Assignment: Warehousing contract

PART I. BUSINESS LICENSE REQUIREMENTS

1.1. Warehousing service
In fact, warehousing rental services include 2 main services: Storing
goods and warehousing.
Storing goods: The company's operations have its own warehouse. These
companies will stock their goods or other company's goods and monthly they
will make a warehousing/storage invoice of that goods. This is not listed as a
real estate business.
Warehousing: The warehouse owner will let the tenant use the warehouse
or lease the land to the tenant for monthly use. This is listed as a real estate
business.

1.2. Warehousing service requirements

Since warehousing business is a conditional business related to real estate
business, it will be necessary to meet the provisions of the law on real estate.
1.2.1. Legal capital
Individuals/business organizations need to establish a company with a
minimum legal capital of VND 20 billion (according to the Law on Real Estate
Business No. 66/2014 / QH13 No. 10). If an organization, family or individual
sells or transfers or leases infrequently, there is no need to establish a company,
but it is necessary to list such activities and pay taxes to the government. In
addition, according to the Enterprise Law No. 68/2014/QH13, the company
needs to maintain this legal capital throughout the entire business process and
the minimum charter capital when registering must be equal to the legal capital.

1.2.2. Rented out real estate

Following the 2014 Real estate Business Law, the warehousing service
need to strictly follow these rule:
- Need to have the Certificates of land use rights.
- Not having any dispute about use rights, ownership.
- Not being seized for judgment execution.
 - Rented out warehouses need to be on date of use / ownership.

1.2.3. Quality of service

Keeping goods in the warehouse is a job to keep the integrity of goods
from quality and quantity until they reach consumers. Not only that, preserving
goods in the warehouse is not a simple job that needs to be met with certain
requirements. Therefore, companies need to adhere to the following rules:
- Preserve the integrity of goods in both quality and quantity
- Arrange and rationally use the area and warehouse capacity
- Ensure convenience to conduct warehouse operations
- Ensure safety when using electronic devices
- Have appraisal documents on fire prevention and fighting.
- Ensure the fire alarm system/fire extinguishing tools are in good
condition.

PART II. CASE STUDY

Sunhouse Group (specializing in manufacturing household appliances)
based in Cau Giay District, Hanoi is in need of renting warehouses in the
Philippines to facilitate the distribution of goods.

Through research, Sunhouse Group has contacted Dinh Vu Port Trading

and Service Joint Stock Company (specializing in providing logistics services at
seaports) also based in Cau Giay district, Hanoi to find suitable warehouses.
After the review period, Dinh Vu port company announced that it has found a
warehouse that meets the requirements of Sunhouse Group and proceeded with
the steps to sign the contract.

In the contract, there is a clause requiring Sunhouse Group to deposit

$162,000 in advance and if Sunhouse Group has a need to repair and renovate
according to its own use requirements, it will have to discuss with Dinh Vu port
company about this change. However, Sunhouse Group, after hiring,
automatically opened the warehouse without notifying Dinh Vu port company
for insignificant reasons. This leads to disputes between the two parties and
must be resolved through mediation.

PART III. THE CONTRACT

The Socialist Republic of Viet Nam

Independence - Freedom - Happiness
__**__
WAREHOUSING LEASE CONTRACT
No. 9999-HD-TNXVKB

Today, 13, June 2022 at DINH VU PORT SERVICE TRADING JOINT

STOCK COMPANY address factory: Cau Giay District, Ha Noi.
We are:
I/. THE LESSOR - (Party A):
Name of company: DINH VU PORT SERVICE TRADING JOINT
TRADING STOCK COMPANY.
Address: Cau Giay District, Ha Noi
- Tell: 0266-888-999
- Fax: (84-4) 7257 868
- Email: dinhvuport@logistics.com
The business registration certificate No: 888/XNK
Tax code: 0123456789
Account number: 0987654321
Represent: Ms. Do My Linh
Position: General Manager

II/. THE LESSEE - (Party B):

Name of company: SUNHOUSE GROUP
Address: Cau Giay District, Ha Noi
- Tell: 0233-111-555
- Fax: (84-4) 9999 111
 - Email: sunhousegroup@jsc.com
The business registration certificate No: 111/XNK
Tax code: 0552211889
Account number: 0132457689
Represent: Ms. Luong Thuy Linh
Position: General Manager

After the careful agreement, the two parties commit to sign this contract
with the terms and conditions as follows:

ARTICLE 1. OBJECTS OF THE CONTRACT

1.1. Party A agrees to lease to Party B the area of 450m2 factory at
number 3, 99 MICT North Access Rd, Manila North Port Terminal, Philippines.
1.2. The purpose of using: Used as a warehouse for finished products.

ARTICLE 2. DURATION OF THE CONTRACT

2.1. Contract term: 1 year, its effect from the day August 17, 2022 party
A hanover area to party B from 17 August, 2023.
2.2. Upon the expiration of the contract, depending on the actual
situation, the two parties may agree to extend the contract.
2.3. In case either party terminates the contract before the agreed time
limit, it must notify the other party at least 15 days in advance.
2.4. In case the contract ends early, Party A is responsible for refunding
the entire amount that Party B has paid in advance after deducting the factory
rent; Party B is entitled to receive back all the equipment purchased and
installed by itself (these equipment will be recorded by both parties and a list
attached).

ARTICLE 3. PRICES AND PAYMENT METHODS

3.1. Factory and warehouse rent is: 60 USD/m2/month (In words: sixty
dollars)
3.2. Party B will pay Party A 6 months in advance for the rent of the
factory and warehouse: 162,000 USD
 (In words: one hundred and sixty-two thousand dollars)
After a period of 6 months, the rent for the factory and warehouse will be
paid once a month on the 5th of every month. Party A is responsible for
providing invoices to Party B.

ARTICLE 4. RIGHTS AND OBLIGATIONS OF PARTY A

4.1. Party A's rights
Request Party B to preserve and use the factory, warehouse according to
the function, design and agreement in the contract.
Request Party B to pay the full rent according to the term and method
agreed in the contract.
Request Party B to hand over the factory or warehouse at the end of the
lease term.
Request Party B to compensate for damages or repair damages caused by
Party B's fault.
Unilaterally terminate or cancel the contract when Party B violates the
conditions to unilaterally terminate or cancel the contract as agreed by the two
parties in the contract or as prescribed by law.
Other rights as prescribed by law.

4.2. Obligations of Party A

Provide complete and truthful information about factories and
warehouses and take responsibility for the information they provide.
Deliver the factory and warehouse to Party B according to the contract
and guide Party B to use the factory and warehouse according to the function
and design.
Maintenance and repair of workshops and warehouses periodically or as
agreed in the contract.
Compensation for damage caused by your fault.
To fulfill tax obligations and other financial obligations as prescribed by
law.
Other obligations as prescribed by law.
 Preserving, repairing warehouse/storage periodically or following the
agreement in the contract.
Claim for damages.
Perform obligations according to the Law.

ARTICLE 5. RIGHTS AND OBLIGATIONS OF PARTY B

5.1. Party B’s Rights
Demand party A fully provides information about warehouse/storage.
Receive the warehouse/storage according to the agreement in the lease contract:
using warehouse/storage in the time of leasing.
Allowed to release a part or all of the warehouse/storage if this was
agreed in the contract or party A agrees with the documents.
Can continue to lease according to the condition which was agreed with
party A in case of changing the warehouse/storage’s owner.
Request party A to fix warehouse/storage in case there are any damages
and request claim for damages if it’s party A’s fault.
Unilaterally terminate the contract when party A violated the conditions
to unilaterally terminate the contract as agreed in the contract or according to
the Law.

5.2. Party B’s Obligations

Preserving, using warehouse/storage as its purposes, design and
according to the agreement in the contract.
Pay leasing fee and perform other obligations according to the agreement
in the contract.
Return the warehouse/storage to party A according to the agreement in
the contract.
Fixing any damages of warehouse / storage if it’s party B’s fault.
Changing structures is prohibited if don’t have party A’s agreement.
Paying damages expense if it’s party B’s fault.
Other obligations according to the law.

ARTICLE 6. TERMINATION OF THE CONTRACT

6.1. Party A has the right to unilaterally terminate the contract without
incurring penalties if Party B is one of the following acts:
a) Do not pay the rental fee after 6 months as stipulated in Article 3
a) Using warehouse/storage with other purposes
b) Intentionally damage the warehouse/storage.
c) Fixing, upgrading or re-leasing the warehouse/storage without any
agreement by documents of party A.

6.2. Party B has the right to unilaterally terminate the contract without
incurring fines and request to damage compensation, if Party A is one of
the following acts:
a) Do not hand over the leased property in accordance with the provisions of
the contract.
b) Do serious damage to the property of the B (with values greater than
50000 USD) due to the fault of party A.
c) The right to use the warehouse/storage is limited for the benefit of third
parties.
d) Do not repair warehouse/storage damages when they are unsafe to use or
cause damage to party B. If party B breach the contract, party B will be
fined 5000 USD.

6.3. The party that unilaterally terminates the warehouse/storage lease

must notify the other party 15 days in advance if there is no other
agreement. In addition to the above cases the parties undertake not to
unilaterally terminate the contract before maturity.

ARTICLE 7. COLLECTIVE COMMITMENT

7.1. Party A commits that they are the legal owner of the warehouse /
storage leased out, not having any disputes or seized for judgment execution
and also commit that the warehouse is safe to use.
7.2. Party B has studied the warehouse for lease.
 7.3. This lease between the 2 parties is completely voluntary, not forced
to lie. During the performance of the contract, if there are any changes, the
parties need to make an annex to the contract signed by both parties.
7.4. The two parties commit to comply with the agreement in the lease
contract.
7.5. Other commitments must comply with the provisions of law.

ARTICLE 8. DISPUTE RESOLUTION

Any disputes arising by the parties during contract performance are
prioritizing resolved through negotiations to jointly find the optimal measures to
ensure the rights and interests of the parties. In the absence of bargaining, the
two sides agreed to refer the matter for resolution at the People’s Court
authorized under the provisions of the law.

ARTICLE 9. GENERAL PROVISIONS

9.1. All amendments and supplements to this Agreement shall only be
effective upon the parties making the agreement or contract addendum and
signed by the authorized person full of both parties. The amendments will be
considered an integral part of the contract and shall take effect from the signing
date.
9.2. The two sides pledged to strictly implement the provisions of the
contract.
9.3. The lease agreement is made in 2 copies, each 1 copy has the same
legality.
9.4. This lease has legal effect from 17/08/2022 to 17/08/2023.

Representative of party A Representative of party B

Signed Singed
PART IV. Dispute
Anticipatory breach case:
10 days before the date of the valid contract is performed, Sunhouse
Group reads the news throughout the newspaper and social platforms that Dinh
Vu Port Investment & Development JSC continually got negative feedback
about the quality of warehousing service relating to the warehouse management
system. As a result, Sunhouse JSC unilaterally requires to terminate the contract
for all of the reasons above then hire another prestigious warehousing company.

Actual breach case:

In the process of using, to keep their products in good condition,
Sunhouse Group JSC has spontaneously remodeled the warehouse without
announcing Dinh Vu Port Trading and Service Joint Stock Company. On the
contract termination date, Dinh Vu Port Investment & Development JS came to
receive and inspect the warehouse and found out that the warehouse had
changed and repaired without the company’s agreement. Dinh Vu Port Trading
and Service Joint Stock Company supposes that Sunhouse Group has breached
the contract, causing damage to the warehouse. Dinh Vu Port Trading and
Service Joint Stock Company claims for damages and breach of contract of
5000 USD. Sunhouse Group disagrees because they suppose that while renting
a warehouse, they have a right to repair it in order to suit the new purpose of
use. Due to the disagreement, the two companies had a dispute.

PART V. Mediation
Vietnam International Commercial Mediation Center is the selected unit.
The mediator discussed privately with each party to understand the situation.
Then there was a public mediation session. Attendees include:
Mediator
Representative of Sunhouse Group and representative of Dinh Vu Port
Trading and Service Joint Stock Company

5.1. The conference includes the following contents:

 The mediator summarizes the dispute as follows: Party B has violated the
contract because in clause 5.2 it is clearly stated that "Party B must not change
or remodel without the permission of the party A".
The two companies discuss and give a solution that the damage from the
dispute is considered to be unconcerned with the operation of party A .
However, party B still has to accept 50% of the compensation.
Party B has accepted compensation in the amount of 2500 USD.
Party A agrees, the two companies reconcile successfully.

5.2. Summary
The mediator makes a report of conciliation and requests that Sunhouse
Group must complete the compensation for Dinh Vu Port Trading and Service
Joint Stock Company within 2 weeks.
The report of conciliation is registered and recognized by law.