Service contract disputes in Vietnam

Along with the socio-economic development, the strong process of opening up and economic integration, service activities accordingly develop and become more diversified. Service contract disputes accordingly also arise more and more, increasing in number and complexity in content.

This article is intended to provide information about service contracts and applicable laws in service contract dispute resolution in Vietnam.

What is a service contract?

According to the provisions of Article 513 of the Civil Code 2015, a service contract means an agreement between parties whereby a service provider performs an act for a client which pays a fee for that act.

Clause 9, Article 3 of the Commercial Law 2005 also stipulates: Provision of services means commercial activities whereby a party is obliged to provide a service to another party and receive payment; the service-using party is obliged to pay to the service provider and use the service as agreed.

Features of service contract

A service contract has the following basic features:

The object of the service contract is work.

This is an important feature to distinguish service contracts from other types of contracts such as purchase and sale contracts, property leases, loan contracts, etc. The object of these contracts is usually property or property rights, while the object of the service contract is a intangible job, which is difficult to determine the quality by means of weighing, measuring, counting and other quantification methods. Therefore, in a service contract, the parties must describe the service in detail, set out specific requirements and goals that the parties want to achieve.

Since the object of the service contract is work, there is no question of the transfer of ownership of the service, the service provider’s obligation is an obligation according to the results of the work or to the best efforts and abilities of the service provider.

The object of the service contract must be the work that can be done, does not violate the prohibition of the law or contrary to social ethics.

The service provider must be a capable entity to perform the service

The service provider must be an organization or individual capable of performing the service. This capacity is the conditions and requirements for service providers, which are specified in specialized laws corresponding to each specific type of service.

Service contracts are diverse in types and fields

Based on the purpose of the service, service contracts can be divided into the following groups: Distribution service contracts, production service contracts, social service contracts and individual service contracts.

According to the Commercial Law 2005, service contracts include: advertising service contracts, display and introduction service contracts, representation contracts, entrustment contracts, agency contracts, auction organization contracts, franchise contracts, ..

According to the provisions of the Civil Code 2015, service contracts include: transportation contract, insurance contract, property depository contract, authorization contract, …

Types of service contract disputes in Vietnam

Dispute requesting declaration of service contract invalid in Vietnam

– A service contract may be invalidated if the contracting party is an organization but the contract signing representative is a person who is not authorized to sign or signs beyond the authority or if the contracting party is an individual who is minor, lack of legal capacity, person with limited cognition or behavior control, person with limited legal capacity.

– Service contract may be invalidated if the object of the contract is an impossible job or a job that violates the prohibition of the law or is contrary to social ethics.

– In case the specialized law stipulates that the corresponding service contract must comply with a specific form, if the signed contract does not meet the requirements for that form, the service contract may be declared invalid.

Dispute requesting service fee payment

If the work to be performed in the service contract is the obligation of the service provider, paying the service fee is the obligation of the customer using the service. There are 2 types of disputes related to service fee payment, including:

– The service provider sues the customer for not paying correctly and in full the service fee as agreed in the contract.

– The customer using the service sues the service provider to refund the service fee paid because the service provider fails to provide the service as agreed in the contract.

Disputes caused by service providers breach of obligations in Vietnam

The dispute in this case arises because the service provider violates the obligations specified in the service contract such as failing to perform the work, performing the work not in accordance with the agreed content, performing the work in incorrect quality, quantity.

Law on service contract dispute resolution in Vietnam

According to the Vietnamese law, a service contract can be a civil contract or a commercial contract depending on the subject and the purpose of the contract. Therefore, depending on each specific contract, the corresponding provisions of the Civil Code or the Commercial Law shall apply.

In principle, the law applied to resolve service contract disputes is the law provisions in effect at the time of transaction arising, that is, at the time the parties sign the service contract.

In addition, because there are many different types of services, when settling disputes, in addition to the general provisions on service contracts, the dispute settlement agency also applies specialized laws governing that type of service. In the settlement of contract disputes, specialized provisions shall prevail; if there are no provisions in specialized laws, general laws shall apply.