The international purchase and sale of goods is a common activity in today’s globalized world. However, how can one ensure compliance with legal regulations and minimize risks in such transactions? NPLaw will help you better understand the legal issues surrounding international purchase and sale of goods in the article below.
The international purchase and sale of goods is a common activity in today’s globalized world. However, how can one ensure compliance with legal regulations and minimize risks in such transactions? NPLaw will help you better understand the legal issues surrounding international purchase and sale of goods in the article below.
I. The current demand for international purchase and sale of goods
The exchange and trade of goods are essential activities in commerce. With increasing cultural, economic, and social interactions between nations, international trade has grown significantly. International purchase and sale of goods plays a crucial role in both national and global economies.
II. What is the international purchase and sale of goods?
Current Vietnamese law does not provide a specific definition of "international purchase and sale of goods." However, Clause 1, Article 27 of the Commercial Law 2005 states:
- International purchase and sale of goods shall be conducted in the forms of export, import, temporary import for re-export, temporary export for re-import, and goods transit.
Thus, rather than a legal definition, the law identifies international purchase and sale of goods through a list of recognized forms.
III. Legal issues related to international purchase and sale of goods
1. Forms of international purchase and sale of goods
According to Clause 1, Article 27 of the Commercial Law 2005, the recognized forms are:
- Export
- Import
- Temporary import for re-export
- Temporary export for re-import
- Goods in transit
This results in a total of seven forms of international purchase and sale of goods under current Vietnamese law.
2. Eligible entities to engage in international trade
Under Vietnamese law, the entities permitted to conduct international purchase and sale of goods are traders. Clause 1, Article 6 of the Commercial Law 2005 defines traders as:
- Economic organizations lawfully established and individuals conducting commercial activities independently and regularly, and with registered business operations.
In other countries, eligible entities may differ depending on national laws.
IV. Types of goods permitted for international purchase and sales contracts
According to Clause 2, Article 3 of the Commercial Law 2005, goods are defined as:
- All movable properties, including those to be formed in the future
- Items attached to land
Given that international purchase and sales require goods to be transported across national borders, the subject of such contracts must be movable goods that are legally tradable in both the buyer’s and seller’s countries.
In short, goods subject to international purchase and sale must:
- Be movable and legally tradable under both parties’ national laws
- Be physically transportable across borders
Thus, it can be understood that goods permitted to be the subject of an international goods purchase and sale contract are movable assets permitted to be bought, sold, and exchanged according to the regulations of the buyer's country and the seller's country and can be transported across the border of another country.
V. Questions on international purchase and sale of goods
1. How is international purchase and sale of goods different from sales involving foreign elements?
International Purchase and Sale of Goods
- According to Clause 1, Article 27 of the Commercial Law 2005: International purchase and sales of goods are carried out in the forms of export, import, temporary import, re-export, temporary export, re-import and transit;
- Article 1 of the 1980 Vienna Convention (CISG), an international purchase and sales contract is a contract signed between parties with commercial headquarters in different countries.
Purchase and Sale of Goods involving foreign elements
This is a civil transaction that falls under Clause 2, Article 663 of the Civil Code 2015, which identifies foreign elements as:
- At least one party is a foreign individual or organization
- All parties are Vietnamese, but the relationship is established, changed, executed, or terminated abroad
- All parties are Vietnamese, but the goods involved are located abroad
Thus, the scope of purchase and sales of goods with foreign elements is broader than international purchase and sales of goods: International purchase and sales of goods have subjects who are traders in different countries and carry out the transportation of goods from one country to another. Meanwhile, purchase and sales of goods with foreign elements only requires one foreign subject or object, the establishment, change, implementation, and termination of the trading relationship takes place abroad.
2. Can parties to an international purchase and sales contract choose applicable law?
Clause 2, Article 5 of the Commercial Law 2005 allows:
- Parties in commercial transactions with foreign elements may agree to apply foreign laws or international commercial practices, provided they are not contrary to fundamental principles of Vietnamese law.
Therefore, Vietnamese law permits parties to select foreign law or international customs, as long as they do not contradict Vietnam's core legal principles.
3. When is the seller not entitled to demand payment from the buyer?
Under Article 62 of the 1980 Vienna Convention (CISG):
- The seller may require the buyer to pay the price, take delivery, or perform other obligations, unless the seller has resorted to a remedy that is inconsistent with such requirements.
Thus, if the seller has taken other legal measures incompatible with demanding payment, they cannot request the buyer to pay.
4. Is it mandatory to have a written contract for international purchase and sale of goods?
Clause 2, Article 27 of the Commercial Law 2005 stipulates:
- International purchase and sale of goods must be conducted on the basis of a written contract or another legally equivalent form.
Hence, under Vietnamese law, a written contract or an equivalent form is required for international sales transactions.
VI. Legal services related to international purchase and sale of goods
The above article by NPLaw has outlined key points about international purchase and sale of goods. With a team of experienced lawyers and legal professionals, NPLaw is committed to delivering reputable legal services in this area.
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