Commercial law: Things business people need to know

The Law that directly regulates and regulates commercial activities is the Commercial Law 2018, which was issued on June 14, 2005 and is still in force. This law has many impacts on life in general and business in particular.

1. Maximum contractual fine of 8% or self-negotiation?

Commercial sanctions are obligations where the breaching party of a commercial contract must bear adverse consequences. Article 292 of the 2005 Commercial Law provides for various types of trade sanctions, including:

- Forced to comply with the contract;

- Violations;

- Forced compensation for damage;

- Suspension of contract performance;

- Suspension of contract performance;

- Cancellation of contract ...

In which the most applicable sanction is contract penalty. The law allows the parties to agree on the fine for breaching the contract. However, the Law governs the fine level for the breach of contractual obligations or the total fine for many violations does not exceed 8% of the value of the breached contract obligations.

At the same time, Article 418 of the 2015 Civil Code stipulates that the parties can agree to sanction violations in the contract, but there is no limit on the penalty for violation.

Therefore, in order to properly apply the prescribed fine level, it is necessary to distinguish clearly which relationship is governed by civil law and which is governed by the Commercial Law. The parties can agree to the applicable law right from the time of signing the contract to avoid troubles, disputes about the application of the law when there is a violation.

2. 2 more cases of liability exemption when contract breaches

In addition to the 2 cases that are exempt from liability when breaching the contract as current regulations (agreed by the parties or by force majeure), the 2005 Commercial Law has added 2 cases of liability exemption. .

Specifically:

- The violation of one party is entirely due to the fault of the other party;

- The violation of a party due to the implementation of a decision of a competent state agency that the parties could not know about at the time of signing the contract.

3. Foreign investors are allowed to buy and sell goods through the Exchange

Article 73 of the 2005 Commercial Law stipulates that: Vietnamese traders are entitled to conduct goods sale and purchase through the Goods Exchange overseas in accordance with the Government's regulations.

At the same time, according to Clause 2, Article 5 of Decree 51/2018 / ND-CP, Vietnamese traders are allowed to participate in goods trading through Commodity Exchanges abroad through Commodity Exchanges in Vietnam. connect with the Commodity Exchange overseas.

This new regulation has expanded the role of the Vietnam Commodity Exchange in connecting with foreign Exchanges, creating favorable conditions for traders to exchange and purchase.

In addition, the Decree also allows foreign investors to participate in the purchase and sale of goods through the Commodity Exchange in Vietnam as a customer or a broker or business member of the Commodity Exchange. with unlimited capital ownership ratio (Article 16a of Decree 51/2018 / ND-CP).

4. Extend case of commercial agency contract termination

Commercial agency means a commercial activity whereby the principal and the agent agree that the agent buys or sells goods on his own behalf or provides the principal's services. for customers to enjoy remuneration (Article 166 of the Commercial Law 2005).

There are two parties involved in a trade agency relationship: the principal and the agent. Accordingly, the two parties assigning the agent and the agent must be the trader, the line of goods suitable for the agent's goods.

Article 126 of the 1997 Commercial Law provides for the termination of an agency contract, in which: “[…] one party has the right to unilaterally suspend the contract when the breach of the contract by the other party is a condition for suspend the contract as agreed by the parties ”.

In other words, under this provision, the parties have the right to terminate the agent term only when the other party fails to perform, perform incompletely or improperly performing the obligations as agreed between the parties or as prescribed by law.

Up to now, the Commercial Law 2005 has extended the termination of the agent term of the parties, if there is no other agreement, the parties have the right to terminate the agent term at any time but must notify. written in advance a period of at least sixty days.