Entering into contracts takes place in a common, frequent, and continuous way. However, not all individuals and organizations have properly and fully complied with the provisions of the law on the content and form of the contract. The parties should pay attention to the following contents from the time of drafting the contract if the parties want the valid contract and ensured rights and interests:
1. Regarding the content of the contract
The Civil Code 2015 stipulates that if the content of the contract is contrary to the prohibition provisions of law and to social morality, the contract will be invalid. Therefore, the parties need to accurately determine the source of the law governing the contractual relationship to serve as a basis for determining the relevant prohibition Sources of law include direct laws such as the Civil Code 2015, Commercial Law 2005, etc., and specialized laws based on the subject matter of goods purchased and services provided.
The drafting party needs to learn about the subject matter of the contract, the needs, and requirements of the parties, etc. to determine the type of contract and the terms required in the contract. Some of the principal contents commonly included in a contract include:
- Information of the parties;
- The subject matter of the contract;
- The price and payment method;
- The contract performance such as time and place of goods delivery and/or provision of services;
- The contract termination and consequences of contract termination;
- The breach of contract and sanctions for handling violations;
- The force majeure events;
- The methods of settlement of disputes (dispute settlement agency);
- The contract validity.
For sale contracts, the subject matter must satisfy the following conditions:
- Must be a tradable property;
- Must be specified. If it is an object, it must be clearly identified through quantity, characteristics, etc. If it is a property right, there must have papers or other proofs of ownership of the seller;
- Not the property in a dispute over ownership;
- Not the property being distrained for judgment enforcement;
- Not being property being used to secure the performance of civil obligations, unless otherwise provided for by law or otherwise agreed by the parties;
- If the subject matter is a property restricted from being traded, the purchase and sale must comply with the law on order and procedures for transferring ownership of such property.
2. Regarding the form of the contract
In case the law does not stipulate the form of the contract that the parties intend to sign, the parties should still choose the written form to have a basis for implementation and evidence in case of a dispute. If the law has specific provisions on the form of the contract, the parties need to comply so that the contract is not declared invalid. The form of a contract is prescribed in legal documents, here are some regulations on the form of some specific types of contracts:
The contract must be made in writing
- Law on Science and Technology 2013: Contract for scientific research and technology development; Technology transfer contract; Science and technology service contract.
- Law on Intellectual Property 2005, amended and supplemented in 2009: Contract for transfer of copyright and related rights; Contract of use of copyright and related rights;
The contract must be notarized or authenticated
- Land Law 2013: Contracts for transfer, donation, mortgage, and capital contribution with land use rights and land-attached assets, except for real estate business.
- Housing Law 2014: Contracts for purchase, sale, donation, exchange, capital contribution, mortgage of houses, transfer of commercial housing purchase and sale contracts, except for the case specified in Clause 2, Article 122 of the Housing Law, etc.
3. Things need to be done when the content and form of the contract are illegal
- The parties need to agree and amend the illegal content with advice and support from individuals/organizations with legal knowledge or providing legal services;
- Change the form of the contract to comply with the provisions of the law, for example, if the law requires it to be notarized/ authenticated in writing, it will be done in this form;
- When the contract has been entered into, if the parties discover any violation, the parties can only agree and amend the contract when the parties are in good faith. If one of the parties does not have goodwill, the agreement cannot be implemented. Therefore, from the time of drafting and/or before entering into a contract, the parties should contact a legal service provider for support and ensure their interests.
The parties’ compliance with the law on the content and form of the contract, as well as detailed agreement and anticipation of possible disputes, will ensure the rights and interests of the parties. Above is the article “Notes on content and form of the contract when drafting contract”. Hope you will get useful value when reading this article.