Things to pay attention to when tenforce the contract

After entering into a contract, the parties are required to comply with the commitments they agreed upon. Therefore, monitoring contract performance is not only to identify violations of partners' obligations, but also to prevent the enterprise itself from violating its obligations to partners.

Depending on the size and way of operation of the business, the business has its own plan to monitor contract implementation. Normally, small-scale businesses do not have to face these problems because managers always closely monitor the contract enforcement process, but a large-scale business with a large number of contracts is very necessary. Establish a strict process. The business can be divided into departments and there will be key implementers in each different stage, but it is also necessary for a single person to supervise the entire process from start to finish.

The most important thing is to ensure supervision of all aspects of the contract, from reminding partners to properly fulfill their obligations, to coordinating between relevant departments to properly fulfill their obligations to their partners, Quickly handle problems that arise during contract implementation and learn from experience for future contracts. Understanding common risks during contract implementation will help businesses monitor this issue better, helping to best limit the damage that occurs.

First, the risk of partners violating contractual obligations:

When the partner violates the obligation to perform the contract, that is, fails to perform, improperly performs or incompletely performs the obligations that he or she is responsible for performing in the contract, the enterprise needs to review its rights. and the contractual obligations of the parties to the respective breaches, understand the legal consequences of each breach, and then take appropriate action to resolve the issue.

The 2015 Civil Code stipulates sanctions for violation of contractual obligations including: detention of property, forced performance of the contract, unilateral termination of contract performance, cancellation of the contract, and compensation for damages. and fines for violations and late payment interest. Compared to the 2015 Civil Code, the 2005 Commercial Law does not have a sanction to unilaterally terminate contract performance, but instead has a sanction to suspend the contract and add a sanction to temporarily suspend contract performance so that the The party is flexible in implementation.

Corresponding to each sanction, the law stipulates different cases of application, so when applying, the parties must clearly understand the legal provisions to choose the most appropriate and beneficial sanction, or the parties Conditions for applying sanctions must be clearly specified in the contract. At the same time, when applying, the enterprise must notify the violating party, avoiding the situation where the enterprise violates the obligation to notify the party that has previously violated.

Second, the time of risk transfer in the contract:

An important issue in the contract implementation process is determining when risk transfers. That means determining at what time the seller must bear the loss and damage of the goods, and from what time those damages and losses are transferred to the buyer. Unless the parties agree on a specific time of transfer of risk in the contract, this time is usually the time the parties deliver and receive the goods.

According to the provisions of Article 441 of the 2015 Civil Code, the time of risk transfer is the time of property delivery, or the time of completing ownership registration procedures for assets that must be registered. In addition, the Commercial Law stipulates in more detail that in each case, for contracts without a specific delivery location, the time of transfer of risk is the time the goods are delivered to the first carrier. Where the goods are delivered to the consignee for delivery and not to the carrier, risk is transferred to the buyer in cases where the buyer receives documents of title or the buyer confirms possession of the goods and some other special cases.

However, the Commercial Law also stipulates the responsibilities of the parties in a number of cases that do not depend on the time of transfer of risk, such as: in cases where defects in the goods arise before the time of transfer of risk, if the buyer knew or should have known about that defect, the buyer must be responsible, except in cases where the buyer did not know or should not have known, then the seller must be responsible for this defect, but the buyer only has a 3-hour period. , 6 or 9 months (depending on the case) to Complaints regarding defects in the goods, beyond this complaint period, the seller is exempted from liability. In case a defect in the goods arises after the time of transfer of risk, but is caused by the seller's breach of contract, the seller must be responsible.

Third, risk due to force majeure events:

A force majeure event is an objective event that is unpredictable and cannot be overcome despite the application of all necessary and permissible measures. According to the provisions of Article 351 of the 2015 Civil Code, in case the obligor fails to properly perform its obligations due to a force majeure event, it is not subject to civil liability, unless otherwise agreed or otherwise provided by law. other regulations.

In fact, unless the parties implicitly agree that an event is force majeure, proving whether an event is force majeure or not is very likely to cause disputes because it affects the situation. directly to the rights and interests of the parties. For example, if a fire occurs due to human irresponsibility or because the business fails to meet fire prevention and fighting conditions, this event is not a force majeure event. because it comes from subjective causes and is a direct consequence of poor prevention awareness.

In other cases, if the party breaches its obligations due to a force majeure event but does not fulfill its obligation to notify the breached party, the breaching party will still be responsible to the breached party for the damages caused by the breach. caused by his violation.

In case one party violates its obligation to perform the contract due to a third party's violation due to a force majeure event. The third party is usually a supplier of raw materials, goods, or a logistics business. Currently, Vietnamese law does not stipulate that a party that violates its obligations is exempt from liability due to a third party's violation of its obligations due to a force majeure event. However, this is a problem that businesses often encounter because current business relationships are based on the supply chain and the parties are only a link in it, and especially in exclusive relationships, Businesses cannot find alternatives.

Therefore, regarding the issue of liability exemption, businesses should carefully draft liability exemption clauses, anticipate actual situations that may occur, and negotiate clearly and in detail to minimize Many disputes arise instead of relying entirely on the law.