Legal regulations and important notes on annexes of the purchase and sale contract

I. Understanding annexes to the purchase and sale contract

An annex to the purchase and sale contract is an agreement that sets up supplements, explanations, modifications, or terminations of the provisions of the main contract. Additionally, it serves as a useful legal tool to enhance and solidify the contract. The effective use of such an annex helps protect the rights of the parties involved and minimizes disputes likely to arise during the contract's execution. 

1. What is an annex to the purchase and sale contract?

An annex to the purchase and sale contract is a document attached to the main contract to supplement, clarify, or further detail certain provisions of the contract. According to Article 403 of the Civil Code 2015, an annex has the same legal validity as its main contract, obtaining contents must not contradict those of the original contract. 

If any provision in the annex conflicts with the main contract, it will be deemed invalid, unless the parties have agreed that such a provision in the annex will replace the corresponding provision in the contract, thereby serving as an amendment to the main contract.

2. Distinguishing between The Annex to the purchase and sale contract and The purchase and sale Contract

By nature:

The purchase and sale contract is an agreement between parties in which the seller transfers the asset and ownership rights to the buyer, and the buyer makes payment to the seller. This is the primary contract that independently creates legal obligations and rights for the parties.

Beside, the annex to the purchase and sale contract is a supplementary document attached to the main contract, serving to supplement on or detail specific provisions of the contract. The annex does not create separate obligations but merely clarifies the rights and responsibilities within the contract. It is only valid when closely linked to the main purchase and sale contract; if separated, it holds no independent legal value.

By basis of formation:

The purchase and sale contract is established based on a mutual agreement and free will of the parties within the legal framework. Such a contract may arise from the need to exchange goods or transfer ownership rights and becomes effective when all legal conditions are met.

An annex to the purchase and sale contract arises from the necessity to further detail the main contract, ensuring that provisions not fully described in the original contract are specified. This annex only exists if the main contract is already effective, and its validity is entirely dependent on the main contract.

By content:

The purchase and sale contract primarily contains provisions as stipulated in Article 398 of the Civil Code 2015, including terms on the subject matters, quantity, quality, prices, payment methods, time and place of performance, rights and obligations of the parties, dispute resolution methods, and liabilities for contract breaches.

The annex to the purchase and sale contract contains detailed content aimed at clarifying the provisions of the main contract. The annex must not contradict the content of its contract. If a provision in the annex conflicts with the main contract, it will be deemed invalid, except the parties have agreed that such an annex serves as a modification to the original contract.

By legal effect:

The purchase and sale contract becomes effective when the parties sign it and fulfill the necessary legal conditions. Once the contract ceases to be effective (due to full performance, expiration, or a legal reason), the obligations and rights under it also terminate.

An annex to the purchase and sale contract has the same validity as the main contract but only within the scope of supplementation and clarification. When the main contract terminates or becomes invalid, the annex also loses its effect. This ensures consistency and coherence in the content and responsibilities of the involved parties.

II. Legal regulations on the annex to the purchase and sale contract

1. Role of the annex to the purchase and sale contract

The annex to the purchase and sale contract serves to explain and elaborate on the provisions of the main contract, helping the parties better understand and accurately execute the contract.

This annex has the same legal validity as the main contract, meaning that its contents are binding on the parties in the same manner as those of the main contract (Article 403 of the Civil Code 2015). For example, the annex may include details regarding the quality, quantity, or specific characteristics of the goods being sold that are not explicitly outlined in the main contract.

2. Essential contents when drafting the annex to the purchase and sale contract

When drafting the annex to the purchase and sale contract, the following main contents should be included:

- Detailed information on provisions being supplemented or clarified from the main contract.

- Implementation methods and specific requirements for the goods or services.

- Additional terms and conditions consistent with the content of the main contract.

- The effective date and requirements for signatures and confirmations from the parties.

The provisions in the annex must not contradict those of the main contract unless the parties have explicitly agreed to modify the contract’s content through the annex (Article 403 of the Civil Code 2015).

3. Latest template for the annex to the purchase and sale contract

Below is a template for the annex to the purchase and sale contract:

SOCIALIST REPUBLIC OF VIETNAM
Independence – Freedom – Happiness
————

……., date …… month …… year 

ANNEX TO THE PURCHASE AND SALE CONTRACT

• Pursuant to the current regulations of Vietnamese law;

• Pursuant to the Purchase and Sale Contract No. … signed on … / … / …;

• Pursuant to the actual needs of both parties;

Today, on … / … / 2024, at the headquarters of … Company, we, the undersigned parties, include:

Seller (Party A):

COMPANY: …………………………………………………………………

Enterprise Registration Certificate No.: …………………………………………

Representative’s Name: ………………………….. Position: ……………………

Business Address: ………………………………………………………………

Phone: ……………………………………… Fax: ……………………………

Tax Code: ……………………………………………………………………….

Bank Account No.: …………………………… At Bank: ……………………

Purchaser (Party B):

COMPANY: …………………………………………………………………

Enterprise Registration Certificate No.: …………………………………………

Representative’s Name: ………………………….. Position: ……………………

Business Address: ………………………………………………………………

Phone: ……………………………………… Fax: ……………………………

Tax Code: ……………………………………………………………………….

Bank Account No.: …………………………… At Bank: ……………………

After reviewing and negotiating, both parties have agreed to sign Annex No. …/… to the Purchase and Sale Contract signed on …/…/… regarding the following amendments:

ARTICLE 1: AMENDED CONTENTS

The following provisions of the purchase and sale contract No. …/HĐMB- … are hereby amended:

1.1. Change in the Quantity of Goods (if applicable):

The amendment to Article … of the purchase and sale contract No. …/HĐMB- … is as follows:

Party A agrees to sell to Party B the goods with the following details:

Total: …

Total value in words: ………………………………………

1.2. Change in Delivery Schedule and/or Location (if applicable):

The amendment to Article … of the purchase and sale contract No. …/HĐMB- … is as follows:

Party A shall deliver the goods to Party B according to the following schedule and location:

1.3. Other Amendments (if applicable): …

ARTICLE 2: IMPLEMENTATION PROVISIONS

2.1. This annex is an integral and inseparable part of the purchase and sale contract No. …/HĐMB- …

2.2. All other terms and conditions of the purchase and sale contract No. …/HĐMB- … remain unchanged and shall continue to be binding on both parties.

2.3. This annex takes effect from the date of signing and is made in two (02) copies, with each party retaining one (01) copy of equal legal validity.

For and on behalf of Party A                                        For and on behalf of Party B

(Signature and full name)                                                (Signature and full name)

III. Questions on the annex to the purchase and sale contract

1. How many times can an annex to the purchase and sale contract be signed?

The Civil Code 2015 does not specify a maximum number of times that an annex can be signed. Therefore, the number of times depends on the level of detail in the contract and the contracting parties’ will.

Thus, the signing of the annex to the purchase and sale contract is determined by the agreement between the parties involved.

2. Distinguishing between the annex and a supplementary contract in the purchase and sale contract

As stated above, the annex is a supplement part of the main contract, serving to explain or elaborate on its provisions without expressing independent intent. The annex is only valid when attached to the main contract and becomes void if the main contract is canceled or terminated.

A supplementary contract, on the other hand, is an independent contract, although its validity may depend on the main contract. The supplementary contract can establish separate obligations, create new rights and obligations not stipulated in the main contract, and may give rise to, modify, or terminate the obligations of the parties (Article 407 of the Civil Code 2015).

3. Is it permissible to sign an annex to the purchase and sale contract for auctioned assets?

Based on Article 48 of the Law on Asset Auctions 2016, a winning bidder has the right to sign the purchase and sale contract for auctioned assets with the asset owner. The law does not prohibit the establishment of an annex to such a contract, provided that the annex serves to explain or supplement specific terms of the contract, and its content does not contradict the main contract.

As per Article 403 of the Civil Code 2015, the annex is part of the main contract and holds the same legal validity. However, its content must not conflict with the main contract unless the parties have agreed to amend the main contract through the annex. If any provision in the annex contradicts the purchase and sale contract, such a provision will be invalid unless both parties agree that it constitutes an amendment to the contract.

Therefore, signing the annex to the purchase and sale contract for auctioned assets is permissible. However, it must only serve to provide further details or modifications agreed upon by the parties to avoid conflicts regarding rights and obligations already clearly defined in the contract and auction law.

4. Can the annex to the purchase and sale contract be amended?

The annex to the purchase and sale contract can be amended if both parties agree. When making adjustments, a new annex or a supplementary document must be prepared to replace the old annex, ensuring that all parties sign to confirm changes. It ensures that the new annex aligns with the current intentions of the parties and does not contradict the main contract.

5. What should be done if the annex contains provisions that contradict the main contract?

Based on Article 403 of the Civil Code 2015, if the annex contains provisions that contradict the main contract, those provisions will be invalid unless the parties have agreed that the annex serves as an amendment to the contract. Thus, in such cases of agreeing amendments, the relevant provisions in the contract will be considered modified according to the annex. Accordingly, the parties should clearly agree on this modification to avoid future disputes.

IV. Legal advice and drafting services for annexes to the purchase and sale contracts

The above content is our legal advice regarding the annex to the purchase and sale contract. If you have any questions, please contact NPLaw immediately. As a professional firm specializing in corporate, commercial law, investment, intellectual property, licensing, dispute resolution, criminal law, and environmental law, NPLaw is confident in providing timely and effective solutions to address all your legal concerns.