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A deposit agreement is a common civil transaction in today’s society. Deposits can be made to ensure the signing of a contract or to guarantee the performance of a contract. The most common deposit agreement is the deposit agreement for the transfer of land use rights. Resolving Deposit Agreement Disputes in Vietnam is inevitable.
Is a Deposit Agreement in Vietnam Required to Be Notarized?
According to the provisions in Article 328 of the 2015 Civil Code, a deposit is the act of one party entrusting the other party with a sum of money or valuable assets (such as gold, precious stones, etc.) to ensure the signing or performance of a contract. If the contract is signed and performed, the party receiving the deposit will return the deposited property to the depositor or deduct it from the contract value. If the depositor refuses to sign or perform the contract, they will forfeit the deposited amount. If the recipient of the deposit refuses to sign or perform the contract, they must return the deposited amount to the depositor and may be liable to pay additional compensation as agreed upon in the deposit agreement.
According to the provisions of this Civil Code, deposit agreements in Vietnam do not require any specific formalities and do not need to be notarized. However, notarization can help mitigate some risks as follows:
– Notaries verify the identification of the parties, provide handprints, and ensure that the contracting parties are the correct individuals. Therefore, a notarized deposit agreement is a legally valid and reliable document.
– Notaries verify land use rights certificates (in the case of deposit agreements for the transfer of land use rights), reducing the risk of fake land titles.
Therefore, a deposit agreement that is not notarized still holds legal validity and binds the parties. However, parties should carefully review and consider all relevant information and documents related to the agreement to avoid risks.
When is a Deposit Agreement Invalid?
A deposit agreement is also a type of civil transaction, so the conditions for its validity or invalidity follow the general provisions for civil transactions. Specifically, a deposit agreement becomes invalid if it falls into one of the following cases:
– One of the contracting parties is a minor, a person without legal capacity to act, a person with impaired cognitive abilities or control over their actions, or a person with limited legal capacity to act.
– The agreement has a purpose or content that violates legal prohibitions or ethical standards.
– The parties enter into the contract with fraudulent intentions to conceal another transaction.
– One of the parties is seriously mistaken when entering into the contract.
– One party deceives, threatens, or coerces the other party into entering into the contract.
– The person entering into the contract, although legally capable of full legal capacity, lacks the ability to comprehend and control their actions at the time of contract signing.
Filing a Lawsuit for a Deposit Agreement Dispute in Vietnam
In cases where there is a deposit agreement dispute that the parties cannot resolve through negotiation or reconciliation, it is possible to file a lawsuit in the competent People’s Court to seek resolution.
Common scenarios for filing a lawsuit for breach of a deposit agreement include:
– One party claiming that the deposit agreement is invalid.
– When the deposit period has expired, and the depositor does not agree to purchase.
– When the deposit period has expired, and the recipient of the deposit does not agree to sell.
Identifying Faults in a Deposit Agreement dispute
Identifying faults in a deposit agreement dispute is crucial because it serves as the basis for determining the compensation obligations of the parties involved.
– If the depositor refuses to sign or perform a purchase contract without reasonable justification, the fault lies with the depositor.
– If the recipient of the deposit refuses to sign or perform a purchase contract without reasonable justification or if the subject matter of the purchase is no longer available, the fault lies with the recipient of the deposit.
– In cases where force majeure or objective impediments prevent either party from signing or performing the contract, the party in violation of the contract is not considered at fault.
– If the deposit agreement becomes void, it is necessary to clarify the reason for the voiding of the deposit agreement. The party at fault for causing the deposit agreement to become void must compensate the other party.
Jurisdiction for Resolving Deposit Agreement Disputes in Vietnam
The party initiating a dispute over a deposit agreement must file a lawsuit with the appropriate authority for resolution. If the lawsuit is filed with the wrong court, it will be returned to the petitioner.
According to the provisions of the 2015 Civil Procedure Code, the competent court to resolve disputes over contracts is the People’s Court in the place of residence of the defendant (for individual defendants) or the place of the defendant’s main office (for organizational defendants).
The petitioner needs to provide a photocopy of the defendant’s national ID card (for individual defendants) or the business license of the defendant (for organizational defendants) along with the lawsuit documents to allow the court to determine jurisdiction upon acceptance.
Guidelines for Resolving Deposit Agreement Disputes in Vietnam
Step 1: Determine the Validity of the Deposit Agreement.
Based on the content presented earlier in this article, you should identify whether the deposit agreement in dispute falls into any of the cases that render the contract void. If the deposit agreement is void, the recipient of the deposit returns the deposit amount to the depositor. The party at fault for causing the deposit agreement to become void must compensate the other party.
Step 2: If the Deposit Agreement Is Valid, Identify the Party in Breach of the Contract.
Based on the content presented earlier in this article, you should identify which party has breached the deposit agreement, whether it is the depositor or the recipient of the deposit.
Step 3: Determine the Compensation Responsibilities of Each Party.
Based on the terms agreed upon in the deposit agreement, you should determine the compensation responsibilities of the party in breach of the contract. If the contract does not contain any relevant terms, you can apply the provisions of Article 328 of the 2015 Civil Code.
