“Entrustment of export and import of goods usually causes disputes between the mandator and mandatory. Enterprises need to pay attention when entering into contracts, selecting partners and other arising matters to best protect their own rights and benefits.” (Quote: Name and position of the author).
Entrustment of export and import of goods (hereinafter referred to as “export and import entrustment”) is governed by the Commercial Law.
1. Lack of agreement in contracts or agreement is insufficient
Lack of agreement in contracts, agreement that is insufficient of not in accordance with Vietnamese and international law. On the basis of the disputes PLF recently received, we have become aware that enterprises often encounter quite basic issues. Specifically, here are some of the main examples:
- Parties carry out export and import entrustment upon an oral agreement in lieu of a written contract (or in other forms of equivalent legal validity).
- Mandate contracts are entered into by and between persons deemed incompetent by the Law.
- Compensation liability, consequence remedy, time and method of compensation are not stated in mandate contracts.
- No resolution mechanism is established for when the exported/imported goods encounter customs-procedures-related issues.
- Unaccepted goods: The Law does not provide guidance for cases where the mandator refuses to receive the goods although the mandatory has fulfilled the contractual obligations. Therefore, the parties should reach a detailed agreement on delivery obligations, responsibilities of both parties and direction to deal with the problems in such case.
- The rights and obligations of each party whenever a dispute arises from or related to the contract and choice of dispute settlement body.
2. Enterprises need to consider post-mandate matters carefully.
2.1 Subjects to entrust and undertake entrustment
Export and import entrustment is carried out between traders. Vietnamese organizations and individuals other than traders may, on the basis of contracts signed in accordance with the legal provisions, entrusting import or export of goods to meet their needs.
2.2 Entrusted goods
All goods, except for those on the list of goods banned or suspended from export and goods on the list of goods banned or suspended from import. Furthermore, the entruster (mandator) or the entrustee (mandatory) must obtain import or export permits before signing entrustment or entrustment undertaking contracts.
2.3 Export and import mandate contract
Export and import entrustment must be made in writing.
