THE BASICS OF CIVIL CONTRACT DISPUTES

It can be seen that many problems in life are operated under the agreement between the subjects, when both parties agree to act and bind each other to achieve their desired goals. Those kinds of agreements will be recongnised as civil contracts when meeting certain statutory conditions in terms of format and contents. These civil contracts exist in all aspects of social life, so disputes arising around these contracts are inevitable.

The basics of civil contract disputes will provide us a big picture of civil contract disputes and how to settle such disputes when a contract is breached or contracting parties find that their legitimate rights and interests have been infringed.

1. Civil contract disputes

The basics of civil contract disputes will firstly present what is civil contract disputes. Civil contract disputes are conflicts, disagreements between the parties about the performance or non-performance of rights and obligations agreed in the contract, comprising both moral rights and economic rights of the contracting parties.

2. Some common civil contract disputes

In the basics of civil contract disputes, we will list out some common civil contract’s disputes for your reference. It can be disputes on rights and obligations, compensation obligation and fine for breach of contract, contract effectiveness, etc. In the case of assets sale and purchase agreement, there can be some dispute on contract price, payment time and method, delivery time, transfer of risks, quantity, and quality of products, etc.

3. Subject and statute of limitations for lawsuits in settlement of civil contracts disputes

Subjects who have the right to request settlement of civil contract disputes are those entering into contracts or their legitimate authorised representatives when deeming that their legitimate rights and interests have been infringed.

The statute of limitations for lawsuits in settlement of civil contract disputes is 03 years. Furthermore, it shall be calculated from the date on which the eligible person knows or should know that his or her legitimate rights and interests are infringed.

4. Jurisdiction for settlement of civil contract disputes

In order to draw on an in-depth knowledge about the basics of civil contract disputes, we would like to address more on jurisdiction of the court over civil contract disputes[1]. To be specific, people’s courts of districts shall have the jurisdiction to settle civil contract disputes according to first-instance procedures[2]. In addition, people’s courts of provinces shall have the jurisdiction to resolve according to first-instance procedures for (i) the civil cases falling under jurisdiction of people’s courts of districts, which are taken up by the people’s courts of provinces for settlement when necessary or at the request of people’s courts of districts, (ii) disputes which involve parties or properties in foreign countries or which must be judicially entrusted to representative agencies of the Socialist Republic of Vietnam overseas or to foreign courts or competent agencies.

5. Method for settlement of civil contract disputes

In order to have a better understanding on methods for settlement of civil contract disputes, the basics of civil contract disputes will address some pros and cons of different methods for settlement of civil contract disputes as below.

• Negotiations

Settlement of disputes by negotiation method will bring a lot of benefits to disputing parties if they are willing to participate in the negotiation process as well as execute the mutual consents. During this process, there is no participation of any other third parties but only two disputing parties to sit together and come up with a mutual balanced-interests consent. This kind of settlement method will save more time and maintain the cooperative relationship among those parties.

• Mediation

Mediation is a dispute settlement method with the participation of another third party who is a mediator. Settlement of civil contract disputes by mediation method may take less time than litigation process in a court or commercial arbitration. And the result is still being recognised by the court in accordance with the regulations of civil proceeding law. However, similar to negotiation method, settlement of civil contract disputes through mediation method may not be enforced if the parties still intend not to comply with what has been agreed.

• Filing a petition to a court or commercial arbitration

In an inevitable situation, although disputing parties have tried their best to settle the civil contract disputes through negotiation and mediation method but still have not reach a mutual balanced-interests consent. Then settlement of civil contract disputes in a court or commercial arbitration is their next step. As a matter of fact, it is a time-consuming method, and will cost them more fee and expenditure. Note that the disputing parties can only choose either court or commercial arbitration. However, along with the participation of the competent jurisdiction, the settlement of civil contract disputes will become more effective. And the parties will execute the judgment as soon as the decision or judgment comes into force.

Above are the issues to note about the basics of civil contract disputes. In the course of civil matters, if customers encounter any difficulties in applying the law, please contact us. Phuoc and Partners is a professional law firm established in Vietnam and currently has nearly 100 members working in three offices in Ho Chi Minh City, Hanoi and Da Nang. Phuoc and Partners is also considered one of the leading civil law firms in Vietnam with leading practice areas in the legal market such as Labour and Employment, Taxation, Mergers and Acquisitions, Litigation. We are confident to be one of the Law Firms providing the best legal services to clients.

[1] Article 26.3 Civil Proceedings Code 2015

[2] Article 35 Civil Proceedings Code 2015