Posted 17.11. 2020 by Cekindo
Due to the US-China trade war and the rising costs in many other countries, Vietnam is now the go-to destination for many types of businesses for foreign investors. Among them, trading is one of the most important business activities in Vietnam.
According to the World Bank, the rising economic and booming trading market are due to these major factors: Vietnamese government’s effort for global economic integration, domestic reforms with external liberalization, lower costs of doing business, growing young population and middle-class, increasing free trade agreements, and advancement and adoption of new technologies.
A sale and purchase contract is an important document for international trade as it serves as an agreement between parties in a transaction that involves certain risks.
According to the 2005 Vietnamese Commerce Law, international sales and purchase activities of goods can only be performed via import, export, re-export with temporary import, re-import with temporary export, and border transfer. The contract not only demonstrates the contracting parties’ rights, benefits, and engagements, it also establishes parties’ obligations.
Therefore, for every sale and purchase transaction of goods, especially international trade with foreign entities, all parties must draft a contract conforming to all national laws and treaties.
The subject of a sale and purchase contract for international trade in Vietnam can be a legal entity or an individual. All subjects in the contract must comply with the laws of their respective country of origin but not the law governing the agreement.
If either of the parties fails to clarify their nationality status or subject position in the contract, this contract will not be valid.
According to 2005 Article 27 of Vietnam’s Commercial Law, it is a legal requirement that all purchase and sales of goods for international trade must be based on written agreements or contracts or other equivalent forms such as telex, facsimile, telegraph, data messages, or other forms approved under the law.
The content of a purchase and sale contract in Vietnam can vary greatly since there are certain limitations for international trades in Vietnam.
However, below are the basic information to be included in the international sale and purchase contract. All contracts must be in written form.
a. Contracting parties’ details
b. Articles of the contract’s goods or items
c. Articles in regard to payments
d. Other articles related to the implementation of the contract:
Cekindo recognises that trading risks are universal regardless of place, business size, sector, and project size. Our experts thus administer a strong and effective approach to negotiating and drafting contracts for our clients especially for international trade in Vietnam.
Not only do we offer approach consistency, but we also provide contract customisation and timely identification of all legal risks. Over the years, Cekindo’s legal specialists have negotiated and drafted thousands of agreements for international trade in Vietnam involving countries from across the globe.
To find out more, please get in touch with our representatives. Complete the form below.