#forms of contract

A contract for the international sale of goods is only recognized as valid if it is expressed in a certain form, by the provisions of applicable law. What conditions on the forms of contracts for the international sale of goods can make the contracts valid? In this article, Apolo Lawyers - Solicitors & Litigators (Tel: (+84) 903.419.479) will answer these questions.

The form of a contract is the outward expression of the contract content, including the synthesis of forms, procedures and means to express and announce the will of the parties, record the contract contents and represent the indicates the existence of the contract. 

1. General provisions on international goods sale and purchase contracts

A contract for the international sale of goods is only recognized as valid if it is expressed in a certain form, by the provisions of applicable law. This is a mandatory condition to prove the existence of the contract.

International sales contracts can be governed by international treaties, national laws or international commercial practices. To determine the law applicable to the form of international sale of goods, the laws of countries mainly apply the principle of “locus regit actum”.

2. Provisions of international treaties on contracts for the international sale of goods

Unlike the provisions in the laws of other countries, as well as the mutual legal assistance agreements that Vietnam has signed with other countries, the United Nations Convention on Contracts for the International Sale of Goods, 1980 (CISG) Article 11 “A contract of sale need not be concluded in or evidenced by writing and is not subject to any other requirement as to form. It may be proved by any means, including witnesses”. However, the CISG also allows States to reserve the right not to apply this Article 11, according to which contracts for the international sale of goods are required to comply with certain formal conditions of international law. The new country is recognized in force.

According to the 2010 PICC, paragraph 2 of Article 1 provides that a contract can be proved “including by witness”. Paragraph 2, Article 9 of the 1980 Rome Convention on the Law Applicable to Contractual Obligations provides that in the case of the parties entering into a contract in different countries, the contract is still valid if it satisfies the condition of formality of the law governing the contract of one of these countries. Thus, the provisions in these documents are quite open to most widely recognizing the conditions of validity of the contract.

>>> Read more: Time of risk transfer in the international contract for the sale of goods in Incoterms 2020

Conditions on the forms of contracts for the international sale of goods​

3. Regulations of Vietnamese law on international goods sale and purchase contracts

To determine the validity of a contract, Vietnamese law in Clause 7, Article 683 of the Civil Code 2015 provides that “Form of a contract shall be determined by the law applied to such type of contract. In the case where the form of a contract does not comply with the form of the law applied to such contract but complies with the form of the law of the country where the contract is entered into or the law of Vietnam, such form of contract shall be recognized in Vietnam”.

Thus, the provisions of Vietnamese law are consistent with the provisions of the Mutual Legal Assistance Agreement that Vietnam has signed with other countries, similar to the provisions of the Nordic countries, Western Europe and the United States. With the above-mentioned general principles, it can be seen that Vietnamese law does not allow subjects to choose the law to regulate the form of a contract.

Thus, if Vietnam joins the United Nations Convention On Contracts For The International Sale Of Goods 1980, Vietnam is entitled to reserve, not apply Article 11 of this Convention, because Vietnamese law contracts for the international sale of goods must be signed in writing.

>>> Read more: Legal service on Penalties For Breach Of Contract

Conditions on the forms of contracts for the international sale of goods​

4. Legal service about the commercial contract of Apolo Lawyers. 

Apolo Lawyers is confident in providing Clients with optimal and effective legal service,  including the following:

Consulting on the right and obligation of the parties in the contract sale of goods;

Consulting to determine the basis for dispute settlement and legal basis for dispute settlement;

Consulting, and preparing to contact and negotiate with related parties in the settlement of international contract sale of goods disputes;

Guide customers to collect documents and evidence, and provide information;

Authorized representative lawyers meet and discuss with Arbitration, Courts, and judgment enforcement agencies to protect the legitimate rights and obligations of clients.

>>> Read more: Dispute settlement of goods sale contract by commercial arbitration in Vietnam

Apolo Lawyers is proud to be a law firm with many years of experience in business consulting that will support clients in the field of commercial contracts. In case you need advice related to a commercial contract, please contact us via email at [email protected] or Hotline – (+84) 903 419 479 for the best advice and support.

First Division G.R. No. 102784 February 28, 1996 324 PHIL 400-415

Facts: In January of 1989, an information for Estafa was filed against Rosa Lim in Regional Trial Court of Quezon City for receiving in trust from Vicky Suarez a ring worth Php 169,000.00 and a bracelet worth 170,000.00 with the obligation to sell the same on commission basis and to turn over the proceeds of the sale to said complainant or to return said jewelry if unsold. Lim was able to return the bracelet. But once in possession of the ring, despite numerous demands, Lim misappropriated and misapplied the same to her own personal use and benefit. Lim, however, alleges that she had returned both the ring and the bracelet, hence she no longer has any liability.

Lim has a different version of the facts. She denies the transaction was for her to sell the 2 pieces of jewelry on commission basis. She told Suarez that she would consider buying the pieces of jewelry for her own use. Lim took the pieces of jewelry and asked Suarez to prepare the necessary papers for her to sign because she was not yet prepared to buy it. The document was prepared, and Lim signed it, but she claims that she didn’t agree to the terms of the receipt regarding the sale on commission basis. Her ‘proof’ is that she signed the document on the upper portion and not at the bottom where a space is provided for the signature of the persons receiving the jewelry.

After arraignment and trials, the RTC found Lim to be guilty beyond reasonable doubt of the offense Estafa. On appeal, the Court of Appeals upheld the decision of the lower court with modifications as to the penalty imposed.  

Issue: Whether the transaction between Rosa Lim and Vicky Suarez is a contract of agency to sell on commission basis as set out in the receipt or a sale on credit.

Held: The transaction is a contract of agency.

The contention of Lim that she cannot be liable for estafa since she never received the jewelries in trust or on commission basis since the did not sign on the blank space provided for the signature of the person receiving the jewelry but at the upper portion thereof is far from meritorious.

Lim signing at the upper portion of the contract does not have the effect of altering the terms of the transaction from a contract of agency to sell on commission basis to a contract of sale. Nor does it suggest that there is vitiation of consent which would make the contract void or voidable. The moment she affixed her signature thereon, petitioner became bound by all the terms stipulated in the receipt. This is clear from Article 1356 of the New Civil Code which provides:

"Contracts shall be obligatory in whatever form they may have been entered into, provided all the essential requisites for their validity are present." . . ."

However, there are some provisions of the law which require certain formalities for particular contracts:

1.     When the form is required for the validity of the contract;

2.     When it is required to make the contract effective as against third parties such as those mentioned in Articles 1357 and 1358; and

3.     When the form is required for the purpose of proving the existence of the contract, such as those provided in the Statute of Frauds in Article 1403.