that the advertisement did not constitute a legally binding offer; it is merely an invitation to treat, a trick or advertising gimmick. * However, the Court of Appeal (Toà phúc thẩm) held that the advertisement was an offer. The intention to be bound may be inferred from the statement that the Company deposited £1,000 in their bank to "demonstrate our sincerity". c. An offer must be made to specific person or people * Offeror: party that makes the offer * Offeree: party that receives the offer d. Time-limit for effectiveness of offers * The period of time within which the offeror is bound by his offer. * The time-limit specified in the offer. * This offer is valid until 01/07/2009 or this offer is binding until 01/07/09 * This offer is valid in 30 days since the date of signature * This offer is binding within 30 days * No specified time-limit: within a reasonable time? * If the last day of the period falls on an official holiday? (Art 20 CISG) → The court can determine depend on relevant factors: the characteristics of the goods, the modes of communication, transportation Find relevant articles in Civil Code 2015 and CISG 1980 1st March 2018: A sent B an offer 7th March 2018: B received the offer 14th March 2018: B wrote and sent the letter of acceptance to A When can A withdraw or revoke his offer? * Withdraw: 1/3 → 7/3 (before B ans) * Revoke: 7/3 → 14/3 e. Withdraw/ Revoke the offer * An offer can be withdrawn prior to its reaching the offeree (Art 15 CISG, Art 389 CC2015) - Chưa nhận được => rút lại (withdraw) * An offer can be revoked any time before the acceptance (Art 16 CISG, Art 390 CC) - Nhận được mà chưa phản hồi => huỷ (revoke) Termination of offers A → B VN CISG 1. Accept all Art 393 Art 18 2. Reject all Art 391.2: terminate → No contract Art 17: terminate → No contract 3. Modify Art 392: new counter-offer Art 19.1+3: materially alter terms (price, payment, quality, quantity,...) → counter-offer Art 19.2: not materially alter terms → acceptance * If the time limit of the offer has expired (Article 391 CC 2015 – 5 cases, Art. 17 CISG – only 1 case) 2.2. Acceptance a. Definition * Acceptance of an offer to enter into a contract means a reply by the offeree to the offeror accepting the entire contents of the offer. (Art 393 CC 2015) * A statement made by or other conduct of the offeree indicating assent to an offer is an acceptance. (Art.18 CISG) Form: written, oral, act (depend on which law) Eg1. A sent an offer to sell 1000 MT steel to B, C, D. The offer is open for 7 days. After 9 days, B accepted the offer. After 5 days, C accepted the offer. After 3 days, D accepted the offer. Which contract has been established? Between A and D, A and C or A and B? ⇒ 2 contracts: A vs C ; A vs D Ans: TH1: Có đủ 2000MT → Send 1000MT to both C & D TH2: Ko đủ hàng 1. After receive acceptance from D, A revoke offer to C 2. Mua 1000MT ở chỗ khác bán cho C 3. Break contract w C/D → Compensate D/C b. Silence? Eg2. On June 1, Seller sent the buyer an offer to sell a specified type and quantity of goods at a stated price and added: “This is such an attractive offer that I shall assume that you accept unless I hear from you by June 15.” Buyer did not reply. Seller shipped the goods on June 16. Ans: CISG Art 18.1: Silence is not acceptance. Art 385 CC2015: Civil contract means an agreement between parties… → Chỉ Seller đề nghị Buyer chưa agree → No contract is formed c. Effective acceptance? * VN law: acceptance must be received by the offeror (Art400 CC2015) * CISG: Art 18 ⇒ “receipt” rule * UK, US: exception to the receipt rule. “The postal rule” acceptance has been communicated once the letter has been posted → don't require offeror receive acceptance Eg. 1/2 A gửi hđồng cho B, time limit 20 days 5/2 B nhận 25/2 B accept → Khác nhau depend VN&CISG or US&UK d. Withdrawal of Acceptance * Art397 CC2015 * Withdraw ph đến trc/ cùng thời điểm Accept COMPARE TO COMMON LAW Offer Acceptance Consideration: Sự đối ứng (Giao hàng - Trả tiền) (Hợp đồng cho tặng ko đc coi là hđồng → gdich dân sự thông thương) Intention to create legal relations 3. Counteroffer and inquiry Exercise: On April 22nd 2019, Petrolex (VN) sent a firm offer for sale of crude oil to IPI (France) in which there were 6 terms and conditions; delivery time was in 6,7,8/ 2019. The offer was valid until 16h30 May 17th 2019 (which was Sunday) On 16h30 May 16th Petrolex drafted the revocation of the offer to send to IPI because the following day would be Sunday. Yet, the person in charge of sending it was off-work. Therefore, the revocation was sent on May 18th. 23h18’ May 16th, IPI sent an acceptance stating that: “We are happy to accept your offer on April 22nd 2019 about delivery in 6,7,8/2019, and we will later discuss with you about the method of delivery in details” Petrolex alleged that the acceptance on late Saturday night was a late acceptance and there was no contract between the parties, therefore, Petrolex didn’t deliver the goods. IPI argued that the acceptance came to the offeror within the time-limit for accepting the offer, and the L/C was issued, therefore, a contract came into existence. Petrolex had breached the contract, not delivering the goods. IPI wished to terminate the contract and claimed for damages of $47,600. Did a contract come into existence? (Applicable law is CISG 1980) ANS 22/4 * Petrolex -> IPI * Deliver 6,7,8/2019 * Valid till 16h30 17/5 16h30 16/5: Petrolex revoke (draft) 18/5: Petrolex revoke (real) 23h18’ 16/5: IPI accept Petro alleged (cáo buộc) late accept → no contract IPI argued: accept within time limit → contract → wished to terminate claimed for damages of $47,600 4 issues: * Applicable law? (CISG?) * Valid offer? * Valid revocation? * Is there acceptance? * IRAC: 4. Essential elements of validity of contract * Capacity of the parties (Năng lực) * Contents * Forms * Principle of complete voluntaries (Nguyên tắc hoàn toàn tự nguyện) 4.1. Capacity of the parties to contracts (i) If parties are individuals/ natural persons (Art. 16-23 CC2015) * Civil legal capacity (Năng lực pháp luật dân sự) * Capacity for civil conducts (Năng lực hành vi dân sự) * Vnese individuals or companies? * Foreign individuals or companies? (ii) If parties are legal entities * Legal entities must register their businesses and be granted business registration certificates (check xem doanh nghiệp có đki kinh doanh ko). * The person who signs in the contract must have the authority to do so (xem người đó có phải địa diện pháp luật, hay được ủy quyền hay không) * Legal representative: “The person appointed by the juridical person according to its charter” (thường là chủ tịch, giám đốc) (Art 137 CC2015) * Authorized representative: The principal may authorize another person to sign and perform the contract (138, 139 CC1025) => kiểm tra xem phạm vi ủy quyền nữa (phải có giấy ủy quyền), nếu giấy ủy quyền là đc ký hợp đồng <1 tỉ nhưng hợp đồng của mình >1 tỷ => ko có hiệu lực. How can we check the representative? → Ask them to show the company charter, authorization certificate (the scope of authorization + duration of that authorization) 4.2. Contents of contracts * The goods aren’t banned from importing and exporting in both the export & import countries. * Contracts must include fundamental terms * UK, US: object of the contract * France, Germany: object and price * CISG: object, quantity, price * VN: no requirement on fundamental terms of the contract 4.3. Forms of contracts * In writing * Verbally * By conducts * CISG? * Not necessarily in written forms - CISG recognizes the principle of freedom of contract form (Art. 11) * Other means/ forms: Art. 119 CL2015 (verbal, written, specific acts, electronic means ~ data message * VN? - According Vietnam Commercial 2005 (Art 27.2) 4.4. Principle of complete voluntaries * Fraud/ Deception: Art 127. CC 15 EG. Passing a car. Buyer asked whether or not rơi vào tình trạng ngập nước chưa? Chỉ khi trả lời là: “Chưa bao giờ ngập nước” thì mới là deception. Còn nếu trả lời không rõ ý đó eg. “cứ kiểm tra đi, thích thì lấy blablaa” thì không bị coi là deception. 🡺 deception khác misunderstanding * Thread: Art 127 CC 15 * Need to prove that you have been threatened by the court/ arbitration. Eg. Witness of the third party, recording, etc. * Mistake: Art 126 CC 15 (nếu hiểu nhầm thì có thể yêu cầu tuyên bố vô hiệu, nhưng nếu các bên đã đạt được mục đích giao dịch ban đầu/ có thể khắc phục ngay hiểu lầm để đạt được mục đích ban đầu thì k vô hiệu giao dịch đó) Legal consequences of invalid contract * The parties are released from the rights and obligations of the contract from the time the contract is entered into. * The parties shall return to each other what they have received under the contract (Ex: deposit) * The party at fault must pay compensation for any loss IV. PERFORMANCE OF CONTRACTS Seller’s obligation Buyer’s obligation 1. Deliver the goods (place of delivery, ensure the conformity of goods) 2. Hand over any documents relating to the goods (Art 34, 35 CL 2005; Art 30-34 CISG) 1. Pay the price (time of payment, place of payment) 2. Take the delivery of the goods (nếu ko nhận phải lưu bãi, international transfer to destination take long time & cost => buyer phải trả tiền này, quality affected) (Art 50 - 56 CL 2005; Art 53, 60 CISG) Time for delivery * Fixing on exact date for receipt of the goods * Delivery in a period of time * No fixed or determinable time of delivery V. LIABILITIES FOR BREACH OF CONTRACT BASIS OF LIABILITY * Breach of contract * Damage suffered by the non-breaching party * Proximate cause bw breach and damage (Mối quan hệ nhân quả) * Fault of the breaching party (Nguyên tắc suy đoán lỗi = “the rule on presumption of fault) 1. Breach of contract * Non-performance (không thực hiện) * Improper performance (thực hiện không đúng) Who shall prove? → Non-breaching party needs to prove How to prove? → by picture, video, contract, documents, payment/ transport documents, insurance documents… (late delivery: show the contract which has delivery, receipt of BL; Defected goods: show the contract and the quality certificate) * Damage/ Loss suffered by the non-breaching party * Physical damage >< spiritual damage (physical: calculated in form of money; spiritual loss: Ex: loss of reputation when they do not have the goods to supply their customers; in fact: very hard to recover spiritual damage) * Direct damage (only this can be recoverable) >< indirect damage (hậu quả trực tiếp của hành vi vi phạm: thiệt hại trực tiếp; ko phải hậu quả trực tiếp: thiệt hại gián tiếp; chỉ có thể đòi bồi thường cho thiệt hại trực tiếp, ko đòi đc cho thiệt hại gián tiếp) * Non-breaching party can only claim compensation if damage occurs * Obligation to prove damages belongs to the non-breaching party * Which loss/damage can be recovered? Article 302. CL 2005 - Damages 1. Damages means a remedy whereby the breaching party pays compensation for the loss caused by a contract-breaching act to the aggrieved party. 2. The value of damages covers the value of the material and direct loss suffered by the aggrieved party due to the breach of the breaching party and the direct profit which the aggrieved party would have earned if such breach had not been committed. (ngoài direct and material loss, có thể đòi cho direct profit) (CISG Art 74) Damages for breach of contract by one party consist of a sum equal to the loss, including loss of profit, suffered by the other party as a consequence of the breach. Such damages may not exceed the loss which the party in breach foresaw or ought to have foreseen at the time of the conclusion of the contract, in the light of the facts and matters of which he then knew or ought to have known, as a possible consequence of the breach of contract. 2. Proximate cause between breach and damage “Damage must be proximately caused by the wrongful conduct of the defendant” EXAMPLE: The buyer was late in requesting the carrier to receive the cargo for 20 days. The seller had to store the goods in the warehouse and suffered some losses: * Cost for storage of goods in a warehouse (1) * Goods got wet and moldy because of a heavy rain during storage period (2) * Loss of goods caused by theft (3) Which loss is recoverable? According CL302 and CISG 74 (1) Late delivery => increase cost for storage => direct loss => recoverable (3) It is the seller’s duty to assure the condition of warehouse => goods got wet and moldy because the seller didn’t keep it safe, not because of rain => seller has to pay for the loss => indirect loss, not recoverable 3. Fault of the breaching party: “the rule on presumption of fault” (nguyên tắc suy đoán lỗi) 1 party breached any of its obligations under the contract → shall be presumed guilty → bear the liability for breach of contract. If the breaching party does not want to bear the liability, he must prove that he is innocent or he isn’t at fault. (breach of contract but not at fault => chứng minh mình thuộc trường hợp miễn trách) 3.1. Excuses for breach of contract (Trường hợp miễn trách) a) Force majeure An event of force majeure is an event which occurs in an objective manner which can not be foreseen and which cannot be remedied by all possible necessary and admissible (chấp nhận đc) measures being taken. (Art 156 CC2015, Art 79 CISG) * Taking within the effectiveness of the contract * Occuring in an objective manner (over the control of the party) * can not be foreseen * The consequences of the event must have been unpreventable Types * Natural disaster * Human or technical failure Comment on this Force Majeur Clause (Nếu là Buyer/Seller thì có/bất lợi gì??) "Force majeure: The seller shall not be responsible for the delay of shipment in all cases of force majeure, including mobilization, war, riots, civil commotion, hostilities, blocade, requisition of vessels, prohibition of export, fire, earthquakes, tempests, and any other contingencies which prevent shipment within the stipulated period. In the event of any aforesaid causes arising, document proving the occurrence of existence shall be sent by the seller to the buyer without delay". Seller - Advantageous Buyer - Disadvantageous 1. + not limited 2. without delay → reasonal tt. After 2m → negotiate. After 2,5m → terminate? 3. + any obligation 4. + Definition of FM 5. with characteristics in Art1 6. within effectiveness of contract 7. time of perform → extended condition 1. unforeseenable all possible action 2. notice time: 5 days, in written form 3. legit evidence 4. + remedies for the buyer: termination rights, refund, or alternative supply arrangements. Obligations of the breaching party in the event of force majeure * Giving notice to the other party (tốt nhất là immediately) * Providing the certification of the force majeure event and providing the causation How to draft a force majeure clause in a contract: * Definition * An open list of typical force majeure events (“include but not limited”) * Specify the obligations of the parties in breach * Stipulate the legal effects Hardship: Hoàn cảnh thay đổi Ex: Covid-19 → Hardship b) Dirty hand (Entire fault of the non-breaching party) The non-breaching party committed a fault before the breaching party breaches the contract. Ex: The seller sells the product to the buyer. The seller is not allowed to sell his packaging but has to use those of the buyer. If the buyer was late in providing the packages to the seller, leading to the seller’s late delivery of the goods, the seller’s breach of contract is entirely the fault of the buyer. c) A third party (suppliers, distributors, carriers, banks,...) at fault Ex1: The manufacturer didn’t deliver the goods to the seller, then the seller couldn’t deliver the goods to the buyer. Is the seller exempt from liability to the buyer? (Art 79(2) CISG) → Chỉ khi the manufacturers cũng encounter fource majeure events nên không giao hàng được cho seller Art 79(2) CISG (1) A party is not liable for a failure to perform any of his obligations if he proves that the failure was due to an impediment beyond his control and that he could not reasonably be expected to have taken the impediment into account at the time of the conclusion of the contract or to have avoided or overcome it or its consequences. (nói về force majeure) (2) If the party's failure is due to the failure by a third person whom he has engaged to perform the whole or a part of the contract, that party is exempt from liability only if: (cả 2 điều kiện này phải đều xảy ra) (a) he is exempt under the preceding paragraph; and (điều 1: beyond the control, encounter force majeure events) (b) the person whom he has so engaged would be so exempt if the provisions of that paragraph were applied to him. (the third parties also encounter force majeure events) (3) The exemption provided by this article has effect for the period during which the impediment exists. (4) The party who fails to perform must give notice to the other party of the impediment and its effect on his ability to perform. If the notice is not received by the other party within a reasonable time after the party who fails to perform knew or ought to have known of the impediment, he is liable for damages resulting from such non-receipt. (5) Nothing in this article prevents either party from exercising any right other than to claim damages under this Convention. Ex2: Seller contracted to sell Buyer a machine to be built in accordance with specifications supplied by Buyer. Seller contracted Electron to manufacture the machine. Electron had a good reputation for efficiency and responsibility but, in this case, mismanaged the production so that it was unable to deliver the machine. At the time of Electron’s fault, Seller could not obtain the machine from another supplier and was unable to deliver the machine to Buyer. Is the seller exempt from the liability? I: Is the seller exempt from the liability? R: Art. 74 (2) CISG A: * Electron mismanaged the production. This is not due to force majeure or beyond the control of Electron because it had good reputation for efficiency and responsibility. * Seller cannot find any substitute machine from other supplier than Electron. C: Electron is not exempt from liability → Seller is also not exempt and have to bear the liability to Buyer Note: If factory got fire - force majeure -> electron encounter force majeure -> can be exempt IV. Remedies for breach of contract under vietnamese law (Article 292 - Commercial Law 2005) 1. Specific performance of contracts (Buộc thực hiện đúng hợp đồng) (Art.297 ComL2005) Specific performance means the innocent party requests the defaulting party to properly implement the contract or to take other measures to cause the contract to be performed, and the defaulting party shall bear any costs incurred. Ground for application: Breach of contract + Fault of the breaching party Example: * If the seller delivered poor quality goods? * Notify the seller immediately (within 3-5 days of discovering the defect) and provide evidence (inspection reports, photos, etc.). * Request the seller to replace or repair the goods at their own cost within a reasonable period (e.g., 7-14 days). * Demand a price reduction if the goods can still be used but do not meet agreed specifications. * If the seller refuses, initiate legal action to enforce specific performance and claim damages. Nếu goods hỏng: * Ycau Seller sửa (70tr) * Buyer sửa * Tự cty sửa (100tr) * Thuê 3rd party (120tr) → có invoice. Làm ntn để chứng minh giá này reasonable? → Prove nó là lowest price in market ⇒ Seller chỉ bồi thường 70tr, 100tr quá đắt ⇒ Cần negotiate TRƯỚC, ycau thực hiện đúng hợp đồng, chịu chi phí phát sinh * If the buyer did not take the delivery of the goods? * Send a formal notice demanding the buyer to take delivery within a specified time (e.g., 3-7 days). * Charge storage fees if the buyer delays beyond the stipulated period. * Request the buyer to arrange transportation within a reasonable timeframe. * If the buyer still refuses, seek legal remedies such as enforcing the contract, claiming damages, or reselling the goods and charging the buyer for losses. 2. Penalty (Phạt vi phạm) Art 418 CC 2015, Art 300 CL 2005 Article 300 - Fine for breach Fine for breach means a remedy whereby the aggrieved party requests the breaching party to pay an amount of fine for its breach of a contract, if so agreed in the contract, except for cases of liability exemption specified in Article 294 of this Law. Ground for application: * There must be an agreement between the parties * There must be a breach of contract but need not be loss suffered by the non-breaching party Level of penalty/ Fine level: * Article 301 of CL 2005: The penalty level shall be agreed to by the parties but shall not exceed 8% of the value of the breached contractual obligation portion. * Article 418.2 of CC 2015: The penalty levels shall be agreed among the parties unless otherwise prescribed by relevant laws. General law = Civil Code < Commercial Law = Specialized law Ex: * Goods: 20,000 MT Kumgang Cement (+-4%) * Price: 55USD/MT * Delivery time: 30 December 2015 * Art 14 in contract: In case of delayed delivery except for Force Majeure cases, after 2 weeks grace period, the Seller shall pay to the Buyer for every week of delay penalty amounting to 0.5% of the total value of the Products whose delivery has been delayed. The penalty, however, shall not exceed 5% of the goods involved in the late delivery. * The seller did not deliver to the buyer Validity of Art 14? → Valid (Có agreement giữa 2 bên, 5%<8%) Can a penalty remedy be applied? → No (vì đây là Non-performance, kp Delay) If yes, what is the amount? → No Nếu giao muộn - Max: 55*20,000*5%=55,000 (USD) 3. Damages * Definition Article 302. Damages (CL 2005) 1. Damages means a remedy whereby the breaching party pays compensation for the loss caused by a contract-breaching act to the aggrieved party. * General rule for measuring damages Article 302. Damages (CL 2005) 2. The value of damages covers the value of the material and direct loss suffered by the aggrieved party due to the breach of the breaching party and the direct profit which the aggrieved party would have earned if such breach had not been committed. * Loss can be compensated * loss of property * reasonable expenses to prevent / mitigate damage * loss of income / profit * Burden of proof and duty to mitigate loss + Obligations to mitigate (Art. 304, 305 CL2005) * Article 304.- Burden of proof of loss The party claiming damages shall bear the burden of proof of the loss, the extent of the loss caused by the act of breach, and direct profit amount which the aggrieved party would have earned if the breach had not been committed. * Article 305.- Obligations to mitigate loss The party claiming damages must apply appropriate measures to mitigate the loss caused by a contract breach, including the loss of direct profit which it would have earned. If the party claiming damages fails to do so, the breaching party may request a rebate of the value of damages to the extent of the loss that would have been mitigated. * Ground for liability to pay damages: (Art 303 CL2005) Except for cases of liability exemption. There must be * Breach of the contract * Loss * Breaching act is the direct cause of the loss suffered * Differences between damages and penalty Damages Penalties * Validity: No need to mention in the contract because the law already govern this issue (Chỉ cần CM đc Grounds for liability) * The non-breaching party must suffer from some damages * Damages must be calculated based on the actual damage (max damages = loss) * Validity: Must be an advanced agreement between 2 parties * The non-breaching party did not need to prove the damages * Breaching party must pay a fixed amount of money (8%) 4. Cancellation/Avoidance of contracts. Art 312 CL 2005 Cancellation of a contract includes cancellation of part of a contract or cancellation of the entire contract. The complete annulment of performance of all or some contractual obligations Ground for application Except for cases of liability exemption * There must be a breaching act which serves as a condition for the cancellation of the contract as agreed upon by the parties * There is a fundamental breach of obligation by a party Fundamental/ Substantial breach * Art 3 (13) of CL 2005 13. Substantial breach means a contractual breach by a party, which causes damage to the other party to an extent that the other party cannot achieve the purpose of the entry into the contract. * Art 25 of CISG A breach of contract committed by one of the parties is fundamental if it results in such detriment to the other party as substantially to deprive him of what he is entitled to expect under the contract, unless the party in breach did not foresee and a reasonable person of the same kind in the same circumstances would not have foreseen such a result. (Article 292 - Commercial Law 2005) CASE: Can the buyers in these cases cancel the contracts? Case 1: A sale contract of alcohol stipulates alcohol must be 20 degrees but the seller delivered 15 degree alcohol → XĐ objective của Buyer: * If the objective is to drink → tuỳ nhu cầu * If the objective is to sell to others → still achieve (k bán lúc này bán lúc khác, thương lượng đc để tìm cách khác tạo profit, chỉ cần k huỷ hợp đồng) * If the objective is to produce (cần độ rượu chuẩn) → fundamental breach Case 2: Italian shoes trading contract. A sales contract of Italian shoes stipulates that the goods are high-class men’s shoes, black, sizes ranging from 40-44. The seller delivered shoes’ sizes ranging from 36-38 = women’s size SL nam đi 36-38 vs 40-44 chênh lệch rất nhiều → Rất khó bán SL ng mua Rượu 15 vs 20 độ chênh lệch ít ⇒ Tỉ lệ đạt đc profit của Case 2 thấp hơn nhiều → fundamental breach Case 3: A Vietnamese company signed a contract to buy paint powder from a Japanese company in order to export lacquer painting to Europe. The Japanese company delivered Hong Kong’s paint powder. If Japanese origin is critical to the contract's purpose (e.g., export requirements), this is likely a substantial breach under both Article 25 of the CISG and Article 3(13) of Vietnamese Commercial Law. If not critical, the breach is minor and may only lead to remedies like price reduction or damages rather than avoidance of the contract. Legal consequences of cancellation of contract * The contract shall be ineffective as from the time at which it was entered into * Each party must return anything it has received from the other party if restitution cannot be made in kind, it must be paid in money. * The party at fault in relation to the cancellation of a contract must compensate for any damage. 5. Suspension of performance of contracts. Definition: Art 308 CL 2005 Article 308.- Suspension of performance of contracts Except for cases of liability exemption specified in Article 294 of this Law, suspension of performance of a contract means a remedy whereby a party temporarily ceases the performance of its contractual obligations in one of the following cases: 1. Upon commission of a breaching act which serves as a condition for the suspension of performance of the contract as agreed upon by the parties; 2. Upon a substantial breach of contractual obligations by a party. → Suspension of performance of a contract means a remedy whereby a party temporarily ceases the performance of its contractual obligations Ground for application: (Art 308) Except for cases of liability exemption a breaching act which serves as a condition for suspension of performance of contact as agreed upon by the parties; or a fundamental breach of obligation by a party Legal consequences (Art 309 CL2005) Contracts which are suspended from performance are still in full force and effective Aggrieved parties are entitled to claim damages 6. Stoppage of performance of contracts. RELATIONSHIP BETWEEN REMEDIES * During the period of application of specific performance, the agrieved party may claim for damages and fines but must not apply other remedies (suspension, stoppage or cancellation of coctract). * Where the parties agree upon fines for breaches, the egrieved party shall be entitled to apply both remedies of fines and damages * A party shall not lose its right to claim damages when other remadies have been applea VII. DRAFTING A CONTRACT FOR AN INTERNATIONAL SALE OF GOODS 1. Parties Name of parties? Do not use the abbreviation name Address? Ex: A lawsuit filed by an Indian company against L.Smith Ltd company in the UK Mua ngũ cốc ở cty L.Smith Ltd, kiện cty ở UK nhưng ko thành công vì cty ở UK nói rằng tên của họ là Louis Smith Ltd Capacity of the party? Ex: Unimex Thai Binh vs Samoa Network Unimex Thai Binh sold 10,000MT of rice to PAL-Angerie, CIF Incoterms. Unimex TB signed a contract to charter the ARS vessel of Samoa Network (SN) in Singapore (which was introduced by VOSA Agency in HCM City). The agreed freight was 300,000 USD. SN loaded the goods on to the vessel and then disappeared. Thus, the loss that Unimex TB has to suffer were 10,000MT of rice and 300,000 of shipping charge. Liên lạc với VOSA, tuy nhiên VOSA chỉ là người giới thiệu, ko kí bất cứ hợp đồng nào Đến địa chỉ của SN: chỉ là một siêu thị nhỏ This is the consequence of signing the contract without checking the capacity of the party (nhờ tham tán thương mại, lên website của bộ kế hoạch đầu tư, kiểm tra mã số thuế…) 2. Name of the goods Use the precise name of the good: Name of the goods + trade name/ scientific name Name of goods + place of origin (Da Lat Milk) Name of goods + manufacture’s name (TH TrueMilk, Toyato car) Name of goods + major specifications (Vietnam rice autumn crop) Name of goods + main use purpose (Sleeping bag) 3. Quantity There must be a unity on the unit of measurement Eg: Unit of length: metre, inch, mile, foot, Method of drafting: A precise quantity Eg: 10 Q7 Audi cars, 100 Macbook laptops A precise quantity + tolerance Eg: 10,000 MT rice +/- 10% 4. Quality Clearly define main characteristics of the goods Use one of or a combination of the following methods * As per national standard (theo tiêu chuẩn quốc gia): it must clearly state which country’s standard, the standard number, year of issuance * As per general cusonmary criteria: eg: FAQ (fair average quality), GMQ (Good Merchantable Quality) * As per description goods: it must describe as many details as possible. Eg: Doanh nghiệp Việt Nam và Nhật Bản: “hoa hồi 5% cánh vụn”. Theo quan điểm của công ty Việt Nam là 5 cánh vỡ vụn thì là cánh vụn, bên Nhật cho rằng 5 cánh vỡ một cánh thì là vụn. * As per sample: the parties must preserve the sample for comparison (thường là 3 mẫu được niêm phong). * As per inspected and approved: place of inspection, inspecting agency, method of inspection, quality certificate (preliminary/final) Biên bản giám định (cảng đến), giấy chứng nhận phẩm chất (cảng đi). Trong hợp đồng phải quy định giấy chứng nhận phẩm chất ở đâu là giá trị cuối cùng (final) Quality dispute Quality Cert (Seller) vs. Survey Report (Buyer) → Thường thuê bên T3 (Vinacontrol…) 5. Price and payment 5.1. Price * Select the currency * Pricing method * The price is specified at the time of signing the contract and cannot be modified if otherwise specified. Example: 5000 USD/MT corn * The price will be determined after signing the contract and during the performance of the contract (Because there are some products that have price variation) Eg: the price of goods is determined by agreement of the two parties 3 days before delivery of goods. * To protect parties’ interest in the event of price fluctuations in the market Example: If increases in the input and principal manufacturing costs of raw materials, labor and energy for the products in any year of this agreement exceed 3%, the supplier shall have the right to adjust the product prices to reflect such increase 5.2. Payment * Clearly specify the date of payment, method of payment * Select one of the following methods of payment (cash payment, bank transfer (T/T, D/P), letter of credit – LC) * For L/C method, the parties double check the L/C whether the L/C is consistent with the contract (nếu người mua mở L/C có ngày giao hàng sớm hơn hợp đồng, người bán giao hàng đúng hợp đồng, ngân hàng sẽ không thanh toán). * Eg: Contract: Shipping time August 2024 L/C: Shipping before 20th Aug 2024 Seller shipped the goods on 25th Aug 2024 Seller cannot receive the payment from the bank because he violates the contract 6. LANGUAGE * Usually, an international sale contract is drafted in two languages. * To avoid conflicts which may arise from inconsistency in the contents of the two versions, the party must select a preffered language in the two languages. * Example: This contract is made into 2 copies in 2 languages: English and Vietnamese. If there is a conflict between the content of the two versions, the English version shall prevail." 7. Time for delivery and handling over documents

Aspect
	Civil Contract
	Commercial Contract
	Subject
	* Involve individuals or private persons
* Include family matters, property ownership, personal services
	* Involve merchants, corporations, or business entities
* Involves goods, services, or financial exchanges in a commercial setting
	Purpose
	* Fulfill obligations of a personal or non-business nature.
* Satisfy individual or societal needs (e.g., gift, lease, or personal loans).
	* Facilitate trade, profit-making, or business activities.
* Ensure economic efficiency and smooth business transactions.
	The governing law
	Civil law, including general rules of obligations and contracts.
	Commercial law, including laws specific to business transactions (trade codes or regulations)
	Traders
Article 6 - Law on Commerce 2005: Individuals or organizations conducting commercial activities independently and regularly and having lawful business registration.
Traders: có thể là individuals / organizations nhưng indi vs orga chưa chắc là traders
Áp dụng: Luật riêng (Thoả thuận trong hợp đồng) → (Nếu luật riêng kco) Luật chung
II. Sources of Law governing International Sale Contracts
1. Convention / Treaty (Công ước / Hiệp ước)
1.1. Definition
an agreement between countries governing a particular matter
* Bilateral treaty/ multilateral treaty
* Countries is binding to the parties to contract when they are:
   * Contracting members of a Treaty
   * Not Contracting members of a Treaty (chọn Công ước làm luật điều chỉnh)
Example of treaties/ conventions:
* The treaty on European Union
* ASEAN Framework Agreement on visa exemption
* Bilateral Trade Agreement between Vietnam and the US (After this, Vietnam can export and get tax incentives)

1.2. United nation convention on contracts for the international sale of goods 1980 (CISG 1980)
* Prepared by UNCITRAL (United Nation Commission on International Trade Law)
* More than 90 contracting members: America, Japan, China, Germany, France, Singapore, Vietnam,…)
* Map of CISG Contracting States
 CISG@40 | United Nations Commission On International Trade Law

Vienna Convention (CISG 1980)
101 articles (4 parts)
* Part I: (Art. 1-13) Scope of application and general provisions
* Part II (14-24) Formation of the contract
* Part III (25-88) Sales of goods: implementation, obligations of the parties, remedies for breach of contract, passing of risk
* Part IV (89-101) Final provision: ratification, acceptance approval, reservation
CISG Case Law:
* CLOUT (Case Law on Uncitral Texts)
* PACE
* UNILEX
* Digest of Case Law on the CISG
Contractual issues excluded from the coverage of CISG??
* CISG only deals with:
   * The formation of the contract and
   * The remedies available to the buyer and the seller
* CISG excludes questions about:
   * The validity of the contract
   * The capacity of the parties
   * The rights of third parties
   * The liability for death and personal injury

1.3. Application of CISG
Article 1
(1) This Convention applies to contracts of sale of goods between parties whose places of business are in different States:
(a) when the States are Contracting States; or
(b) when the rules of private international law lead to the application of the law of a Contracting State.

Ex: A contract is signed between Seller ( Country A) and Buyer (Country B). Will the CISG apply to the contract if...?
a. Both country A and country B are member states of the CISG
→ Yes (Explain: Article 1a CISG)
b. Neither country A nor country B is member state of the CISG
→ Depend. If both parties in 2 countries agree on applying CISG. (Explain: Article 1b CISG)
c. Country A is a member state of the CISG, country B is not.
→ Depend. If both parties in 2 countries agree on choosing CISG (or country A’s law)  as a governing law (Yes). If they agree on applying other law (country B or 3rd country) (No) (Explain: Article 1b CISG)
2. National law / Domestic law
2.1. When will national/ domestic law apply?
* Chosen by the parties
(i) By the terms of the contract (Applicable law: any disputes arising will be settled by VN commercial law)
(ii) By an appendix attached to the contract
* A treaty or convention leads to the application of local law
* Chosen by courts or arbitration panels. (Law of the most related or closely connected country, for example where the contract is signed, where the contract is performed)
2.2. How to apply local law?
Rules on application of local law:
1. Specific law – luật đặc thù (VN commercial law) => applied this first
2. General law (Civil code)
Ex: An international contract of sale stipulated that “This contract and any other matters arising out of this contract shall be governed by Vietnamese law”
⇒ Áp dụng luật chuyên ngành trước, luật chung sau. Nếu có sự mâu thuẫn => ưu tiên luật chuyên ngành (được quy định trong Luật thương mại Commercial Law)

Which national laws? Reality?
Seller
	Buyer
	Applicable
	Singapore
	VN
	English (common law), Singapore 
⇒ bất lợi cho d/n VN = lý do vì sao VN tham gia công ước Viên => đỡ rủi ro hơn
	South Korea
	VN
	French, Korean, Singapore
	Switzerland
	VN
	Singaporean
	England 
	VN
	English
	China
	VN
	VN
	Thailand, UEA
	VN
	English
	Japan
	VN
	Singaporean, Japanese 
	VN
	Hongkong
	Singaporean, Vnese
	America        
	VN        
	Singaporean
	Germany        
	VN        
	Swiss, Singaporean

⇒ Singapore law is commonly used because:
* In English (#VN - luật VN tiếng Anh được dịch trên mạng, không đc kiểm chứng, China (even large economy) - language) → Easy to understand, no conflict
* Documents are easy to find on websites
* Singapore is a hub of transport, arbitrage (trọng tài) → professional → many countries choose it as a place to solve a dispute

Ex: An international contract sale of goods between a French company (the Seller) and a Singapore company (the Buyer)
* Case 1: The contract agrees that the applicable law is French law. (= Domestic Law + CISG)
⇒ CISG is prioritized when having dispute
* Case 2: The contract agrees that the applicable law is Singapore law
⇒ Singapore law is applied → Bc mem of CISG, nc lớn → Prioritized)
* Case 3: The contract discusses the choice of English law 
⇒ English law is applied (England kp mem CISG - ngầm hiểu 2 bên muốn loại CISG)
* Case 4: The contract does not stipulate the applicable law.
⇒ CISG will be applied automatically (Article I.I.a CISG - France & Singapore are contracting mem)
3. Customary law / Commercial practices (Tập quán TMQT)
3.1. Requirements of a commercial practice
* An established and repeated practice
* Widely recognized in a region or worldwide
* An explicit meaning
* Identifying the rights and obligations of the parties to contract
3.2. When practices apply?
* Chosen by the parties
* Governing convention leads to the application of customs
* Where the matters in questions are not addressed by laws nor agreed by the parties
4. Case law
Source of Common law
Apply when:
* Parties agree to choose the law of a common law country
* Chosen by Court/ Arbitration Panel (Normally similar case law)

How to choose applicable laws?
* Law that is closely related to the contract
* Choose the law that protect your rights
* Choose the law that you know better
* Choose the laws usually applied in business lines
(Thường dùng English law khi vchuyen đường biển)
5. Conflict of law
* Conflict of laws signifies the difference between the laws of 2 or more jurisdictions that are applicable to a dispute in question. The results of the case depend upon the selection of the law to resolve the dispute.
* Nếu 2 bên tranh chấp ko chọn đc luật chung ⇒ Hội đồng trọng tài dựa vào International private law.

Example: An US Co. entered into a written contract w/ a Chinese Co. contacted by phone to discuss additional term CNese comp didn’t comply additional agreement
US comp alleged (cáo buộc) that CNese Co. had broken the contractual obligation >< Chinese Co. argued that additional agreement was not their obligation, not valid.

Khi có xung đột, dùng luật của nước người bán. Nếu người bán là VN, additional term không có hiệu lực, vì term đc chấp nhận là đc thêm vào dựa trên written contract. Nhưng nếu người bán là US, additional term có hiệu lực, CN vi phạm obligation.
How to overcome? (Applying Conflict of laws rules)
* Create uniform rules on the matter (Signing treaties)
* Apply conflict of laws rules (Áp dụng các quy phạm xung đột)
Art 683 CC2015 → Nếu VN là ng bán thì áp dụng luật VN
1. Parties in a contractual relationship may agree to choose the law applicable to the contract, except in the cases provided in clauses 4, 5 and 6 of this article. In case the contracting parties fail to agree the applied law, the law of the country with which such contract closely associates shall apply
…
4. If the object of a contract is an immovable property, the law applied to transfer of its ownership rights and/ or other property-related rights, lease of immovable property or using the immovable property as the guarantee for performance of obligations shall be the law of the country where the immovable property is located.

6. Choice of law clause
* “This contract, and all questions relating to its formation, validity, interpretation or performance shall be governed by Vietnamese law"
* Applicable law: “The validity and performance of this purchase shall be governed by the laws of the state shown on Buyer's address on this order"
* "The contract between the parties is made, governed by, and shall be construed in accordance with the laws of Canada applicable therein, which shall be deemed to be the proper law hereof…”
III. Formation of contract
1. Fundamental principles of entering into a contract
* Freedom of contract (free to choose the goods, the price, quantity – if they are not illegal)
* Voluntary agreement (willing to enter the contract)
* Equality (the parties are equal)
* Honesty & Good-faith (Trung thực - Parties must display all information that relating to the contract; Thiện chí – Parties must not create difficulties to the other side, must support each other to fulfill the contract)
2. Offer & acceptance in formation of contract
2.1. Offer
a. Definition
An offer to enter into a contract = a clear expression by the offeror of its intention to enter into a contract and to be bound by such offer made to another specific party or the public (hereinafter referred to as the offeree). (Art 386 CC 2015)
A proposal for concluding a contract addressed to one or more specific persons constitutes an offer if it is sufficiently definite and indicates the intention of the offeror to be bound in case of acceptance. (Art 14 CISG)
* Differences bw CC vs CISG 
Offer must be a clear expression vs sufficiently definite
to be bound by such offer made to another specific party or the public vs to be bound in case of acceptance to one or more specific persons
“A clear expression”
Article 398. Contents of contracts
1. The contracting parties may agree on the contents of a contract.
2. A contract may have the following contents:
a) Subject matter of the contract;
b) Quantity and quality;
c) Price and method of payment;
d) Time-limit, place and method of performing the contract;
dd) Rights and obligations of the parties;
e) Liability for breach of contract;
b. OFFER >< AN INVITATION TO TREAT (Lời mời chào hàng) 
Ex: Cửa hàng chào hàng => an invitation to offer/ treat
Khách vào cửa hàng và muốn mua => offer
* An offer is a proposal while an invitation to offer/ treat is inviting someone to make a proposal.
→ So, in an invitation to treat, the offeror does not make an offer, rather invites other parties to make an offer.
* An offer becomes an agreement when accepted. On the other hand, an invitation to offer becomes an offer when someone responds to it.
Examples of invitation to treat:
* The display of goods with a price tag attached in a shop window or on a supermarket shelf
* Advertisements, catalogues and brochures
* Company prospectuses: A company invites applications from the public to subscribe for its share.
* Auctions
* Tenders
An offer must be clear and definite

Ex: A state agency announces a tender for the installation of a new telephone network
Case 1:  A requires contractors to develop a technical and financial proposal for the project
Is A's intention clear or not? 
→ Not clear, not state the technical requirements, the price
Case 2: A specifies the technical proposal and states that it will accept a tender that meet the technical requirements at the lowest price
→ Is an offer because it is clear: state the technical requirements and the price, the intention to enter into a contract

Tender: a written or formal offer to supply goods or do a job for an agreed price (mời đấu thầu)

Case: Carlill v Carbolic Smoke Ball Company [1893] 2 QB 256
A company advertised that their new drug, the carbolic smoke ball would cure influenza and if it did not, the buyer would receive $1000. 
→ Offer:
* When sued, Carbolic argued that the advertisement did not constitute a legally binding offer; it is merely an invitation to treat, a trick or advertising gimmick.
* However, the Court of Appeal (Toà phúc thẩm) held that the advertisement was an offer. The intention to be bound may be inferred from the statement that the Company deposited £1,000 in their bank to "demonstrate our sincerity".
c. An offer must be made to specific person or people 
* Offeror: party that makes the offer
* Offeree: party that receives the offer
d. Time-limit for effectiveness of offers
* The period of time within which the offeror is bound by his offer.
* The time-limit specified in the offer.
   * This offer is valid until 01/07/2009 or this offer is binding until 01/07/09
   * This offer is valid in 30 days since the date of signature
   * This offer is binding within 30 days
* No specified time-limit: within a reasonable time?
* If the last day of the period falls on an official holiday? (Art 20 CISG) 
→ The court can determine depend on relevant factors: the characteristics of the goods, the modes of communication, transportation

Find relevant articles in Civil Code 2015 and CISG 1980
1st March 2018: A sent B an offer
7th March 2018: B received the offer
14th March 2018: B wrote and sent the letter of acceptance to A
When can A withdraw or revoke his offer?
* Withdraw: 1/3 → 7/3 (before B ans)
* Revoke: 7/3 → 14/3
e. Withdraw/ Revoke the offer 
* An offer can be withdrawn prior to its reaching the offeree (Art 15 CISG, Art 389 CC2015) - Chưa nhận được => rút lại (withdraw)
* An offer can be revoked any time before the acceptance (Art 16 CISG, Art 390 CC) - Nhận được mà chưa phản hồi => huỷ (revoke)

Termination of offers
A → B
	VN
	CISG
	1. Accept all
	Art 393
	Art 18
	2. Reject all
	Art 391.2: terminate → No contract
	Art 17: terminate → No contract
	3. Modify
	Art 392: new counter-offer
	Art 19.1+3: materially alter terms (price, payment, quality, quantity,...) → counter-offer
Art 19.2: not materially alter terms → acceptance

* If the time limit of the offer has expired (Article 391 CC 2015 – 5 cases, Art. 17 CISG – only 1 case)
2.2. Acceptance
a. Definition
* Acceptance of an offer to enter into a contract means a reply by the offeree to the offeror accepting the entire contents of the offer. (Art 393 CC 2015)
* A statement made by or other conduct of the offeree indicating assent to an offer is an acceptance. (Art.18 CISG)
Form: written, oral, act (depend on which law)

Eg1. A sent an offer to sell 1000 MT steel to B, C, D. The offer is open for 7 days.
After 9 days, B accepted the offer.
After 5 days, C accepted the offer.
After 3 days, D accepted the offer.
Which contract has been established? Between A and D, A and C or A and B?
⇒ 2 contracts: A vs C ; A vs D
Ans:
TH1: Có đủ 2000MT → Send 1000MT to both C & D
TH2: Ko đủ hàng
1. After receive acceptance from D, A revoke offer to C
2. Mua 1000MT ở chỗ khác bán cho C
3. Break contract w C/D → Compensate D/C
b. Silence?
Eg2. On June 1, Seller sent the buyer an offer to sell a specified type and quantity of goods at a stated price and added: “This is such an attractive offer that I shall assume that you accept unless I hear from you by June 15.” Buyer did not reply. Seller shipped the goods on June 16.
Ans:
CISG Art 18.1: Silence is not acceptance.
Art 385 CC2015: Civil contract means an agreement between parties… → Chỉ Seller đề nghị Buyer chưa agree → No contract is formed
c. Effective acceptance?
* VN law: acceptance must be received by the offeror (Art400 CC2015)
* CISG: Art 18
⇒ “receipt” rule
* UK, US: exception to the receipt rule. “The postal rule” acceptance has been communicated once the letter has been posted → don't require offeror receive acceptance
Eg.
1/2 A gửi hđồng cho B, time limit 20 days
5/2 B nhận
25/2 B accept
→ Khác nhau depend VN&CISG or US&UK
d. Withdrawal of Acceptance
* Art397 CC2015
* Withdraw ph đến trc/ cùng thời điểm Accept

COMPARE TO COMMON LAW
Offer
Acceptance
Consideration: Sự đối ứng (Giao hàng - Trả tiền) (Hợp đồng cho tặng ko đc coi là hđồng → gdich dân sự thông thương)
Intention to create legal relations 
3. Counteroffer and inquiry
Exercise:
On April 22nd 2019, Petrolex (VN) sent a firm offer for sale of crude oil to IPI (France) in which there were 6 terms and conditions; delivery time was in 6,7,8/ 2019. The offer was valid until 16h30 May 17th 2019 (which was Sunday)
On 16h30 May 16th Petrolex drafted the revocation of the offer to send to IPI because the following day would be Sunday. Yet, the person in charge of sending it was off-work. Therefore, the revocation was sent on May 18th.
23h18’ May 16th, IPI sent an acceptance stating that: “We are happy to accept your offer on April 22nd 2019 about delivery in 6,7,8/2019, and we will later discuss with you about the method of delivery in details”
Petrolex alleged that the acceptance on late Saturday night was a late acceptance and there was no contract between the parties, therefore, Petrolex didn’t deliver the goods.
IPI argued that the acceptance came to the offeror within the time-limit for accepting the offer, and the L/C was issued, therefore, a contract came into existence. Petrolex had breached the contract, not delivering the goods.
IPI wished to terminate the contract and claimed for damages of $47,600.
Did a contract come into existence? (Applicable law is CISG 1980)
ANS
22/4
* Petrolex -> IPI
* Deliver 6,7,8/2019
* Valid till 16h30 17/5
16h30 16/5: Petrolex revoke (draft)
18/5: Petrolex revoke (real)
23h18’ 16/5: IPI accept
Petro alleged (cáo buộc) late accept → no contract
IPI argued: accept within time limit → contract → wished to terminate claimed for damages of $47,600

4 issues:
* Applicable law? (CISG?)
* Valid offer?
* Valid revocation?
* Is there acceptance?
* IRAC:

4. Essential elements of validity of contract
* Capacity of the parties (Năng lực)
* Contents
* Forms
* Principle of complete voluntaries (Nguyên tắc hoàn toàn tự nguyện)
4.1. Capacity of the parties to contracts
(i) If parties are individuals/ natural persons (Art. 16-23 CC2015)
* Civil legal capacity (Năng lực pháp luật dân sự)
* Capacity for civil conducts (Năng lực hành vi dân sự) 
   * Vnese individuals or companies?
   * Foreign individuals or companies?

(ii) If parties are legal entities
* Legal entities must register their businesses and be granted business registration certificates (check xem doanh nghiệp có đki kinh doanh ko).
* The person who signs in the contract must have the authority to do so (xem người đó có phải địa diện pháp luật, hay được ủy quyền hay không)

* Legal representative: “The person appointed by the juridical person according to its charter” (thường là chủ tịch, giám đốc) (Art 137 CC2015) 
* Authorized representative: The principal may authorize another person to sign and perform the contract (138, 139 CC1025) => kiểm tra xem phạm vi ủy quyền nữa (phải có giấy ủy quyền), nếu giấy ủy quyền là đc ký hợp đồng <1 tỉ nhưng hợp đồng của mình >1 tỷ => ko có hiệu lực.
How can we check the representative?
→ Ask them to show the company charter, authorization certificate (the scope of authorization + duration of that authorization)
4.2. Contents of contracts
* The goods aren’t banned from importing and exporting in both the export & import countries.
* Contracts must include fundamental terms
   * UK, US: object of the contract
   * France, Germany: object and price
   * CISG: object, quantity, price
   * VN: no requirement on fundamental terms of the contract
4.3. Forms of contracts
* In writing
* Verbally
* By conducts
   * CISG?
      * Not necessarily in written forms - CISG recognizes the principle of freedom of contract form (Art. 11)

* Other means/ forms: Art. 119 CL2015 (verbal, written, specific acts, electronic means ~ data message

* VN? - According Vietnam Commercial 2005 (Art 27.2)
4.4. Principle of complete voluntaries
* Fraud/ Deception: Art 127. CC 15

EG. Passing a car. Buyer asked whether or not rơi vào tình trạng ngập nước chưa? Chỉ khi trả lời là: “Chưa bao giờ ngập nước” thì mới là deception. Còn nếu trả lời không rõ ý đó eg. “cứ kiểm tra đi, thích thì lấy blablaa” thì không bị coi là deception. 🡺 deception khác misunderstanding

* Thread: Art 127 CC 15
   * Need to prove that you have been threatened by the court/ arbitration. Eg. Witness of the third party, recording, etc.

* Mistake: Art 126 CC 15 (nếu hiểu nhầm thì có thể yêu cầu tuyên bố vô hiệu, nhưng nếu các bên đã đạt được mục đích giao dịch ban đầu/ có thể khắc phục ngay hiểu lầm để đạt được mục đích ban đầu thì k vô hiệu giao dịch đó)

Legal consequences of invalid contract
* The parties are released from the rights and obligations of the contract from the time the contract is entered into.
* The parties shall return to each other what they have received under the contract (Ex: deposit)
* The party at fault must pay compensation for any loss

IV. PERFORMANCE OF CONTRACTS
Seller’s obligation
	Buyer’s obligation
	1. Deliver the goods (place of delivery, ensure the conformity of goods)
2. Hand over any documents relating to the goods
(Art 34, 35 CL 2005; Art 30-34 CISG)
	1. Pay the price (time of payment, place of payment)
2. Take the delivery of the goods
(nếu ko nhận phải lưu bãi, international transfer to destination take long time & cost => buyer phải trả tiền này, quality affected)
(Art 50 - 56 CL 2005; Art 53, 60 CISG)
	Time for delivery
* Fixing on exact date for receipt of the goods
* Delivery in a period of time
* No fixed or determinable time of delivery

V. LIABILITIES FOR BREACH OF CONTRACT
BASIS OF LIABILITY
* Breach of contract
* Damage suffered by the non-breaching party
* Proximate cause bw breach and damage (Mối quan hệ nhân quả)
* Fault of the breaching party (Nguyên tắc suy đoán lỗi = “the rule on presumption of fault)
1. Breach of contract
* Non-performance (không thực hiện)
* Improper performance (thực hiện không đúng)

Who shall prove?
→ Non-breaching party needs to prove
How to prove?
→ by picture, video, contract, documents, payment/ transport documents, insurance documents… (late delivery: show the contract which has delivery, receipt of BL; Defected goods: show the contract and the quality certificate)

* Damage/ Loss suffered by the non-breaching party
      * Physical damage >< spiritual damage (physical: calculated in form of money; spiritual loss: Ex: loss of reputation when they do not have the goods to supply their customers; in fact: very hard to recover spiritual damage)
      * Direct damage (only this can be recoverable) >< indirect damage (hậu quả trực tiếp của hành vi vi phạm: thiệt hại trực tiếp; ko phải hậu quả trực tiếp: thiệt hại gián tiếp; chỉ có thể đòi bồi thường cho thiệt hại trực tiếp, ko đòi đc cho thiệt hại gián tiếp)
* Non-breaching party can only claim compensation if damage occurs
* Obligation to prove damages belongs to the non-breaching party
* Which loss/damage can be recovered?
Article 302. CL 2005 - Damages 
1. Damages means a remedy whereby the breaching party pays compensation for the loss caused by a contract-breaching act to the aggrieved party. 
2. The value of damages covers the value of the material and direct loss suffered by the aggrieved party due to the breach of the breaching party and the direct profit which the aggrieved party would have earned if such breach had not been committed. (ngoài direct and material loss, có thể đòi cho direct profit)
(CISG Art 74)
Damages for breach of contract by one party consist of a sum equal to the loss, including loss of profit, suffered by the other party as a consequence of the breach. Such damages may not exceed the loss which the party in breach foresaw or ought to have foreseen at the time of the conclusion of the contract, in the light of the facts and matters of which he then knew or ought to have known, as a possible consequence of the breach of contract.
2. Proximate cause between breach and damage
“Damage must be proximately caused by the wrongful conduct of the defendant”

EXAMPLE: The buyer was late in requesting the carrier to receive the cargo for 20 days. The seller had to store the goods in the warehouse and suffered some losses:
* Cost for storage of goods in a warehouse (1)
* Goods got wet and moldy because of a heavy rain during storage period (2)
* Loss of goods caused by theft (3)
Which loss is recoverable?
According CL302 and CISG 74
(1) Late delivery => increase cost for storage => direct loss => recoverable
(3) It is the seller’s duty to assure the condition of warehouse => goods got wet and moldy because the seller didn’t keep it safe, not because of rain => seller has to pay for the loss => indirect loss, not recoverable

3. Fault of the breaching party: “the rule on presumption of fault” (nguyên tắc suy đoán lỗi)
1 party breached any of its obligations under the contract
→ shall be presumed guilty → bear the liability for breach of contract.

If the breaching party does not want to bear the liability, he must prove that he is innocent or he isn’t at fault.
(breach of contract but not at fault => chứng minh mình thuộc trường hợp miễn trách)
3.1. Excuses for breach of contract (Trường hợp miễn trách)
a) Force majeure
An event of force majeure is an event which occurs in an objective manner which can not be foreseen and which cannot be remedied by all possible necessary and admissible (chấp nhận đc) measures being taken. (Art 156 CC2015, Art 79 CISG)
* Taking within the effectiveness of the contract
* Occuring in an objective manner (over the control of the party)
* can not be foreseen
* The consequences of the event must have been unpreventable
Types
* Natural disaster
* Human or technical failure

Comment on this Force Majeur Clause (Nếu là Buyer/Seller thì có/bất lợi gì??)
"Force majeure: The seller shall not be responsible for the delay of shipment in all cases of force majeure, including mobilization, war, riots, civil commotion, hostilities, blocade, requisition of vessels, prohibition of export, fire, earthquakes, tempests, and any other contingencies which prevent shipment within the stipulated period. In the event of any aforesaid causes arising, document proving the occurrence of existence shall be sent by the seller to the buyer without delay".
Seller - Advantageous
	Buyer - Disadvantageous
	1. + not limited
2. without delay → reasonal tt. After 2m → negotiate. After 2,5m → terminate?
3. + any obligation
4. + Definition of FM
5. with characteristics in Art1
6. within effectiveness of contract
7. time of perform → extended condition
	1. unforeseenable all possible action
2. notice time: 5 days, in written form
3. legit evidence
4. + remedies for the buyer: termination rights, refund, or alternative supply arrangements.

Obligations of the breaching party in the event of force majeure
* Giving notice to the other party (tốt nhất là immediately)
* Providing the certification of the force majeure event and providing the causation
How to draft a force majeure clause in a contract:
* Definition
* An open list of typical force majeure events (“include but not limited”)
* Specify the obligations of the parties in breach
* Stipulate the legal effects

Hardship: Hoàn cảnh thay đổi
Ex: Covid-19 → Hardship
b) Dirty hand (Entire fault of the non-breaching party)
The non-breaching party committed a fault before the breaching party breaches the contract.

Ex: The seller sells the product to the buyer. The seller is not allowed to sell his packaging but has to use those of the buyer. If the buyer was late in providing the packages to the seller, leading to the seller’s late delivery of the goods, the seller’s breach of contract is entirely the fault of the buyer.
c) A third party (suppliers, distributors, carriers, banks,...) at fault
Ex1: The manufacturer didn’t deliver the goods to the seller, then the seller couldn’t deliver the goods to the buyer.
Is the seller exempt from liability to the buyer? (Art 79(2) CISG)
→ Chỉ khi the manufacturers cũng encounter fource majeure events nên không giao hàng được cho seller

Art 79(2) CISG
(1) A party is not liable for a failure to perform any of his obligations if he proves that the failure was due to an impediment beyond his control and that he could not reasonably be expected to have taken the impediment into account at the time of the conclusion of the contract or to have avoided or overcome it or its consequences. (nói về force majeure)
(2) If the party's failure is due to the failure by a third person whom he has engaged to perform the whole or a part of the contract, that party is exempt from liability only if: (cả 2 điều kiện này phải đều xảy ra)
(a) he is exempt under the preceding paragraph; and (điều 1: beyond the control, encounter force majeure events)
(b) the person whom he has so engaged would be so exempt if the provisions of that paragraph were applied to him. (the third parties also encounter force majeure events)
(3) The exemption provided by this article has effect for the period during which the impediment exists.
(4) The party who fails to perform must give notice to the other party of the impediment and its effect on his ability to perform. If the notice is not received by the other party within a reasonable time after the party who fails to perform knew or ought to have known of the impediment, he is liable for damages resulting from such non-receipt.
(5) Nothing in this article prevents either party from exercising any right other than to claim damages under this Convention.

Ex2: Seller contracted to sell Buyer a machine to be built in accordance with specifications supplied by Buyer. Seller contracted Electron to manufacture the machine. Electron had a good reputation for efficiency and responsibility but, in this case, mismanaged the production so that it was unable to deliver the machine. At the time of Electron’s fault, Seller could not obtain the machine from another supplier and was unable to deliver the machine to Buyer.
Is the seller exempt from the liability?

I: Is the seller exempt from the liability?

R: Art. 74 (2) CISG

A: 
* Electron mismanaged the production. This is not due to force majeure or beyond the control of Electron because it had good reputation for efficiency and responsibility. 
* Seller cannot find any substitute machine from other supplier than Electron.

C: Electron is not exempt from liability → Seller is also not exempt and have to bear the liability to Buyer 
Note: If factory got fire - force majeure -> electron encounter force majeure -> can be exempt
IV. Remedies for breach of contract under vietnamese law
(Article 292 - Commercial Law 2005)
1. Specific performance of contracts (Buộc thực hiện đúng hợp đồng)
(Art.297 ComL2005)
Specific performance means the innocent party requests the defaulting party to properly implement the contract or to take other measures to cause the contract to be performed, and the defaulting party shall bear any costs incurred.

Ground for application: Breach of contract + Fault of the breaching party

Example:
* If the seller delivered poor quality goods?
   * Notify the seller immediately (within 3-5 days of discovering the defect) and provide evidence (inspection reports, photos, etc.).
   * Request the seller to replace or repair the goods at their own cost within a reasonable period (e.g., 7-14 days).
   * Demand a price reduction if the goods can still be used but do not meet agreed specifications.
   * If the seller refuses, initiate legal action to enforce specific performance and claim damages.

Nếu goods hỏng:
      * Ycau Seller sửa (70tr)
      * Buyer sửa
         * Tự cty sửa (100tr)
         * Thuê 3rd party (120tr) → có invoice. Làm ntn để chứng minh giá này reasonable? → Prove nó là lowest price in market
⇒ Seller chỉ bồi thường 70tr, 100tr quá đắt
⇒ Cần negotiate TRƯỚC, ycau thực hiện đúng hợp đồng, chịu chi phí phát sinh
* If the buyer did not take the delivery of the goods?
   * Send a formal notice demanding the buyer to take delivery within a specified time (e.g., 3-7 days).
   * Charge storage fees if the buyer delays beyond the stipulated period.
   * Request the buyer to arrange transportation within a reasonable timeframe.
   * If the buyer still refuses, seek legal remedies such as enforcing the contract, claiming damages, or reselling the goods and charging the buyer for losses.
2. Penalty (Phạt vi phạm)
Art 418 CC 2015, Art 300 CL 2005

Article 300 - Fine for breach
Fine for breach means a remedy whereby the aggrieved party requests the breaching party to pay an amount of fine for its breach of a contract, if so agreed in the contract, except for cases of liability exemption specified in Article 294 of this Law.

Ground for application:
* There must be an agreement between the parties
* There must be a breach of contract but need not be loss suffered by the non-breaching party

Level of penalty/ Fine level:
* Article 301 of CL 2005: The penalty level shall be agreed to by the parties but shall not exceed 8% of the value of the breached contractual obligation portion.
* Article 418.2 of CC 2015: The penalty levels shall be agreed among the parties unless otherwise prescribed by relevant laws.
General law = Civil Code < Commercial Law = Specialized law

Ex:
* Goods: 20,000 MT Kumgang Cement (+-4%)
* Price: 55USD/MT
* Delivery time: 30 December 2015
* Art 14 in contract: In case of delayed delivery except for Force Majeure cases, after 2 weeks grace period, the Seller shall pay to the Buyer for every week of delay penalty amounting to 0.5% of the total value of the Products whose delivery has been delayed. The penalty, however, shall not exceed 5% of the goods involved in the late delivery.
* The seller did not deliver to the buyer
Validity of Art 14? → Valid (Có agreement giữa 2 bên, 5%<8%)
Can a penalty remedy be applied? → No (vì đây là Non-performance, kp Delay)
If yes, what is the amount? → No
Nếu giao muộn - Max: 55*20,000*5%=55,000 (USD)
3. Damages 
* Definition
Article 302. Damages (CL 2005)
1. Damages means a remedy whereby the breaching party pays compensation for the loss caused by a contract-breaching act to the aggrieved party.

* General rule for measuring damages
Article 302. Damages (CL 2005)
2. The value of damages covers the value of the material and direct loss suffered by the aggrieved party due to the breach of the breaching party and the direct profit which the aggrieved party would have earned if such breach had not been committed.

* Loss can be compensated
   * loss of property
   * reasonable expenses to prevent / mitigate damage
   * loss of income / profit

* Burden of proof and duty to mitigate loss + Obligations to mitigate (Art. 304, 305 CL2005)
   * Article 304.- Burden of proof of loss
The party claiming damages shall bear the burden of proof of the loss, the extent of the loss caused by the act of breach, and direct profit amount which the aggrieved party would have earned if the breach had not been committed.
   * Article 305.- Obligations to mitigate loss
The party claiming damages must apply appropriate measures to mitigate the loss caused by a contract breach, including the loss of direct profit which it would have earned. If the party claiming damages fails to do so, the breaching party may request a rebate of the value of damages to the extent of the loss that would have been mitigated.

* Ground for liability to pay damages: (Art 303 CL2005)
Except for cases of liability exemption. There must be
   * Breach of the contract
   * Loss
   * Breaching act is the direct cause of the loss suffered

* Differences between damages and penalty
Damages
	Penalties
	* Validity: No need to mention in the contract because the law already govern this issue (Chỉ cần CM đc Grounds for liability)
* The non-breaching party must suffer from some damages
* Damages must be calculated based on the actual damage (max damages = loss)
	* Validity: Must be an advanced agreement between 2 parties
* The non-breaching party did not need to prove the damages
* Breaching party must pay a fixed amount of money (8%)
	4. Cancellation/Avoidance of contracts.
Art 312 CL 2005
Cancellation of a contract includes cancellation of part of a contract or cancellation of the entire contract. The complete annulment of performance of all or some contractual obligations

Ground for application
Except for cases of liability exemption
* There must be a breaching act which serves as a condition for the cancellation of the contract as agreed upon by the parties
* There is a fundamental breach of obligation by a party

Fundamental/ Substantial breach
* Art 3 (13) of CL 2005
13. Substantial breach means a contractual breach by a party, which causes damage to the other party to an extent that the other party cannot achieve the purpose of the entry into the contract. 
* Art 25 of CISG
A breach of contract committed by one of the parties is fundamental if it results in such detriment to the other party as substantially to deprive him of what he is entitled to expect under the contract, unless the party in breach did not foresee and a reasonable person of the same kind in the same circumstances would not have foreseen such a result.
(Article 292 - Commercial Law 2005)

CASE: Can the buyers in these cases cancel the contracts?

Case 1: A sale contract of alcohol stipulates alcohol must be 20 degrees but the seller delivered 15 degree alcohol

→ XĐ objective của Buyer:
* If the objective is to drink → tuỳ nhu cầu
* If the objective is to sell to others → still achieve (k bán lúc này bán lúc khác, thương lượng đc để tìm cách khác tạo profit, chỉ cần k huỷ hợp đồng)
* If the objective is to produce (cần độ rượu chuẩn) → fundamental breach

Case 2: Italian shoes trading contract. A sales contract of Italian shoes stipulates that the goods are high-class men’s shoes, black, sizes ranging from 40-44. The seller delivered shoes’ sizes ranging from 36-38 = women’s size

SL nam đi 36-38 vs 40-44 chênh lệch rất nhiều → Rất khó bán
SL ng mua Rượu 15 vs 20 độ chênh lệch ít
⇒ Tỉ lệ đạt đc profit của Case 2 thấp hơn nhiều → fundamental breach

Case 3: A Vietnamese company signed a contract to buy paint powder from a Japanese company in order to export lacquer painting to Europe. The Japanese company delivered Hong Kong’s paint powder.

If Japanese origin is critical to the contract's purpose (e.g., export requirements), this is likely a substantial breach under both Article 25 of the CISG and Article 3(13) of Vietnamese Commercial Law.
If not critical, the breach is minor and may only lead to remedies like price reduction or damages rather than avoidance of the contract.

Legal consequences of cancellation of contract
* The contract shall be ineffective as from the time at which it was entered into
* Each party must return anything it has received from the other party if restitution cannot be made in kind, it must be paid in money.
* The party at fault in relation to the cancellation of a contract must compensate for any damage.
5. Suspension of performance of contracts.
Definition: Art 308 CL 2005 
Article 308.- Suspension of performance of contracts
Except for cases of liability exemption specified in Article 294 of this Law, suspension of
performance of a contract means a remedy whereby a party temporarily ceases the
performance of its contractual obligations in one of the following cases:
1. Upon commission of a breaching act which serves as a condition for the suspension of
performance of the contract as agreed upon by the parties;
2. Upon a substantial breach of contractual obligations by a party.

→ Suspension of performance of a contract means a remedy whereby a party temporarily ceases the performance of its contractual obligations
Ground for application: (Art 308) 
Except for cases of liability exemption
a breaching act which serves as a condition for suspension of performance of contact as agreed upon by the parties; or
a fundamental breach of obligation by a party

Legal consequences (Art 309 CL2005)
Contracts which are suspended from performance are still in full force and effective
Aggrieved parties are entitled to claim damages

6. Stoppage of performance of contracts.

RELATIONSHIP BETWEEN REMEDIES
* During the period of application of specific performance, the agrieved party may claim for damages and fines but must not apply other remedies (suspension, stoppage or cancellation of coctract).
* Where the parties agree upon fines for breaches, the egrieved party shall be entitled to apply both remedies of fines and damages
* A party shall not lose its right to claim damages when other remadies have been applea

VII. DRAFTING A CONTRACT FOR AN INTERNATIONAL SALE OF GOODS

1. Parties
Name of parties? Do not use the abbreviation name
Address?
Ex: A lawsuit filed by an Indian company against L.Smith Ltd company in the UK
Mua ngũ cốc ở cty L.Smith Ltd, kiện cty ở UK nhưng ko thành công vì cty ở UK nói rằng tên của họ là Louis Smith Ltd

Capacity of the party?
Ex: Unimex Thai Binh vs Samoa Network
Unimex Thai Binh sold 10,000MT of rice to PAL-Angerie, CIF Incoterms. Unimex TB signed a contract to charter the ARS vessel of Samoa Network (SN) in Singapore (which was introduced by VOSA Agency in HCM City). The agreed freight was 300,000 USD. SN loaded the goods on to the vessel and then disappeared. Thus, the loss that Unimex TB has to suffer were 10,000MT of rice and 300,000 of shipping charge.
Liên lạc với VOSA, tuy nhiên VOSA chỉ là người giới thiệu, ko kí bất cứ hợp đồng nào
Đến địa chỉ của SN: chỉ là một siêu thị nhỏ
This is the consequence of signing the contract without checking the capacity of the party (nhờ tham tán thương mại, lên website của bộ kế hoạch đầu tư, kiểm tra mã số thuế…)

2. Name of the goods
Use the precise name of the good:
Name of the goods + trade name/ scientific name
Name of goods + place of origin (Da Lat Milk)
Name of goods + manufacture’s name (TH TrueMilk, Toyato car)
Name of goods + major specifications (Vietnam rice autumn crop)
Name of goods + main use purpose (Sleeping bag)
3. Quantity
There must be a unity on the unit of measurement
Eg: Unit of length: metre, inch, mile, foot,
Method of drafting:
A precise quantity
Eg: 10 Q7 Audi cars, 100 Macbook laptops
A precise quantity + tolerance
Eg: 10,000 MT rice +/- 10%
4. Quality
Clearly define main characteristics of the goods
Use one of or a combination of the following methods
* As per national standard (theo tiêu chuẩn quốc gia): it must clearly state which country’s standard, the standard number, year of issuance
* As per general cusonmary criteria: eg: FAQ (fair average quality), GMQ (Good Merchantable Quality)
* As per description goods: it must describe as many details as possible.
Eg: Doanh nghiệp Việt Nam và Nhật Bản: “hoa hồi 5% cánh vụn”. Theo quan điểm của công ty Việt Nam là 5 cánh vỡ vụn thì là cánh vụn, bên Nhật cho rằng 5 cánh vỡ một cánh thì là vụn.
* As per sample: the parties must preserve the sample for comparison (thường là 3 mẫu được niêm phong).
* As per inspected and approved: place of inspection, inspecting agency, method of inspection, quality certificate (preliminary/final)
Biên bản giám định (cảng đến), giấy chứng nhận phẩm chất (cảng đi). Trong hợp đồng phải quy định giấy chứng nhận phẩm chất ở đâu là giá trị cuối cùng (final)

Quality dispute
Quality Cert (Seller) vs. Survey Report (Buyer)
→ Thường thuê bên T3 (Vinacontrol…)
5. Price and payment
5.1. Price
* Select the currency
* Pricing method
   * The price is specified at the time of signing the contract and cannot be modified if otherwise specified. Example: 5000 USD/MT corn
   * The price will be determined after signing the contract and during the performance of the contract (Because there are some products that have price variation) Eg: the price of goods is determined by agreement of the two parties 3 days before delivery of goods.
* To protect parties’ interest in the event of price fluctuations in the market
Example: If increases in the input and principal manufacturing costs of raw materials, labor and energy for the products in any year of this agreement exceed 3%, the supplier shall have the right to adjust the product prices to reflect such increase
5.2. Payment
* Clearly specify the date of payment, method of payment
* Select one of the following methods of payment (cash payment, bank transfer (T/T, D/P), letter of credit – LC)
   * For L/C method, the parties double check the L/C whether the L/C is consistent with the contract (nếu người mua mở L/C có ngày giao hàng sớm hơn hợp đồng, người bán giao hàng đúng hợp đồng, ngân hàng sẽ không thanh toán).
* Eg: Contract: Shipping time August 2024
L/C: Shipping before 20th Aug 2024 
Seller shipped the goods on 25th Aug 2024
Seller cannot receive the payment from the bank because he violates the contract
6. LANGUAGE
* Usually, an international sale contract is drafted in two languages.
* To avoid conflicts which may arise from inconsistency in the contents of the two versions, the party must select a preffered language in the two languages.
* Example: This contract is made into 2 copies in 2 languages: English and Vietnamese. If there is a conflict between the content of the two versions, the English version shall prevail."
7. Time for delivery and handling over documents

Transcript for:International Sales Contracts Overview

Transcript for:
International Sales Contracts Overview