Once a contract is made legally, contracting parties shall implement and such contract is respected by third parties. As stated in Civil Code 2015 (“CC”): “Each commitment or agreement that does not violate regulations of law and is not contrary to social ethics shall be bound by contracting parties and must be respected by other entities”. However, in the implementation process, the contract can be amended, which means, rights and obligation of parties can be amended accordingly.
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Due to the fact that the contract is result of before agreement,
amendment shall follow certain conditions. According to laws, parties may agree
to amend a contract. Enterprises need to pay attention to some following issues
when amending the contract in the implementation process:
Firstly, entities participating in contract amendment is the matter which
enterprises need to notice. Both contract and supplemental agreement are made
on behalf of the parties, which means between two juridical persons. In
reality, juridical persons only carry out transactions through representatives,
it may be legal representative or authorized representative. Therefore,
entities participating in contract amendment shall be representative of
juridical persons. A civil transaction entered into and performed with a third
person by a representative in accordance with his/her scope of authorization
shall give rise to rights and obligations of the principal. Regarding
consequence of civil transactions made by unauthorized persons or by
representatives beyond scope of representation, such civil transactions shall not
give rise to rights and obligations of the principal or not give rise to rights
and obligations of the principal with respect to that part of the transaction
which exceeded the scope of representation, except for any of the following
cases: (i) The principal recognizes the transaction or gives consent; (ii) The
principal knows it without any objection within an appropriate time limit;
(iii) It is the principal’s fault that the other party does not know or is not
able to know that the person entering into and performing the civil transaction
therewith was unauthorized or beyond his/her scope of representation. In above
circumstances, the unauthorized person must fulfill the obligations to the
person with which he/she transacted or the obligations owning to the person
with which he/she transacted in respect of the part of transaction which is
beyond the scope of representation, unless such person knew or should have
known that the representative was unauthorized or the scope of representation
was exceeded but still transacted. A person having transacted with above
representative has the right to terminate unilaterally the performance or to
terminate the made civil transaction or to terminate the civil transaction with
respect to that part which is beyond the scope of representation or with
respect to the entire transaction and to demand compensation for any damage,
except that such person knew or should have known that that the representative
was unauthorized or the scope of representation was exceeded or the case of
which the principal recognizes the transaction or gives consent. If above
representatives and the other party in a civil transaction deliberately enter
into and perform such transaction and thereby cause damage to the principal,
they must jointly compensate for the damage.
Form of agreement on amending contract is the second matter
which needs to be taken into consideration. Amendment shall comply with the
form of the initial contract. For instance, if the initial contract is made in
written, notarized, certified, registered, the amendment shall follow such
forms. The form of contract shall be the conditions for its effectiveness in
cases where it is provided by law. Therefore, the form of amended contract
shall be the conditions for its effectiveness in cases where it is provided by
law. In invalid contracts, the general rule is restoring everything to its
original state and returning to each other what have received. The condition
for the contract of non-compliance with form recognized by the Court’s decision
is that one party or the parties has fulfill at least two third of the
obligation contract. However, not one party or the parties fulfilling at least
two third of the obligation contract will naturally make such contract invalid
but there must go through the Court. Specifically, according to request of one
party, after fully considering conditions mentioned above, the Court shall make
a decision on recognizing the validity of such contract. This principle also
applies to contracts amendment. It is important that parties to consult with
lawyers at early stage to anticipate matters of dispute and clearly have
clauses drafted to avoid potential future disputes.
ANT Lawyers – An dispute law firm in Vietnam has law offices in Hanoi, Ho Chi Minh City and Da Nang. The lawyers at each law offices in Vietnam have consistently made valuable and important contributions to our profession through the cases we handled on daily basis to facilitate business transaction or represented our clients to access justice.
