Abstract:
International sales contracts are the cornerstone of global trade, defining the rights and obligations of parties in cross-border transactions. Establishing a legal framework aligned with international standards, particularly the 1980 Vienna Convention (CISG), is crucial for reducing legal risks and ensuring transparency in commercial dealings. While both Vietnam and China are CISG members, their legal systems and enforcement mechanisms exhibit significant differences. This study analyzes the implementation of CISG in Vietnam and China, highlighting key legal disparities and their implications. Based on this comparative analysis, the paper offers recommendations to enhance Vietnam’s legal framework, support businesses and judicial authorities in resolving disputes effectively, and facilitate deeper international economic integration.
Keywords: international sales contract; Vienna Convention 1980; international economic integration.
1. Introduction
The international sale of goods contract serves as a fundamental pillar of global trade, acting as a legal instrument to ensure the rights and obligations of parties engaged in cross-border transactions. In the context of international economic integration and the rapid expansion of global commerce, establishing a transparent, coherent, and internationally aligned legal framework is an urgent requirement for all nations. The CISG has become one of the most significant international treaties, functioning as a "common law" for regulating international commercial contracts, helping countries and businesses mitigate legal risks and enhance transaction certainty.
Both Vietnam and China are members of the CISG, having committed to applying the convention in their international trade activities. However, the two countries exhibit distinct differences in their legal systems, legal traditions, and experience in implementing the CISG. China, as one of the world's largest economies, has developed a well-established and flexible legal system with extensive experience in applying the CISG. In contrast, Vietnam, having only joined the CISG in 2015, is still in the process of integrating and refining its legal framework. This contrast presents a vivid and valuable academic and practical comparison between the two neighboring countries, where domestic law and the CISG intersect and interact in regulating international commercial contracts.
This paper aims not only to analyze the similarities and differences between the legal systems of Vietnam and China in applying and enforcing the CISG but also to highlight the strengths, weaknesses, and challenges in practical implementation. Through this analysis, the study provides an in-depth perspective on the compatibility between the CISG and each country's domestic law while offering recommendations for Vietnam to improve its legal framework, ultimately enhancing the protection of businesses' rights and interests in international trade.
2. Overview of the CISG
The Vienna Convention on Contracts for the International Sale of Goods is a significant international legal instrument, established to create a unified and equitable legal framework for international commercial transactions. The CISG is structured into three main parts:
Part I: Scope of Application and General Provisions
This section defines the conditions under which the CISG applies, including contracts for the international sale of goods between parties whose places of business are in member states or when conflict-of-law rules lead to the application of the law of a member state. General principles such as freedom of contract, good faith, and contract interpretation are also clearly outlined in this section.
Part II: Formation of Contracts
This part focuses on the rules governing contract formation. It includes provisions on offers, acceptance, and the conditions for a contract to be considered valid. The CISG emphasizes transparency and predictability in transactions, ensuring that parties have the opportunity to negotiate and reach mutual agreement.
Part III: Rights and Obligations of the Parties
This section details the rights and obligations of the seller and buyer, including the delivery of goods, transfer of documents, payment, and receipt of goods. The CISG also provides legal remedies for contract breaches, such as requiring performance, price reduction, damages, or contract termination.
An important point to note is that the CISG applies only to contracts for the international sale of goods, as stipulated in Article 1. The convention does not regulate issues concerning the legal validity of contracts, ownership of goods, or dispute resolution mechanisms, as specified in Article 4. This means that matters outside the CISG’s scope will be governed by national laws or other legal frameworks agreed upon by the parties. The CISG provides a standardized legal framework that helps minimize legal conflicts in international trade and fosters the development of global commerce.
3. Comparison of Vietnam and China's legal framework on international sales contracts
3.1. Accession timeline and legal framework
Vietnam and China are both member states of the CISG, but their accession timelines and approaches to incorporating CISG provisions into domestic law differ, reflecting each country's distinct legal perspective.
Vietnam officially acceded to the CISG in 2015, with the Convention taking effect on January 1, 2017. Before joining, Vietnam had already established a basic legal framework governing contracts for the sale of goods through the 2015 Civil Code and the 2005 Commercial Law. The 2015 Civil Code, in Chapter XVII, provides general regulations on contracts in civil transactions, while the 2005 Commercial Law focuses more specifically on the commercial aspects of sales contracts. These two legal documents continue to play a supplementary role when the CISG is applied, particularly in cases that fall outside the scope of the Convention. Additionally, Article 1 of the 2015 Civil Code emphasizes the principle of applying national laws in cases of legal conflicts, ensuring flexibility and alignment with Vietnam’s practical legal context.
China, in contrast, was one of the earliest countries to ratify the CISG, having done so in 1988. With a longer period of application, China has accumulated extensive practical experience in handling issues related to international sales contracts. In addition to directly applying the CISG, China has incorporated CISG provisions into its domestic legal system through the 1999 Contract Law of China. This law not only clarifies the CISG’s provisions but also expands its application scope, ensuring consistency within the national legal framework. Moreover, the Supreme People’s Court of China has issued various circulars and guidelines to support CISG implementation, enhancing transparency and consistency in judicial decisions. Article 2 of the 1999 Contract Law of China also permits the application of international principles such as the CISG when agreed upon by the parties, further facilitating international trade.
3.2. Contract formation regulations
The regulations on contract formation in Vietnamese and Chinese law share many similarities but also exhibit notable differences, particularly regarding formal requirements.
In Vietnam, Article 388 of the 2015 Civil Code stipulates that a contract is considered concluded when the parties reach an agreement on its essential terms. This emphasizes the mutual consent of the parties in establishing the contract. According to Article 24 of the 2005 Commercial Law, a contract for the sale of goods can be concluded in various forms, including written documents, verbal agreements, or specific conduct. However, this approach remains influenced by the civil law tradition, imposing stricter formal requirements in specific cases. For example, Article 401 of the 2015 Civil Code requires contracts to be in writing when the transaction involves a large value or falls under sectors requiring a high degree of transparency. This approach reflects flexibility while maintaining legal clarity for complex transactions.
In China, Article 9 of the 1999 Contract Law states that a contract is formed when an offer and acceptance are agreed upon. This approach is simplified and aligned with Article 11 of the CISG, which states that a contract does not need to be concluded in any specific form. Furthermore, Article 25 of the 1999 Contract Law reinforces the principle of freedom of contract formation, promoting flexibility in both domestic and international trade. This demonstrates China’s proactive incorporation of CISG principles into its domestic legal framework, creating a modern and internationally compatible legal system.
The key difference between the two countries lies in their formal requirements. Vietnam maintains specific form requirements in certain cases to ensure legal validity and transaction transparency, whereas China has removed most formal restrictions to align more closely with the CISG. Articles 14 and 18 of the CISG explicitly state that a contract can be formed without any specific formal requirements, and China has clearly adhered to this principle through its 1999 Contract Law. In contrast, Article 388 of Vietnam’s Civil Code and the relevant provisions in the 2005 Commercial Law still reflect civil law traditions in their approach to contract formation.
3.3. Contract breach remedies
Contract breach remedies are a crucial aspect of commercial law, ensuring the protection of parties’ rights and promoting transparency and fairness in transactions. However, Vietnam and China differ significantly in their approach to these remedies and their degree of alignment with the CISG.
In Vietnam, contract breach remedies are outlined in Chapter VI of the 2005 Commercial Law, including penalties for breach (Article 292), damages (Article 302), and contract termination (Article 310). These measures offer the aggrieved party multiple options to safeguard their rights. However, Vietnam’s legal framework can be complex and sometimes overlapping, as it combines provisions from both the Commercial Law and the Civil Code. This may lead to confusion in applying the regulations, especially when disputes arise in international sales contracts. Additionally, Vietnam has yet to develop clear and unified guidelines on applying the CISG in contractual disputes, reducing the Convention’s effectiveness in practice.
In China, the legal framework for contract breach remedies is simpler and more consistent. Article 94 of the 1999 Contract Law explicitly defines the conditions for contract termination, while Article 113 emphasizes the right to claim damages in the event of a breach. China’s legal provisions are designed to align closely with the CISG, particularly regarding remedies. For example, Article 46 of the CISG grants the right to require remedy in cases of non-conforming goods, and this principle is clearly incorporated into Chinese law. The priority given to the CISG in international contracts also helps China maintain transparency and flexibility in resolving cross-border disputes.
Comparing the two countries, a key difference is consistency with the CISG. China has actively incorporated CISG principles, including the concept of fundamental breach under Article 25 of the CISG. In contrast, Vietnam has not yet developed an equivalent concept, leading to inconsistencies between domestic law and international standards. This not only affects legal coherence but also creates challenges in resolving international trade disputes effectively.
3.4. Application of national law when the CISG does not govern
In international sales contracts, when the CISG does not apply or when the parties do not explicitly agree on the governing law, national laws play a crucial role in resolving legal issues. Although both Vietnam and China are members of the CISG, they have different approaches to applying national laws in such situations.
In Vietnam, Article 664 of the 2015 Civil Code states that if the contracting parties do not agree on the applicable law, international commercial practices or relevant national laws will be applied. This provision highlights the role of international trade customs while allowing parties some flexibility in dispute resolution. However, reliance on international practices can sometimes make it difficult to determine the most appropriate legal principles, especially when there is no clear consensus between the parties. This complexity can increase the uncertainty of dispute resolution and reduce transparency in international trade.
In China, the approach to applying national law when the CISG does not govern is clearer and more flexible. Article 142 of China’s Civil Code allows the parties to freely choose the applicable law in international sales contracts. Notably, this provision explicitly prioritizes CISG application in the absence of a specific agreement, reinforcing China’s commitment to international legal harmonization. If the CISG does not apply, Chinese domestic law is also structured to align with international legal principles, ensuring a clear and transparent legal environment for cross-border transactions.
When comparing the two countries, China demonstrates greater flexibility and transparency in handling issues beyond the CISG's scope. By allowing parties to freely choose the governing law while prioritizing the CISG, China facilitates international trade and minimizes legal risks. In contrast, Vietnam’s approach, while recognizing international trade customs, still lacks supporting mechanisms to ensure consistency and efficiency in dispute resolution. This difference reflects each country's level of legal integration and practical experience in applying international legal principles. China’s legal framework is more aligned with global trade norms due to its CISG-first approach and clear legal provisions, whereas Vietnam still needs to enhance its legal framework to improve efficiency and transparency in international trade practices.
4. Reform proposals for Vietnam
To enhance the effective application of the CISG in Vietnam, legal and policy reforms should be implemented to ensure compatibility with international standards and support businesses in global trade. The following proposals focus on amending existing laws, capacity building, case law development, and simplifying contractual breach sanctions.
First, the 2005 Commercial Law and the 2015 Civil Code should be amended to align with Articles 14, 18, and 25 of the CISG. This includes incorporating the concept of "fundamental breach" (Article 25 CISG) into the Commercial Law to clarify the conditions under which serious breaches allow for contract termination or compensation claims. Such amendments will harmonize Vietnamese law with international standards, making it easier for Vietnamese businesses to navigate global transactions.
Second, training and awareness programs on the CISG should be intensified. Businesses, judicial officials, including judges and lawyers, should be educated on the principles and provisions of the CISG. Regular specialized training courses for judges on CISG-related dispute resolution should be organized to improve judicial competence and increase the practical application of the CISG.
Third, case law development is essential to ensure transparency and consistency in CISG application. The Supreme People’s Court should encourage and publish case precedents related to the CISG to provide clear guidance for lower courts. Establishing a system of case precedents will not only enhance predictability in dispute resolution but also help businesses understand how CISG rules are applied in practice.
Finally, contractual breach sanctions should be simplified by consolidating relevant provisions in the Civil Code and Commercial Law. Currently, overlapping regulations between the two laws can cause confusion for businesses and the judicial system. Unifying these provisions will improve clarity and transparency, reducing legal disputes and enhancing the efficiency of contract enforcement mechanisms.
Overall, these reforms will not only strengthen CISG implementation in Vietnam but also contribute to creating a more favorable legal environment for international trade, ultimately boosting the global competitiveness of Vietnamese enterprises.
5. Conclusion
The comparison between Vietnamese and Chinese laws in applying the CISG highlights the limitations of Vietnam’s legal system. It is evident that Vietnam must undertake significant legal reforms to enhance its compatibility with the CISG, not only to improve the effectiveness of the Convention's application but also to support Vietnamese businesses in international integration.
China, with its long-standing experience in domesticating and flexibly applying CISG provisions, has developed a modern, consistent, and transparent legal framework. This has not only facilitated Chinese enterprises' operations in the global market but also strengthened China’s legal standing in international trade disputes. The Chinese experience underscores the importance of prioritizing CISG application, incorporating key concepts such as “fundamental breach”, and establishing clear and effective legal support mechanisms.
Enhancing Vietnam’s alignment with the CISG is not merely a legal obligation but also an opportunity to assert its role and credibility in global trade. With appropriate reforms, Vietnam can unlock its full potential, strengthen its economic and legal standing on the international stage, and promote the sustainable growth of domestic trade and investment. This transformation will be a crucial foundation for Vietnam’s deep integration and successful competition in the era of globalization.
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Pháp luật về hợp đồng mua bán hàng hóa quốc tế của Việt Nam và Trung Quốc: Góc nhìn so sánh trong bối cảnh thực thi CISG
Ths. Huỳnh Thị Hồng Cúc
Tóm tắt:
Hợp đồng mua bán hàng hóa quốc tế là nền tảng cho thương mại toàn cầu, đảm bảo quyền và nghĩa vụ giữa các bên trong giao dịch xuyên biên giới. Việc xây dựng một khung pháp lý phù hợp với chuẩn mực quốc tế như Công ước Vienna 1980 (CISG) là yếu tố quan trọng để giảm thiểu rủi ro pháp lý và tạo sự minh bạch trong thương mại. Việt Nam và Trung Quốc đều là thành viên CISG nhưng khác biệt đáng kể về hệ thống pháp luật và thực tiễn thực thi. Bài viết so sánh pháp luật Việt Nam và Trung Quốc về hợp đồng mua bán hàng hóa quốc tế dưới góc độ thực thi CISG nhằm đưa ra các khuyến nghị hoàn thiện pháp luật Việt Nam, hỗ trợ doanh nghiệp và cơ quan tư pháp giải quyết tranh chấp hiệu quả, thúc đẩy hội nhập kinh tế quốc tế.
Từ khoá: hợp đồng mua bán hàng hóa quốc tế, Công ước Vienna 1980, hội nhập kinh tế quốc tế.
