CONTRACT LAW

(cont.)
MAIN ▸ Validity of contract
CONTENT ▸ Performance of contract
▸ Discharge of contract
▸ Breach of contract
▸ Remedies
1
VALIDITY OF
CONTRACT
▸ Valid contract
▸ Satisfy all conditions for validity
▸ (art. 117 of the 2015 Civil Code)
▸ Invalid contract
▸ One or more conditions is/are
violated
▸ Void and voidable contract
▸ Legal effect of invalid contract
▸ No change
▸ Parties must restore everything to
its original state
▸ Compensation of the party at fault
2
PERFORMANCE
OF CONTRACT
▸ Principles
▸ Parties have obligation to fulfill
contract requirement
▸ Unilateral, bilateral and sample
contract
▸ Good faith
3
DISCHARGE OF
CONTRACT
 ▸ Discharge by performance
▸ Discharge with agreement
FORM OF
▸ Discharge in case of frustration
DISCHARGE (subject and parties)
▸ Discharge in case of breach of
contract
 ▸ Discharge by performance
▸ Discharge with agreement
FORM OF
▸ Discharge in case of frustration
DISCHARGE (subject and parties)
▸ Discharge in case of breach of
contract
 Are below contract is discharge? Which
form of discharge?
A and B make a contract for selling an
REFLECTION Iphone.
QUESTIONS - A can not deliver the Iphone ontime
because he is seriously sick
- The Iphone is stolen before the date
of delivery
- A wants to increase the price to 10%
and B agrees.
4
BREACH OF
CONTRACT
 Company A sent an order to Company B on May 1, 2018 to
purchase 100 mattresses (grade 2) of Company B, stating that
May 15 was the deadline for response and request delivery on
May 25. Company B received the order and sent an acceptance
REFLECTION letter, informing Company A that there were only 80
QUESTIONS mattresses of grade 2 in stock, the remaining 20 mattresses
would be replaced with grade 1 with the price 50% higher than
grade 2. Company A received this letter (but had no) response
and agree. On May 25, Company B delivered the goods.
Company B claimed that Company A breached the contract
and requested Company A to receive the goods and pay for the
shipping.
IS THIS A BREACH OF CONTRACT?
 - Non-performance of contract
- Material obligation
- Good faith

What is a breach of
contract
5
REMEDIES
 ▸ Specific performance
▸ Penalties
REMEDIES
▸ Damages
FOR BREACH
OF
▸ Suspension of performance of
CONTRACT contracts
(Art. 292 of
Commercial ▸ Stoppage of performance of
Law 2005)
contract
▸ Cancellation of contract
 Example:
In case of late delivery by the Seller, what can the
Buyer do in application of specific performance?

SPECIFIC
PERFORMANCE
Specific performance: Art 297 Commercial Law
2005
Step 1: Request the breaching party to properly
perform the contract: repair, replace, delivery
supplement,…
Step 2: Apply other measures to cause the
contract to be performed; Request the
breaching party to bear any costs incurred
 Vietnamese Commercial Law 2005: Art
PENALTIES 300

- Penalty is applicable only if agreed in the

contract and cannot exceed 8% of the value
of the breached contractual obligations
 - Monetary compensation
- Material and direct loss
- Loss of profit – Foreseeable
DAMAGES

- Base for damages: Breach of contract,

loss and this loss is directly caused by
the breach of contract
 Whether the party at fault must pay damage?
- A and B are in a contract for selling Iphone.
Because of late delivery of Iphone, A can
not make a call to give acceptance for other
REFLECTION
QUESTION
contract, which cause the loss for A.
- C and D are in a contract for selling an
apartment. C want to move to this
apartment because it is close to her son. D
cancels the contract. C is too disappointed
to be stressed and need special care.
 Conditions:
- A material breach occurs; or
- Agreement on suspension
SUSPENSION OF - Requirement to inform
PERFORMANCE Consequence:
OF CONTRACT
- Contract is still effective
- Non-breaching party can claim damages
 Conditions:
- A material breach occurs; or
- Agreement on stoppage
- Requirement to inform
STOPPAGE OF Consequence:
PERFORMANCE - Contract is terminated when the breaching party
OF CONTRACT receives notice of stoppage
- Parties do not have to continue performance of contract
- The party who has performed can claim payment or
request the other party to perform their part respectively.
- Non-breaching party can claim damages
 Conditions:
- A material breach occurs; or
- Agreement on cancellaation
Consequence:
CANCELLATION - Contract has no effect from the time of formation
OF CONTRACT - Parties do not have to continue performance
- The party who has performed can claim payment or
request the other party to perform their part
respectively.
- Non-breaching party can claim damages
 ▸ Upon agreement
▸ Force Majeure
EXCUSES
▸ Breach was totally caused by
(EXEMPTION OF the other party
LIABILITY)
(Art. 294 of the ▸ Breach caused by performing a
Commercial Law
2005) decision by a government
agency not know to the parties
at the time of contracting
 Company X signed a contract with Company K to sell
200 tons of cement Grade 1 for Company K in order to do
a construction project. At the time of delivery, Company
K found that there were 12 tons of cement grade 2 among
200 tons of cement delivered by Company X. Company
REFLECTION K requested that X must take back 12 tons of cement
QUESTION grade 2 and substitute by 12 tons of cement Grade 1
within 5 days after X received K’s letter.
Questions:
a) Can K claim damages?
b) The inadequate delivery of 12 tons of cement grade 1
caused delay in the construction project, can K claim
penalty? Or other remedies? If yes, which type of
remedy? Why?