ALL REGULATIONS ON COMPENSATION FOR NON-CONTRACTUAL DAMAGE

What is the compensation for non-contractual damage? In general, the compensation for non-contractual damage is a circumstance in which a physically and mentally aggrieved person requests a person causing damage to compensate for the damage occurred not due to a breach of the obligations in a contract.

In order to find out all regulations on compensation for non-contractual damage, first of all, people need to know the conditions for giving rise to a liability for the compensation for non-contractual damage. According to Article 584 of the Civil Code 2015, the conditions for giving rise to the liability for the compensation for non-contractual damage are: (i) An existence of an illegal act of infringing upon life, health, honour, dignity, prestige, property, other legitimate rights, and interests; (ii) An existence of actual damage occurred; (iv) the damage is not caused by force majeure events or is at the entire fault of the aggrieved person.

When the conditions for giving rise to a liability for the compensation for non-contractual damage appear, the next need-know regulations are principles of the compensation for non-contractual damage? According to Article 585 of the Civil Code 2015, the compensation for non-contractual damage must be in accordance with the following principles: (i) Actual damage must be compensated in full and promptly; (ii) The parties are free to agree on the amount of compensation, the form of compensation and the method of compensation. However, this agreement must not be contrary to the law regulations; (iii) The person being responsible for the compensation for non-contractual damage may be entitled to a reduction in case such damage was caused unintentionally and is extremely large in comparison to the financial positions of such person; (iv) When the amount of the compensation for non-contractual damage determined becomes unrealistic, the parties have the right to request the Court or other competent state agency to change it; (v) When the person damaged is in fault in causing damage, he/she is not entitled to compensation for non-contractual damage caused by his/her fault; and (vi) The person damaged shall not be compensated for not taking the necessary measures to prevent or limit, resulting in being damaged.

To know all regulations on compensation for non-contractual damage, people cannot ignore the regulations on the determination of the damage. On the other hand, which losses, faults are considered damages?

• Damage caused by property infringement includes: (i) Property which was lost, destroyed, or spoiled; (ii) Interests associated with the use and exploitation of the property was lost or declined; (iii) Reasonable costs to prevent, limit and remedy the damage; and (iv) Other damages as prescribed by law (if any).
• Damage caused by health infringement includes: (i) Reasonable costs for the treatment, nursing, and rehabilitation of the lost and declined health of the aggrieved person; (ii) Loss of or reduction in actual income of the aggrieved person; (iii) Reasonable costs and the actual income losses of the carers of the aggrieved person during the treatment period; if the aggrieved person loses the ability to work and requires a permanent carer, the damage shall include reasonable costs for taking care of such person; (iv) The cost of compensating for the mental loss of the aggrieved person shall be agreed upon by the parties, but shall not exceed fifty-month the statutory pay rate prescribed by the State; and (v) Other damages prescribed by law (if any).
• Damage caused by life infringement includes: (i) All costs of compensation for damage caused by health infringement mentioned above; (ii) Reasonable funeral costs; (iii) Support for the dependants of the aggrieved person; (iv) The cost of compensating for the mental loss of the closest relatives in the first line of succession to the deceased or the persons who were directly reared by the deceased or the persons who directly reared the deceased. This compensation amount shall be agreed upon by the parties, but shall not exceed one-hundred-month the statutory pay rate prescribed by the State; and (v) Other damages prescribed by law (if any).
• Damage caused by honour, dignity, or prestige infringement includes (i) Reasonable costs to limit or remedy the damage; (ii) Loss of or reduction in actual income; (iii) The cost of compensation for mental loss shall be agreed upon by the parties, but not exceeding ten-month the statutory pay rate prescribed by the State; and (iv) Other damages prescribed by law (if any).

Finally, the other issue which must not be ignored if people would like to find out all regulations on compensation for non-contractual damage is the statutory time limit for initiating legal action for the compensation for non-contractual damage. According to Article 588 of the Civil Code 2015, when the parties cannot agree on the compensation amount, the aggrieved person has the right to request the Court to settle the dispute within 03 years from the date on which such person knows or must know legitimate rights and interests infringed.

The above is an overview of all regulations on compensation for non-contractual damage. If you have trouble with legal issues of all regulations on compensation for non-contractual damage please contact us: Phuoc & Partners is a professional consulting firm established in Vietnam which currently has nearly 100 members working in three offices in Ho Chi Minh City, Hanoi, and Danang. Phuoc & Partners. It is rated as one of the leading consulting firms specializing in civil litigation in Vietnam that has leading practice areas in the legal market such as Labour and Employment, Taxation, Merger and acquisition, Litigation. We are confident in providing customers with optimal and effective service.