Disputes Of Contracts For The Sale Of Goods

Contracts for the sale of goods is an agreement to the establishment, execution, and termination of the rights and obligations between the subjects in the goods sale and purchase relationship.

According to the provisions of Article 24 of the Commercial Law 2005, the contracts for the sale of goods can be expressed verbally, in writing, or established by specific behaviour. For all types of contracts for the sale of goods that are required by law to be made in writing, such provisions must be complied with.

Disputes of contracts for the sale of goods

Disputes of contracts for the sale of goods are disagreements and conflicts over rights and obligations between the seller and the buyer, which may be related to the improper performance or failure to perform rights and obligations are recognized in the contracts for the sale of goods and relevant laws. Disputes of contracts for the sale of goods may also arise from the interpretation of texts in the contract, the amendment, supplementation, termination of the contract, or the liability to compensate for damage caused by a breach of the contract.

Currently, the disputes of contracts for the sale of goods occur frequently and tend to increase rapidly. According to statistics on the website announcing judgments and decisions of the Supreme People’s Court, from the beginning of 2020 to July 2021, there have been 1.031 judgments and decisions on settling disputes of contracts for the sale of goods to be announced. This figure does not take into account disputes of contracts for the sale of goods resolved through negotiation, conciliation and commercial arbitration.

Disputes of contracts for the sale of goods originate from many causes. This includes both subjective causes such as the intentional breach of obligations by the parties to the contract and objective causes such as force majeure events occurring. However, the parties did not anticipate this event when signing the contracts for the sale of goods, which can be mentioned in the current situation as the Covid-19 pandemic taking place around the world.

The disputes of contracts for the sale of goods include:

• Disputes caused by the subject of the contract not authorized to sign;
• Disputes over the objective of the contract;
• Disputes caused by the seller’s breach of the delivery obligations;
• Disputes caused by the buyer’s breach of payment obligations;
• Disputes of contracts for the sale of goods related to the issue of compensation for damage caused by a breach of contract;
• Disputes of contracts for the sale of goods to the goods warranty obligations.

The methods for resolving disputes of contracts for the sale of goods

According to the provisions of the Commercial Law 2005, when disputes of contracts for the sale of goods occurs, the parties can resolve it through (i) negotiation, (ii) conciliation between the parties by an agency, organizations or individuals that are agreed upon by the parties to act as mediators, (iii) settle at commercial arbitration and (iv) settle at Court.

To limit the damage arising from the settlement of disputes, before entering into contracts for the sale of goods, the parties need to draft the terms of the contract in a strict, clear, and detailed manner and should anticipate all possible situations as well how to handle them. Any unclear details need to be clarified immediately to avoid unnecessary disputes and damages.

The above is an overview of the disputes of contracts for the sale of goods. If you have trouble with legal issues of the disputes of contracts for the sale of goods, please contact us: Phuoc & Partners is a professional consulting firm established in Vietnam and currently has nearly 100 members working in three offices in Ho Chi Minh City, Hanoi and Danang. Phuoc & Partners is also rated as one of the leading consulting firms specializing in business law in Vietnam that has leading practice areas in the legal market such as Intellectual Property, Labor and Employment, Taxation, Merger and acquisition, Litigation. We are confident in providing Clients with optimal and effective legal service.