VIETNAMESE COMMERCIAL LAW - Chapter 5 Intermediary Commercial Activities








	
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CHAPTER 5 INTERMEDIARY COMMERCIAL ACTIVITIES
SECTION I REPRESENTATION OF BUSINESS ENTITIES
Article 141 Representation of business entities
Article 142 Contracts for representation of business entities
Article 143 Scope of representation
Article 144 Term of representation of business entities
Article 145 Obligations of representatives
Article 146 Obligations of represented entities
Article 147 Right to receive representative's remuneration
Article 148 Payment of expenses incurred
Article 149 Lien
SECTION 2 COMMERCIAL BROKERAGE
Article 150 Commercial brokerage
Article 151 Obligations of commercial brokers
Article 152 Obligations of principals
Article 153 Right to broker’s remuneration
Article 154 Payment of expenses incurred in relation to brokerage activities
SECTION 3 SALE AND PURCHASE OF GOODS BY AUTHORIZED DEALERS
Article 155 Sale and purchase of goods by authorized dealers
Article 156 Authorized dealers
Article 157 Principals
Article 158 Goods subject of authorization
Article 159 Authorization contracts9
Article 160 Authorization of third parties
Article 161 Receipt10 of authorization from multiple principals
Article 162 Rights of principals
Article 163 Obligations of principals
Article 164 Rights of authorized dealers
Article 165 Obligations of authorized dealers
SECTION 4 COMMERCIAL AGENCY
Article 166 Commercial agency
Article 167 Principals and agents
Article 168 Agency contracts
Article 169 Forms of agency
Article 170 Ownership rights in commercial agency
Article 171 Agent's remuneration
Article 172 Rights of principals
Article 173 Obligations of principals
Article 174 Rights of agents
Article 175 Obligations of agents
Article 176 Payments in cases of agency
Article 177 Term of agency

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VIETNAMESE COMMERCIAL LAW
Chapter 5 Intermediary Commercial Activities

Signature (d-m-y):14-06-2005


CHAPTER 5 INTERMEDIARY COMMERCIAL ACTIVITIES

SECTION I REPRESENTATION OF BUSINESS ENTITIES

Article 141 Representation of business entities

1. Representation of a business entity means the agreement of one business entity (referred to as the representative) to act as authorised by another business entity (referred to as the represented entity) to conduct commercial activities in the name and under the instructions of the latter business entity and which is entitled to receive remuneration for acting as representative.

2. In the event that a business entity nominates its personnel to act as its representative, the provisions of the Civil Code shall apply.

Article 142 Contracts for representation of business entities

A contract for representation of a business entity must be made in writing or in another form with equivalent legal validity.

Article 143 Scope of representation

Parties may agree for a representative to conduct a part or all of the commercial activities falling within the scope of activities of the represented entity.

Article 144 Term of representation of business entities

1. The term of representation shall be as agreed by the parties.

2. Where there is no agreement, the term of representation shall be terminated when the represented entity serves notice of termination of the contract for representation on the representative or when the representative serves notice of termination of the contract on the represented entity.

3. Unless otherwise agreed, if the represented entity unilaterally serves notice of termination of the contract for representation pursuant to clause 2 of this article, the representative shall have the right to require the represented entity to pay an amount of remuneration for the signing by the represented entity of contracts with customers the representative has dealt with and to pay other sums of remuneration to which the representative would otherwise have been entitled.

4. If the term of representation is terminated pursuant to clause 2 of this article at the request of the representative then the representative shall lose its right to remuneration for transactions for which it would otherwise have been entitled to earn remuneration, unless the parties agree otherwise.

Article 145 Obligations of representatives

Unless otherwise agreed, a representative shall have the following obligations:

1. To conduct commercial activities in the name and in the interests of the represented entity;

2. To notify the represented entity of [business] opportunities and the results of implementation of authorized commercial activities;

3. To comply with the instructions of the represented entity, except where such instructions breach the law;

4. Not to conduct commercial activities in its own name or in the name of a third person within the scope of representation;

5. Not to disclose or supply to others confidential information relating to commercial activities of the represented entity during the term of representation and within two years of termination of the contract for representation;

6. To preserve the assets and materials assigned for the purpose of carrying out the representative acts.

Article 146 Obligations of represented entities

Unless otherwise agreed, a represented entity shall have the following obligations:

1. To notify the representative immediately of the signing of contracts negotiated by the representative, the performance of contracts entered into by the representative, and the acceptance or rejection of acts implemented by the representative beyond the scope of representation.

2. To supply the assets, materials and information necessary for the representative to carry out the representative acts.

3. To pay remuneration and other reasonable charges to the representative.

4. To notify promptly the representative of the inability [of the represented entity] to enter into or perform the contracts falling within the scope of representation.

Article 147 Right to receive representative's remuneration

1. Representatives shall be entitled to remuneration in respect of contracts entered into within the scope of representation. The right to remuneration shall arise from the time agreed by the parties in the contract for representation.

2. Where there is no agreement, the rate of remuneration for a representative shall be determined in accordance with article 86 of this Law.

Article 148 Payment of expenses incurred

Unless otherwise agreed, representatives shall have the right to claim the payment of reasonable expenses incurred in order to perform the representative acts.

Article 149 Lien

Unless otherwise agreed, representatives shall have the right to withhold assigned assets and materials as security for payment of remuneration and charges which are due.

SECTION 2 COMMERCIAL BROKERAGE

Article 150 Commercial brokerage

Commercial brokerage means commercial activity whereby a business entity acts as an intermediary (referred to as the broker) between parties purchasing and selling goods and providing services (referred to as the principals) during the course of negotiations and signing contracts for sale and purchase of goods or provision of services and which is entitled to remuneration under a brokerage contract.

Article 151 Obligations of commercial brokers

Unless otherwise agreed, a commercial broker shall have the following obligations:

1. To preserve samples of goods and materials assigned for the purpose of brokerage activities and to return them to a principal upon completion of brokerage activities;

2. Not to disclose or supply information detrimental to the interests of a principal;

3. To be responsible for the legal status, but not the capacity for payment, of the principals;

4. Not to participate in performance of a contract between principals unless authorized by a principal.

Article 152 Obligations of principals

Unless otherwise agreed, a principal shall have the following obligations:

1. To provide the necessary information, materials and facilities related to the goods and services.

2. To pay broker’s remuneration and other reasonable charges to the broker.

Article 153 Right to broker’s remuneration

1. Unless otherwise agreed, the right to broker’s remuneration shall arise from the time when the principals enter into a contract with each other.

2. Where there is no agreement, the rate of broker’s remuneration shall be determined in accordance with article 86 of this Law.

Article 154 Payment of expenses incurred in relation to brokerage activities

Unless otherwise agreed, a principal must pay all reasonable expenses incurred in relation to the brokerage, even where the brokerage activities fail to achieve any result for the principal.

SECTION 3 SALE AND PURCHASE OF GOODS BY AUTHORIZED DEALERS

Article 155 Sale and purchase of goods by authorized dealers

The sale and purchase of goods by authorized dealers means commercial activity whereby the authorized dealer carries out the sale and purchase of goods under its own name subject to terms agreed with the principal and is paid dealer's remuneration.

Article 156 Authorized dealers

An authorized sale and purchase dealer means a business entity dealing in goods which are consistent with the goods the subject of authorization and carrying out the sale and purchase of goods on terms agreed with the principal.

Article 157 Principals

A sale and purchase principal means either a business entity or someone who is not a business entity who authorizes an authorized dealer to conduct the sale and purchase of goods at the request of the principal and who must pay dealer's remuneration.

Article 158 Goods subject of authorization

All goods which are legally in circulation may be the subject matter of an authorized sale and purchase.

Article 159 Authorization contracts9

A contract for sale and purchase authorization must be in writing or in another form with equivalent legal validity.

Article 160 Authorization of third parties

An authorized dealer may not authorize a third party to perform the signed contract for sale and purchase authorization without the written consent of the principal.

Article 161 Receipt10 of authorization from multiple principals

An authorized dealer may conduct an authorized sale and purchase of goods on behalf of more than one principal.

Article 162 Rights of principals

Unless otherwise agreed, a principal shall have the following rights:

1. To require the authorized dealer to provide full information relating to the performance of the authorization contract.

2. Not to bear liability for breach of law by the authorized dealer except in the circumstances stipulated in article 163.4 of this Law.

Article 163 Obligations of principals

Unless otherwise agreed, a principal shall have the following obligations:

1. To provide necessary information, materials and facilities for the performance of the authorization contract.

2. To pay dealer's remuneration and other reasonable charges to the dealer.

3. To pay money and deliver goods strictly as agreed.

4. To be jointly liable when the authorized dealer breaches the law for any reason caused by the principal or when the parties intentionally act contrary to the law.

Article 164 Rights of authorized dealers

Unless otherwise agreed, an authorized dealer shall have the following rights:

1. To require the principal to provide necessary information and materials for the performance of the authorization contract.

2. To receive dealer's remuneration and other reasonable expenses.

3. Not to bear liability for goods which have been delivered to the principal correctly as agreed.

Article 165 Obligations of authorized dealers

Unless otherwise agreed, an authorized dealer shall have the following obligations:

1. To conduct the sale and purchase of goods as agreed.

2. To notify the principal of matters relating to the performance of the authorization contract.

3. To follow the instructions of the principal which are consistent with the agreement.

4. To preserve assets and materials assigned for the purpose of performance of the authorization contract.

5. To maintain the confidentiality of information relating to the performance of the authorization contract.

6. To pay money and deliver goods correctly as agreed.

7. To be jointly liable for a breach of law by the principal if the breach was caused partly by the fault of the authorized dealer.

SECTION 4 COMMERCIAL AGENCY

Article 166 Commercial agency

Commercial agency means commercial activity whereby the principal and the agent agree for the agent in its own name to conduct the sale or purchase of goods for the principal or to provide services of the principal to customers in return for remuneration.

Article 167 Principals and agents

1. A principal means a business entity which delivers goods to an agent for sale or provides money for the purchase of goods to an agent to purchase goods, or a business entity which invests an agent for the provision of services with authority to provide services.

2. Agent means a business entity which receives goods for agency sale or which receives money for agency purchase or means a party which accepts authority to provide services.

Article 168 Agency contracts

An agency contract must be in writing or in another form with equivalent legal validity.

Article 169 Forms of agency

1. Off-take agency means a form of agency whereby the agent conducts the sale or purchase of a whole quantity of goods or provides a complete service for the principal.

2. Exclusive agency means a form of agency whereby within a specified geographical area a principal only authorizes one sole agent to sell or purchase one or a number of specified lines of goods, or to provide one or a number of specified types of services.

3. General agency for sale and purchase of goods or provision of services means a form of agency whereby the agent organizes a network of sub-agents to conduct the sale or purchase of goods or to provide services for the principal.

The general agent shall represent the network of sub-agents. Sub-agents shall operate under the management and in the name of the general agent.

4. Other forms of agency as agreed by the parties.

Article 170 Ownership rights in commercial agency

The principal is the owner of goods and money delivered to the agent.

Article 171 Agent's remuneration

1. Unless otherwise agreed, agent's remuneration shall be paid to the agent in the form of a commission or price differential.

2. Where the principal fixes the selling or purchasing price of goods or the service charge to the customer then the agent shall be entitled to commission calculated as a percentage of such selling or purchasing price of goods or service charge.

3. Where the principal does not fix the selling or purchasing price of goods or the service charge to the customer but only fixes the price for selling to the agent, then the agent shall be entitled to a price differential. The amount of the price differential shall be determined as the difference between the selling or purchasing price of goods or the service charge to the customer on the one hand and the price which the principal fixes for the agent on the other hand.

4. Where the parties do not have an agreement on the amount of agent's remuneration, the amount of remuneration shall be calculated as follows:

(a) The actual amount of remuneration paid to the parties previously;

(b) Where clause (a) is inapplicable, the amount of the agent’s remuneration shall be the average amount of agent’s remuneration applicable to the same type of goods and services which the principal has paid to other agents;

(c) Where clauses (a) and (b) are inapplicable, the amount of the agent’s remuneration shall be the normal amount of agent’s remuneration applicable to the same type of goods and services on the market.

Article 172 Rights of principals

Unless otherwise agreed, a principal shall have the following rights:

1. To fix the selling or purchasing price of goods or the service charge [made by the agent] to the customer.

2. To fix the price for selling to the agent.

3. To request the agent to take security measures as provided for by law.

4. To request the agent to make payment or to deliver goods in accordance with the agency contract.

5. To inspect and supervise the performance of the agency contract by the agent.

Article 173 Obligations of principals

Unless otherwise agreed, a principal shall have the following obligations:

1. To provide guidelines and information for and facilitate the performance of the agency contract by the agent.

2. To be liable for the quality of goods of an agent selling and purchasing goods, and for the quality of services of an agent providing services.

3. To pay remuneration and other reasonable expenses to the agent.

4. To return the assets of the agent used as security (if any) to the agent upon termination of the agency contract.

5. To be jointly liable for a breach of law by the agent if the breach was caused partly by the fault of the principal.

Article 174 Rights of agents

Unless otherwise agreed, an agent shall have the following rights:

1. To enter into agency contracts with one or more principals, except for the cases stipulated in article 175.7 of this Law.

2. To require the principal to pay money or deliver goods in accordance with the agency contract; upon termination of the agency contract, to recover11 from the principal assets (if any) which were used as security.

3. To require the principal to provide guidelines and information for, and to satisfy other conditions relating to performance of the agency contract.

4. To make decisions on the selling price of goods and on the service charge to customers in the case of off-take agency.

5. To be paid remuneration and to enjoy other legitimate rights and benefits arising from the agency activities.

Article 175 Obligations of agents

Unless otherwise agreed, an agent shall have the following obligations:

1. To sell or purchase goods and to provide services to customers at the price of goods and level of charges for provision of services fixed by the principal;

2. To comply strictly with the agreements with respect to the delivery or receipt of goods or money with the principal;

3. To provide security for the discharge of civil obligations in accordance with law;

4. To pay to the principal proceeds from the sale of goods, in the case of a sale agent; to deliver the purchased goods, in the case of a purchase agent; and to pay the charges for provision of services in the case of an agent providing services;

5. To preserve the goods after receipt thereof in the case of a sale agent, or prior to delivery thereof in the case of a purchase agent; to be jointly liable for the quality of goods in the case of a sale or purchase agent, and to be jointly liable for the quality of services in the case of an agent providing services, where the fault is caused by the agent;

6. To be subject to inspection and supervision by the principal and to report to the principal on the agency activities;

7. Where the law contains a specific provision to the effect that the agent may only sign an agency contract with one principal with respect to a specified type of commodity or service, then the agent must comply with such law.

Article 176 Payments in cases of agency

Unless otherwise agreed, payments for goods, for provision of services, and payments of agent's remuneration shall be made on each occasion after the agent has completed the sale or purchase of a certain quantity of goods or completed the provision of a certain amount of services.

Article 177 Term of agency

1. Unless otherwise agreed, the term of agency shall only terminate after a reasonable period of time but no earlier than sixty (60) days from the date when either party serves a notice of termination of the agency contract on the other party.

2. Unless otherwise agreed, if the principal serves a notice of termination of contract pursuant to clause 1 of this article, then the agent shall have the right to request the principal to pay damages for the period of time during which the agent acted as agent for the principal.

The amount of such damages shall be the average monthly agent's remuneration for each year that the agent acted as agent for the principal. If the term of agency was less than one year, the amount of such damages shall be calculated as the average monthly agent's remuneration during the term of the agency.

3. If an agency contract is terminated at the request of an agent, the agent shall not have the right to claim damages from the principal for the term for which the agent acted as agent for the principal.




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