Current legal regulations on unilateral contracts

The nature of a unilateral contract is its simplicity and ease of execution, making it easier for the parties to agree and fulfill their obligations. So how can we understand what a unilateral contract is and the issues related to unilateral contracts? Let's explore with NPLaw the current legal regulations related to this issue below.

I. Understanding unilateral contracts

A unilateral contract is a type of contract in which only one party undertakes an obligation, while the other party merely has the right to benefit from that obligation. This type of contract is often applied in simple transactions, such as rental contracts, loan agreements, or gift contracts.

In fact, the nature of a unilateral contract is its simplicity and ease of execution, making it easier for the parties to agree and fulfill their obligations. Thus, the provider will fulfill the committed obligation, while the other party only needs to receive the benefits from that obligation without having to perform any obligation.

However, although a unilateral contract may seem simple, the parties still need to pay attention to the specific terms in the contract, such as the time for fulfilling obligations and the rights and responsibilities of each party, to avoid potential disputes during the execution of the contract. Understanding the unilateral contract not only helps the parties protect their interests but also contributes to creating a transparent and efficient transaction environment.

II. Legal regulations on unilateral contracts

1. What is a unilateral contract?

Pursuant to Clause 2, Article 402 of the Civil Code 2015, it is regulated as follows: A unilateral contract is a contract in which only one party has an obligation.

And according to Article 409 of the Civil Code 2015, it also regulates the execution of unilateral contracts as follows:

For a unilateral contract, the obligated party must fulfill their obligation as agreed and can only perform it before or after the deadline if the involved party agrees.

Accordingly, a unilateral contract is understood as a contract in which only one party has an obligation. In which the obligated party must fulfill their obligation as agreed and may only perform it before or after the deadline if the involved party agrees.

2. Conditions for a unilateral contract to come into effect

Since a unilateral contract is a form of civil transaction pursuant to Article 116 of the Civil Code 2015, the conditions for the contract to come into effect are also the conditions for the civil transaction to come into effect.

Accordingly, pursuant to Article 117 of the Civil Code 2015, the conditions for a contract to be valid include:

- The subject has civil legal capacity and civil act capacity in accordance with the established contract.

- The parties involved in the contract are fully voluntary.

- The purpose and content of the contract do not violate any legal prohibitions and are not contrary to social ethics.

The form of the contract is a condition for the contract to come into effect in cases where the law regulates it.

3. How to determine bilateral and unilateral contracts?

Here are a few criteria to determine bilateral and unilateral contracts:

III. Some questions about unilateral contracts

1. Is a gift contract for gifting assets a type of unilateral contract?

Pursuant to Clauses 1 and 2, Article 402 of the Civil Code 2015 is as follows:

- A bilateral contract is a contract in which each party has obligations towards the other.

- A unilateral contract is a contract in which only one party has an obligation.

Accordingly, a unilateral contract is understood as a contract in which only one party has an obligation.

Referring to Article 457 of the Civil Code 2015, it explains the contract of gifting assets as follows: A contract of gifting assets is an agreement between the parties whereby the gifting party transfers their asset and transfers ownership to the receiving party without requiring compensation, and the receiving party agrees to accept it.

At the same time, Article 462 of the Civil Code 2015 regulates the gift contract for assets that have the following conditions:

- The gifting party can require the receiving party to fulfill one or more obligations before or after the gift. The conditions of the gift must not violate the prohibitions of the law and must not go against social ethics.

- In the case where obligations must be fulfilled before the gift, if the receiving party has completed the obligations but the gifting party has not delivered the asset, the gifting party must compensate for the obligations fulfilled by the receiving party.

- In the case where obligations must be fulfilled after the gift, and the receiving party does not fulfill them, the gifting party has the right to reclaim the asset and demand compensation for damages.

According to the above regulations, a gift contract is an agreement between the parties whereby the gifting party transfers their asset and transfers ownership to the receiving party without requiring compensation, and the receiving party agrees to accept it.

On the other hand, a gift contract for assets can be understood as primarily creating obligations for the gifting party.

However, if it falls under the case of conditional gifting, the gifting party can require the receiving party to fulfill one or more obligations before or after the gift. The conditions of the gift must not violate the prohibitions of the law and must not go against social ethics.

Thus, in the case of a conditional gift of assets, obligations have arisen for both parties. Therefore, the gift contract in this case cannot be a unilateral contract.

In summary, a unilateral contract can be both a unilateral contract and a bilateral contract depending on whether the asset-gifting party specifies the rights and obligations of the receiving party.

2. Cases of unilateral contracts being invalid

Pursuant to Article 407 of the Civil Code 2015, which regulates invalid contracts as follows:

- The regulations on invalid civil transactions pursuant to Articles 123 to 133 of this Code also apply to invalid contracts.

- The invalidity of the main contract terminates the subcontract unless the parties agree that the subcontract replaces the main contract. This regulation does not apply to methods that guarantee the performance of obligations.

- The invalidity of the subcontract does not terminate the main contract unless the parties agree that the subcontract is an inseparable part of the main contract.

Thus, a unilateral contract being invalid is like an invalid civil transaction. That is when, violating the regulations of the Civil Code 2015, the unilateral contract will be invalid, meaning it will no longer be effective.

3. What should be noted about the subjects when signing a unilateral contract?

When signing a unilateral contract, it is necessary to pay attention to the following issues related to the subjects involved:

- The parties involved in signing the contract must have full legal capacity. This means they must be of legal age and capable of understanding and controlling their actions. If one of the parties lacks legal capacity, the contract may be deemed invalid.

- Subjects of the contract: It is necessary to clearly identify the parties involved in the contract, including their names, addresses, phone numbers, and tax identification numbers (if applicable). If one party is an organization, it is necessary to ensure that the organization has been legally established and has the authority to sign the contract.

- The parties must have a clear agreement on the terms of the contract. There was no pressure or fraud during the signing process. This consensus needs to be expressed transparently and specifically.

- Contract form: Some types of contracts may require a specific form (for example, contracts must be in writing, notarized, or authenticated). It is necessary to pay attention to ensure the contract has legal validity.

- Obligations and rights: The parties need to clearly understand their obligations and rights in the contract. This helps avoid disputes later on.

- The contract must not violate the current legal regulations. If the contract contains illegal terms, it will be considered invalid.

- The parties need to have the ability to fulfill their obligations under the contract. If one party is unable to perform, the contract may not be fully executed.

Paying attention to these issues will help ensure that the unilateral contract is signed legally and is valid, thereby protecting the interests of the parties involved.

IV. Legal consulting services related to unilateral contracts

Above is all the detailed information that NPLaw provides to support esteemed customers regarding the issue of unilateral contracts. In case you have any further questions related to the aforementioned issue or other legal matters, please contact NPLaw immediately for our team to provide direct consultation and guidance.