2021 Handouts and Tutorials

FOREIGN TRADE UNIVERSITY - HCMC CAMPUS
PROFESSIONAL OPERATION FACULTY
DEPARTMENT OF LAW
INTERNATIONAL
BUSINESS LAW
PART I: HANDOUTS
& TUTORIALS
HCMC, 2021
[INTERNATIONAL BUSINESS LAW - TUTORIALS] Jan 19, 2021
CHAPTER 1: INTRODUCTION TO INTERNATIONAL BUSINESS LAW
Part 1. Decide if the following statements are TRUE or FALSE
1. Case law and official letters are sources of Vietnam’s law.
2. Case law is source of international business law.
3. Case law is not the source of law in civil law jurisdictions
Part 2. Questions and case problems
1. How does international business differ from domestic business? Explain how those
differences affect the risk of doing business internationally. What factors influence that
risk?
2. What is the importance of international business law?
3. What are the sources of international business law?
4. Distinguish between private law and public law.
4. What are the difference between the civil law and common law system?
Part 3. Multiple choice
1. According to Vietnam’s law, which of the following is NOT a type of delegated

legislation?
A. Decree
B. Circular
C. Ordinance
D. Official letter
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2. What is the difference between private law and public law?
A. Private law refers to the relationship between individual citizens. Public law refers to
the relationship between individual citizens and the state.
B. Public law refers to the relationship between individual citizens. Private law refers to
the relationship between individual citizens and the state.
C. Private law relates to crimes committed inside the home. Public law relates to crimes
committed in public places.
D. Private law relates to court hearings conducted in private. Public law relates to court
hearings conducted in public.
3. Which of the following accurately reflects the distinction between substantive and
procedural law?
A. Substantive law reflects the rules on procedure and evidence. Procedural law reflects
the elements or conditions for the law to apply.
B. Procedural law reflects the rules on procedure and evidence. Substantive law reflects
the elements or conditions for the law to apply.
C. Substantive law and procedural law are synonymous.
D. None of the above.
CHAPTER 2: PARTIES DOING BUSINESS ABROAD
Part 1. Decide if the following statements are TRUE or FALSE
1. A multiple member LLC is considered as a legal person when registering for business.
2. A multiple member LLC is allowed to issue all kind of securities
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3. The time limit for members to contribute the capital to the LLC as committed is agreed
upon by all members.
4. Each type of enterprise may have more than one legal representative.
5. Chairman of an LLC may not be the member of such company.
6. A controlling board is compulsory in the organizational structure of an LLC
7. A LLC director must have experience in company management.
A voting preference shareholder carries more votes than an ordinary one
1. What are similarities and differences between Representative offices and branches?
2. List forms of business made by foreign traders in Vietnam
3. Company A (Vietnam) entered into a contract with Company B (Japan):
Commodity: Chilled Crabs
Delivery term: FOB Da Nang
Payment: L/C at sight
As the contract is silent on the issue of whether the crabs are with or without their claws,
the company A further contacted Mr C – Head of the Representative office of Company
B in Vietnam for the details. Mr C then revised the contract by adding the wording
‘Crabs without their claws’. Company B then rejected to take the delivery and claimed
that Company A delivered non-conforming commodity.
Decide if A, B or C is in breach. Explain.
4. Which of the following are confusingly similar to the registered business name, which
is Duyên Hải Construction JSC?
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1. Duyên Hải JSC
2. Duyên Hải Construction Co.,Ltd
3. Duyên và Hải Construction JSC
4. Duyên & Hải Construction JSC
5. Now that the ‘T&T’ shoes brand is one of the top brand in the Vietnamese shoes
market, some shoes traders in Ba Chieu Market together establish a company, whose
Vietnamese name and the abbreviated name are ‘Tập thể và tôi’ and ‘T&T’ respectively.
Does the newly- established company’s name contravene Law on Enterprises 2020?
6. A, B, C together established D Co.,Ltd. Upon their agreement of capital contribution,

A committed to contribute 500 mil, B with 350 mil and C with his factory of 450mil.
After that, C wants to contribute his 450-million car instead of his factory as committed.
a. Is C allowed to change his type of contributed assets?
b. On the due date, B contributed 200 mil (The committed capital amount is 350mil).
- How to deal with the unpaid capital amount?
- Is B still the member of the company? If yes, what is his liability?
7. X Co.,Ltd: A = 200mil, B=300mil, C=250 mil, D=350 mil, E=150 mil. Charter capital
amount = 1.250 bil. C wants to transfer his capital amount:
1/ the 4 remaining members want to purchase b’s capital amount
2/only A and B want to purchase
33/ only E wants to purchase
Decide the amount each member could purchase.
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8. The B.M has 5 members: A (Chairperson), B, C, D, E. 4 members attend the meeting

to vote on the dismissal of General Director H and G’s appointment as new G.D. Results:
A, B agree to dismiss H and appoint G
C,D object to the dismissal and appointment
E sends the vote by mail: “Object to the dismissal of Mr H”
Who is the G.D? H or G?
9. I am currently a director of a jsc located in hcm city. I plan to establish a subsidary

company located in Hanoi. Am I allowed to be the director of this newly-established
company?
10. Mr A is the owner of the sole proprietorship B specialized in trading construction

materials. Mr A plans to expand its business into construction and determines to run his
business alone as he has complete control and decision-making power over the business.
Which of the following are legal?
1. Mr A plans to establish another sole proprietorship specialized in construction.
2. The sole proprietorship B plans to establish a 1-member LLC and authorize Mr A to

act concurrently as both the President and Director of this company.
3. The sole proprietorship B plans to mobilize capital by issuing 1000 enterprise’s bonds.
4. The sole proprietorship B plans to establish its branches based in Ha Noi and Can Tho
specialized in construction.
5. Mr A plans to establish 1-member LLC whose business line is construction. Mr A is

the owner of this company.
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11. Duong, Thanh, Trung, Hai established the Pacific Co., Ltd specialized in export and
export promotion. The company has registered the charter capital of 5 VND billion. The
capital contribution of each member is as follows:
- Duong contributed 800 million in cash (16% of charter capital)
- Thanh contributed via the debt certificate of Thanh My company of 1.3 VND billion. It
is agreed by all members that this certificate is valued at 1.2 billion (24% of charter
capital)
- Trung contributed capital by his house whose value at the time of the capital
contribution is 700 million. However, all the members agreed to evaluate it at 1.5 billion
(30% of charter capital) as they all believe that the house price will be significantly
increased given that the road in front of the house may be expanded in the near future.
Hai committed to contribute VND 1.5 billion in cash (30% of chartered capital) but
initially contributed only 500 million VND. The rest 1 billion will be paid under the
company’s request.
After 3 months of its operation, Hai failed to contribute the rest capital amount as
committed and the company has a net profit of 800 million.
1. Does Hai receive the profit in the proportion to his contributed capital (500 million) or
his committed capital amount (1.5 billion)?
2. Is it legal to contribute capital by a debt certificate? Thanh My company paid off only
600 million because it went bankrupt. Does Thanh have to contribute the rest? How will
the profit be distributed?
3. Is it legal if the house was overvalued compared with its actual value at the time of
capital contribution?
12. Which of the following are entitled to establish and manage the enterprises?
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1- Mrs C – Head of the HCMC Department of Industry and Trade
2- Mr A – Lecturer of FTU
3- Mr Y – Head of Representative office of foreign trader in VN
4- The Sole proprietorship B
CHAPTER 3: INTERNATIONAL SALE OF GOODS CONTRACT
1. A Co.,Ltd – A Vietnamese seller whose headquarter in District Binh Thanh entered

into a sale of garment contract with B SJC – A Vietnamese buyer located in District 1.
The two parties chose the Korean law as the applicable law for contract as both legal
representatives of such companies are Korean. This choice of law provision is valid? If
not, which law would be applied to settle the dispute?
2. Should Hong Kong (or Macao) acquire an effective Convention status by reason of
being a territorial unit of China?
3. The contract No.170211 VCT-FETA concluded on 17/1/2011 b/w VIET COTTON

YARN INVESTMENT TRADING JSC & FETA TEKSTIL SAN.TIC.LTD.STI:
“ALL OTHER CONDITIONS, WHICH NOT STATED IN THIS CONTRACT, WILL

REFER TO INCOTERMS 2000’’. What do you think about this choice of law?
4. An Ecuadorian company (the Buyer) entered into a contract with a Texan company
(the Seller) for the sale of gasoline. The requirement of the buyer is to opt out of the
CISG and choose Ecuadorian domestic sales law as the applicable law for the contract.
Which of the following choice of law clause meets the buyer’s requirements?
OPTION 1: ‘CISG SHALL NOT BE APPLICABLE FOR THIS CONTRACT’
OPTION 2: ‘THE APPLICABLE LAW: THE LAWS OF THE REPUBLIC ECUADOR’
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5. On 25 Feb 2003, Metal Construction JSC (A) (VN), represented by Mr Ngô Văn Kèn
entered into a contract with Mechel Metal Supply Ltd (Lichtenxtain) (B). A failed to
open the L/C within the time limit. The goods were made available at destination port but
A failed to take delivery. B then sold the goods to another company at a lower price. B
brought A to the ICC.
A’s arguments:
- The contract is invalid as Mr Ken is not the legal representative. He is merely the
director of the dependent unit of company A.
- Mr Ken failed to advise the Board of Management of the existence of contract.
B’s arguments:
- In the past, Mr Ken, acting as an authorized legal representative, used to conclude

the contract with Company B.
- Mr Ken declares that he advised the Director of the contract by phone.
Decide if A or B is in breach. Explain.
6. A requests B to set out the conditions for the renewal of a contract for the supply of
wine, due to expire on 31 December. In its offer B includes a provision stating that “if we
have not heard from you at the latest by the end of November, we will assume that you
have agreed to renew the contract on the conditions indicated above”. Discuss.
7. Under a long-term contract for the supply of wine B regularly met A’s orders without
expressly confirming its acceptance. On 15 November A orders a large stock for New
Year. B does not reply, nor does it deliver at the requested time.
Discuss whether B is in breach.
8. The Polish seller (Y) sent an offer to the Vietnamese buyer (X). The offer is valid until
30th May.
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26/5: X accepted the offer on one condition –that Y might reduce the price
29/5: X accepted the entire content of the initial offer
27/5: Y concluded the contract with another buyer.
X claims for damages.
Decide if Y is in breach. Explain.
10. Plaintiff, a Swiss corporation, entered into contracts to purchase chicken from B.N.S.
International Sales Corporation. Defendant was a New York corporation. The English
language contracts called for the delivery of “chicken” of various weights. When the
birds were shipped to Switzerland, the 2-lb. sizes were not young broiling chickens as the
plaintiff had expected, but mature stewing chickens or fowl. The plaintiff protested,
claiming that in German the term chicken referred to young broiling chickens. The
question for the court was: What kind of chicken did the plaintiff order? Was it “broiling
chicken,” as the plaintiff argued, or any chickens weighing 2 lbs., as the defendant
argued? Frigaliment Importing Co., Ltd. v. B.N.S. International Sales Corp., 190 F. Supp.
116 (S.D.N.Y. 1960).
What could the parties have done to avoid this misunderstanding?
11. A, a manufacturer in country X, sells a nuclear power station to B, a utility company

in country Y. Under the terms of the contract A undertakes to supply all the power
station’s requirements of uranium for ten years at a price fixed for that period, expressed
in US dollars and payable in New York. The following separate events occur:
(i) After five years the currency of country Y collapses to 1% of its value against the
dollar at the time of the contract.
(ii) After five years the Government of country Y imposes foreign exchange controls
which prevent B paying in any currency other than that of country Y.
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(iii) After five years the world uranium market is cornered by a group of speculators.
The price of uranium on the world market rises to ten times the contract figure.
Decide if aforementioned events are force majeure.
12. Lucent Technologies International, Inc., subcontracted with a Saudi Arabian

company, National Group, for work that Lucent was doing as part of a $4 billion
telecommunications project for the Saudi government. National Group sued Lucent for
damages for terminating the contract. The damages included an amount for lost profits.
The contract contained no choice of law provision and Saudi law applied. The U.S. court
had to decide if recovery of lost profits was prohibited as gharar. After all, gharar
prohibits gambling, or the sale of the “calf while still in the womb” or of “fish in the
sea.” What is gharar, and how does this Islamic law principle affect calculation of
damages for breach of contract under Islamic law? Would this decision have been
different under the CISG? National Group for Communications and Computers, Ltd. v.
Lucent Technologies International, Inc., 331 F. Supp. 2d 290 (D.N.J.2004).
13. Bende had a contract to sell boots to the government of Ghana for $158,500. Bende
promised to deliver the boots “as soon as possible.” Bende then contracted with Kiffe,
who agreed to make the boots in Korea and to deliver them in Ghana within sixty to
ninety days at a price of $95,000. The contract contained no force majeure clause. Kiffe
knew that Bende was going to resell the boots. Kiffe failed to deliver the boots on the
agreed date because a train carrying the boots had derailed in Nebraska. Bende brought
this action against Kiffe for breach of contract. Bende and Sons, Inc. v. Crown Recreation
and Kiffe Products, 548 F. Supp. 1018 (E.D.N.Y. 1982).
a. Kiffe claimed that the contract had been rendered commercially impracticable and that
performance was excused. Do you agree? Why or why not? Was the train wreck
foreseeable or unforeseeable?
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b. What could Kiffe have done in negotiating the contract to protect itself from this
contingency?
c. If Bende would have incurred an additional $18,815 in freight charges and

miscellaneous costs had the breach not occurred, what would be its measure of damages?
Is Bende entitled to lost profits? How are damages measured in a case such as this?
d. In this case, the risk of damage or loss to the boots while in transit remained with the
seller, Kiffe. How would the case differ if the parties had agreed that Kiffe would merely
ship (not deliver) the goods by a certain date and that Kiffe would bear the risk of loss
during transit? (
14. Rotorex, a New York corporation, agreed to sell air compressors to Delchi, an Italian
company. The compressors were for use in producing Ariele air conditioners. The first
shipment reached Delchi, and Delchi paid $188,000. In preparation, Delchi had spent 39
million lire for special tooling, and 27 million lire for special insulation and tubing for
use in making Arieles. Delchi expended 18 million lire in shipping and customs duties.
Delchi then paid $130,000 to Rotorex for a second shipment. While the second shipment
was enroute, Delchi discovered that the first lot was nonconforming. It rejected the
compressors and canceled the contract. Delchi spent several million lire to replace
problem grommets, inspect, repair, and retest the compressors in an effort to make them
usable. During this time, Delchi’s assembly line shut down, incurring unproductive
assembly worker wages. Delchi was able to obtain some substitute compressors from
other sources in time for the selling season, which it had to adapt for Ariele units at
additional expense. It arranged to have a shipment of Sanyo compressors, which it has
previously ordered, sent to it by air freight so that it could fill someorders. Delchi was
also unable to fill some orders, amounting to millions of lire in lost profit. Delchi brought
this action for damages. What expenses should Delchi be allowed to recover from
Rotorex as a result of its delivery of nonconforming and why? How should the court
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measure each element of damages? Delchi Carrier, SpA v. Rotorex Corp., 1994 WL
495787 (N.D.N.Y. 1994).
15. Your company, Acme Widgets, sells its widgets worldwide. Acme has a contract for
250,000 widgets to be shipped to the Czech Republic. The price stated in the offer and
acceptance is $1 per widget, C.I.F. Prague. During the production of the widgets, the
price of one component increases 250 percent due to a shortage. In addition, these
widgets are due for shipment on June 15 and arrival in Prague no later than July 1. On
June 15, a stevedores’ strike begins, which lasts for 60 days. Are either or both of these
factors—the material price increase and the stevedores’ strike—an excuse for Acme’s
nonperformance? What legal theory might Acme use under U.S. common law as an
excuse? Under the CISG?
16. A German seller sued a Russian buyer because the buyer failed to pay for the
equipment supplied to the buyer pursuant to their contract. The buyer acknowledged it
had received the goods but said its nonpayment should be excused because it was due to
the failure of the bank responsible for the buyer’s foreign currency transactions to make
payment to the seller. The buyer claimed the bank’s lack of the available currency
resources should be regarded as a force majeure, discharging it from liability for
nonpayment to the buyer. The contract did include a force majeure clause, but it did not
refer to the buyer’s lack of foreign currency. Do you agree with the buyer? Tribunal of
International Commercial Arbitration at the Russian Federation Chamber of Commerce
and Industry 17 October 1995. (See case law on UNICTRAL texts Abstract No. 142;
reproduced with permission on Pace University’s CISG Website.)
17. A U.S. software manufacturer sold software for processing
credit card charges to a U.S. limited liability company that was a wholly-owned
subsidiary of a German corporation. The software did not function properly and
generated erroneous reports of charges. The U.S. buyer and its German parent sued the
software manufacturer for breach of contract. The plaintiffs asserted that the CISG was
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applicable to the transaction as the head of the German parent company signed the
purchase and sales contract. The software manufacturer alleged that the CISG was
inapplicable as the contract was addressed to the U.S. limited liability company, and the
purchase price was paid with a check tendered by the U.S. purchaser. Is the CISG
applicable to this transaction? Why or why not? American Mint LLC v. GOSoftware,
Inc., 2006 U.S. Dist. LEXIS 1569 (M.D. Pa. 2006).
18. A Canadian seller sued a U.S. purchaser for the purchaser’s refusal to pay for
concrete light poles utilized in a construction project in Florida. The purchaser
counterclaimed that it had sustained damages because the poles had not been delivered on
time. The seller admitted that it had problems with production and was unable to ship a
truck load of poles every two weeks as it had done in the past. Nevertheless, the
purchaser accepted the poles that had been shipped. Applying the CISG, the court
interpreted Article 39 to encompass not only nonconforming goods but also goods that
were not shipped in a timely manner pursuant to the contract. Thus, the light poles could
be deemed nonconforming based not on their performance but rather on their untimely
delivery. As the purchaser had given notice of the untimely delivery of the light poles
within two years from their delivery, it was free to pursue its counterclaim. Do you agree
with this result? Is the court’s interpretation of Article 39 too expansive? Was Article 39
intended to include untimely delivery as well as nonconforming goods? Sky Cast, Inc.v.
Global Direct Distribution, LLC, 2008 U.S. Dist. LEXIS21121 (E.D. Ky. 2008).
19. A U.S. purchaser sued a German limited partnership alleging that the partnership
breached a contract to deliver 15,000-18,000 metric tons of used Russian railroad rail to
the U.S. company for recycling into other products. The rail was to be shipped from the
port in St. Petersburg, Russia, travel by sea for four weeks, and be delivered to the
purchaser at its factory in Illinois by December 31, 2002. The seller failed to meet this
deadline allegedly due to the unexpected early freezing of the St. Petersburg port on
approximately December 1, 2002. The seller thus alleged that its performance was
subject to force majeure. In denying the purchaser’s motion for summary judgment, the
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court acknowledged that the contract was governed by the CISG and, specifically, Article
79 relating to force majeure. It also noted the absence of U.S. case law interpreting
Article 79. However, instead of applying foreign case law or scholarly commentary to the
interpretation of Article 79, the court simply applied similar provisions contained within
§ 2-615 of the UCC. Applying the UCC, the court concluded that the freezing of the port
rendered the seller’s performance impracticable, and the premature freezing was
unforeseeable. The court’s opinion has been condemned as “the worst CISG decision in
twenty-five years” due to its disregard of the international character of the CISG and the
need for uniformity in international trade. It has also been cited as an example of the
“homeward trend” in improperly utilizing analogous domestic law to interpret the CISG.
What is meant by “homeward trend”? Do you agree with the application of this trend and
result in this case? Compare the opinion with that in Chicago Prime Packers Inc. issued
by the same court in the same year. What are the possible explanations for the divergence
in sources utilized to interpret the CISG? Raw Materials, Inc. v. Manfred Forberich
GMBH & Co., 2004 U.S. Dist. LEXIS 12510 (N.D. Ill. 2004).
CHAPTER 4: CARRIAGE OF GOODS BY SEA CONTRACT
1. Captain Ishmael has the misfortune of shipping porcelain vases and sandstone statues
for two different English buyers across the Malacca Straits on the Hispaniola. He packs
the two commodities compactly in crates and secures a carriage-of-goods contract
contained in a bill of lading (that does not contain a force majeure piracy clause). Given
the danger involved, Ishmael employs Starbuck to keep a lookout for pirates but the latter
falls asleep and fails to stop pirates from boarding the ship and stealing all of the cargo.
The two buyers sue the Hispaniola and Starbuck separately for the value of the respective
commodities that were being shipped. Discuss their liability based on the Hague and the
Hague-Visby rules.
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2. Fishman shipped a container of boys’ pants on a ship owned by Tropical. The

container was lost at sea due to improper storage. The pants were packed into bundles of
12 each and placed into what is known in the industry as a “big pack.” A “big pack” is
similar to a 4’ × 4’ pallet, partially enclosed in corrugated cardboard, with a base and
cover made of plastic. The bill of lading stated, “1 × 40 ft. [container] STC [said to
contain] 39 Big Pack Containing 27,908 units boy’s pants.” Fishman maintains that
Tropical is liable for an amount up to $500 for each of the 2,325 bundles. If the carrier is
liable for up to $500 per “package,” what is the limit of the carrier’s liability? Fishman &
Tobin, Inc. v. Tropical Shipping & Const. Co., Ltd., 240 F.3d 956 (11th Cir. 2001).\
CHAPTER 5: DISPUTE SETTLEMENT
Part 1. Multiple choices.
1. Which of the following is true concerning negotiation?
A. The outcome arising from negotiation is final and binding upon the parties to the
dispute.
B. Negotiation shall be exhausted prior to resorting to litigation and arbitration.
C. Negotiation is pursued upon the consent of the parties to the dispute.
D. Negotiation is more efficient, although more expensive, than mediation.
2. A Vietnamese company (seller) located in Binh Thanh District, Hochiminh city intends
to sue a Japanese buyer in a Vietnamese court for violation of contract for sales of
goods. Under these facts, the trial court that will first hear and decide this case is the:
A. Economic tribunal in the Hochiminh city people’s court.
B. Economic tribunal in Binh Thanh District people’s court.
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C. Supreme People's Court of Vietnam.
D. High-level People’s Court of Vietnam.
3. Which of the following is NOT one of the characteristics of arbitration?
A. Confidentiality
B. Party autonomy
C. Simplified procedures and faster decisions
D. Subject to appeal on the merits
4. According to Vietnam’s law, is there any hierarchy or priority among the various
methods of dispute resolution?
A. There is no hierarchy among these methods and the choice belongs to the disputing
parties.
B. Yes, negotiation and mediation shall be exhausted prior to resorting to litigation and
arbitration.
C. Litigation and arbitration prevail over negotiation and mediation, since they are
binding upon the parties.
D. It is a matter of an impartial third party to decide which method will have priority over
the other.
5. Where the contract is silent on the time limit for lodging complaints and the buyer
failed to pay the price of the goods, according to Law on Commerce 2005, the seller is
entitled to lodge the complaint within:
A. Three months from the date of delivery of goods.
B. Six months from the date of delivery of goods.
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C. Nine months from the date on which the buyer shall have to pay the price in full.
D. Two years from the date on which the buyer shall have to pay the price in full.
6. If the buyer fails to lodge the complaint regarding the non-conforming goods within
the time limit stipulated in the contract, according to Vietnam’s law, which of the
following statements is true?
A. The seller is not liable for delivery of non-conforming goods.
B. The buyer is not entitled to sue the seller for delivery of non-conforming goods.
C. A and B
D. None of the above.
7. The arbitration agreement is null and void if:
A. It fails to specify a specific arbitration center to resolve the dispute.
B. It fails to specify how the arbitrator is selected.
C. It is made via an exchange between the parties by fax.
D. It is made between parties lacking legal capacity.
8. In a binding arbitration clause:
A. A contractual provision gives the parties the opportunity to select arbitration,

mediation, or litigation as the method of dispute resolution.
B. The losing party must be handcuffed and led out of the arbitration room, and
immediately begin serving an arbitrator-imposed term of imprisonment.
C. A contractual provision mandates that all disputes arising under the contract must be
settled by arbitration.
D. None of the above

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9. Which of the following statements concerning arbitration is NOT true?
A. Arbitration is the procedure by which parties refer their dispute to (an) arbitrator(s).
B. It is common practice for commercial contracts to contain express clauses referring

disputes to arbitration.
C. Any award given in arbitration is enforceable.
D. Invalidity or unenforceability of the contract shall result in the invalidity of the

arbitration agreement.
10. Which of the following is the convention that makes arbitration awards more easily
enforceable than litigation judgments in foreign courts?
A. CISG
B. The New York Convention of 1958
C. Hague-Visby Rules
D. Rome Convention of 1980
You are CEO of a large publicly traded company. You are negotiating several contracts
with foreign governments in Vietnam, India, and Brazil to provide hardware and software
to government agencies. Are you interested in including an arbitration clause in the
contract? What are the pluses and minuses of such a clause? What alternatives do you
have? How does your plan change, if at all, if you are dealing with multiple corporations
in the same countries? What if you are dealing with one corporation in the United
Kingdom and one in New York? Discuss how these variables may affect your decision.
2. You have started a small high-tech company in New York.
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a. You are running an informational Website. Customers must call your 800 number to
place an order. A customer in Alaska is very unhappy with your product. Can he or she
successfully sue you in Alaska?
b. You decide you want to be clear in all your future dealings, so you insert a forum
selection clause in all of your contracts with your customers that stipulates arbitration in
New York under the rules of the American Arbitration Association. Would this be
enforceable?
c. What if the forum selection clause stated that all disputes would be heard in Tibet?
d. What ramifications are there to changing your Website and making it more interactive
so that people can place orders there?
e. What if your competitor is using your trade secrets and your patents without your
permission or payment? Would you be interested in arbitrating this dispute? Explain.
f. What difference would it make if your competitor were a Dutch company?
g. The CEO has asked you to outline a comprehensive strategy to deal with customers,
suppliers, and citizen groups complaining about a myriad of issues as well as employee
complaints (both domestic and foreign). Prepare a short memo addressing key principles,
major concerns, and suggested actions
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INTERNATIONAL BUSINESS LAW
TRAN THANH TAM (LL.M, PhD Candidate)

CONTACT INFORMATION
Lecturer: TRẦN THANH TÂM
Tranthanhtam.cs2@ftu.edu.vn
0918. 014. 246

COURSE INTRODUCTION
1. Course content
2. Course objectives
3. Reading materials
4. Teaching method
5. Learning method
6. Course assessment
1. COURSE CONTENT
1 Introduction to International Business Law
2 Parties doing business in Vietnam
3 International Sale of Goods Contract
4 Carriage of Goods By Sea Contract
5 Dispute Resolution
2. COURSE OBJECTIVES
1. Understand sources of IBL, similarities and

differences between IBL and domestic law
2. Grasp legal status of parties doing business in
Vietnam.
3. Recognize valid international business contracts in
general, sale of goods contract and carriage of
goods by sea contract in particular.
4. Be capable of utilizing the regime of commercial
dispute resolution in international context.
3. READING MATERIALS
Textbook(s):
International Business Law:
Handouts
Optional reading(s):
1- Nguyễn Minh Hằng, International Business Law (2012) (in
Vietnamese)
2- Nguyễn Thị Mơ, Law for doing business abroad (2015) (in
Vietnamese)
3- Indira Carr and Peter Stone (2018), International Trade Law
4- Richard Schaffer, Filiberto Agusti and Lucien Dhooge (2014) -
International Business Law and Its Environment
5- Ray August, Don Mayer and Michael Bixby (2013) International
Business Law: Text, cases and readings
• VIETNAMESE LEGAL DOCUMENTS:
1. LAW ON ENTERPRISES 2020
2. LAW ON COMMERCE 2005
3. CIVIL CODE 2015
4. CIVIL PROCEDURE CODE 2015
5. MARITIME CODE 2015
6. LAW ON VIETNAM COMMERICAL ARBITRATION
2010
7. OTHER BY-LAWS
• INTERNATIONAL TREATIES:
1. Convention on Contract for International Sale
of Goods 1980 (CISG)
2. Convention on the Recognition and
Enforcement of Foreign Arbitral Awards 1958
(New York Convention)
3. Hague – Visby Rules
4. Hamburg Rules
4. TEACHING METHOD
• BASED ON THE LECTURES (HANDOUTS) GIVEN
TO STUDENTS
• SOCRATIC DIALOGUE
5. LEARNING METHOD
• LEGAL THINKING
• DISCUSSION
• GROUP PRESENTATION
• SELF - STUDY
LAW ON COMMERCE 2005
Article 317. Forms of resolution of disputes
1. Negotiations between the parties.
2. Mediation between the parties by a body,
organization or individual selected by the parties to
act as the mediator.
3. Resolution by the Arbitration or the Court.
Procedures for resolution of commercial disputes by
arbitration or a court shall comply with procedures
applicable to arbitrations or courts provided for by
law.
6. COURSE ASSESSMENT
MARK (%) FORM OF ASSESSMENT
ATTENDANCE 10% ATTENDANCE CHECK
MID – TERM TEST 30% TRUE/FALE STATEMENT
FINAL EXAM 60% WRITING TEST

(TRUE/FALSE STATEMENT +
SHORT ANSWERS + CASES)
PLUS MARK
TENTATIVE SCHEDULE
DAY CONTENT DAY CONTENT
1ST DAY - 18/1 CHAPTER 1 9TH DAY - 26/2 CHAPTER 3
2ND DAY - 20/1 CHAPTER 2 10TH DAY – 01/3 CHAPTER 3
3RD DAY – 22/1 CHAPTER 2 11TH DAY – 3/3 CHAPTER 4
4TH DAY – 25/1 CHAPTER 2 12TH DAY – 5/3 CHAPTER 4
5TH DAY – 27/1 CHAPTER 2 13TH DAY - 8/3 CHAPTER 5
6TH DAY – 29/1 CHAPTER 3 14TH DAY – 10/3 CHAPTER 5
7TH DAY – 22/2 CHAPTER 3 15TH DAY – 12/3 GUEST SPEAKER
8TH DAY – 24/2 CHAPTER 3

CHAPTER 1:
INTRODUCTION TO INTERNATIONAL BUSINESS LAW
TRẦN THANH TÂM

(LLM, PhD Candidate)
READING MATERIALS
1. Richard Schaffer, Filiberto Agusti and Lucien
Dhooge (2014) - International Business Law and
Its Environment (See Chapter 1 – p.2-23;
Chapter 2 – p.29-36, p.47-49)
2. Ray August, Don Mayer and Michael Bixby
(2013) International Business Law: Text, cases
and readings (See Chapter 1- p.21-28; 65-70)
3. Nguyễn Minh Hằng, International Business Law
(2012) (See Chapter 1)
OUTLINE
1. Definition and scope of IBL
2. Sources of IBL
3. IBL and categories of law
DISCUSSION
• Your Singaporean counterpart on a contract
negotiation is demanding that the appropriate
law be that of Singapore. Do you agree?
• Your customer in China has not paid your invoice

– what do you do?
What is the importance of IBL?
• to make us aware of the legal issues involving

businesses and how to deal with them
• To avoid risks arising from international
business transactions
• IBL is helpful in maintaining business in legal
ways
• to have secured business: If a business is
found not to be in compliance with a law, it
could possibly be subject to very heavy fines!
19
1. DEFINITION & SCOPE OF IBL
• International Business Law (IBL) is a body of law

and regulations, derived from national and
international sources, that governs international
business transactions.
INTERNATIONAL BUSINESS
TRANSACTIONS
• List forms of international business/methods of

entering a foreign market
– International trade & transportation

– The Licensing of intellectual property
– Foreign direct investment
The Scope of IBT: The Practitioner
Perspective
the legal relationships
between buyers and
their
sellers of goods and
relationships
services;
with carriers
the
arrangements
they have
with insurer
The operations of
firms in foreign Dispute settlement
host countries
2. Sources of IBL
• What are the sources of:
– Vietnam’s law
– IBL
23
Sources of law in Vietnam
Constitution
Legislation Acts, Codes
Delegated Ordinances
Decrees
legislation Circulars
Decisions
24
2. Sources of IBL
• Treaties and conventions
– Treaty = Legally binding agreements between a
minimum of two states
– Convention = Legally binding multilateral treaties
between states sponsored by international
organizations (i.e. U.N.), usually negotiated on a
regional/global basis and open to adoption by many
nations.
25
2. Sources of IBL
• Domestic law
– Legislation
– Case law
26
2. Sources of IBL
• Lex mercatoria (trade usages)
– Translates as the “law merchant” – body of rules
created by the trade community to serve the needs
of international trade
– Origin in the Middle Ages when international fairs
were held in places such as St Ives in England and in
Italy. At these fairs they had their own “fair” court
which applied its own rules and recorded its
decisions, some of which are still available
27
Examples of Incorporation of Lex
Mercatoria
• CISG Article 9
– (1) The parties are bound by any usage to which they have
agreed and by any practices which they have established
between themselves.
– (2) The parties are considered, unless otherwise agreed, to
have impliedly made applicable to their contract or its
formation a usage of which the parties knew or ought to have
known and which in international trade is widely known to,
and regularly observed by, parties to contracts of the type
involved in the particular trade concerned.
• UNIDROIT PRINCIPLES OF INTERNATIONAL
COMMERCIAL CONTRACTS
– (Purpose of the Principles)
– These Principles set forth general rules for
international commercial contracts.
– They may be applied when the parties have
agreed that their contract be governed by
general principles of law, the lex mercatoria or
the like.
3. Categories of Law
Law is a very large field, and it is common to

divide it into categories
• Private law and public law

• Common law and Civil law
30
Private Law and Public Law
• Private Law and Public Law are concerned

with relationships
31
Private Law
• Private Law deals with the relationships

between ordinary people in everyday
transactions
• That includes you and me, as well as
businesses and companies
32
Private Law
Individual Individual
Law regulates relationship

between them
33
Public Law
• Public Law deals with the relationships between
government organisations and ordinary citizens
– also between different government organisations
34
Public Law
State State Bodies
Individual
Law regulates relationship

between them
35
DISCUSSION
• Criminal law
• Constitutional law
• Administrative law
• Law of contract
• Tort law
• Property law
• Family law
• Company law
IBT as a Sub-Category of
International Law
Law
International
Domestic Law
Law
Public Private
International International
Law Law
IBT
Common Law and Civil Law
• Common Law and Civil Law are terms used

to describe legal systems
• A legal system is the way the law is
structured and operated in a country
– England and Vietnam have different legal
systems
38
Common Law
• Common Law is used to describe legal

systems based on the English legal system
• These are usually countries which were
once part of the British Empire
– eg: America, Australia, New Zealand
39
Civil Law
• Civil Law is used to describe legal systems which
are based on old Roman Law (from the Roman
Empire in what is now Italy)
• eg: France, Germany
40
Common Law v. Civil Law
Common Law Civil Law
• Case law and the courts • Consists of a legal code
are most important of general principles
source of law which is the source of
law
41
Common Law v. Civil Law
Below: A world map showing countries today that have a civil law system (light blue), countries that
have a common law system (green), and countries that have both (orange).
42
CHAPTER 2:
PARTIES DOING BUSINESS IN VIETNAM
READING MATERIALS
LEGAL DOCUMENTS
1. Law on Commerce 2005
2. Law on Enterprises 2020
3. Law on Bankruptcy 2014
4. Law on Investment 2020
OPTIONAL READINGS
1. Nguyễn Thị Mơ, Law for doing business abroad (2015) (in Vietnamese) (See
Chapter 2).
2. Trương Nhật Quang (2016), Law on Enterprises – Fundamental issues (in
Vietnamese).
3. Phạm Hoài Huấn (2016), Law on Vietnam’s Enterprises – Cases – Explanation
& Comments (in Vietnamese).
CHAPTER 2
II
II
1. DEFINITION
3.
FOREIGN
I. TRADER
TRADERS
IN
VIETNAM
2.
CONDITIONS
1. DEFINITION
• Art 5.6 Law on Commerce 1997:

“Traders shall be individuals, legal persons,
cooperatives, and family households having
business registration for commercial activities
which are carried out independently and
regularly.”
• Art 6.1 Law on Commerce 2005:
Traders include lawfully established economic
organizations and individuals that conduct
commercial activities in an independent and
regular manner and have business registrations
2. CONDITIONS FOR BEING A TRADER
Necessary Sufficient
2.1. NECESSARY CONDITIONS
1. Parties (individuals, organizations) shall

conduct commercial activities
2. Commercial activities are conducted
independently
3. Commercial activities are conducted
regularly
2.1. NECESSARY CONDITIONS
Commercial activities mean activities for the

purpose of generating profits, including: sale
and purchase of goods, provision of services,
investment, commercial promotion and other
activities for the profit purpose.
(Art 3.1 Law on Commerce)
2.2. SUFFICIENT CONDITIONS
→ The parties shall register their business

CEO, CHAIRMAN
3. FOREIGN TRADERS IN VIETNAM
3.1. Definition
3.2. Forms
3. FOREIGN TRADER IN VIETNAM
3.1. DEFINITION
“Foreign traders mean traders established and making

their business registrations according to the provisions of
foreign laws or recognized by foreign laws”
(Art 16.1 Law on Commerce)
3. FOREIGN TRADERS IN VIETNAM
3.2. FORMS OF FOREIGN TRADERS IN VIETNAM
+ Representative Office
(Art 3.6; 17; 18 Law on Commerce, Decree No. 72/2006/NĐ-CP)
+ Branch
( Art.3.7; 19; 20 Law on Commerce, Decree No. 72/2006/NĐ-CP)
DISCUSSION
1. What are similarities and differences

between Representative offices and
branches?
2. List forms of business made by foreign

traders in Vietnam
DISCUSSION
Company A (Vietnam) entered into a contract with Company

B (Japan):
Commodity: Chilled Crabs
Delivery term: FOB Da Nang
Payment: L/C at sight
As the contract is silent on the issue of whether the crabs are
with or without their claws, the company A further contacted
Mr C – Head of the Representative office of Company B in
Vietnam for the details. Mr C then revised the contract by
adding the wording ‘Crabs without their claws’.
Company B then rejected to take the delivery and claimed
that Company A delivered non-conforming commodity.
II. ENTERPRISES UNDER THE LAW ON
ENTERPRISES 2020
1. FUNDAMENTALS
2. FORMS OF ENTERPRISES UNDER THE LAW ON
ENTERPRISES 2020
3. ESTABLISHMENT, DISSOLUTION AND
BANKCRUPTCY OF ENTERPRISES
1. FUNDAMENTALS
1.1. HISTORY OF THE ENTERPRISE LAW IN VN
1.2. BASIC DEFINITIONS

1.1 HISTORY OF THE ENTERPRISE LAW IN VN
Forms of Prior to 2005 2005-2009 2009-2020 2021 onwards
Business
Cooperative Law on Law on Law on Law on
Cooperatives Cooperatives Cooperatives Cooperatives
1996/2003 2003 2012 2012
State-owned Law on State-

company owned company
1995/2003
LLC Law on Law on Law on Law on
JSC Enterprises 1999 Enterprises Enterprises Enterprises
(Company Law 2005 2014 2020
Partnership and Law on Sole
Sole Proprietorship was
Proprietorship annulled)
100% foreign- Law on foreign
owned investment in VN
company 1996 (amended in
Joint venture 2000)
1. FUNDAMENTALS

- ENTERPRISE
“Enterprise means an organization that has its own
name, assets, office, and is established or registered for
establishment in accordance with law to do business. ”
( Art 4.10 Law on Enterprises 2020)
ENTERPRISE – COMPANY?
1. FUNDAMENTALS

- BUSINESS
‘Business means the continuous conduct of one, several
or of all of the stages of a process, from investment,
production to sale of products or provision of services on
the market for profit-making purposes.’
( Art 4.21, Law on enterprises 2020)

BUSINESS – COMMERCE ?
1. FUNDAMENTALS

- BUSINESS NAME
+ The Vietnamese name of an enterprise

comprises two elements: Type of enterprise
and proper name.
+ The proper name must be written in letters in
the Vietnamese alphabets, the letters F, J, Z, W,
numerals and symbols.
LEGAL ISSUES ON BUSINESS NAME
Law on
Enterprises
2020 (Art
37 → 41)
PROHIBITED ACTS IN NAMING
ENTERPRISES
1. Using names which are identical or confusingly
similar to the name of a registered enterprise.
2. Using the name of a state agency, people’s armed
forces unit, political organization, socio-political
organization, socio-politico-professional organization,
social organization or socio-professional organization
as the whole or part of the proper name of an
enterprise, unless it is consented to by such agency,
unit or organization.
3. Using terms and symbols which contravene national
historical traditions, culture, ethics and fine customs.
IDENTICAL NAME
Identical names means that the Vietnamese name
of an enterprise requesting registration, when
written, is completely similar to the Vietnamese
name of a registered enterprise.
→ A & B Co.,Ltd - a & b Co.,Ltd???
CONFUSINGLY SIMILAR
a/ The Vietnamese name of an enterprise requesting
registration is pronounced the same as the name of a
registered enterprise;
b/ The abbreviated name of an enterprise requesting
registration is identical to the abbreviated name of a
c/ The foreign-language name of an enterprise requesting
registration is identical to the foreign-language name of a
d/ The proper name of an enterprise requesting registration
is different from the proper name of a registered enterprise
of the same type only by an ordinal number, a cardinal
number, a letter in the Vietnamese alphabet, or letters F, J, Z
or W written next to or spaced after the proper name of such
enterprise;
CONFUSINGLY SIMILAR
dd/ The proper name of an enterprise requesting registration is
different from the proper name of a registered enterprise of the
same type only by the symbol "&" or "và", ".", "+", "-" and "_";
e/ The proper name of an enterprise requesting registration is
same type only by the word "tân" immediately preceding or the
word "mới" written next to or spaced after or before the proper
name of a registered enterprise;
g/ The proper name of an enterprise requesting registration is
same type only by one of the following expressions: "miền Bắc",
"miền Nam", "miền Trung", "miền Tây" and “miền Đông”;
h/The proper name of an enterprise is identical to the proper name
of a registered enterprise.
The cases prescribed at Points d, dd, e, g and h of this Clause do not
apply to subsidiaries of a registered enterprise.
2. FORMS OF ENTERPRISES UNDER
THE LAW ON ENTERPRISES 2020
2.1. Limited Liability Company (46 – 87)
2.1.1. Two or more members (46-73)
2.1.2. One member (74 – 87)
2.2. Joint-Stock Company (111 - 176)
2.3. Partnership (177 - 187)
2.4. Sole Proprietorship (188 - 193)
2.5. Corporate group (194 - 197)
2.6. State-owned Company (88- 110)
2. FORMS OF ENTERPRISES BASED
ON LAW ON ENTERPRISES
- Characteristics:
+ Member
+ Member liability
+ Ability to issue shares
+ Legal entity status
- Finance (Capital contribution, Capital
Transfer, Profit contribution,…)
- Management Structure, legal representative
- Strengths, weaknesses of each kind of
enterprises
2.1. LIMITED LIABILITY COMPANY
WITH TWO OR MORE MEMBERS
2.1.1. CHARACTERISTICS
A) MEMBER
B) MEMBER LIABILITY
C) ABILITY TO ISSUE SHARES
D) LEGAL ENTITY
2.1.2. FINANCE
A) CAPITAL CONTRIBUTION
B) TRANSFER OF CONTRIBUTED CAPITAL AMOUNT
C) REDEMPTION OF CONTRIBUTED CAPITAL AMOUNT
D) ADJUSTMENT TO CHARTER CAPITAL
E) PROFIT DISTRIBUTION
2.1.3. MANAGEMENT STRUCTURE
2.1. LLC WITH TWO OR MORE
MEMBERS
A) MEMBER
- MAY BE ORGANISATION OR INDIVIDUALS
- QUANTITY: 2≤x≤50
(?) LESS THAN 2 & MORE THAN 50???

MEMBERS
B) MEMBER LIABILITY
“Members must be liable for the debts and other
property obligations of the enterprise within the
amount of capital contributed to the enterprise”
- Exception: Art 47.4: Committed capital?
MEMBERS
C) ABILITY TO ISSUE SHARES
→ MUST NOT ISSUE SHARES except when it
converts to become a shareholding company.
→ WHY?
MEMBERS
D) LEGAL ENTITY
→ from the date of issuance of its Enterprise
Registration Certificate (ERC).
→ (?) Contracts prior to business registration?
MEMBERS
2.1.2. FINANCE
A) CAPITAL CONTRIBUTION:
+ CONTRIBUTED ASSETS: ART 34
+ VALUATION OF CONTRIBUTED ASSETS: ART 36
+ TRANSFER OF OWNERSHIP OF CONTRIBUTED
ASSETS: ART 35
+ OBLIGATION OF CAPITAL DISTRIBUTION: Members must
contribute capital to the company in full and in the type of assets
as undertaken when registering establishment of an enterprise,
within a period of ninety (90) days from the date of issuance of
the ERC, excluding the duration of transporting or importing
assets contributed as capital and conducting administrative
procedures for conversion of ownership of assets.
MEMBERS
(?) PROOF OF CAPITAL CONTRIBUTION:
→ Capital Contribution Certificate (Art 47.5)

MEMBERS
B. TRANSFER OF CONTRIBUTED CAPITAL AMOUNT
→ Restrictions: Art 51-52-53
→ Reasons for such restrictions?
MEMBERS
C. REDEMPTION OF CONTRIBUTED CAPITAL
AMOUNT
- WHEN? ART 51.1, 53.4
- CONSEQUENCES?:
+ TERMINATION OF MEMBER STATUS
+ THE CHARTER CAPITAL WILL BE DECREASED
MEMBERS
D. ADJUSTMENT TO CHARTER CAPITAL (Art.68)
- INCREASE OF CHARTER CAPITAL: 2 POSSIBILITIES
+ Capital contribution of members is increased
+ Capital contributions are made by new members
- DECREASE OF CHARTER CAPITAL: 3 POSSIBILITIES
+ Return part of the contributed capital to members –
Conditions?
+ Redeem the members’ contributed capital amounts
+ The charter capital has not been paid in sufficiently
and timely
MEMBERS
D. PROFIT DISTRIBUTION (ART 69)
- 3 CONDITIONS
+ Generate profits
+ Fulfil taxes and other financial obligations
+ Ensure that all debts and other property
obligations may be fully paid after distribution of
profits
MEMBERS
2.1.3. MANAGEMENT STRUCTURE: Art 54
MEMBERS’ COUNCIL
DIRECTOR CONTROLLING BOARD

(GENERAL DIRECTOR)
REMARK: Company >=11 members: Controlling board is

compulsory. Company < 11 members : Controlling board is optional
MEMBERS
2.1.3. MANAGEMENT STRUCTURE: Art 54
MEMBERS’ COUNCIL
DIRECTOR CONTROLLING BOARD

(GENERAL DIRECTOR)
REMARK: State-owned LLCs and its subsidiaries: Controlling

board is compulsory. The remainder: Controlling board is optional
LEGAL REPRESENTATIVE
→ ART.12-15
→ ART 54.3
A. MEMBERS’ COUNCIL (ART.55)

- POSITION:
+ HIGHEST DECISION-MAKING BODY
+ COMPRISE ALL MEMBERS
- MEMBERS’S COUNCIL MEETING: ART 57
- RIGHTS AND OBLIGATIONS: ART 55.2
B. CHAIRPERSON OF MEMBERS’COUNCIL (ART 56)

- SHALL BE ELECTED BY THE MEMBERS’ COUNCIL
- MAY CONCURRENTLY ACT AS THE DIRECTOR OF
THE COMPANY
- THE TERM OF OFFICE: =<5 YEARS (WITHOUT
TERM LIMIT)
C. DIRECTOR/GENERAL DIRECTOR
- MANAGE THE DAY-TO-DAY BUSINESS OPERATION
OF THE COMPANY
- MAY CONCURRENTLY ACT AS THE CHAIRPERSON
OF THE COMPANY
- MAY BE THE LEGAL REPRESENTATIVE
- CRITERIA AND CONDITIONS: ART 64
D. CONTROLLING BOARD
- Rights and Obligations: Art 65.3

- Criteria and Conditions: Art 65.2
2.2. ONE-MEMBER LLC
- MEMBER
- MEMBER LIABILITY
- LEGAL ENTITY STATUS
- ABILITY TO ISSUE SHARES
2.2.2. FINANCE
- CAPITAL CONTRIBUTION
- CAPITAL WITHDRAWAL VÀ TRANSFER
- ADJUSTMENT TO CHARTER CAPITAL
2.2. ONE-MEMBER LLC
A. MEMBER: 01 MEMBER (INDIVIDUAL/ORGANISATION)
B. MEMBER LIABILITY:
→ liable for all debts and other property obligations of the
company within the amount of the charter capital of the
company.
C. LEGAL ENTITY STATUS:
→ from the date of issuance of the ERC
D. ABILITY TO ISSUE SHARES:
→ NOT ALLOWED except in a case of conversion to become
a shareholding company
2.2.2. FINANCE
A. CAPITAL CONTRIBUTION: IN FULL WITHIN THE

TIME LIMIT (ART.75)
B. CAPITAL WITHDRAWAL AND TRANSFER: ART 77
C. ADJUSTMENT TO CHARTER CAPITAL: ART 87
+ DECREASE OF CHARTER CAPITAL – CONDITIONS?
+ INCREASE OF CHARTER CAPITAL
INSTITUTIONAL OWNER INDIVIDUAL OWNER

PRESIDENT
Members’ council PRESIDENT
DIRECTOR DIRECTOR DIRECTOR
CONTROLLING BOARD CONTROLLING BOARD
REMARK: State-owned LLCs: Controlling board is compulsory. The remainder:

Controlling board is optional
2.3. JOINT-STOCK COMPANY
A. MEMBER
B. MEMBER LIABILITY
C. ABILITY TO ISSUE SHARES
D. LEGAL ENTITY STATUS
E. LEGAL ISSUES ON CHARTER CAPITAL
2.3.2. TYPES OF SHARES
2.3. JOINT-STOCK COMPANY
A. MEMBER:
- INDIVIDUAL, ORGANISATION
- MIN: 3, MAX: UNLIMITED
B. MEMBER LIABILITY: LIMITED LIABILITY WITHIN
THE CONTRIBUTED CAPITAL AMOUNT
C. ABILITY TO ISSUE SHARES: ALLOWED TO ISSUE
ALL KIND OF SHARES
D. LEGAL ENTITY STATUS: from the date it is
granted an ERC.
LEGAL ISSUES ON CHARTER CAPITAL

The charter capital is divided into equal portions
called shares
LEGAL ISSUES ON CHARTER
CAPITAL
DISTINGUISH:
+ CAPITAL STRUCTURE OF LLC WITH 2 OR MORE
MEMBERS:
CHARTER CAPITAL= T1 + T2+ …+ Tn ( n≤ 50)
+ CAPITAL STRUCTURE OF SJC:

LEGAL ISSUES ON CHARTER CAPITAL
CHARTER CAPITAL = TOTAL PAR VALUE OF SOLD

SHARES
AT THE TIME OF ESTABLISHMENT:

CHARTER CAPITAL = TOTAL PAR VALUE OF SHARES
REGISTERED FOR PURCHASE
Distinguish: Sold Shares – Shares allowed to be
offered – Unsold shares
D. TRANSFER OF SHARES (ART 127)
SHARES CAN BE FREELY TRANSFERED, EXCEPT FOR 3 CASES:
1. TRANSFER RESTRICTION STIPULATED IN THE COMPANY
CHARTER
2. VOTING PREFERENCE SHARES NOT ALLOWED TO

TRANSFER
3. ORDINARY SHARES OF FOUNDING SHAREHOLDERS
WITHIN 3 YEARS FROM THE DATE OF ISSUANCE OF ERC :
- B/W FOUNDING SHAREHOLDERS: FREELY TRANSFERRED
- OTHER SHAREHOLDERS/PERSON: APPROVED BY GMS
- REMARK: ART 120.4 LAW ON ENTERPRISES 2020
2.3.2. TYPES OF SHARES (Art 113)
2 TYPES:
ORDINARY SHARES: MANDATORY
PREFERENCE SHARES: OPTIONAL
- Each share of the same type must entitle its

holder to the same rights, obligations and
interests.
A. ORDINARY SHARES
- OWNER: INDIVIDUAL/ ORGANISATION
- TRANSFER: FREELY TRANSFERRED EXCEPT THE
CASES STIPULATED IN ART 120.3, 127.1
- VOTING: 1 ORDINARY SHARE = 1 VOTE
- CANNOT BE CONVERTED INTO PREFERENCE
SHARES
B. PREFERENCE SHARES
+ Voting preference shares;

+ Dividend preference shares;
+ Redeemable preference shares;
+ Other preference shares stipulated in the charter
of the company.
VOTING PREFERENCE SHARES

- PREFERENCE: MORE VOTES THAN A ORDINARY
SHARE
- 1 Voting Preference Share = n VOTE (n > 1,

CHARTER)
(n: THE QUANTITY OF VOTES)
VOTING PREFERENCE SHARE
- ‘A voting preference shareholder carries more votes than
an ordinary one’?
- VOTE CALCULATION: 3 Elements

+ TYPE OF SHARES ( VOTING PREFERENCE OR ORDINARY)
+ THE QUANTITY OF SHARES
+n=?
EXAMPLE: A= 100 ORDINARY SHARES, B = 10 VOTING
PREFERENCE SHARES
-n = 10: A = B
-n > 10: A < B
-n < 10: A > B
VOTING PREFERENCE SHARE
1. OWNER: FOUNDING SHAREHOLDERS +

ORGANISATIONS AUTHORIZED BY THE
GOVERNMENT (ART 116.1)
+ FOUNDING SHAREHOLDER: VALID FOR 3 YEARS +
CONVERTED INTO ORDINARY ONES
+ ORGANISATIONS AUTHORISED: UNLIMITED
→ why?
2. RESTRICTIONS: NON-TRANSFERABLE
DIVIDEND PREFERENCE SHARE
-PREFERENCE:
PAID AT A RATE HIGHER THAN THAT PAID FOR AN
ORDINARY STOCK OR AT AN ANNUAL FIXED RATE.
-RESTRICTION:
- HAVE NO RIGHTS TO VOTE, ATTEND THE GMS,
NOMINATE CANDIDATE TO THE BOARD OF
MANAGEMENT, CONTROLLING BOARD.
REDEEMABLE PREFERENCE SHARE
1. PREFERENCE: SHALL BE REDEEMED BY THE

COMPANY…
2. RESTRICTION:
HAVE NO RIGHTS TO VOTE, ATTEND THE GMS,
NOMINATE CANDIDATE TO THE BOARD OF
MANAGEMENT, CONTROLLING BOARD.
REMARK
AN ADDITIONAL PREFERENCE FOR DIVIDEND AND

REDEEMABLE PREFERENCE SHARES (Art.117.2.b)
Upon dissolution or bankruptcy of the company:
1. Redeemable preference shares
2. Dividend Preference shares
3. Voting Preference shares + Ordinary shares +
other type of shares
GENERAL MEETING OF
SHAREHOLDER MODEL 1
BOARD OF CONTROLLING BOARD

MANAGEMENT
DIRECTOR/
GENERAL DIRECTOR
CONTROLLING BOARD NOT MANDATORY: 2 CONDITIONS
- Quantity: < 11 shareholders
- Institutional shareholders own < 50% /Total shares
GENERAL MEETING OF
SHAREHOLDER MODEL 2
BOARD OF
MANAGEMENT
DIRECTOR/
GENERAL DIRECTOR
2 CONDITIONS
- 20% members of the B.M are independent members
- Auditing Committee is required in the B.M
GENERAL MEETING OF
SHAREHOLDER (ART.135)
- POSITION: HIGHEST DECISION-MAKING BODY
- COMPRISE ALL SHAREHOLDERS HAVING THE
RIGHT TO VOTE
- RIGHTS AND OBLIGATIONS: ART.138
- OTHER ISSUES: ART.139 → ART.152
BOARD OF MANAGEMENT
1. POSITION: THE BODY MANAGING THE COMPANY
- FULL COMPETENCE TO MAKE DECISIONS IN THE NAME OF
THE COMPANY…
2. QUANTITY:
3 ≤ n ≤ 11
3. TERM OF OFFICE:
+ MEMBERS OF B.M: UP TO 5 YEARS WITHOUT TERM LIMIT
4. CRITERIA, CONDITIONS
+ MEMBER OF B.M: ART 155.1
+ INDEPENDENT MEMBER OF B.M: ART 155.2
5. RIGHTS AND OBLIGATIONS: ART 153.2
BOARD OF MANAGEMENT
6. ADOPTING RESOLUTIONS OF THE B.M

- 1 MEMBER OF THE B.M = 1 VOTE
- PRINCIPLE OF VOTING
+ Majority Rule
+ In the event of a Tie vote: The vote of the chairperson is
decisive
AUDITING COMMITTEE – ART 161
1. POSITION
2. QUANTITY
3. RIGHTS AND OBLIGATIONS
DIRECTOR/GENERAL DIRECTOR
- TERM OF OFFICE: UP TO 5 YEARS (WITHOUT TERM
LIMITS)
- CRITERIA: ART 162.5
DISCUSSION
“ I AM CURRENTLY A DIRECTOR OF A JSC LOCATED

IN HCM CITY. I PLAN TO ESTABLISH A SUBSIDARY
COMPANY LOCATED IN HANOI. AM I ALLOWED TO
BE THE DIRECTOR OF THIS NEWLY-ESTABLISHED
COMPANY?
CONTROLLING BOARD
(ART.168 → ART.174)
- QUANTITY: 3 ≤ n ≤ 5, TERM OF OFFICE: UP TO 5
YEARS
- RELATIONSHIP WITH B.M/ G.D: INDEPENDENT
- CRITERIA AND CONDITIONS: ART.169
- RIGHTS AND OBLIGATIONS: ART.170
2.4. PARTNERSHIP
GENERAL PARTNER LIMITED PARTNER
MANDATORY OPTIONAL
INDIVIDUAL (WHY?) INDIVIDUAL/ORGANIS

ATION
MIN:2 – MAX: UNLIMITED
UNLIMITED
2.4. PARTNERSHIP
- MEMBER LIABILITY
GENERAL PARTNER LIMITED PARTNER
Liable for the liable for the debts of
obligations of the the partnership within
partnership with all of the limit of the capital
their assets amount they have
contributed to the
partnership
C. LEGAL ENTITY STATUS
LAW 1999 – LAW 2005 & 2014 & 2020
D. ABILITY TO ISSUE SHARES:
NOT ALLOWED TO ISSUE SECURITIES OF ANY
KINDS
2.4.2. MEMBERSHIP REGULATIONS
- Rights and obligations of G.P: Art 181

- Restrictions on rights of G.P: Art 180
- Termination of G.P Status: Art 185
- Admission of new partners: Art 186
- Rights and obligations of L.P: Art 187
RESTRICTIONS ON RIGHTS OF G.P: ART 180

- Not allowed to be the owner of a sole proprietorship or a
general partner of another partnership (Unless approved by
other general partners)
- Not allowed to conduct in his/her own name or in the
name of another person the same business lines as those of
the partnership for his/her personal benefits or for the
interests of another organization or individual
- Not allowed to transfer part or the whole of his/her capital
contribution in the partnership to another person without
the consent of other general partners.
Termination of G.P Status: Art 185

During 2 years after termination of general
partner status, the general partner, who either
voluntarily withdraws capital from the partnership
or has been excluded from the partnership, shall
still be jointly liable with all his/her assets for the
partnership’s debts which arise prior to the date
of termination of partner status.
ART 182
MEMBERS’ COUNCIL
CHAIRPERSON (MAY ACT

CONCURRENTLY AS
DIRECTOR/GENERAL DIRECTOR)
(UNLESS OTHERWISE PROVIDED BY THE CHARTER)
LEGAL REPRESENTATIVE OF THE PARTNERSHIP

- GENERAL PARTNERS: act as legal
representatives and organize management of
day-to-day business of the partnership
- CHAIRPERSON/DIRECTOR: Represent the
partnership in relationship with state agencies;
represent the partnership as defendant or
plaintiff in lawsuits, commercial disputes or
other disputes.
2.5. SOLE PROPRIETORSHIP
SOLE PROPRIETORSHIP = PRIVATE ENTERPRISE?
SOLE PROPRIETORSHIP VS STATE-OWNED

COMPANIES?
A. OWNER:
AN INDIVIDUAL
1 INDIVIDUAL = 1 SOLE PROPRIETORSHIP, WHY?
B. MEMBER LIABLITY:
Liable for all activities of the enterprise with all
his/her assets.
C. LEGAL ENTITY STATUS
D. ABILITY TO ISSUE SECURITIES
2.5.2. RIGHTS AND OBLIGATIONS OF
ENTERPRISE OWNERS
A. FINANCE
B. MANAGEMENT
C. LEASE OF ENTERPRISE
D. SALE OF ENTERPRISE
ENTERPRISE OWNERS
A. FINANCE (ART 189)

- Register the investment capital by
himself/herself.
- Reduce the investment capital below the
amount of investment capital registered only
after registration with the business registration
agency.
- Have total discretion in deciding on the use of
profits after payment of taxes.
ENTERPRISE OWNERS
B. MANAGEMENT - ART 190
- Have total discretion in making all business
decisions
- Act as the legal representative
- Director can be the owner or can be hired -
Liability?
ENTERPRISE OWNERS
C. LEASE OF ENTERPRISE: ART 191
- The owner of a private enterprise may lease his/her
whole enterprise provided that a written notice and
a notarized copy of the lease contract shall be sent
to the business registration agency and the tax
agency within 3 working days after the lease
contract becomes effective.
- During the lease term, the owner of the private
enterprise shall remain responsible before law as the
owner of the enterprise.
- The rights and responsibilities of the owner and
the lessee with respect to the business operations of
the enterprise shall be provided in the lease contract
ENTERPRISE OWNERS
D. SALE OF ENTERPRISE (ART 192)
- The owner may sell his/her enterprise to another
person.
- After selling his/her enterprise, the owner shall
remain liable for all debts and other property
obligations of the enterprise incurring before the
date of handing over the enterprise, unless
otherwise agreed by the purchaser, the seller and
creditors of the enterprise.
2.6. CORPORATE GROUPS
ECONOMIC GROUP, CORPORATIONS: ART 194

PARENT COMPANIES, SUBSIDIARIES: ART 195
RIGHTS AND RESPONSIBILITIES OF A PARENT
COMPANY TO ITS SUBSIDIARIES: ART 196
FINANCIAL STATEMENTS OF PARENT
COMPANIES AND SUBSIDIARIES: ART 197
3. ESTABLISHMENT – DISSOLUTION
- BANKCRUPTCY
3.1. ESTABLISHMENT AND MANAGEMENT OF ENTERPRISES (ART 17)
→INDIVIDUALS AND ORGANISATIONS…
EXCEPTIONS:
1. STATE AGENCIES… USING STATE ASSETS… TO MAKE PROFITS FOR THEIR OWN
ORGANISATIONS
2. PUBLIC OFFICIALS, PUBLIC EMPLOYEES…
3. OFFICERS, NON-COMMISSION OFFCERS…
4. MANAGERS, PROFESSIONAL MANAGERS IN STATE COMPANIES
5. MINORS; PERSONS WHOSE CIVIL ACT CAPACITY IS RESTRICTED OR LOST; PERSONS
WITH COGNITIVE DIFFICULTIES OR DIFFICULTIES WITH BEHAVIOURAL CONTROL;
ORGANIZATIONS WITHOUT LEGAL ENTITY STATUS;
6. PERSONS BEING EXAMINED FOR PENAL LIABILITY, SERVING PRISON SENTENCES;
OTHER CASES PRESCRIBED BY THE LAWS ON BANKRUPTCY AND CORRUPTION
PREVENTION AND COMBAT.
7. ORGANIZATIONS BEING COMMERCIAL LEGAL ENTITIES WHICH ARE PROHIBITED
FROM CONDUCTING BUSINESS OR OPERATING IN CERTAIN SECTORS PURSUANT TO
THE CRIMINAL CODE.
3.2. CAPITAL CONTRIBUTION
THOSE NOT ALLOWED TO CONTRIBUTE CAPITAL

- State agencies, units of people’s armed forces
using state assets to contribute capital to
enterprises to make profits for their own
organizations and units;
- Those who may not contribute capital to
enterprises in accordance with the law on
public officials and employees.
3.3. PROCEDURE FOR ENTERPRISE
REGISTRATION
- Enterprise registration authorities: Business
Registration Office - The Department of
Planning and Investment
- Documents and procedure for enterprise
Registration:
- Time limit for issuing certificate of enterprise
registration:
3.4. DISSOLUTION OF ENTERPRISES
Circumstances & conditions for dissolution?

ÓPoff its debts
Solvent = able to pay
What are scenarios that an enterprise shall be
dissolved?
Compulsory?
Voluntary?
3.4. DISSOLUTION OF ENTERPRISES
Procedures?
Is the dissolution initiatedÓP
by a resolution?
What is the order of payment of company debts?
When is the company deemed to be dissolved?
Prohibited activities?
3.5. BANKCRUPTCY OF
ENTERPRISES
When does a company fall into the state of bankruptcy?
Insolvent = unable to pay its debts when they fall due
VN: The Bankruptcy Law 2014
ÓP
Other jurisdictions: Insolvency Law
Will falling into the state of bankruptcy lead to the declaration of
bankruptcy (bring the business to an end)?
Winding up or liquidation involves the closing down of the business and
the realization of company assets for the benefit of creditors.
Thank You
CHAPTER 3:
INT’L SALE OF GOODS CONTRACT
READING MATERIALS
1. Richard Schaffer, Filiberto Agusti and Lucien Dhooge
(2014) - International Business Law and Its Environment
(See Chapter 4 – p.86-119)
2. Ray August, Don Mayer and Michael Bixby (2013)
International Business Law: Text, cases and readings
(See Chapter 10- p.559-609)
3. Indira Carr and Peter Stone (2018), International Trade
Law (See Chapter 2 – p.60-94)
4. Nguyễn Minh Hằng, International Business Law (2012)
(See Chapter 3)
READING MATERIALS
LEGAL DOCUMENTS
2. Law on Foreign Trade Management 2017
3. Civil Code 2015
4. Decree No. 187/2013/NĐ-CP dated on 20/11/2013
5. United Nations Convention on Contracts for the international sale
of goods (1980) [CISG]
6. Incoterms 2010, Incoterms 2000
7. Unidroit principles of International Commercial Contracts (PICC)
2016
I. FUNDAMENTALS OF INT’L SALE OF GOODS
CONTRACT
INT’L SALE OF GOODS CONTRACT
= SALE OF
GOODS +
CONTRACT “INTERNATIONALITY ”
1.1. DOMESTIC SALE OF GOOD
CONTRACT
1.2. INTERNATIONAL CHARACTER

1.1. DOMESTIC SALE OF GOODS
CONTRACT
• Parties
• Object: Art 3.2 – Law on Commerce
• Purpose
• Form: Art 24 – Law on Commerce
• Governing law: Art 4 – Law on Commerce
1.2.1. Parties
1.2.2. Object
1.2.3. Payment currency
1.2.4. Governing law and dispute
settlement body
1.2.INTERNATIONAL CHARACTER
1.2.1. Parties
- CISG: Art 1.1, Art 10
- Vietnam’s law: Law on Commerce 2005
– Art 27.1
1.2.INTERNATIONAL CHARACTER
→ What if a party has more than one
place of business?
Ex: A buyer in Austria (a CISG State)

purchased goods from the Swiss branch
of a company with headquarters in
Liechtenstein (notably: a non-CISG
Contracting State) (CLOUT case 261)
1.2.2. Object
- CISG:
- Vietnam’s law: Law on Commerce 2005
– Art 27.1: Can be delivered across
borders
Remark: Country’s border – customs
border (Export Processing Zone;
commercial and industrial Zone…)
1.2.3. Payment currency
- Payment currency can be foreign to at

least one party to the contract
1.2.4. Governing law and dispute
settlement body
II. LEGAL FRAMEWORKS FOR INT’L SALES
CONTRACT
II. LEGAL FRAMEWORK FOR
INT’L SALES CONTRACT
1. International treaties
2. Domestic law
3. International trade practices
I. INTERNATIONAL TREATIES
• Treaties are legally binding written
agreements between two or more nations.
CISG IN A NUTSHELL
The issue of applicability
1. CISG - A brief history
2. Structure of the CISG
3. Scope of application
4. Exclusion of the CISG

CISG IN A NUTSHELL
1. CISG – A BRIEF HISTORY
• Developed by the United Nations

Commission on International Trade Law
(UNCITRAL) in response to the failure of
ULIS & ULF
• Signed in Vienna in 1980 & came into
force on 01 Jan 1988
• Recognised as a ‘success story’ due to
its widespread adoption and impact
CISG IN A NUTSHELL
CISG IN A NUTSHELL
• 1.
94CISG – A BRIEF
contracting members
HISTORY(updated on
28th Oct 2020)
• ¾ of all international business
transactions
• Over 4500 case presentations &
abundant number of scholarly writings
dedicated to the CISG
• A model for law reform projects at
both national and regional level.
CISG IN A NUTSHELL
2. STRUCTURE OF THE CISG
• Part 1: Sphere of application and general

provisions (Art 1-13)
• Part 2: Formation of the contract (Offer
and acceptance) (Art 14-24)
• Part 3: Rights, obligations and remedies
to buyers and sellers (Art 25-88)
• Part 4: Final provisions (Art 89-101)
CISG IN A NUTSHELL
3. SCOPE OF APPLICATION
Art 1:
(1) This Convention applies to contracts of sale of goods between parties whose
places of business are in different States:
(a) when the States are Contracting States; or
(b) when the rules of private international law lead to the application of the law of
a Contracting State.
(2) The fact that the parties have their places of business in different States is to be
disregarded whenever this fact does not appear either from the contract or from any
dealings between, or from information disclosed by, the parties at any time before or
at the conclusion of the contract.
(3) Neither the nationality of the parties nor the civil or commercial character of the
parties or of the contract is to be taken into consideration in determining the
application of this Convention.
CISG IN A NUTSHELL
3. SCOPE OF APPLICATION
3.1. DIRECT APPLICATION: ART 1(1)(a)
3.2. INDIRECT APPLICATION: ART 1(1)(b)

CISG IN A NUTSHELL
3.1. DIRECT APPLICATION: ART 1(1)(a)
• the CISG is “directly”or “autonomously”

applicable when the parties have their places of
business in different Contracting States
CISG IN A NUTSHELL
‘PLACE OF BUSINESS’
• The fact that the parties have their places of

business in different States must be apparent
before or at the at the conclusion of the contract
within the meaning of Article 1(2)
• Where a party (e.g. a natural person) does not
have a place of business, his or her “habitual
residence” is to be applied (Article 10(b)).
CISG IN A NUTSHELL
• The “place of business” is not defined under the

Convention
• It is subject to an autonomous interpretation
unaffected by local definitions (Article 7(1)).
CISG IN A NUTSHELL
• Drafting history:
‘…place of business shall not be considered his place of business
unless the party at that place maintains a permanent organisation
[including an office and personnel of his own]
‘a stable place where the entire or (part of) the contract is

performed and which has autonomous power to conduct the
bargaining and to conclude the contract’ (Argentina & Belgium)
an establishment having no competence to conclude the contract

is still considered as a place of business provided that it has power
to bargain (Norway)
CISG IN A NUTSHELL
• Scholarly writing:
Certain characteristics attributed to the notion
of ‘place of business: Duration, stability and a
certain degree of independence.
+ a mere place of contracting such
as booths at an exhibitions or rented hotels
+ a liaison office
CISG IN A NUTSHELL
• Case law:
- It is mostly applied without providing any definitions
or further explanations.
- Some cases exhibit a homeward trend by defining a
place of business as either ‘place of incorporation’ or
‘principal place of business’
- Many cases share the similar approach with CISG
scholars that reference is made to duration, stability
and independence
CISG IN A NUTSHELL
‘ MULTIPLE PLACE OF BUSINESS’
• Art 10(a): Principal place of business

theory vs Closest relationship theory?
If a party has more than one place of business, the
place of business is that which has the closest
relationship to the contract and its performance,
having regard to the circumstances known to or
contemplated by the parties at any time before or
at the conclusion of the contract;
CISG IN A NUTSHELL
MULTIPLE PLACE OF BUSINESS
Ex: A buyer in Austria (a CISG State)

purchased goods from the Swiss
branch of a company with
headquarters in Liechtenstein
(notably: a non-CISG Contracting
State) (CLOUT case 261)
CISG IN A NUTSHELL
A Certain Ri Dev., Co. v. A Certain H.K. Bang Dev., Co.], (2008) Shen Zhong Fa Min Si Zhong
Zi No. 101 Civil Judgment (Shenzhen Intermediate People’s Ct. Mar. 30, 2009).
• a Hong Kong company performed the sales contract

partly through a factory set up in Shenzhen (the
equipment sold under the contract was apparently
delivered to and stationed in the factory).
• the company’s headquarters in Hong Kong was held to be
the place of business with the “closest relationship to the
contract and its performance” under Article 10(a) given
that it was in Hong Kong that the company performed its
main obligation under the sales contract by making
payments through a local bank
CISG IN A NUTSHELL
US case law
• Zodiac Seats US LLC v. Synergy Aero. Corp., 2019 U.S. Dist.

LEXIS 68456: In weighing which location has the closest
relationship to the contract, courts consider where the
communications about the contract or representations about the
product originated.
• the Court finds that Synergy's employees involved in the initial

negotiation of the contracts at issue were based in Colombia.
Moreover, the ongoing renegotiation, and alleged novation pursuant
to the Commitment Letters, occurred during a July 26, 2016, visit
by Zodiac to Synergy's location in Colombia. Accordingly, both at
the time the contracts were formed, and throughout the
performance of the contract, the Court finds that as between Brazil
and Columbia, Colombia had the "closest relationship to the
contract and its performance." Therefore, the Court finds that the
CISG governs the parties' dispute
CISG IN A NUTSHELL
US case law
• McDowell Valley Vineyards, Inc. v. Sabate USA Inc., 2005 WL 2893848

(N.D. Cal. Nov. 2, 2005): the CISG does not apply where
most communications emanated from the United States, thus
under the CISG, the parties were both American, not from
different member states);
• Asante Technologies, Inc. v. PMC-Sierra, Inc., 164 F. Supp. 2d 1142,
1149 (N.D. Cal. 2001): Finding the "place of business" to be
Canada where "most if not all of the defendant's representations
regarding the technical specifications of the products emanated
from Canada
CISG IN A NUTSHELL
‘CONTRACTING STATE’
• A current list of CISG contracting states, including

their dates of ratification, acceptance, approval,
or accession, and the relevant effective dates of
the Convention, is available from the UNCITRAL
website:
https://uncitral.un.org/en/texts/salegoods/conv
entions/sale_of_goods/cisg/status
CISG IN A NUTSHELL
• Should Hong Kong (or Macao) acquire an

effective Convention status by reason of being a
territorial unit of China?
CISG IN A NUTSHELL
• On 20 June 1997, the PRC deposited a diplomatic
note with the Secretary General of the United
Nations announcing that the treaties in Annex I to
the note ‘will be applied’ to the HKSAR. This annex
did not include any reference to the CISG.
• As a result, courts seated throughout the world have
taken inconsistent positions with respect to the
CISG’s applicability to the HKSAR.
– the Supreme Court of France (Cour de cassation), the
Zhejiang High People’s Court decided that the CISG does
not apply to the HKSAR .
6
– Some courts in the United States have found that the CISG
is applicable to the HKSAR
CISG IN A NUTSHELL
(1) This Convention applies to contracts of sale of

goods between parties whose places of business
are in different States:
(b) when the rules of private international law
lead to the application of the law of a Contracting
State.
CISG IN A NUTSHELL
• rules of private international law -> private international law

of the forum.
• These rules may be found in an international set of rules if in
force and applicable (e.g. the 1955 Hague Convention on the
Law Applicable to Contracts for the International Sale of Goods,
the 1980 Rome Convention on the Law Applicable to
Contractual Obligations ) or in the domestic body of rules on
private international law of that state, depending on the legal
framework in the forum state.
CISG IN A NUTSHELL
RESERVATION UNDER ART 95
• article 95 was introduced to give Contracting

States the opportunity to choose not to be bound
by article 1 (1) (b).
CISG IN A NUTSHELL
RESERVATIONS UNDER ART 95
• Armenia: Pursuant to Article 95 of the Convention, the Republic of

Armenia declares that it will not apply the Article 1, subparagraph (1) (b)
of the Convention to the parties that declare not to be bound by the
Article 1, subparagraph (1) (b) of the Convention.
• China: The People's Republic of China does not consider itself to be
bound by subparagraph (b) of paragraph 1 of article 1.
• Saint Vincent and the Grenadines: “The Government of Saint Vincent
and the Grenadines declares that Saint Vincent and the Grenadines will
not be bound by subparagraph 1 (b) of Article 1 of the Convention.”
• USA: "Pursuant to article 95 the United States will not be bound by
subparagraph (1) (b) of Article 1".
CISG IN A NUTSHELL
• Lao People's Democratic Republic (2019): “In accordance with article

95 of the United Nations Convention on Contracts for the International
Sale of Goods (CISG), the Government of the Lao People’s Democratic
Republic declares that it will not be bound by subparagraph (1) (b) of
article 1 of the Convention and will apply the Convention to Contracts of
Sale of Goods only between those parties whose place of business are in
different States when the States are Contracting States.”
• Singapore: "In accordance with article 95 of the said Convention, the
Government of the Republic of Singapore will not be bound by sub-
paragraph (1) (b) of article 1 of the Convention and will apply the
Convention to the Contracts of Sale of Goods only between those
parties whose places of business are in different States when the States
are Contracting States.“
CISG IN A NUTSHELL
• Germany: Germany did not make an Article 95 reservation when

ratifying to the Convention, but made an interpretative declaration that
relates to certain effects of Article 95 reservations made by other
Contracting States
‘The Government of the Federal Republic of Germany holds the view that
Parties to the Convention that have made a declaration under article 95 of
the Convention are not considered Contracting States within the meaning
of subparagraph (a) (b) of article 1 of the Convention. Accordingly, there is
no obligation to apply - and the Federal Republic of Germany assumes no
obligation to apply - this provision when the rules of private international
law lead to the application of the law of a Party that has made a declaration
to the effect that it will not be bound by subparagraph (1) (b) of article 1 of
the Convention.’
CISG IN A NUTSHELL
Netherlands:
• Article 2 of the Dutch Implementing CISG Act dated
December 18, 1991 request foreign judges in Article
95 reservation states not to apply the Dutch Civil
Code provisions on sales (Book 7, Title 1 of the Civil
Code) but rather CISG, if Dutch law were to be
applicable by virtue of the local conflict rule.
• This suggestion is of course not binding on foreign
courts but by enacting this Dutch solution the
legislator has indicated that under Dutch law it
prefers a solution which enhances uniformity rather
than one that relies on local Dutch law
CISG IN A NUTSHELL
CISG-AC opinion 15:
1. A declaration under Article 95 excludes the declaring Contracting

State's obligation under public international law to apply the Convention in
accordance with Article 1(1)(b). However, it does not prevent the courts of
such a State from applying the Convention when their rules of private
international law lead to the application of the law of a Contracting State.
2. A declaration under Article 95 is without any effect for the

Convention's applicability in accordance with Article 1(1)(a). In applying Article
1(1)(a), it is irrelevant whether the forum State has made an Article 95
declaration or whether one (or both) parties to the sales contract have their
place of business in a State which has made an Article 95 declaration.
3. When the forum is in a Contracting State that has made no declaration

under Article 95, the Convention applies in accordance with Article 1(1)(b)
even when the rules of private international law lead to the application of the
law of a Contracting State that has made an Article 95 declaration.
CISG IN A NUTSHELL
Module: The issue of applicability
1. CISG - A brief history
2. Structure of the CISG
3. Scope of application
4. Exclusion of the CISG

CISG IN A NUTSHELL
4. EXCLUSION OF THE CISG
• Overview
• Classification
• Implicit exclusion: Variations
CISG IN A NUTSHELL
4. EXCLUSION OF THE CISG
Art 6:
The parties may exclude the application
of this Convention or, subject to article
12, derogate from or vary the effect of
any of its provisions.
CISG IN A NUTSHELL
4. EXCLUSION OF THE CISG: OVERVIEW

• the principle of party autonomy
expressed in Art. 6 CISG permits parties to
agree to exclude its application, at the
time of or after the conclusion of the
contract.
• An agreement to exclude the CISG is
governed by the rules on contract
formation and modification in Arts 11, 14-
24, 29 CISG.
CISG IN A NUTSHELL
4. EXCLUSION OF THE CISG: CLASSIFICATION
Ex-ante exclusion
e.g. the form of a contract clause
purporting to “opt out” of the CISG
Ex-post exclusion
e.g. agreements made during court
proceedings prior to a court decision on
applicable laws
CISG IN A NUTSHELL
4. EXCLUSION OF THE CISG: CLASSIFICATION

• Express exclusion
e.g. ‘Australian law applicable under
exclusion of UNCITRAL law’.
• Implicit exclusion
e.g. ‘ These terms and conditions and the
transactions contemplated hereby shall be
governed by, and construed in accordance
with the laws of England’.
CISG IN A NUTSHELL
Implicit exclusion
• It can be an issue of some difficulty in
determining whether the application of the
CISG is implicitly excluded.
• The intent of the parties to exclude must be
determined in accordance with Art. 8 CISG.
CISG IN A NUTSHELL
ART 8 negotiations
Parties’s intention
reasonable interpretation
usages
CISG IN A NUTSHELL
4. EXCLUSION OF THE CISG: VARIATIONS

Implicit exclusion (1)
#1: Where the CISG is applicable by virtue of Article
1(1)(a), but the parties agree to choose, either in
contract or in subsequent legal proceedings, the law
of a contracting state (such as Vietnam) as the proper
law of their contract, does this choice of law oust the
CISG?
• Prevailing view: A mere choice of the law of a
contracting state, without being specifically confined
to its domestic law, does not of itself constitute such
an implicit exclusion.
CISG IN A NUTSHELL

• #2: Choice of an expressly specified
domestic statute or code where that
would otherwise be displaced by the
CISG’s application.
→Drafting History: ‘referring to the title of
[a municipal law]’ was seen as potential
evidence of parties’ intent to exclude.
CISG IN A NUTSHELL
Case law:
Germany: German Civil Code BGB,
German Commercial Code HGB
Austria: Austrian Consumer Protection
Act or Austrian Commercial Code
The USA: ‘Uniform Commercial Code’
Hungary: Hungarian Civil Code?
CISG IN A NUTSHELL

• #3: Choice of the law of a territorial
unit of a Contracting State? (e.g
choices of the law of ‘California’, the
‘Province of British Columbia’,‘the state
of Pennsylvania’ )
CISG IN A NUTSHELL
Implicit exclusion
ThyssenKrupp v. Sinochem: Guiding case of Chinese SPC
• A contract between a German seller and a Chinese
buyer contained a choice of law clause designating
the law of New York as the proper law of the
contract. The SPC held that the parties “had not
excluded its application.” The CISG remained
applicable by virtue of Article 1(1)(a). The chosen
law of New York was to supplement the CISG on
matters not covered by the CISG.
CISG IN A NUTSHELL
Exclusion of the CISG in Chinese

courts:
‘while a choice of Chinese law in the contract
will not per se exclude the application of the
CISG, the same choice made in court
proceedings will be given such an exclusory
effect provided the parties so intend.’
CISG IN A NUTSHELL

• #4: A reference to INCOTERMS = intent
to exclude the CISG?
2. DOMESTIC LAW
2.1. Application of domestic law
2.1. APPLICATION OF DOMESTIC
LAW
- It is agreed in the contract at the time
the contract is concluded
- It is agreed by the parties after the
contract is concluded
- It is referred by the applicable int’l
treaty
- It is decided by the court/arbitral
tribunal who has the jurisdiction to
settle the dispute
2.1. APPLICATION OF DOMESTIC
LAW
‘In default of a law declared applicable by the
parties under the conditions provided in the
preceding Article, a sale shall be governed by
the domestic law of the country in which the
vendor has his habitual residence at the time
when he receives the order.’
(Art 3- the Convention on the Law
Applicable to Int’l Sales of Goods – The
Hague 1955)
WHICH LAW SHOULD BE CHOSEN?
• RESTRICTIONS:
– Art 670.2 Civil Code 2015; A.481 Procedure Code
2015
– Art 683.4 Civil Code 2015.
– Conflict with the public orders or general principles
of VN’ laws (Art 670.1 Civil Code 2015; Art 5.2 Law
on Commerce2005; Art 5.3 VN Maritime Code
2015)
Article 670 CIVIL CODE
1. A foreign law referred to [to which reference is made]
shall not apply in the following cases:
(a) The consequences of application of the foreign law are
inconsistent with the fundamental principles of the law
of Vietnam;
(b) It is impossible to determine the contents of the
foreign law although necessary measures have been
applied in accordance with the law on civil proceedings.
2. Where a foreign law does not apply in accordance with
clause 1 of this article, the law of Vietnam shall apply.
Article 481 CIVIL PROCEDURE CODE
If the Vietnamese Court apply a foreign law to settle a civil case involving foreign
element according to provisions of Vietnamese law and/or of an International treaty
to which the Socialist Republic of Vietnam is a signatory, the responsibility for
determining and providing foreign shall be performed as follows:
1. If the involved party of a civil case is allowed to choose a foreign law to be applied,
he/she shall provide the foreign law he/she has chosen for the Court being in charge
of such case. The involved party shall be responsible for the accuracy and legitimacy
of the foreign law he/she provides for the Court.
If involved parties fail to agreed with each other about the foreign law to be chosen
or in necessary cases, the Court shall request the Ministry of Justice, the Ministry of
Foreign Affairs, consular offices of the Socialist Republic of Vietnam in foreign
countries or request the diplomatic missions of foreign countries in Vietnam (via the
Ministry of Foreign Affairs) to provide the foreign laws;
2. If Vietnamese law and/or International treaties to which the Socialist Republic of
Vietnam is a signatory provide for that foreign laws shall be applied, the involved
parties may provide foreign laws for the Court or the Court shall request the Ministry
of Justice, the Ministry of Foreign Affairs or consular offices of the Socialist Republic
of Vietnam in foreign countries to provide it with foreign laws;
3. The Court may request agencies, organizations and individuals professional in
foreign laws to provide it with information about foreign laws;
4. Past the 06-month time limit from the date of request for provision of foreign laws
as provided for in this Article, if there is no response, the Court shall apply
Vietnamese law to settle the civil case.
Article 683.4 CIVIL CODE
Where the subject matter of a contract is
immoveable property, the law applicable to
transfer of ownership rights and other rights
with respect to property being immoveable
property, [applicable to] lease of immoveable
property or use of immoveable property in
order to guarantee the performance of
obligations shall be the law of the country in
which the immoveable property is located.
This contract, and all questions relating to its
formation, validity, interpretation or
performance shall be governed by…
- the law of Vietnam
-PICC
“Questions relating to this contract that are not settled by the
provisions contained in the contract itself shall be governed by the
United Nations Convention on Contracts for the International
Sale of Goods (Vienna Sales Convention of 1980, hereafter
referred to as CISG).
Questions not covered by the CISG shall be governed by the
UNIDROIT Principles of International Commercial Contracts
(hereafter referred to as UNIDROIT Principles), and to the extent
that such questions are not covered by the UNIDROIT Principles,
by reference to [specify the relevant national law by choosing one
of the following options:
The applicable national law of the country where the Seller has
his place of business, or
The applicable national law of the country where the Buyer has
his place of business, or
The applicable national law of a third country (specify the
country).]”
3. INTERNATIONAL TRADE
PRACTICES
3.1. Application of Int’l trade practices
3.2. Remarks
3.1. APPLICATION OF INT’L
TRADE PRACTICES
• Where it is agreed by the parties

• Where it is referred by the applicable law.
• In the case where the applicable law cannot
settle the dispute, the international trade
practices may be invoked.
3.2. REMARKS
1. The contract No.170211 VCT-FETA on
17/1/2011 b/w VIET COTTON YARN
INVESTMENT TRADING JSC & FETA
TEKSTIL SAN.TIC.LTD.STI:
“ ALL OTHER CONDITIONS, WHICH NOT
STATED IN THIS CONTRACT, WILL REFER
TO INCOTERMS 2000”
2. The contract No. BVQA400 b/w FORMOSA
INDUSTRIES CORPORATION & NANYA
PLASTICS CORPORATION:
“ The INCOTERMS 2000 will be used for this
contract”
HOW TO USE INCOTERMS® 2010
What do INCOTERMS® deal with?
• The principal duties of the seller.
• The principal duties of the buyer.
• Transfer of risks – place and point in time.
• Allocation of all costs incurred from dispatch to
arrival at the place or port of destination.
• Formalities (e.g. customs formalities) for
import, export or transit.
What do INCOTERMS® not deal with?

• Questions of ownership.
• Breach of contract and the legal consequences.
• Declarations of indemnity.
• Delivery options.
• Modes of payment.
• Notice of defects.
Notes
• It is not mandatory to use INCOTERMS® in a
sale contract.
• INCOTERMS® are not price clauses, but do have
an impact on the pricing.
• Sales contracts which are based on a former
version (e.g. INCOTERMS® 2000) remain valid
according to the terms of that version.
Notes
• Buyers and sellers should refer to the
appropriate version of the INCOTERMS®
e.g. FOB Hamburg, INCOTERMS® 2010.
• It is possible to add clauses or change the
wording of INCOTERMS®.
e.g. CFR Charleston port USA incl. THC, CUC, ISPS in
Charleston.
FCA Vienna Airport loaded on aircraft.
DDP Hanoi Vietnam VAT unpaid.
III. REQUIREMENTS FOR A VALID INT’L SALE OF
GOODS CONTRACT
III. REQUIREMENTS FOR A VALID
CONTRACT
1. Parties to the contract
2. Forms of the contract
3. Content of the contract
4. Objects of the contract
1. PARTIES TO THE CONTRACT
- VN: Decree No. 187/2013/NĐ-CP
- Competence to enter into a contract:
+ Legal representative
+ Authorized representative
1. PARTIES TO THE CONTRACT
• Exceed the sphere of authorization?

• The legal representative knows but shows no
objection within a reasonable period?
See more:
- Art 142-143 Civil Code 2015
- Resolution No. 04/2003 of the Judges Council of
the Supreme People’s court
Article 674 CIVIL CODE
1. The capacity for civil acts of individuals shall be
determined in accordance with the law of the country of
which such person holds nationality, except in the case
provided in clause 2 of this article.
2. Where a foreign individual establishes or performs civil
transactions in Vietnam, the capacity for civil acts of such
foreign individual shall be determined in accordance with
the law of Vietnam.
3. The determination of whether an individual has lost
capacity for civil acts, has difficulties in being aware of, or
controlling his or her own acts or has restricted capacity for
civil acts in Vietnam must comply with the law of Vietnam.
CIVIL CODE
Article 19 Capacity for civil acts of individuals
The capacity for civil acts of an individual shall be the
capability of the individual to establish and exercise
civil rights and perform civil obligations through his or
her acts.
Article 20 Adults
1. Adults are persons who are eighteen (18) or more
years of age
2. An adult shall have full capacity for civil acts except
in the circumstances provided in articles 22, 23 and 24
of this Code.
CIVIL CODE
Article 22 Loss of capacity for civil acts
1. Where a person is incapable of being aware of or controlling
his or her own acts due to any mental or other illness, a court
shall, based on the conclusion of forensic mental examination
and at the request of a person with related rights or interests, or
a relevant agency or organization, issue a decision declaring the
former person as a person who has lost capacity for civil acts.
Where the basis on which a person has been declared as having
lost the capacity for civil acts no longer exists, the court shall, at
the request of such person or any person with related rights or
interests, or a relevant agency or organization, issue a decision
revoking the decision declaring the loss of capacity for civil acts.
2. Civil transactions of a person who has lost the capacity for civil
acts must be established and performed by his or her legal
representative.
ART 142 CIVIL CODE
1. A civil transaction entered into and performed by an unauthorized person
shall not give rise to rights and obligations with respect to the principal,
except in one of the following cases:
(a) The principal has recognized the transaction;
(b) The principal knew but has not objected within a reasonable period;
(c) The principal is at fault, resulting in the fact that the transacting person did
not know or could not have known that the person who entered into or
performed the civil transaction with him or her was unauthorized.
2. Where a civil transaction established or performed by an unauthorized
person does not give rise to rights and obligations with respect to the
principal, the unauthorized person must, nevertheless, fulfil obligations to the
person with whom he or she transacted, unless such person knew or should
have known that the representative was unauthorized but still carried out the
transaction.
3. A person having transacted with an unauthorized person has the right to
terminate unilaterally the performance of or to rescind the civil transaction
entered into and to demand compensation for any loss and damage, except
where such person knew or should have known that the representative was
unauthorized but still carried out the transaction or in the case prescribed in
clause 1(a) of this article.
ART 143 CIVIL CODE
1. A civil transaction entered into and performed by a representative beyond his or
her scope of representation shall not give rise to rights and obligations of the principal
with respect to that part of the transaction which exceeded the scope of
representation, except in one of the following cases:
(a) The principal has agreed;
(b) The principal knew but has not objected within a reasonable period;
(c) The principal is at fault, resulting in the fact that the transacting person did not
know or could not have known that the person entered into or performed the civil
transaction with him or her beyond the scope of representation.
2. Where a civil transaction established or performed by a representative beyond the
scope of representation does not give rise to rights and obligations with respect to
that part of the transaction established or performed which exceeded the scope of
representation, the representative must fulfil obligations to the person with whom he
or she transacted with respect to that part of the transaction which exceeded the
scope of representation, unless such person knew or should have known that the
scope of representation was exceeded but still carried out the transaction.
3. A person having entered into a transaction with such representative has the right to
terminate unilaterally or rescind the civil transaction with respect to that part which is
beyond the scope of representation or with respect to the entire transaction and
demand compensation for any loss and damage, except where such person knew or
should have known that the scope of representation was exceeded but still carried
out the transaction or in the case prescribed in clause 1(a) of this article.
2. FORM OF THE CONTRACT
• Written form or equivalent: Viet Nam (Art

27.2, Law on Commerce), China, Argentina,
Chile, Belarus, Hungary, Ucraina…
• The US: (Art 2.201, UCC): a contract for the
sale of goods for the price of $500 or more shall
be made in writing
• CISG 1980: Art 11 & Art 96
3. CONTENT OF THE CONTRACT
A. Are there any clauses mandatory in the
contract?
B. The content must not be contrary to the

laws
A. Mandatory clauses in the
contract
- Viet Nam: Art 398 – Civil Code
- CISG 1980: Art 19.3
COMMERCIAL LAW 1997
Article 50 Principal Contents of Contracts for Sale and Purchase of Goods
Contracts for sale and purchase of goods must contain the following principal
contents:
1. Name of goods;
2. Quantity;
3. Specifications, quality;
4. Price;
5. Method of payment;
6. Location and time for delivery and receipt of goods.
In addition to the principal contents stipulated in this article, parties may
agree on other contents of the contract.
ART 398 – CIVIL CODE 2015
1. Parties to a contract have the right to agree on
the contents in the contract.
2. A contract may contain the following contents: (a)
Subject matter of the contract; (b) Quantity and
quality; (c) Price and method of payment; (d) Time-
limit, place and method of performing the contract;
(dd) Rights and obligations of the parties; (e)
Liability for breach of contract; (g) Method of
resolving disputes.
4. OBJECT OF THE CONTRACT
- Goods banned from export and import
- Goods imported and exported under
conditions
- Goods freely imported and exported
(See more: Appendix 1-3 – Decree
187/2013/NĐ-CP)
IV. OFFER AND ACCEPTANCE
OFFER AND ACCEPTANCE
OFFER
INT’L SALE OF
+ GOODS
CONTRACT
ACCEPTANCE
Forms:
- Offer + Acceptance = Contract
- Offer signed by both the seller and buyer =
Contract
1. OFFER
+ CISG 1980: Art.14 → Art.24
+ Civil Code 2015: Art.386 → Art. 397

Contract formation under the CISG
OFFER ACCEPTANCE
• Form of acceptance (Art CONTRACT
• Criteria for an offer
18) • The time when the
(Art 14)
• Counter-offer (Art 19) contract is
• Withdrawal (Art 15)
• Time allowed for concluded (Art 23-
• Revocation (Art 16) 24)
acceptance (Art 20-21)
• Termination (Art 17)
• Withdrawal (Art 22)
1. OFFER
1. Criteria for an offer

2. Withdrawal and revocation of an offer
Criteria for an offer
1 - Việt Nam: Art 386 Civil Code
- CISG 1980: Art 14
ART 386.1
Offer to enter into a contract means a
clear expression by the offeror of its
intention to enter into a contract and to
be bound by such offer made to
another determined party or to the
public (hereinafter collectively referred
to as the offeree).
ART 14 CISG 1980
(1) A proposal for concluding a contract addressed
to one or more specific persons constitutes an
offer if it is sufficiently definite and indicates the
intention of the offeror to be bound in case of
acceptance. A proposal is sufficiently definite if
it indicates the goods and expressly or implicitly
fixes or makes provision for determining the
quantity and the price.
(2) A proposal other than one addressed to one or
more specific persons is to be considered merely
as an invitation to make offers, unless the
contrary is clearly indicated by the person
making the proposal.
REMARKS
• Inquiries
• Mass distribution of a catalogue of
merchandise
• Brochures
• Advertisement
→DISCLAIMER SHOULD BE PROVIDED SUCH AS:

ART 14 VS ART 55 – OPEN PRICE
CONTRACT
‘Where a contract has been validly concluded
but does not expressly or implicitly fix or
make provision for determining the price, the
parties are considered, in the absence of any
indication to the contrary, to have impliedly
made reference to the price generally charged at
the time of the conclusion of the contract for
such goods sold under comparable circumstances
in the trade concerned.’
ART 14 VS ART 55 – OPEN PRICE
CONTRACT
Case law:
In the majority of cases, the courts and arbitral
tribunals came to the conclusion that a contract
had been formed while in rare cases a different
result was reached
WITHDRAWAL AND
2 REVOCATION
- CISG: Art 15.2, Art 16
- VN: Art 389, Art 390 Civil Code
WITHDRAW REVOKE
OFFER REACHES DISPATCHES ACCEPTANCE
2 EXCEPTIONS ( Art.16.2)
ART 389 CIVIL CODE 2015
An offeror may modify or withdraw an offer to enter
into a contract in the following cases:
(a) The offeree receives notice of modification or
withdrawal of the offer prior to or at the same time as
receipt of the offer;
(b) The offeror clearly specified the circumstances in
which the offer could be modified or withdrawn and
such circumstances have in fact arisen.
An offeror may revoke the offer to enter into a

contract if such right was specified in the offer
and the offeree receives the notice of revocation
of the offer prior to the offeree providing a notice
of acceptance of the offer to enter into the
contract.
2. ACCEPTANCE
+ CISG 1980: Art.14 → Art.24
+ Civil Code 2015: Art.386 → Art.397

2. ACCEPTANCE
1. the offeree shall accept the entire

content of the offer
2. the acceptance must be received
within the time limitation set forth in
the offer
3. the acceptance shall not be withdrawn
The offeree shall accept the
1 entire content of the offer
- Civil Code 2015: Art 392, 393

- CISG 1980: Art.19.2; Art.19.3
“Acceptance of an offer to enter into a contract

means a reply by the offeree accepting the
entire contents of the offer”
→ ‘Mirror image’ rule
ART.19 CISG 1980
(1) A reply to an offer which purports to be an acceptance but
contains additions, limitations or other modifications is a
rejection of the offer and constitutes a counter-offer.
(2) However, a reply to an offer which purports to be an
acceptance but contains additional or different terms which do
not materially alter the terms of the offer constitutes an
acceptance, unless the offeror, without undue delay, objects
orally to the discrepancy or dispatches a notice to that effect. If
he does not so object, the terms of the contract are the terms of
the offer with the modifications contained in the acceptance.
(3) Additional or different terms relating, among other things, to
the price, payment, quality and quantity of the goods, place and
time of delivery, extent of one party's liability to the other or
the settlement of disputes are considered to alter the terms of
the offer materially.
THE ACCEPTANCE MUST BE
2 RECEIVED WITHIN THE TIME
LIMITATION SET FORTH IN THE
OFFER
- CISG: ART.18, ART.21

- VN: ART 394
FORMS OF ACCEPTANCE
- Written forms
- Oral form
- Performing an act
- SILENCE = ACCEPTANCE?
+ CISG (Art 18.1)
+ VN (Art 393 Civil Code)
The acceptance shall not be
3 withdrawn
- VN: Art 397 Civil Code
- CISG: Art 22
V. TERMS OF THE CONTRACT
V. TERMS OF THE CONTRACT
1. Name & addresses of parties

2. Commodity
3. Quantity
4. Quality
5. Payment
6. Delivery
7. Choice of Law
8. Dispute resolution
1. NAME & ADDRESSES OF PARTIES
+ Specified in the enterprise registration certificate

+ Branch of a company?
+ New partners: Check the legality?
LEGALITY OF THE FOREIGN PARTNERS
• Why to check?
• What to check?
• How to check?
LESSONS LEARNED FROM UNIMEX THÁI
BÌNH
❑ Unimex Thái Bình sold 10.000MT of rice to PAL-
Algérie, CIF Incoterms 1990
❑ Samoa Network (SN) (Singapore) is chartered to
carry goods
❑ Prepaid freight is USD 300.000
❑ SN received the goods and vanished
❑ Damage: 10.000MT of rice and USD 300.000
120
LESSONS LEARNED FROM UNIMEX THÁI
BÌNH
What should Unimex Thái Bình do?
- Bring SN to the court?
- Address of SN: C/O ….
- SN - “ghost company”
- Failed to sue
2. Commodity/ description of goods
- Uniform understandings of parties to the
contract
- Both the trade name and scientific name
should be incorporated
- Consistency among various documents
EXAMPLES
• Vietnamese long grain white rice of 10% broken,
crop 2005
• Two-litre multi rice cooker, Natio brand, model
FX12, made in Japan, 2003
3. QUANTITY
- Tolerance
- Franchise
3. QUANTITY
‘Coffee covered by this contract term is sold on

shipped weights basis, and unless otherwise
specified on the contract, the franchise is 0.5%’
→ The seller is not liable for any loss in weight
within the specified franchise.
TOLERANCE
+ Variations:
“ ±….”, “about”, “approximately”, “more or less”…
+ Tolerance option:
- “ At seller’s option”
- “ At buyer’s option”
- “ At charterer’s option”
+ Tolerance price?
TOLERANCE
Article 30 –UCP 600:
a. “ The word “about” or “approximately” used in connection
with the amount of the credit or the quantity or the unit price
stated in the credit are to be construed as allowing a tolerance
not to exceed 10% more or 10% less than the amount, the
quantity or the unit price to which they refer
b. A tolerance not to exceed 5% more or 5% less than the
quantity of the goods is allowed, provided the credit does not
state the quantity in terms or a stipulated number of packing
units or individual items and the total amount of the drawings
does not exceed the amount or the credit”
FOR EXAMPLE
QUANTITY: 500 MT
(10% MORE OR LESS AT SELLER’S
OPTION AT CONTRACT PRICE)
4. QUALITY
4.1. Methods to denote quality
4.2. Quality Inspection

4. QUALITY
- By sample
- By standard or category
- By specifications
- By technical documents
- Dựa vào hàm lượng các chất chủ yếu trong
hàng
BY SAMPLE
“The specification of the goods shall be about as
per sample No.12FTS approved by both sides on
02 Jan 2018, sealed and signed by both parties;
such sample forms an integral part of this contract.
The samples are made into three (3) versions, to
be preserved by Seller, Buyer and The Vietnam
Superintendence and Inspection JSC
(VINACONTROL) as basis for dispute settlement.
Parties shall preserve these samplese until the
stipulated limitation of claim expires’’.
BY STANDARD OR CATEGORY
TCVN 4193: 2001 – VIETNAMESE COFFEE
STANDARD
TCVN 6096: 2004 – BOTTLE DRINKING WATER
See more at: www.tcvn.org.vn

BY SPECIFICATIONS
COMMODITY: LOVE SET WOODEN FURNITURE
01 TABLE (1.150 × 610 × 840)mm
01 LOUNGE ARMCHAIR (1.040 × 600 × 450)mm
02 LOVE ARMCHAIRS (590 × 610 × 840)mm
BY MAJOR CONTENTS OF THE
PRODUCT
EXPORTED RICE
BROKEN TẤM 10%MAX
MOISTURE ĐỘ ẨM 14%MAX
CHALKY GRAIN HẠT BẠC BỤNG 7%MAX
DAMAGED GRAIN HẠT HƯ 0,5%MAX
YELLOW GRAIN HẠT VÀNG 1%MAX
FOREIGN MATTER TẠP CHẤT 0,2% MAX

BY TECHNICAL DOCUMENTS
“ PRODUCT SPECIFICATION SHALL BE IN
CONFORMITY WITH TECHNICAL DOCUMENTS
NO…, SIGNED BY BOTH PARTIES ATTACHED
HEREIN. THIS DOCUMENT SHALL SERVE AS AN
INTEGRAL PART OF THE PRESENT CONTRACT”
DISCUSSION
1. “Up to export standard, 100% brand new”
2. “ The seller will make finished garments as the
counter sample which is signed and confirmed by
both parties”
3. “Goods are 100% brand new and packed products in
good condition for normal transportation by sea
and/or by air”
4. “Final at loading port as per Certificates of Quality/
weight issued by independent conveyor”
5. “As per sample approved by the Seller and upon
agreed by the Buyer”
4. QUALITY
4.2. QUALITY CHECK - INSPECTION

4.2. QUALITY CHECK - INSPECTION
A. Mandatory quality checking - inspection
B. Inspection agencies
E. Certificate of quality – Survey report

A. MANDATORY CHECK- INSPECTION
- MANDATORY CHECK AT LEAVING PORT
→ 3 possibilities:
1. Stated in the contract
2. Stated in the L/C
3. Regulations of sellers/buyers’countries
- MANDATORY CHECK AT DESTINATION PORT
→ Regulations of buyers’ countries
B. INSPECTION AGENCIES
- Clearly stated in the contract
- Not stated in the contract
E. Quality Certificate - Survey Report
• Absolutely binding
• Relatively binding
• Not binding
RELATIVELY BINDING
WHEN CAN SELLER/BUYER REJECT COQ?
- Fraud of the seller
- Mistakes and negligence of the surveying
agency
VI. REMEDIES FOR BREACH OF THE
CONTRACT
1. Exemptions for non-performance
2. Remedies for breach of the contract

1. EXEMPTIONS FOR NON-PERFORMANCE
- Vietnam’s law:
+ Law on Commerce: Art 294-295-296
+ Civil Code: Art 156.1; Art 351.2
- CISG: Art 79, Art 80
- PICC 2016: Art 7.1.7

ART 294 – LAW ON COMMERCE

+ A case of liability exemption agreed upon by the
parties
+ Force majeure event (Compared to Art 79.1 CISG)
+ A breach by one party is entirely attributable to the
other party's fault (Compared to Art 79.2)
+ A breach is committed by one party as a result of the
execution of a decision of a competent state
management agency which the party cannot know, at the
time the contract is entered into.
FORCE MAJEURE
 Art 156.1 Civil Code 2015: An event of force
majeure is an event which occurs in an objective
manner which is not able to be foreseen and
which is not able to be remedied by all possible
necessary and admissible measures being taken.
 Art 79.1 CISG 1980: A party is not liable for a
failure to perform any of his obligations if he
proves that the failure was due to an impediment
beyond his control and that he could not
reasonably be expected to have taken the
impediment into account at the time of the
conclusion of the contract or to have avoided or
overcome it or its consequences.
REMARKS (ART.295 LAW ON COMMERCE 2005)

• The party must promptly notify in writing the
other party of cases of liability exemption and
possible consequences thereof.
• Provide the evidence from qualified authority
• Comparisons: Art 79(4) CISG

Effects of exemptions on the rights and duties of

the parties
• Not liable for damages resulting from non-
performance
• Comparisons: Art 79(5) CISG
FORCE MAJEURE vs HARDSHIP
• Hardship: Art 420 – Civil Code

1. The change of circumstances shall be deemed fundamental
when it meets all following conditions:
a) The circumstances change due to objective reasons occurred
after the conclusion of the contract;
b) At the time of concluding the contract, the parties could not
foresee a change in circumstances;
c) The circumstances change such fundamentally that if the parties
know in advance, the contract has not been concluded or are
concluded, but with completely different content;
d) The continuation of the contract without the change in the
contract would cause serious damage to one party;
dd) The advantaged party has adopted all the necessary measures
in its ability, in accordance with the nature of the contract, cannot
prevent or minimize the extent of effect.
Effect of Hardship: Art 420 – Civil Code

2. In the case of basic circumstances change, the advantaged
party may request the other party to the re-negotiate the
contract in a reasonable period of time.
3. If the parties cannot reach an agreement on amending the
contract within a reasonable period of time, any of the parties
may request a court to:
a) Terminate the contract at a specific time;
b) Adapt the contract with a view to restoring its equilibrium
The court may only decide to adapt the contract in the event
that the termination of the contract would cause greater
damage than the cost to perform the contract if it is adapted
2. REMEDIES FOR BREACH OF CONTRACT
• Remedies available to the injured party under the
general contract law
payment
Buyer Seller
goods
• Contractual parties fully perform their obligations and
gain the benefits they bargained for.
• If a party fails to perform part or all of the required
duties under the contract, then breach of contract
occurs. The other party cannot get the benefits it
bargained for.
2. REMEDIES FOR BREACH OF CONTRACT
• What types of breach of contract are there?
Non-performance, delayed performance and
defective performance.
• What are the buyer’s remedies for the seller’s
breach?
• What are the seller’s remedies for the buyer’s
breach?
2.3. COMMON REMEDIES FOR BREACH THE CONTRACT
- Specific performance (Art 297→299 Law on

Commerce – Art 28; 46→48; 62→63 CISG)
- Penalty (Art 300-301 Law on Commerce)
- Damages (Art 302→306 Law on Commerce;
Art 74 → 77 CISG)
- Avoidance of the contract (Đ312 →315 Law
on Commerce; CISG: [49(1); 51(2); 64(1); 74;
73; 81-84]
SPECIFIC PERFORMANCE
(1) The seller has made non-delivery/delivered a part of goods

(2) The seller has delivered non-conforming goods
(3) The buyer failed to pay or take delivery
-- A grace period to be given for the buyer/seller to perform their

obligations
-- What happens if they fail to perform within the given grace
period?
SPECIFIC PERFORMANCE
• Relationships with other remedies

• ART 299 LAW ON COMMERCE 2005
• ART 48; 63 CISG
PENALTY
• Penalty means a remedy whereby the aggrieved
party requests the breaching party to pay an
amount of fine for its breach of a contract, if so
agreed in the contract (Art 300 – Law on
commerce 2005)
DISCUSSION
Should the Sellers fail to make delivery on time as stipulated
in the Contract, with exception of Force Majeure causes
specified in Clause 13 of this Contract, the Buyers have the
right to penalize the Sellers. Only in case the delay shipment
is more than 1 week. The penalty, however, shall not exceed
10% of the goods involved in the late delivery. The rate of
penalty is charged at 0.5% for every seven days starting
counting from 8th day of the delay, odd days less than seven
days should be counted as seven days.
PENALTY
• “The fine level for a breach of a contractual
obligation or the aggregate fine level for more than
one breach shall be agreed upon in the contract by
the parties but must not exceed 8% of the value of
the breached contractual obligation portion.”
(Art 301 Law on Commerce 2005 )
Exceptions:
+ Art 266 Law on Commerce 2005
+ Art 146.2 Law on Construction 2014
Compare: Art 418 Civil Code 2015
PENALTY
• Art 146.2 Law on Construction 2014
‘For works using state funds, the fine level must not
exceed 12% of the value of the violated contract’
PENALTY
RELATIONSHIPS WITH OTHER REMEDIES

- Art 307 Law on Commerce 2005
- Art 418 Civil Code 2015
DAMAGES
“ Liability to pay damages shall arise upon existence
of all of the following elements:
1. Breach of the contract;
2. Material loss;
3. Act of breaching the contract is the direct cause
of the loss.”
(Art 303 Law on Commerce 2005)
DAMAGES
CLASSIFICATION OF DAMAGES
• Loss suffered by the other party as a consequence

of the breach
• Loss of profit
DAMAGES
Principles of claiming damages
• The party claiming damages must bear the burden of

proof of the loss
• A party claiming damages must take such measures
as are reasonable in the circumstances to mitigate
the loss
DAMAGES
RELATIONSHIP WITH OTHER REMEDIES

• Art 307 Law on Commerce 2005
• Art 419 Civil Code 2015
• Limitation of damages clause/liquidated
damages clause: Art 419 & 360 Civil Code
ART 360 – CIVIL CODE 2015
‘Where there is any loss and damage resulting from

a breach of an obligation, the obligor must
compensate for the total loss and damage, unless
otherwise agreed or provided by law.’
AVOIDANCE OF THE CONTRACT
• Law on Commerce 2005: Art 312 → Art 315
• CISG: 49(1); 51(2); 64(1); 74; 73; 81-84
• Fundamental breach:
+ CISG: Art 25
+ Law on commerce: Art 3.13
ART 3.13 LAW ON COMMERCE
Fundamental breach means a contractual
breach by a party, which causes damage to the
other party to an extent that the other party
cannot achieve the purpose of the entry into the
contract.
ART 25 CISG
A breach of contract committed by one of the
parties is fundamental if it results in such
detriment to the other party as substantially to
deprive him of what he is entitled to expect
under the contract, unless the party in breach did
not foresee and a reasonable person of the same
kind in the same circumstances would not have
foreseen such a result.
Foreseeability and/or knowledge of
the detriment
• lack of foreseeability and knowledge pertains to the
detriment caused by the breach of contract, and not the
breach itself or its reasons
• The promisor’s knowledge or foreseeability of the
promisee’s expectations are relevant (only) for
interpreting and assessing the importance of the
obligation that has been breached, and its significance for
the promisee
• A promisee is only entitled to rely on something as a
‘substantial’ expectation ‘under the contract’ (Article 25) if
his contracting partner knew (or a reasonable person of
the same kind in the same circumstances would have
known) that, by entering into the contract, such a
particular expectation would be created.
the detriment
• Where an obligation’s importance has been clearly defined in the contract (e.g a
fixed date for delivery, making time ‘of the essence): the party in breach cannot
prevent avoidance of the contract by arguing that he did not foresee any detriment
to the promise
• Where an obligation’s importance has been addressed during negotiations
+ If the buyer informs the seller about the obligations he has entered into
towards his own customers, their importance is discernible to both parties and the
consequences of their non-fulfilment foreseeable for the seller.
+ It may also have been made unequivocally clear during negotiations (and
provable) that if a certificate of examination, an export licence, etc were not obtained
by the seller, the buyer would have no interest in the contract, would not conclude a
contract without the inclusion of that obligation, and would therefore wish to avoid
the contract if that obligation were breached.
• In other cases: a question of interpreting the contract in accordance with Article
8(2) and (3) by asking whether a reasonable person of the same kind, e.g one
active in the same branch of the trade or economic sector, would have recognized
its importance.
the detriment
A reselling buyer who purchases certain ‘wholefood products’,
tomatoes, from a new supplier. The buyer only operates in the
market for organic food products and its customers are
environmentally conscious. At the time of conclusion of the contract,
the buyer did not inform the seller about the importance of this eco-
friendly feature of the goods. Because of the shortage in organic
tomatoes, the supplier delivers tomatoes that were at some point
treated with chemical fertilizer. If the buyer wants to avoid the
contract because of delivery of non-conforming goods, it must show
that it is substantially derived of what it was entitled to expect under
the contract. If it can show that it cannot resell the goods within its
normal course of business, the question of foreseeability of this result
for the supplier becomes decisive.
• Effects of avoidance:
+ CISG: Art 81-84
+ Law on commerce: Art 314
CARRIAGE OF GOODS BY SEA
CONTRACT
READING MATERIALS
1. Richard Schaffer, Filiberto Agusti and Lucien
Dhooge (2014) - International Business Law and
Its Environment (See Chapter 6 – p.151-178)
2. Ray August, Don Mayer and Michael Bixby (2013)
International Business Law: Text, cases and
readings (See Chapter 6- p.622-656)
3. Indira Carr and Peter Stone (2018), International
Trade Law (See Chapter 5– p.158-168; p.277-315)
4. Nguyễn Thị Mơ, Law for doing business abroad
(2012) (See Chapter 5)
READING MATERIALS
1. Hague Rule 1924
2. Visby Rule
3. Hamburg Rule 1978
4. Vietnam Maritime Code 2015
5. Carriage of Goods by sea Act of the United
States – COGSA 1936
6. The UK Carriage of Goods by sea Act 1971
CHAPTER 4
I LINER CHARTERING
II VOYAGE CHARTER PARTY – VCP

I. LINER CHARTERING
1. Definition, main features and process of
liner tendering
2. Legal rules governing Bill of lading
3. Obligations of the parties to Liner chartering
4. Liability of the carrier

1. Definition, main features and
process of liner tendering
Definition
A liner is a ship which is employed in a service between
one port (or range of ports) and another port (or range of
ports). It does this with a regularity and frequency which
will conform to an advertised schedule which, in the
main liner trades, is on a fixed day of the week basis
(Institute of chartered Shipbrokers, 2011)
Main Features
• A liner is a common carrier that recalls the analogy of a bus
service.
• A liner almost always carries general cargo, very often in
small consignments.
• Bill of lading is evidence of a contract between the carrying
line and the shipper and it is rate indeed to alter by
negotiation any of the other terms and conditions of
carriage laid down by the liner operator.
• The freight paid by the shipper for liner transportation
(liner terms) includes the full cost of loading from the quay
and discharging it to the quay at destination. THC?
• There are no demurrage or dispatch under liner terms
Process of Liner tendering
• Step 1: Get Booking note from the Agent/ Carrier. Booking
note means an order from a shipper to book shipping space
with a carrier.
• Step 2: Fulfill the Booking note with needed information
such as: Name of shipper, Name of consignee, Port of
loading, Port of discharge, Discriptions of goods, Gross
weight, Measurement…
• Step 3: Get the Booking confirmation with necessary
information to prepare for delivering goods such as closing
time, container release…
• Step 4: Get the Bill of lading after cargoes have been
received or shipped on board.
2. LEGAL RULES GOVERNING B/L
1. International treaties
2. Domestic law
3. International mercantile customs and
usages.
2.1. INTERNATIONAL TREATIES
• Hague Rule
• Visby Rule
• Hamburg Rule
• Rotterdam Rule
THE HAGUE RULES 1924
(International convention for the Unification of Certain
Rules of Law relating to Bills of lading)
• Come into force: 02/6/1931

• State members: 88
• Content: 16 Articles
• The Hague Rules form the basis of national
legislation in almost all of the world's major
trading nations, and probably cover more than
90 per cent of world trade.
THE HAGUE RULES 1924
THE VISBY RULES 1968/1979
• Visby Rule 1968 has come into effect
on 23/6/1977
• Visby Rule 1979 has come into effect
on 14/2/1984
• Not all state members of Hague rule
are members of Visby rules
→ “Hague - Visby Rules”
THE HAMBURG RULES
The United Nations on the Carriage of
Goods by sea
• Come into force: 01/11/1992
• Content: 34 Articles
• State members:
+ 34 members
ROTTERDAM RULES
UN Convention on Contracts for the International
Carriage of Goods Wholly or Partly by Sea
• Adopted by the UN General Assembly

On 11 December 2008
• It has been ratified by 4 countries
• Not yet in force as they have been
ratified by only four states.
2.2. NATIONAL LAW
2.2.1. Principles of application
2.2.2. Sphere of application

2.2.1. PRINCIPLE OF APPLICATION
SPECIALISED LAW SHALL BE PREVAILED
+ Viet Nam:
1. Vietnam Maritime Code 2015
2. Decree No 140/2007/NĐ-CP
3. Decree 87/2009/NĐ-CP
+ The US: COGSA 1936
+ The UK: COGSA 1971
+ China: Maritime Code 1992
2.2.2. SPHERE OF APPLICATION
1. WHERE IT IS REFERRED BY B/L
CLAUSE PARAMOUNT :
“As far as this Bill of lading covers the
Carriage of the Goods by sea or inland
waterways, this Bill of Lading shall have effect
subject to the provisions of the International
Carriage of Goods by Sea Act of Japan,
enacted 13 June 1957, as amended 3 june
1992,.....”
2. WHERE IT IS DECIDED BY THE
COURT/ARBITRAL TRIBUNAL
ART 3.4 VN MARITIME CODE 2015:
“Any legal relation concerning a cargo shipping

contract shall be governed by the laws of the
country to which cargo is shipped as agreed upon
in this contract. ”
2.3. INTERNATIONAL MARITIME
PRACTICES
WHERE B/L AND LEGAL RULES

GOVERNING B/L DO NOT GOVERN
SPECIFIC MATTERS IN DISPUTE.
3. OBLIGATIONS OF PARTIES IN LINER
CHARTERING
3.1. Duties of the carrier
3.1.1. Obligation to provide a seaworthy
ship
3.1.2. Care of cargo
3.1.3. Obligation to issue a bill of lading
3.2. Duties of the charter
3.2.1. Obligation to provide goods
3.2.2. Obligation to pay to the carrier
3.1.1. Obligation to provide a seaworthy
ship
+ Art III Hague Rules 1924
+ Hamburg Rules 1978: Can be

inferred from Art 5.1
+ Art 150, 171- VN Maritime Code 2015

HAGUE RULES – ARTICLE III
The carrier shall be bound before and at

the beginning of the voyage to exercise
due diligence to:
(a) Make the ship seaworthy.
(b) Properly man, equip and supply the ship.
(c) Make the holds, refrigerating and cool
chambers, and all other parts of the ship in
which goods are carried, fit and safe for
their reception, carriage and preservation.
ART 150 VN MARITIME CODE 2015
The carrier shall be bound before and at the

beginning of the voyage to exercise due
diligence to make the ship seaworthy; properly
man, equip and supply the ship; make the holds,
refrigerating and cool chambers, and all other
parts of the ship in which goods are carried, fit
and safe for their reception, carriage and
preservation of goods.
DUE DILIGENCE
3
CARGOWORTHINESS
2 OF THE VESSEL
THE EFFICIENCY OF THE CREW
1 AND EQUIPMENT
PHYSICAL CONDITION OF THE SHIP
3.1.2. CARE OF CARGO
• Art 3.2 Hague Rules 1924
• Art 171 VN Maritime Code 2015

3.1.2. CARE OF CARGO
• “… the carrier shall properly and carefully load,
handle, stow, carry, keep, care for, and discharge
the goods carried..”
(Art 3.2 Hague Rules)
• “Bear responsibility for loading and unloading of
goods in a careful and appropriate manner, and
carefully preserve goods during the carriage
process”
(Art 171.1, VN Maritime Code)
3.1.3. Obligation to issue a B/L
Art 3.3 Hague Rules

‘After receiving the goods into his charge the
carrier or the master or agent of the carrier
shall, on demand of the shipper, issue to the
shipper a bill of lading…’
2. OBLIGATION OF THE CHARTERER
• PROVIDE GOODS TO THE CARRIER
• PAY FREIGHT
4. LIABILITY OF THE CARRIER
4.1. The period of liability

4.2. Time limitations
4.3. Limitation of Liability
4.4. The Immunities of the Carrier
4.5. Trách nhiệm của người chuyên chở
trong một số trường hợp cụ thể
4.1. THE PERIOD OF LIABILITY
• Group 1: From tackle to tackle

+ Hague Rules
+ US, Singapore…
• Group 2: From taking in charge until
delivery.
+ Hamburg rules: Art 4
+ VN Maritime Code: Art 170
+ China, Ukraine, Poland, Thailand,…
4.2. TIME LIMITATION
• Hague Rules (Art 3.6)

• Hamburg Rules 1978 (Art 20.1; 20.2)
• VN Maritime Code 2015 (Art 169)
4.2. TIME LIMITATION
• HAGUE RULES: In any event the carrier and the ship shall be discharged
from all liability in respect of loss or damage unless suit is brought
within one year after delivery of the goods or the date when the
goods should have been delivered.
• Hamburg RULES: Any action relating to carriage of goods under this

Convention is time-barred if judicial or arbitral proceedings have not
been instituted within a period of two years. The limitation period
commences on the day on which the carrier has delivered the goods or
part thereof or, in cases where no goods have been delivered, on the
last day on which the goods should have been delivered.
• VN: The statute of limitation for submission of a claim on loss of and

damage to the goods shall be 01 year from the date of discharge of the
goods or the date on which the goods should have been delivered to
the consignee.
4.3. LIMITATION OF LIABILITY
• Hague Rules 1924 (Art 4.5)

• Protocol 1968 (Art 2)
• Protocol 1979 (Art 2)
• Hamburg Rules 1978 (Art 6)
• VN Maritime Code (Art 152)
→ Late delivery (Hamburg = VN Maritime
code)
4.4. THE IMMUNITIES OF CARRIER
• Hague Rules 1924 : Art 4.2
• Hamburg Rules 1978: Art 5.1
• VN Maritime Code: Art 151.2

4.4. THE IMMUNITIES OF CARRIER
REMARKS:
- Navigation & management of the ship
- Nautical Faults vs Commercial Faults
4.5. LIABILITY OF CARRIERS IN
CERTAIN CIRCUMSTANCES
• DANGEROUS GOODS
• DECK CARGO
• DEVIATION
DANGEROUS GOODS
• Art 4.6 Hague rules 1924

• Art 13 Hamburg rules 1978
• Art 155 VN Maritime Code 2015
DECK CARGO
• Hamburg Rule 1978: Art 9

• Hague Rule: No stipulation
• VN Maritime Code 2015: Art 172
DEVIATION
+ Lawful deviation: deviation for the purpose

of avoiding danger to crew, vessel and cargo
and deviation for the purpose of saving life or
property, are lawful deviations
+ Unlawful deviation
a breach of contract and the charterers can
entitled to damages as well as, in some cases,
to cancel the charter agreement.
II. VOYAGE CHARTER PARTY (V./CP)
1. Definition
2. Standard forms of voyage charterparty
3. Main contents of Voyage charterparty
4. Obligations of the parties to the VCP
5. Lien on cargo
1. DEFINITITON
A voyage charterparty is a charterparty under

which the shipowner charters out and the
charterer charters in the whole or part of the
ship’s space for the carriage by sea of the
intended goods from one port to another and
the charterer pays the agreed amount of
freight.
Charter party → “Carta Partita” (divided
document)
2. STANDARD FORMS OF VCP
• Group 1: General cargo
+ GENCON (1922, 1976, 1994),
SCANCON, NUVOY…
• Group 2: Specific cargo
+ NOGRAIN 89
+ CEMENCO
+ EXONVOY, MOBILVOY 96, SHELLVOY
+ CUBARSUGAR
3. MAIN CONTENTS OF VCP
i) Date, name and address of shipowner and·charterer.
ii) Description of ship - name and where registered, Tonnages, capacities,
and cargo gear relevant to the cargo in ·question.
iii) Nature of goods to be shipped and in what manner.
iv) Name of loading and discharging ports.
v) Details of routes to be followed and what conditions the vessel might
be allowed to deviate from it.
vi) Date vessel is to arrive at the loading port.
vii) The freight rate and currency.
viii) Whose agents are to be used.
ix) How the problems of strikes, ice congestion in ports, shortage of cargo
etc.are to be settled
x) Arbitration clause.
(Muthiah & Krishna Veni, 2010)
3. MAIN CONTENTS OF VCP
1. Preamble 11.Both to blame collision

2. Owner’s responsibility 12. G/A and new Jason
3. Deviation 13. Taxes and dues
4. Payment of freight 14. Agency
5. Loading and discharging 15 Brokerage
6. Laytime 16 General strike
7. Demurrage 17 War risks
8. Lien 18 General ice
9. Canceling 19 Law and arbitration
10. Bill of lading
Standard VCP of Gencon (1994)
4. OBLIGATIONS OF THE PARTIES
TO THE VCP
4.1. OBLIGATIONS OF THE CARRIER
4.2. OBLIGATIONS OF THE CHARTERER

5. LIEN ON CARGO
A lien is a right given to a shipowner to retain

possession of the cargo at the port of
discharge as security for the payment of
freight or other charges. It is noted that lien
may arise at common law or may be
provided for in an express term of the
contract of carriage.
- VN Maritime Code: Art 167.4 and Art 157.2

DISPUTE RESOLUTION
Tran Thanh Tam (LLM, PhD Candidate)

Foreign Trade University – HCMC Campus
READING MATERIALS

2. Law on VN Commercial Arbitration 2010
3. Civil Procedure Code 2015
4. Decree No. 22/2017/NĐ-CP on
commercial mediation
4. New York Convention 1958
5. ICC Arbitration Rules
6. VIAC Arbitration Rules (Effective on
01/3/2017)
READING MATERIALS
1. Richard Schaffer, Filiberto Agusti and

Lucien Dhooge (2014) - International
Business Law and Its Environment (See
Chapter 3 – p.56-80)
2. Ray August, Don Mayer and Michael
Bixby (2013) International Business
Law: Text, cases and readings (See
Chapter 3- p.127-181)
3. Indira Carr and Peter Stone (2018),
International Trade Law (See Chapter 19
– p.629-652; chapter 20- p.654-669)
4. Nguyễn Thị Mơ, Law for doing
business abroad (2012) (See Chapter 6)
NEGOTIATION
CON- MEDIATION
TENT
LITIGATION (COURTS)
ARBITRATION
I. NEGOTIATION
1.1. Definition
1.2. Advantages and Disavantages
1.3. Remarks
1.1. DEFINITION
Negotiation is the process of reaching an

agreement by discussion
1.3. REMARKS
“Commercial disputes must be first resolved

through negotiations between the
parties…Where negotiation or conciliation
fails, commercial disputes may be resolved by
an arbitration body or a court.’’
( Art 239 Law on Commerce 1997)
→ NEGOTIATIONS ARE MANDATORY
1.3. REMARKS
Law on Commerce 2005:
• Art 237.1.e
• Art 40.2
1.3. REMARKS
- Time limit for negotiation/complaints?
Art 318 – Law on Commerce

II. MEDIATION
1. Definition:
Mediation involves the use of a third party
who transmits and interprets the
proposals of the principal parties and
sometimes advances independent
proposals
II. MEDIATION
2. Features:
• Non-binding, voluntary, conciliatory
• Both parties must be willing to be

assisted by an independent party
• Always reserve the right to other

courses of action
III. LITIGATION
A dispute between the parties is taken to

court through the commencement of a
lawsuit
III. LITIGATION
• Remember the 5 issues of litigation

with foreign parties:
1. It can take a long time

2. It is complicated
3. It is expensive
4. Be ready for anything to happen
5. Nothing is guaranteed (‘I can’t lose’)
Legal Names of disputing Parties
CRIMINAL LAW CIVIL LAW
• Prosecution(R) • Plaintiff
• Accused • Defendant
• Appellant
• Respondent
61
Parties
• Plaintiff commences the lawsuit
• Respondent defends the lawsuit

Litigation
• Plaintiff vs. Respondent
• Claim by Plaintiff against Respondent
• Demands relief, i.e. damages

III. LITIGATION
• Statement of Claim
• Statement of Defence
Which Level of Court
1. Regional court, Higher Court,
Supreme Court
2. Depends on the law of the

geographic jurisdiction where
the law suit is started
3. May depend on the $ value you

are suing for
COURT SYSTEM IN VN
- Supreme People’s Court
- High People’s Court
- Provincial People’s Court
- District People’s Court
- Miliary Court
(Art 3 – Law on organization of
People’s Courts 2014)
Which Level of Court
Vietnam:
Commercial disputes involving foreign
elements are settled by economic
tribunals in the People’s Province
Courts.
IV. ARBITRATION
ADVANTAGES
• Confidentiality
• Party autonomy
• Simplified procedures and faster
decisions
• Not subject to appeal on the merits
• Enforceable in approx 142 countries
CLASSIFICATION
- Ad-hoc Arbitration
- Institutional Arbitration
INSTITUTIONAL ARBITRATION
• ICC International Court of Arbitration

(LCIA)
www.iccwbo.org/court/arbitration
• Singapore International Arbitration
Centre
Website: www.siac.org.sg
• Japan Commercial Arbitration
Association
Website: www.jcaa.or.jp
• China International Economic and
Trade Arbitration
INSTITUTIONAL ARBITRATION
• Hong Kong International Arbitration

Centre (HKIAC)
Website: www.hkiac.org
• American Arbitration Association
Website: www.adr.org
• Thai Arbitration Institute
( Ministry of Justice)
ARBITRATION CENTERS IN VN
1. Vietnam International Arbitration Centre – VIAC
6th Floor, 9 Đào Duy Anh, Đống Đa, HN
2. Pacific International Arbitration Centre – PIAC
57-59 Hồ Tùng Mậu, Bến Nghé, HCM
3. Hochiminh City Commercial Arbitration Center –
TRACENT
460 Cách mạng Tháng tám,Tân Bình, HCM
ARBITRATION CENTERS IN VN
4. Vietnam Finance and Banking Commercial Arbitration
Centre – VIFIBAR– 569-573 Trần Hưng Đạo Dist 1 HCM
5. Finance Commercial Arbitration Centre – FCCA –
215/42 Nguyễn Xí, Bình Thạnh, TPHCM
6. Vietnam Lawyers’ Commercial Arbitration Centre –
VLCAC – 163/18 Xô Viết Nghệ Tĩnh – Bình Thạnh,
TPHCM
DISPUTE SETTELEMENT AT VIETNAM
PEOPLE’S COURTS FROM 2005 TO 2012
11995
8418
6574 6879
4748
3783
1978
1035
2005 2006 2007 2008 2009 2010 2011 2012
ARBITRATION VS COURT
• Economic Court • VIAC
– HCM City
People’s Court: 2015: 146 cases
1000 - 1100 cases
per year
50 cases / 0,25 cases/

year/ judge year/Arbitr
ator
Conditions for resolving dispute by
arbitration
• A dispute shall be resolved by arbitration if
the parties have an arbitration agreement.
ARBITRATION AGREEMENT
• Form: In writing or equivalent
+ Art 2 New York Convention 1958
+ Art 16 Law on VN Commercial
Arbitration 2010 (VNCAL)
ART 16 – VNCAL 2010
a) An agreement established via an exchange between the
parties by telegram, facsimile, telex, email or other form
prescribed by law;
b) An agreement established via the exchange of written
information between parties;
c) An agreement prepared in writing by a lawyer, notary or
competent organization at the request of the parties;
d) Reference by the parties during the course of a transaction to
a document such as a contract, source document, company
charter or other similar documents which contain an arbitration
agreement
e) Exchange of a statement of claim and defense which express
the existence of an agreement proposed by one party and not
denied by the other party.
ARBITRATION AGREEMENT
(?) What is the relationship between
arbitration agreement and contract?
An arbitration agreement shall exist totally

independently of the contract.
Any modification, extension or rescission of the
contract, or invalidity or unenforceability of the
contract shall not result in the invalidity of the
arbitration agreement.
(Art 19 – VNCAL)
ARBITRATION AGREEMENTS NULL
AND VOID
VNCAL 2010 (Art 18):
a) The dispute arises in a sector outside the competence for
arbitration prescribed in article 2 of this Law;
b) The person who entered into the arbitration agreement lacked
authority as stipulated by law.
c) The person who entered into the arbitration agreement lacked
legal capacity pursuant to the Civil Code;
d) The form of the arbitration agreement does not comply with
article 16 of this law;
e) One of the parties was deceived, threatened or coerced
during the process of formulation of the arbitration agreement
and requests a declaration that the arbitration agreement is void;
f) The arbitration agreement breaches a prohibited clause
prescribed by law.
Recognition and enforcement of
foreign arbitral awards
Three questions will arise:
1) what are the conditions required for
recognition or enforcement?
2) What procedure should be expected?
3) What defence might be available?

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FOREIGN TRADE UNIVERSITY - HCMC CAMPUS

PROFESSIONAL OPERATION FACULTY

CHAPTER 1: INTRODUCTION TO INTERNATIONAL BUSINESS LAW

Part 1. Decide if the following statements are TRUE or FALSE

1. Case law and official letters are sources of Vietnam’s law.

2. Case law is source of international business law.

3. Case law is not the source of law in civil law jurisdictions

Part 2. Questions and case problems

2. What is the importance of international business law?

3. What are the sources of international business law?

4. Distinguish between private law and public law.

Part 3. Multiple choice

1. According to Vietnam’s law, which of the following is NOT a type of delegated

2. What is the difference between private law and public law?

C. Substantive law and procedural law are synonymous.

D. None of the above.

CHAPTER 2: PARTIES DOING BUSINESS ABROAD

Part 1. Decide if the following statements are TRUE or FALSE

2. A multiple member LLC is allowed to issue all kind of securities

5. Chairman of an LLC may not be the member of such company.

6. A controlling board is compulsory in the organizational structure of an LLC

7. A LLC director must have experience in company management.

A voting preference shareholder carries more votes than an ordinary one

Part 2. Questions and case problems

2. List forms of business made by foreign traders in Vietnam

3. Company A (Vietnam) entered into a contract with Company B (Japan):

Commodity: Chilled Crabs

Delivery term: FOB Da Nang

Payment: L/C at sight

Decide if A, B or C is in breach. Explain.

1. Duyên Hải JSC

2. Duyên Hải Construction Co.,Ltd

3. Duyên và Hải Construction JSC

4. Duyên & Hải Construction JSC

6. A, B, C together established D Co.,Ltd. Upon their agreement of capital contribution,

a. Is C allowed to change his type of contributed assets?

- How to deal with the unpaid capital amount?

- Is B still the member of the company? If yes, what is his liability?

1/ the 4 remaining members want to purchase b’s capital amount

2/only A and B want to purchase

33/ only E wants to purchase

Decide the amount each member could purchase.

8. The B.M has 5 members: A (Chairperson), B, C, D, E. 4 members attend the meeting

A, B agree to dismiss H and appoint G

C,D object to the dismissal and appointment

E sends the vote by mail: “Object to the dismissal of Mr H”

Who is the G.D? H or G?

9. I am currently a director of a jsc located in hcm city. I plan to establish a subsidary

10. Mr A is the owner of the sole proprietorship B specialized in trading construction

Which of the following are legal?

1. Mr A plans to establish another sole proprietorship specialized in construction.

2. The sole proprietorship B plans to establish a 1-member LLC and authorize Mr A to

5. Mr A plans to establish 1-member LLC whose business line is construction. Mr A is

- Duong contributed 800 million in cash (16% of charter capital)

1- Mrs C – Head of the HCMC Department of Industry and Trade

3- Mr Y – Head of Representative office of foreign trader in VN

4- The Sole proprietorship B

CHAPTER 3: INTERNATIONAL SALE OF GOODS CONTRACT

Part 1. Questions and case problems

1. A Co.,Ltd – A Vietnamese seller whose headquarter in District Binh Thanh entered

3. The contract No.170211 VCT-FETA concluded on 17/1/2011 b/w VIET COTTON

“ALL OTHER CONDITIONS, WHICH NOT STATED IN THIS CONTRACT, WILL

OPTION 1: ‘CISG SHALL NOT BE APPLICABLE FOR THIS CONTRACT’