Negotiation & Drafting

in Contracts
Skills for lawyers

Lecturer: Nguyen Phan Phuong Tan

Email: tannpp.uel.edu.vn
http://www.free-powerpoint-templates-design.com
Subject’s structure

01 Review of contracts
Reviewing key points of contractual theories and
law on contract.
02 Skills in negotiation
Understanding and mastering steps in negotiation
of commercial contracts.

Skills in drafting
03 contracts
Understanding and mastering skills and important
notes in drafting contractual documents
04 Practice &
Examination
Part 1
Review of Contracts
What is a contract?
What is a contract?

• Art. 385 (Civil Code 2015): “Civil contract means an agreement between
parties in relation to the establishment, modification or termination of civil
rights and obligations”
What is a contract?

• Binding promise
• Expressing the intention/will of parties on binding promises at the time of
entering into the contract.
• The creation of a legal relationship
• Involving rights and duties of parties’ agreement
• To be protected by the law
Are all agreements contracts?

Art.117.1(a),(b) (C.C. 2015): the capacity of parties

Art.117.1(c) (C.C.2015): the object of the contract
Art. 3 (C.C. 2015): principles of contracting
Principles of contracting

Art. 3 C.C. 2015 states that a civil contract must be entered into in accordance
with the following principles:
• Freedom to enter into a contract in provided that it is consistent with law and
social morals.
• Voluntariness, equality, goodwill, co-operation, honesty and good faith.
 Invalid Contract

When is a contract considered invalid? An invalid civil transaction shall not give rise to, change
Art.123 to Art.133, and Art.408 of C.C.2015 or terminate any civil rights and obligations of the parties
as from the time the transaction is entered into.

When a civil transaction is invalid,

the parties shall restore everything to its original state
and shall return to each other
what they have received.

If the restitution is not able to make in kind,

it may paid in money.

The party at fault which caused damage

must compensate therefore.
Causes lead to Invalid Contract
(Art. 123-Art. 133 , 408 C.C 2015)

• Invalidity of civil transactions due to breach of legal

prohibitions or contravention of social
morals.
• Invalidity of civil transactions due to falsification.
• Invalidity of civil transactions due to
misunderstandings.
• Invalidity of civil transactions due to deception or
threat.
Causes lead to Invalid Contracts (cont.)

• Invalidity of civil transactions entered into by persons

incapable of being aware of or controlling their acts.
• Invalidity of civil transactions established and
performed by minors and persons having lost
their capacity for civil acts or having had their
capacity for civil acts restricted.
Causes lead to Invalid Contracts (cont.)

• Invalidity of civil contracts due to impossibility of performing

subject matter
• Invalidity of civil transactions due to non-compliance with
form.
Expression (forms) of contract

• Art. 119 C.C. 2015

• “A civil transaction shall be expressed verbally, in writing, or through specific
acts.”
• In cases where it is provided for by law that a civil transaction must be
expressed in writing, notarized, authenticated, registered or permitted, such
provisions must be complied with.
 Stages of Contracting

01 02 03 04

Conclusion Execution Termination

Negotiation

Via direct/indirect methods Define the time when a

contract is considered to be Performance of rights and Violations and Dispute
concluded. obligations in contract resolution.
 Negotiation
The Offer

The Acceptance

Indirect

Direct
Indirect Negotiation

• The offer
• Acceptance of the offer
• Conclusion
The offer

• What is a lawful offer?

• Article 386.1 C.C 2015
• Sent to one or a specific number of client/to public.
• A clear expression of the offeror’s intention to enter into a contract.
• Having a full content with primary terms and other terms (if any) like
the official one.
• The offeror shall be bound by its offer.
Acceptance of the offer

• Acceptance of an offer to enter into a contract is reply by

the offeree to the offeror accepting the entire contents of
the offer. (Art.393.1 C.C. 2015)
• What is a lawful acceptance?
• Made within the time-limits in case the offer has specified a
time-limits.
• Accepting the entire content of the offer.
Conclusion of contract

The offerer The Offeree

Conclusion of the contract

• A contract is deemed to be concluded at the time when the offeror

receives the reply accepting to enter into the contract
• Where parties have agreed that the silence shall constitute an
acceptance, a contract shall be deemed to be concluded when the
time-limit for reply has expired and the offeree remains silent.
Conclusion of the contract

• In case of oral contract, the contract is only concluded when all parties
have reached agreement on the content of the contract.
• In case of written contract, the contract is only concluded when the last
party signs the contract.
 Execution

Rights and Obligations Rights and Obligations

Contract
Remedies in Commerce

• Article 292 of Law on Commerce 2005:

• Specific performance
• Penalty for breach
• Compensation for damage
• Temporary cessation of performance of contract
• Termination of performance of contract
• Rescission of contract
Termination/Rescission of Contract
(Article 423 of Civil Code 2015; Article 310, 312 of Law on Commerce 2005)

• The remedy of termination or rescission of the contract shall

apply in the following cases:
• Upon occurrence of an act of breach which the parties have agreed
shall be a condition resulting in rescission of the contract;
• When one party commits a fundamental/serious breach of the
contractual obligations.
• Fundamental/Serious breach of contract: means breach of
contract by one party causing loss to the other party to the
extent that such other party is not able to achieve its objective
of entering into the contract. (Art.3(13) of Law on Commerce 2005,
Art.423(2) of Civil Code 2015)
Rescission of the contract due to inability to perform
(Art.425 C.C 2015)

• Where the obligor cannot perform part or all of its obligations

to make the purpose of the obligee may not be reached, the
obligee party can cancel the contract and claim damages.
Dispute Resolution

Negotiation

Mediation

Litigation

Arbitration
A. Litigation in Court

• A provincial court is empowered to hold first-instance trials of cases

according to the provisions of the Code of Civil Procedure, to conduct
appellate trials of cases where the first-instance judgments and/or
rulings of lower courts have not yet taken legal effect but have been
appealed and/or protested against according to the provisions of the
procedural law and to supervise/review cases where judgments and/or
rulings of lower courts have already taken legal effect but have been
protested, according to provisions of the procedural law.
• All cases involving foreign elements – for example, cases where one
party or the related asset is located o shore and subject to the
enforcement of foreign arbitral awards and foreign judgments – are
subject to the jurisdiction of the provincial court.
• A district court has the power to hold first-instance trials in civil,
commercial, and labor cases except for when the provincial courts
deem it necessary to exert jurisdiction over a matter.
A. Litigation in Court

• Interrogation dominates all court hearings. Any party choosing

Vietnam as a jurisdiction in which to settle its dispute must bear in
mind that court procedures are time consuming and sometimes
unpredictable. Although, by law, court proceedings are taken within
three months (or five months if the case is complicated) from the
date on which the case is led with the court, in practice, this time
limit is normally longer.
• By law, a panel consisting of a judge and two people’s juries
should conduct the hearing. In practice, at the district court, a
single judge will conduct the hearing. At the appeal court, a case is
heard by a panel of three judges. The burden of proof is on the
plaintiff and the defendant. Witness evidence is heard and the
documents submitted by the parties are reviewed. The case is
decided on the documents and the evidence.
A. Litigation in Court

• The court hearing is open unless the court decides that it must be held
in private. A court judgment or decision may be appealable. A party may
appeal the entire or part of the court judgment which has not come into
force. The time limit for an appeal is 15 days from the date on which the
court judgment is issued. The time limit for review of a case on appeal is
between four months and five months depending on whether the case is
simple or complicated. In practice, this time limit may be longer or
shorter depending on the case.
• A court judgment or decision, if not voluntarily enforced by the losing
party, may be referred to the civil judgment enforcement agency.
Enforcement of a judgment is normally time consuming in Vietnam due
to the overload of cases that need to be enforced. Although a private
bailiff system has been introduced on a pilot basis since 2009 to support
the civil judgment enforcement system, its effectiveness remains
restrictive.
B. Arbitration in Vietnam

• Commercial arbitration centers were set up in Vietnam by the end

of the 1990s as a result of the restructuring of economic arbitration
centers. Currently, there are seven commercial arbitration centers
in Vietnam with about 300 arbitrators. Although Vietnamese law
allows both ad hoc and institutional arbitration, ad hoc arbitration is
very rare due to its lack of a formal presence and relatively
restricted decision enforcement.
• Under the Law on Commercial Arbitration, commercial arbitration
centers may settle non-commercial cases if the parties have
agreed to bring their case to arbitration. However, in cases where
a dispute must be resolved by a Vietnamese court, such as those
involving land use rights, arbitration is not possible.
B. Arbitration in Vietnam

• The enactment of the Law on Commercial Arbitration, replacing the 2003 Ordinance on
Commercial Arbitration, has improved the terms of commercial arbitration. One benefit
of the Law on Commercial Arbitration is that, for disputes that fall within its scope, an
arbitral award arising pursuant to it may be brought directly to an enforcement agency
for enforcement unless such award is cancelled by a Vietnamese court.
• The following are the salient points set forth under the Law on Commercial Arbitration
which address defects of the 2003 Ordinance on Commercial Arbitration:
• A foreign arbitrator may now be appointed to comprise an arbitration tribunal in
Vietnam
• There is no limitation with respect to the qualifications of an arbitrator as regards
the possession of a bachelor’s degree
• An arbitration tribunal now has the power to impose interim relief measures to
prevent changes in the status quo ante The use of Vietnamese language is no
longer required and the parties to arbitration can choose to use the most
convenient language during proceedings.
B. Arbitration in Vietnam

Enforcing a Foreign Court Judgment/Arbitral Award be in Vietnam

•Vietnam is a party to the 1958 New York Convention, therefore an
award rendered by a convention state member is enforceable in
Vietnam. A foreign award from a country which is not a party to the
convention may also be enforced in Vietnam on a reciprocal basis.
•Similarly, judgments issued by courts in countries that have entered
into a judicial agreement with Vietnam will also be considered for
enforcement in Vietnam. Recognition of judgments issued by the courts
in those countries that have not signed a judicial agreement may be
considered for recognition on a reciprocal basis.
Thank you for your attention!