ECONOMIC CONTRACT OR COMMERCIAL CONTRACT

In the current circumstances, Economic contract or commercial contract is still the concern of many enterprises and individuals because they do not know whether to name contracts containing economic or business purposes as Economic contracts or commercial contracts or wondering which legal documents will govern this contractual relationship when there are still many economic contract templates searched on websites, that are based on the Ordinance on Economic Contracts 1989. In this case, the article Economic contract or commercial contract is produced to support enterprises and individuals to have an overview so that they can properly apply legal documents.

The first issue, Economic contract or commercial contract

When the Ordinance on Economic Contracts 1989 is invalid, the concept of “economic contract” is not used in the later legislation anymore, such as the Civil Codes 1995, 2005, and 2015 or the Commercial Law 1997 and 2005. Thus, when entering into a contract, should parties use an Economic contract or a commercial contract. There is an opinion that just the title “Contract” is fine in case you don’t know how to name a contract. This is not illegal but it is not enough since the name of the contract does not represent the general content of the contract as well as will make the third party feel that parties are not professional. Thus, whether an Economic contract or a commercial contract?, the most appropriate choice is to use the types of contracts specified in the current Civil Code, Commercial Law, or other specialized laws in accordance with parties’ purposes of the contract. In which, some common contracts under the Civil Code 2015 can be referred to such as sale contracts of property, exchange contracts of property, gift contracts of property, loan contracts of property, lease contracts of property, “thue khoan” contracts of property, borrowing contracts of property, contracts of converting, transferring, leasing, subleasing, donating, mortgaging and contributing land use rights as capital, cooperation contracts, service contracts, transport contracts, processing contracts, bailment contracts of property, authorization contracts; or if parties are merchants or one party is a merchant and another is not a merchant, parties can use commercial contracts under the Commercial Law 2005, in particular: commodity trading contracts, service contracts (in general), sale promotion service contracts, commercial advertising service contracts, contracts for services of displaying and introducing goods and services, trade fair and exhibition organization service contracts, contracts for representation for traders, commercial brokerage contracts, mandate contracts, agency contracts, processing contracts, transit service contract, franchise agreements, etc. In addition to the above-mentioned types of common contracts, there are other types of contracts governed by other specialized laws such as construction contracts, legal service agreements, etc.

The second issue, the legal basis and the legal effect of the bases shown in the contract

Enterprises and individuals should note the naming of an Economic contract or a commercial contract? as well as the grounds stated in the contract are very important. Although the contract name or applicable legal basis may be incorrect, when a dispute occurs, this should not affect the decision of the jurisdiction. But if naming correctly and using the right legal basis will help the parties in the contract initially be aware of their rights and obligations.

Above are the issues to note about Economic contracts or commercial contracts. In the course of commercial activities, if customers encounter any difficulties in drafting or reviewing Economic contracts or commercial contracts, 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.