The contract is the basis for giving rise to, changing or terminating the rights and obligations of the parties. The contract becomes effective when certain conditions are met

Legal grounds:

• Civil Code 2015.

Contract is a type of civil transaction that gives rise to, changes or terminates civil rights and obligations. However, if the contract is invalid, it will not give rise to, change or terminate the civil rights and obligations of the parties from the time of signing the contract. Therefore, in order to protect their interests when participating in civil transactions, when entering into a contract, the parties should note a few important points as follows:

1. The parties of the contract

In order to participate in the establishment and performance of a contract, the contracting parties must have full civil legal capacity and civil act capacity in accordance with the established civil transactions.

The parties of the contract must be considered comprehensively, including 2 contents: the organization or individual who is the party of the contract and the representative for that organization or individual (in case the individual has representative). The representative must have full authority to represent the subject to enter into the contract, shown in the document appointing, recognizing the representative, and the power of attorney.

2. Purpose and content of the contract

Individuals and legal entities have the right to freely and voluntarily agree to establish, perform and terminate their civil rights and obligations. However, civil law has the principle that civil rights can be restricted in necessary cases for reasons of national defense, national security, social order and safety, social ethics, health of the community.

Therefore, all commitments and agreements do not violate the prohibition of the law and are not contrary to social ethics.

3. Free will of the contracting parties

Another principle of civil law is that individuals and legal entities must establish, perform and terminate their civil rights and obligations in good faith and honestly.

Acts of coercion, intimidation, deception to cause confusion leading one party to enter into a contract against their will are not accepted by law.

Therefore, parties participating in civil transactions are completely voluntary.

4. Form of contract

Vietnamese law allows a contract to be expressed in the following forms:

• Verbal;
• Written;
• By specific behavior.

However, there are some specific contracts that must be made in writing and notarized, authenticated and registered. For example, a contract for the transfer of land use rights is required to be notarized and authenticated. In these cases, a contract that violates the terms of its formality shall be void, except in the following cases:

• A civil transaction that has been established in accordance with regulations must be in writing but the document is not in accordance with the provisions of law and one party or parties have performed at least two-thirds of the obligations in the transaction, at the request of one party or the parties, the Court shall issue a decision to recognize the validity of such transaction.
• A civil transaction that has been established in writing but violates the mandatory regulations on notarization and authentication where one party or the parties have performed at least two-thirds of the obligations in the transaction, at the request of one party or the parties, the Court shall issue a decision to recognize the validity of such transaction. In this case, the parties are not required to perform the notarization or authentication.