Legal regulations on requiring execution of uncompleted contractual obligations by the other party

In civil and commercial transactions, the commitment to properly execute obligations by the parties is a main factor in ensuring trust and efficiency. However, obligations are not always completed fully or on time. So how can a party require execution of uncompleted contractual obligations by the other party in order to protect its lawful interests?

I. Current situation of requiring execution of uncompleted contractual obligations by the other party

Situations in which one party fails to properly execute obligations undertaken under a contract or prescribed by law are quite common. It may lead to various adverse consequences, ranging from disruption of business plans and financial losses to the loss of opportunities for the non-breaching party.

Having a thorough understanding of legal provisions governing the rights to require execution of obligations not completed by the other party is essential for parties to protect their legitimate rights and interests.

II. Legal provisions on requiring execution of uncompleted contractual obligations by the other party

1. Where are the parties’ obligations stipulated?

The obligations of the parties in a legal relationship are primarily stipulated in the following sources:

• Contracts: It is the principal source defining the specific obligations agreed upon and undertaken by the parties.
• Statutory provisions: In certain cases, the law directly prescribes obligations that parties must comply with, even in the absence of a contract or where the contract does not fully regulate such obligations. For example, non-contractual liability for damages (Article 584 of the Civil Code 2015 ).
• Customs, practices, or oral agreements (where there is evidence to substantiate their existence).

2. If one party fails to execute contractual obligations, what rights does the other party have?

Pursuant to Article 351 of the Civil Code 2015 on civil liability for breach of obligations:

• A party that breaches its obligations must take civil liability toward the entitled party.

A breach of obligations occurs when the obligated party fails to execute obligations on time, or executes obligations incompletely or without in accordance with their agreed content.

• In cases where the obligated party fails to properly execute its obligations due to a force majeure, it shall not take civil liability, unless otherwise agreed or otherwise provided by law.
• The obligated party shall not take civil liability if it proves that the failure to execute the obligation is entirely attributable to the fault of the entitled party.

Accordingly, where one party fails to execute or improperly executes contractual obligations, the entitled party may require the obligated party to continue proper performance, claim damages, or apply other remedies as agreed in the contract or as provided by law.

3. If the parties do not enter into a contract, can one party still require the other to execute obligations?

A civil transaction is legally effective when it satisfies all conditions prescribed under Article 117 of the Civil Code 2015, including:

• The participating parties have appropriate civil legal capacity and civil act capacity for the established transaction;
• The parties participate in the transaction voluntarily;
• The purpose and content of the transaction do not violate prohibitions of law or contravene social ethics.
• The form of the civil transaction is a condition for its validity in cases provided by law.

In addition, pursuant to Clause 1, Article 119 of the Civil Code 2015: A civil transaction may be established verbally, in writing, or through specific acts. A civil transaction conducted via electronic means in the form of data messages in accordance with the law on electronic transactions shall be deemed a written transaction.

Accordingly, even if the parties do not enter into a written contract, obligations may still arise and must be complied with, provided that the civil transaction satisfies the above conditions for validity. In such cases, if one party causes damage to the other, the injured party has the right to claim compensation.

III. Certain questions on requiring execution of uncompleted contractual obligations by the other party

1. Can a lawsuit be initiated to require a party to execute its obligations?

Pursuant to Article 186 of the Civil Procedure Code 2015: Agencies, organizations, and individuals have the right, either by themselves or through their lawful representatives (hereinafter collectively referred to as plaintiffs), to initiate a lawsuit before a competent court to request protection of their lawful rights and interests.

Accordingly, if an entitled party considers that its lawful rights and interests have been infringed, it is fully entitled to initiate legal proceedings before a court to require the obligated party to properly execute obligations as agreed in the contract or as prescribed by law.

2. Is a party entitled to suspend execution of a contract if the other party fails to execute its obligations?

Pursuant to Article 411 of the Civil Code 2015:

• A party obliged to execute obligations first has the right to defer execution if the other party’s ability to execute its obligations has seriously deteriorated to the extent that it is unable to complete as committed, until the other party regains such ability or provides security for execution .

Accordingly, the entitled party has the right to temporarily suspend execution of its own obligations if it determines that the obligated party is unable to execute or has failed to properly execute its obligations as agreed, in accordance with the above provisions.

3. Is it possible to claim interest if a party fails to complete payment obligations?

Pursuant to Clause 1, Article 357 of the Civil Code 2015: If an obligated party delays payment, it must pay interest on the delayed amount corresponding to the period of delay.

Accordingly, where the obligated party delays payment, it must pay interest on the delayed amount for the corresponding delay period.

4. Can a third party be required to take joint liability if the obligated party absconds?

Pursuant to Article 335 of the Civil Code 2015 on guarantees:

• A guarantee is a commitment by a third party (the guarantor) to the entitled party (the guarantee beneficiary) to execute obligations on behalf of the obligated party (the guaranteed party) if the guaranteed party fails to execute or improperly executes its obligations upon maturity.
• The parties may agree that the guarantor shall only be required to execute obligations on behalf of the guaranteed party where the guaranteed party is incapable of performing the guaranteed obligations.

In addition, with respect to spousal property, pursuant to Article 27 of the Law on Marriage and Family 2014:

• Husband and wife take joint liability for transactions conducted by one party as prescribed in Clause 1, Article 30, or for other transactions in accordance with representation provisions under Articles 24, 25, and 26 of this Law.
• Husband and wife take joint liability for obligations prescribed in Article 37 of this Law.

Accordingly, whether a third party may be required to take joint liability depends on the existence of a security arrangement or legal provisions governing third-party liability in relation to the obligations of the absconding party. Where such grounds exist, the entitled party has a legal basis to require the third party to execute the obligations.

5. If an obligation cannot be executed due to a force majeure, is liability still imposed?

Pursuant to Clause 2, Article 351 of the Civil Code 2015: If the obligated party fails to properly execute its obligations due to a force majeure, it shall not take civil liability, unless otherwise agreed or otherwise provided by law.

Accordingly, where an obligated party is unable to execute its obligations due to a force majeure, it shall not take civil liability, unless otherwise agreed or otherwise provided by law.

IV. Legal consulting services on requiring execution of uncompleted contractual obligations by the other party

The above is NPLaw’s article on requiring execution of uncompleted contractual obligations by the other party under current regulations. With a team of experienced lawyers and legal consultants, NPLaw provides reputable and professional legal services, ensuring the best protection of our Clients’ lawful rights and interests. Should you require legal assistance, please contact NPLaw for consultation and support.