CIVIL CODE

THE NATIONAL ASSEMBLY
——–
SOCIALIST REPUBLIC OF VIETNAM
Independence – Freedom – Happiness
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The Law No. 91/2015/QH13Hanoi, November 24, 2015

 

CIVIL CODE

Pursuant to the Constitution of the Socialist Republic of Vietnam;

The National Assembly promulgates a Civil Code.

PART ONE
GENERAL PROVISIONS
Chapter I
GENERAL PROVISIONS
Article 1. Scope
The Civil Code provides the legal status, legal standards for the conduct of natural and juridical persons; the rights and obligations of natural and juridical person (hereinafter referred to as persons) regarding personal and property rights and obligations in relations established on the basis of equality, freedom of will, independence of property and self-responsibility (hereinafter referred to as civil relations).
Article 2. Recognition, respect, protection and guarantee of civil rights

  1. In the Socialist Republic of Vietnam, all civil rights are recognized, respected, protected and guaranteed under the Constitution and law.
  2. Civil rights may be limited as prescribed in law in exceptional circumstances that due to national defense and security, social safety and order, social ethics and the community’s health.

Article 3. Basic principles of civil law

  1. Every person shall be equal in civil relations, may not use any reason for unequal treatment to others, and enjoy the same protection policies of law regarding moral rights and economic rights.
  2. Each person establishes, exercises/fulfills and terminates his/her civil rights and obligations on the basis of freely and voluntarily entering into commitments and/or agreements. Each commitment or agreement that does not violate regulations of law and is not contrary to social ethics shall be bound by contracting parties and must be respected by other entities.
  3. Each person must establish, exercise/ fulfill, or terminate his/her civil rights and/or obligations in the principle of goodwill and honesty.
  4. The establishment, exercise and termination of civil rights and/or obligations may not infringe national interests, pubic interests, lawful rights and interests of other persons.
  5. Each person shall be liable for his/her failure to fulfill or the incorrect fulfillment of any such civil obligations.

Article 4. Application of the Civil Code

  1. This Law is a common law that applies to civil relations.
  2. Any relevant law that applies to civil relations in specific fields may not be contrary to the basic principle of civil law prescribed in Article 3 of this Law.
  3. If another relevant law has no regulation or has regulations that infringe Clause 2 of this Article, the regulations of this Law shall apply.
  4. In cases where an international agreement to which the Socialist Republic of Vietnam is a signatory contains provisions different from the provisions of this Code with regard to a same matter, the provisions of such agreement shall apply.

Article 5. Application of practices

  1. Practices mean rules of conduct obvious to define rights and obligations of persons in specific civil relations, forming and repeating in a long time, recognized and applying generally in a region, race, or a community or a field of civil.
  2. In cases where it is neither provided for by law nor agreed upon by the parties, practices may apply but they must not contravene the principles provided for in Article 3 of this Code.

Article 6. Application of analogy of law

  1. In cases where a issue rises under scope of civil law which it is neither provided for by law nor agreed upon by the parties nor, nor applied by practices, analogy of law shall apply.
  2. In cases where it is neither provided for by law nor agreed upon by the parties, practices may apply but they must not contravene the principles provided for in Article 3 of this Code.

Article 7. State policies on civil relations

  1. The establishment, performance and termination of civil rights and obligations must ensure the preservation of national identities, respect and promote good customs, practices and traditions, solidarity, mutual affection and cooperation, the principle of every individual for the community and the community for every individual and the noble ethical values of ethnicities living together on Vietnamese soil.
  2. In civil relations, the conciliation between contracting parties in accordance with regulations of law shall be encouraged.

Chapter II
ESTABLISHMENT, EXERCISE AND PROTECTION OF CIVIL RIGHTS
Article 8. Bases for establishment of civil rights
Civil rights shall be established on the following bases:

  1. Contracts;
  2. Unilateral legal acts;
  3. Decisions of courts or other competent state agencies as prescribed;
  4. Outcomes of labor, production and business; or creation of subjects of intellectual property rights;
  5. Possession of property;
  6. Illegal use of assets or illegal gain therefrom;
  7. Damage caused by an illegal act;
  8. Performance of a task without authorization;
  9. Other bases specified by law.

Article 9. Exercise of civil rights

  1. Each person shall exercise his/her civil on his/her own will in accordance with Article 3 and Article 10 of this Code.
  2. The non-exercise of civil rights does not constitute a basis for termination of those rights, unless otherwise prescribed by law.

Article 10. Limitations on exercise of civil rights

  1. Each person may not abuse his/her own civil rights to cause damage to other persons or violate his/her own obligations or for other unlawful purposes.
  2. If a person fails to comply with Clause 1 of this Article, a court or a competent agency shall, according to the nature and consequences of the violation, either protect part or the whole of his/her rights, compel him/her to given compensation and other sanctions as prescribed by law.

Article 11. Methods for protecting civil rights
If a person has his/her civil rights violated, he/she may protect them himself/herself as prescribed in this Code, other relevant laws or request competent authorities to:

  1. Recognize, respect, protect and guarantee of his/her civil rights;
  2. Order the termination of the act of violation;
  3. Order a public apology and/or rectification;
  4. Order the performance of civil obligations;
  5. Order compensation for damage;
  6. Cancellation of isolated unlawful decision of competent agencies, organizations or persons;
  7. Other requirements specified by law.

Article 12. Self-protection of civil rights
The self-protection of a particular civil right must conform to the nature and severity of the violation against such civil right and be not contrary to basic principles of civil law prescribed in Article 3 of this Code.
Article 13. Compensation for damage
Each person has his/her civil rights violated shall be eligible for total damage, unless otherwise agreed by parties or unless otherwise prescribed by law.
Article 14. Protection of civil rights by competent authorities

  1. Each court and a competent authority must respect and protect civil rights of persons.

If a particular civil right is violated or is under a dispute, the protection of such right shall be implemented as prescribed in procedural law at the court or arbitrator.
The protection of civil rights under administrative procedures shall be implemented as prescribed by law. A decision on settlement of case/matter under administrative procedures may be re-examined at a court.

  1. Each court may not refuse to settle a civil matter or case with the season that there is no provision of law to apply; in this case, regulations in Article 5 and Article 6 of this Code shall apply.

Article 15. Cancellation of isolated unlawful decisions of competent agencies, organizations or persons
A court or a competent authority is entitled to cancel an isolated decision of another competent agency, organization or person, upon a request for protection of civil rights.
If the isolated decision is cancelled, the civil right against which the decision violates shall be restored and protected by the methods prescribed in Article 11 of this Code.
Chapter III
NATURAL PERSONS
Section 1. LEGAL PERSONALITY AND LEGAL CAPACITY OF NATURAL PERSONS
Article 16. Legal personality of natural persons

  1. The legal personality of a natural person is his/her capability to have civil rights and civil obligations.
  2. All individuals shall have the same legal personality.
  3. The legal personality of a natural person commences at birth and terminates at death.

Article 17. Contents of the legal personality of a natural person

  1. Personal rights not associated with property, and personal rights associated with property.
  2. Ownership rights, inheritance rights and other rights with respect to property.
  3. Rights to participate in civil relations and to assume obligations arising out of such relations.

Article 18. No restrictions on the legal personality of natural persons
The legal personality of a natural person shall not be restricted, unless otherwise provided for by law.
Article 19. Legal capacity of natural persons
The legal capacity of a natural person is his/her capability to establish and exercise civil rights and perform civil obligations through his/her acts.
Article 20. Adults

  1. Adults are persons who are eighteen years of age or older.
  2. Each adult shall have full legal capacity, except for the cases prescribed in Articles 22, 23 and 24 of this Code.

Article 21. Minors

  1. Minors are persons who are under eighteen years of age.
  2. Civil transactions of each child under six years of age shall be established and performed by his/her legal representative.
  3. Each person who is from six to under eighteen years of age must have the consent of his/her legal representative to enter in and perform civil transactions, except for civil transactions which are performed for the purpose of meeting the needs of daily life suitable for the age group.
  4. Each person who is from fifteen to under eighteen years of age is entitled to enter in and perform civil transactions by himself/herself, except for civil transactions related to real estate, movables required registration and other civil transactions as prescribed by law that are subject to the consent of his/her legal representative.

Article 22. Lack of legal capacity

  1. A court shall, based on the opinion of forensic-psychiatric examination by any authorized organization and at the request of a person with related rights or interests or a relevant agency or organization, issue a decision to declare a legally incapacitated person who as a result of his/her mental or other illnesses cannot realize or conduct his/her actions.

Where the basis on which a person has been declared incapacitated no longer exists, the court shall, at the request of such person or any person with related rights or interests, issue a decision to revoke the decision declaring the incapacitated person.

  1. All civil transactions of a legally incapacitated person shall be established and performed by his/her legal representative.

Article 23. Persons with limited cognition or behavior control

  1. A court shall, based on the opinion of forensic-psychiatric examination by any authorized organization and at the request of a person with related rights or interests or a relevant agency or organization, issue a decision to declare an adult with limited cognition or behavior control due to his/her physical or spiritual condition, and appoint a legal guardian and define rights and obligations of such guardian.
  2. Where the basis on which a person has been declared limited cognition or behavior control no longer exists, the court shall, at the request of such person or any person with related rights or interests, issue a decision to revoke the decision declaring the person with limited cognition or behavior control.

Article 24. Persons with limited legal capacity

  1. A court shall, at the request of a person with related rights or interests or a relevant agency or organization, issue a decision to declare a person with limited legal capacity after excessive drug consumption or other psychotropic substances, worsening material situation of the family.

The court shall appoint a legal representative of the person with limited legal capacity and the representation scope.

  1. All civil transactions related to the property of a person with limited legal capacity declared by a court must obtain the consent of his/her legal representative, except for transactions to meet the needs of daily life.
  2. Where the basis on which a person has been declared limited capacity of exercise no longer exists, the court shall, at the request of such person or any person with related rights or interests, issue a decision to revoke the decision declaring the incapacitated person.

Section 2. PERSONAL RIGHTS
Article 25. Personal rights

  1. Personal rights specified in this Code are civil rights inherent to each natural person, which cannot be transferred to other persons, unless otherwise provided for by other laws.
  2. All civil relations relating to personal rights of a minor, a legally incapacitated persons, or a person with limited cognition or behavior control shall be established and performed with the consent of his/her legal representative as prescribed in this Code, other relevant laws or decisions of a court.

All civil relations relating to personal rights of a person declared missing or dead shall be established and performed with the consent of his/her spouse or adult children; or his/her parents if he/she has no spouse or child, unless otherwise provided for by this Code or other relevant laws.
Article 26. Right to have family and given names

  1. Each natural person has right to have a family name and a given name (including a middle name, if any). The family and given names of a person shall be the family and given names in the birth certificate of such person.
  2. The family name of a person shall be passed from his/her biological father’s or mother’s as mutually agreed between the parents; if the parents fails to agree, the person’s family name shall be determined according to customary practices. If the father of such person is undetermined, his/her family name shall be passed from his/her natural mother’s.

If an abandoned child whose natural parents are unidentified is adopted, his/her family name shall be passed from his/her adoptive father’s or mother’s as mutually agreed between the parents. If the child has either an adoptive father or an adoptive mother, his/her family name shall be passed from such person’s.
If an abandoned child whose natural parents are unidentified and he/she has not been adopted but has been fostered by a foster establishment or a , his/her family name shall be determined at the request of the head of such foster family or at the request of the person registering the birth of the child.
Biological father and mother specified in this Code means a father and mother determined at the event of parturition; intended father and mother and the resulting child as prescribed in the Law on marriage and families.

  1. The naming is restricted in case it violates lawful rights and interests of other people and contravenes basic principles of civil law prescribed in Article 3 of this Code.

The name of each Vietnamese citizen must be in Vietnamese or other ethnic minority languages of Vietnam and not include any figure or any symbol other than a letter.

  1. Each natural person shall enter in and perform his/her civil rights and obligations following his/her family and given name.
  2. A person may not use his/her code name or pen name to cause damage to the lawful rights and interests of other people.

Article 27. Right to change family names

  1. An individual has the right to request a competent authority to recognize a change of a family name in any of the following cases:
  2. a) Changing the family name of a natural child from biological father’s to biological mother’s or vice versa;
  3. b) Changing the family name of an adopted child from biological father’s or mother’s to adoptive father’s or mother’s at the request of the adoptive parents;
  4. c) If a person ceases to be an adopted child and such person or his/her biological father or mother request to reclaim the family name which is given by the biological father or mother;
  5. d) Changing the family name of a person whose biological parents have been identified upon the request on that father or mother or such person;
  6. dd) Changing the family name of a lost person who has discovered the origin of his/her bloodline;
  7. e) Changing the family name of a person to his/her spouse’s in the marriage and family relations involving foreign elements in accordance with law of the country in which the foreign spouse is a citizen or retrieves his/her family name before the change;
  8. g) Changing the family names of children upon the change of family names of their father’s or mother’s;
  9. h) Other cases prescribed in by law on civil status affairs.
  10. The changing of the family name of a person who is nine years of age or older shall be subject to the consent of such person.
  11. The changing of a family name shall not change or terminate the civil rights and obligations which were established in the former family name.

Article 28. Right to change given names

  1. An individual has the right to request a competent authority to recognize the change of a given name in any of the following cases:
  2. a) Where it is so requested by the person who has a given name which causes confusion or has an adverse effect on his/her feelings or on his/her honor, legitimate rights and interests;
  3. c) Where the adoptive father or mother of the person wishes to change the given name of their adopted child; of if a person ceases to be an adopted child and such person or his/her biological father or mother request to reclaim the given name which is given by the biological father or mother;
  4. d) Changing the given name of a person whose biological parents have been identified upon the request on that father or mother or such person;
  5. dd) Changing the given name of a lost person who has discovered the origin of his/her bloodline;
  6. dd) Change the given name of a person to his/her spouse’s in the marriage and family relations involving foreign elements in accordance with law of the country in which the foreign spouse is a citizen retrieves his/her family name before the change;
  7. e) Changing of given name of a person whose gender identity is re-determined or a transgender person;
  8. g) Other cases prescribed in by law on civil status affairs.
  9. The changing of the given name of a person who is nine years of age or older shall be subject to the consent of such person.
  10. The changing of a given name shall not change or terminate the civil rights and obligations which were established in the former given name.

Article 29. Right to indentify and re-identify ethnicity

  1. Each individual has the right to identify and re-identify his/her ethnicity.
  2. Each individual shall have his/her ethnicity identified at birth in accordance with the ethnicity of his/her biological father and mother. Where the biological father and mother belong to two different ethnic groups, the ethnicity of the child shall be passed from the father’s or mother’s as mutually agreed between the parents; if the parents fail to agree, the ethnicity of the child shall be identified in accordance with relevant customary practices; if the customary practices are different, the ethnicity of the child shall be identified in accordance with the customary practice of smaller ethnic minority.

If an abandoned child whose natural parents are unidentified is adopted, his/her ethnicity shall be passed from his/her adoptive father’s or mother’s as mutually agreed between the parents. If the child has either an adoptive father or an adoptive mother, his/her ethnicity shall be passed from such person’s.
If an abandoned child whose natural parents are unidentified and he/she has not been adopted but has been fostered by a foster establishment, his/her ethnicity shall be identified at the request of the head of such foster family or at the request of the person temporarily fostering the child at the time when the birth of the child is registered.

  1. An individual has the right to request a competent authority to identify or re-identify the ethnicity in any of the following cases:
  2. a) Re-identification of the ethnicity of the biological father or mother where they belong to two different ethnic groups;
  3. b) Re-identification of the ethnicity of the biological father or mother where the adoptive child have their biological parents identified.
  4. The re-identification of the ethnicity of a person who is from fifteen to eighteen years of age shall be subject to the consent of such person.
  5. It is forbidden to abuse the ethnicity re-identification intended to profiteering or divisive, prejudicial to the unity of the ethnic groups of Vietnam.

Article 30. Right to declaration of birth and death

  1. When an individual is born, he/she has the right to have his/her birth declared.
  2. When an individual dies, he/she has the right to have his/her death declared.
  3. If a newborn dies after 24 hours or later from the time of birth, his/her birth and death must be declared; if he/she dies under 24 hours from the time of birth, his/her birth and death are not required to be declared, unless his/her biological father or mother request.
  4. The declaration of birth and death shall be prescribed in by law on civil status affairs.

Article 31. Right to nationality

  1. Each individual has the right to nationality.
  2. The identification, change, acquirement, renouncement, or assume of Vietnamese nationality shall be stipulated in the Law on Vietnamese nationality.
  3. Rights of each non-nationality resident within Vietnam’s territory shall be guaranteed as prescribed by law.

Article 32. Rights of an individual with respect to his/her image

  1. Each individual has rights with respect to his/her own image.

The use of an image of an individual must have his/her consent.
When an image of an individual is used for commercial purposes, that person is eligible for a remuneration, unless otherwise agreed.

  1. The use of image for any of the following purposes needs not the consent of the image’s owner or his/her legal representative:
  2. a) For national and public benefits;
  3. b) For public activities, including conventions, seminars, sports activities, art shows and other public activities that do not infringe the honor, dignity or prestige of the image’s owner.
  4. If the use of an image violates the regulation prescribed in this Article, the image’s owner has the right to request a court to issue a decision that compel the violator or relevant entities to revoke, destroy or terminate the use of the image, compensate for damage and adopt other measures as prescribed in law.

Article 33. Right to life, right to safety of life, health and body

  1. Each individual has the right to life, the inviolable right to life and body, the right to health protection by law. No one shall be killed illegally.
  2. When any person has a life threatening accident or illness, a person who discovers such situation must take such person or require suitable entities to a nearest health facility; the health facility must provide medical examination and treatment in accordance with law on medical examination and treatment.
  3. The consent of a person is required for the anesthesia, surgery, amputation, transplant of his/her tissues or bodily organs; the application of new medical cures to that person; medical, pharmacy or scientific testing or any method of testing on a human body.

If the person is a minor, a legally incapacitated person, a person with limited cognition or behavior control or an unconscious patient, the consent of his/her father, mother, spouse, grown child or legal guardian is required; in cases where there is a threat to the life of the patient which cannot wait for the consent of the aforesaid persons, a decision of the head of the health facility is required.

  1. A post-mortem operation shall be performed in any of the following cases:
  2. a) The deceased person expressed consent prior to death;
  3. b) In the absence of such consent, the consent of a parent, spouse, grown child or legal guardian of the deceased was obtained;
  4. c) In necessary cases, pursuant to a decision of the head of the health facility or a competent authority as prescribed in law.

Article 34. Right to protection of honor, dignity and prestige

  1. Honor, dignity and prestige of an individual is inviolable and protected by law.
  2. Each individual has the right to request a court to reject any piece of information adversely affecting to his/her honor, dignity and/or prestige.

The honor, dignity and prestige of a deceased person shall be protected at the request of his/her spouse or grown children; or his/her parent if he/she has no spouse or child, unless otherwise prescribed by law.

  1. If a piece of information adversely affecting to the honor, dignity and prestige of a person is posted on a mean of mass media, that piece of information shall be removed or rectified by that kind of mean. If that piece of information is kept by an agency, organization or individual, such entity is required to cancel it.
  2. In case it is impossible to identify the person informing the information adversely affecting the honor, dignity and/or prestige of a person, the latter person has the right to request a court to declare that such piece of information is incorrect.
  3. The person receiving the information adversely affected his/her honor, dignity and/or prestige both has the right to request rejection of such piece of information and has the right to require to informing person gives a public apology and rectification and compensation.

Article 35. Right to donate or receive human tissues and body organs and donate corpses

  1. Each individual has the right to donate his/her tissues or body organs when he/she is alive or donate his/her tissues, body organs or corpse after his/her death for the purpose of medical treatment of other persons or medical, pharmacy or other scientific researches.
  2. Each individual has the right to receive tissues and/or body organs of other persons for his/her medical treatment. Health facilities and juridical persons competent to scientific research have the right to receive human body organs and/or corpses for the purpose of medical treatment or medical, pharmacy or other scientific researches.
  3. The donation or removal of human tissues and body organs and donation or removal of corpses must comply with statutory requirements and regulations of this Code, the Law on donation, removal and transplantation of human tissues and organs, and donation or removal of corpses and other relevant laws.

Article 36. Right to re-determine gender identity

  1. An individual has the right to re-determine his/her gender identity.

The re-determination of the gender identity of a person is implemented where the gender of such person is subject to a congenital defect or has not yet been accurately formed and requires medical intervention in order to identify clearly the gender.

  1. The re-determination of the gender identity of a person shall comply with regulations of law.
  2. Each individual undergone re-determination of gender identity has the right and obligation to apply for change of civil status affairs as prescribed in law on civil status affairs and has the personal rights in conformity with the re-determined gender identity as prescribed in this Code and relevant laws.

Article 37. Sex reassignment
The sex reassignment shall comply with regulations of law. Each surged transgender has the right and obligation to apply for change of civil status affairs as prescribed in law on civil status affairs and has the personal rights in conformity with the transformed gender as prescribed in this Code and relevant laws.
Article 38. Right to private life, personal secrets and family secrets

  1. The private life, personal secrets and family secrets of a person are inviolable and protected by law.
  2. The collection, preservation, use and publication of information about the private life of an individual must have the consent of that person; the collection, preservation, use and publication of information about the secrets of family must have the consent of all family’s members, unless otherwise prescribed by law.
  3. The safety of mails, telephones, telegrams, other forms of electronic information of an individual shall be ensured and kept confidential.

The opening, control and keeping of mails, telephones, telegrams, other forms of electronic information of an individual may only be conducted in cases provided by law.

  1. Contracting parties of a contract may not disclose information about each other’s private life, personal secrets or family secrets that they know during the establishment and performance of the contract, unless otherwise agreed.

Article 39. Personal rights in marriage and families

  1. Each individual has the right to marry or divorce, the right to equality between husband and wife, the right to acknowledge father, mother or child, the right to adopt children and be adopted in marriage relation, parent-children relation and relations between family’s members.

All children, of the same parents, regardless of their parents’ marriage status, have the same rights and obligations to their parents.

  1. Each individual exercises his/her personal rights in marriage and families as prescribed in this Code, the Law on marriage and families and relevant laws.

Section 3. PLACE OF RESIDENCE
Article 40. Place of residence of individuals

  1. The place of residence of an individual is the place where such person usually lives.
  2. In cases where it is impossible to determine an individual’s place of residence as provided for in Clause 1 of this Article, his/her place of residence shall be the place where such person is currently living.
  3. If a party, in a particular civil relation, changes his/her place of residence in association with his/her exercise of right or fulfillment of obligation, he/she must notify the other of the new place of residence.

Article 41. Place of residence of minors

  1. The place of residence of a minor is the place of residence of his/her parents; if the parents have separate places of residence, the place of residence of the minor shall be the place of residence of the father or mother with whom the minor usually lives.
  2. A minor may have a place of residence separate from the place of residence of his/her parents if so agreed by his/her parents or so provided for by law.

Article 42. Place of residence of wards

  1. The place of residence of a ward is the place of residence of his/her guardian.
  2. A ward may have a place of residence separate from the place of residence of his/her guardian if so agreed by the guardian or so provided for by law.

Article 43. Places of residence of husbands and wives

  1. The place of residence of a husband and wife is the place where the husband and the wife usually live together.
  2. A husband and a wife may have separate places of residence if they so agree upon.

Article 44. Places of residence of military personnel

  1. The place of residence of a military personnel member currently performing his/her military service is the place at which his/her military personnel’s unit is stationed.
  2. The place of residence of a/an army officer, regular member of military personnel, defense worker or official is the place at which his/her unit is stationed, except in cases where he/she has a place of residence as specified in Clause 1 Article 40 of this Code.

Article 45. Place of residence of persons performing itinerant occupations
The place of residence of a person performing an itinerant occupation on a ship, boat or other means for itinerant work is the place of registration of such ship, boat or means, unless he/she has a place of residence specified in Clause 1 Article 40 of this Code.
Section 4. GUARDIANSHIP
Article 46. Guardianship

  1. Guardianship means an individual or organization (hereinafter referred collectively to as guardian) is required by law or appointed to take care of and protect legitimate rights and interests of a minor or a legally incapacitated person or a person with limited cognition and behavior control (hereinafter referred to as a ward).
  2. When a person with limited cognition and behavior control is capable of expressing his/her will anytime when he/she requests the guardianship, his/her consent is required.
  3. The guardianship must be registered at a competent authority as prescribed in law on civil status affairs.

Natural guardians must fulfill their obligations regardless of their registration of guardianship.
Article 47. Wards

  1. Wards include:
  2. a) Minors who have lost their mothers and fathers, or whose parents are unidentifiable;
  3. b) Minors whose parents are both incapacitated persons; parents have limited cognition or behavior control; parents have limited capacity of exercise; parents have their parental rights restricted by a court; and parents do not have the means to care for or educate such minor and the parents request the minor to be a ward;
  4. c) Incapacitated persons;
  5. d) Persons with limited cognition or behavior control.
  6. A person may only be a ward of one guardian, except where the guardians are parents in charge of one child or grandparents in charge of one grandchild.

Article 48. Guardians

  1. Each natural person or juridical person who meets all requirements prescribed in this Code is entitled to be a guardian.
  2. If a person with full legal capacity chooses a guardian for him/her, such guardian shall be selected if the person needs the guardianship with the consent of the ward. The selection of guardian must be made in writing and notarized or certified.
  3. Each natural or juridical person may be a guardian of multiple persons.

Article 49. Requirements for natural persons to be guardians
Each natural person who meets all of the following requirements may act as a guardian:

  1. Having full legal capacity;
  2. Having good ethics and necessary means to exercise rights and fulfill obligations of a guardian;
  3. Not being a person facing a criminal prosecution or a person who has been convicted but his/her criminal record has been not expunged for a deliberate crime of violation of life, health, honor, dignity or property of another person;
  4. Not being a person having parental rights to minor child restricted by a court.

Article 50. Requirements for juridical persons to be guardians
Each juridical person who meets all of the following requirements may act as a guardian:

  1. Having civil legal personality in conformity with the guardianship;
  2. Having necessary means to exercise rights and fulfill obligations of a guardian.

Article 51. Supervision of guardianship

  1. The relatives of a ward shall have the responsibility to appoint a representative to supervise the guardianship in among the relatives or appoint another natural or juridical person to act as a guardianship supervisor.

The appointment of guardianship supervisor must have the consent of such person.
If the supervision relates to management of property of the ward, the supervisor must register it at the People’s Committee of commune where the ward resides.
Relatives of a ward means his/her spouse, parents and children; if there is no such person, relatives of the ward means his/her grandparents and biological siblings; if there is also no such person, relatives of the ward means his/her biological uncles and aunts.

  1. If there is no relative of a ward or the relatives fails to appoint a guardianship supervisor as prescribed in Clause 1 of this Article, the People’s Committees of commune where the guardian resides shall appoint a natural or juridical person to supervise the guardianship. If there is a dispute over the appointment of guardianship supervisor, it shall be subject to a court’s decision.
  2. Each supervisor being natural person must have full legal capacity, each supervisor being juridical person must have legal personality in conformity with the supervision; the supervisor must have necessary means to conduct the supervision.
  3. Each guardianship supervisor has the following rights and obligations:
  4. a) Monitory and inspect the guardian in the guardianship;
  5. b) Examine and offer opinions in writing in terms of establishment and performance of civil transactions prescribed in Article 59 of this Code.
  6. c) Request a regulatory agency in charge of guardianship to change or terminate the guardianship or supervision of guardianship.

Article 52. Natural guardians of minors
A natural guardian of a minor prescribed in Points a and b Clause 1 Article 47 of this Code shall be determined as follows:

  1. The eldest brother or sister shall be the guardian of the ward; if the eldest brother or sister fails to satisfy all requirements for acting as a guardian, the next eldest brother or sister shall be the guardian, unless otherwise agreed that another biological brother or sister shall be the guardian;
  2. If there is no guardian prescribed in Clause 1 of this Article, the paternal grandfather, grandmother or the maternal grandfather, grandmother shall be the guardian; or those persons shall agree to appoint a person or some persons to be guardian(s);
  3. If there is no guardian prescribed in Clause 1 and Clause 2 of this Article, a biological uncle or aunt of the ward shall be the guardian.

Article 53. Natural guardians of incapacitated persons
If there is no guardian prescribed in Clause 2 Article 48 of this Code, the natural guardian of a legally incapacitated person shall be determined as follows:

  1. If a wife is a legally incapacitated person, her husband shall be the guardian; if a husband is a legally incapacitated person, her wife shall be the guardian;
  2. If both parents are incapacitated persons or either of them is a legally incapacitated person and the other does not fully meet requirements to be a guardian, the eldest child shall be the guardian; if the eldest child does not fully meet the requirements to be a guardian, the next eldest child shall be the guardian;
  3. If an adult being a legally incapacitated person has no spouse or child or such person has spouse or children but they do not fully meet the requirements to be a guardian, his/her father and/or mother shall be the guardian.

Article 54. Appointment of guardians

  1. If a minor or a legally incapacitated person has no guardian as prescribed in Article 52 and 53 of this Code, the People’s Committee of commune where such person resides must appoint a guardian for the ward.

If there is a dispute between guardians prescribed in Article 52 and Article 53 of this Code in terms of guardians or appointment of guardians, a court shall appoint the guardian.
The expectation of a minor aged 6 years or older in terms of his/her guardian must be considered.

  1. The appointment of a guardian must have the consent of such person.
  2. The appointment of a guardian must be made in writing, specifying the reason for appointing the guardian, the specific rights and obligations of the guardian and the status of the ward’s property.
  3. Apart from the cases prescribed in Clause 2 Article 48 of this Code, the guardian of a person with limited cognition and behavior control shall be appointed among the guardians prescribed in Article 53 of this Code by a court. If there is no such person, the court shall appoint another natural or juridical person to be a guardian.

Article 55. Obligations of guardians with regard to wards under fifteen years of age

  1. Take care of and educate the ward.
  2. Represent the ward in civil transactions, except where it is provided for by law that wards under fifteen years of age can enter in and perform civil transactions by themselves.
  3. Manage the property of the ward.
  4. Protect legitimate rights and interests of the ward.

Article 56. Obligations of guardians with regard to wards from fifteen to eighteen years of age

  1. Represent the ward in civil transactions, except where it is provided for by law that wards from fifteen to eighteen years of age can enter in and perform civil transactions by themselves.
  2. Manage the property of the ward, unless otherwise prescribed by law.
  3. Protect legitimate rights and interests of the ward.

Article 57. Obligations of guardians with regard to incapacitated persons or person with limited cognition and behavior control

  1. The guardian of a legally incapacitated person shall have the following obligations:
  2. a) Take care of and ensure the treatment of illness of the ward;
  3. b) Represent the ward in civil transactions;
  4. c) Manage the property of the ward;
  5. d) Protect legitimate rights and interests of the ward.
  6. The guardian of a person with limited cognition and behavior control shall have obligations specified in the decision of a court according to the obligations prescribed in Clause 1 of this Article.

Article 58. Rights of guardians

  1. The guardian of a minor or a legally incapacitated person shall have the following rights:
  2. a) Use the property of the ward in order to take care of and pay for the needs of the ward;
  3. b) Receive payment of all necessary expenditures on management of the property of the ward;
  4. c) Represent the ward in the establishment and performance of civil transactions in order to protect legitimate rights and interests of the ward.
  5. The guardian of a person with limited cognition and behavior control shall have rights specified in the decision of a court according to the rights prescribed in Clause 1 of this Article.

Article 59. Management of property of wards

  1. The guardian of a minor or a legally incapacitated person must manage the property of his/her ward as if it were his/her own property.

The sale, exchange, lease, lending, pledge, mortgage, deposit and other transactions involving the property of the ward, which has a high value, must have the consent of the guardianship supervisor.
The guardian must not donate the property of his/her ward to other persons. Unless the transaction is undertaken for the interests of the ward and the guardianship supervisor consents to the transaction, all civil transactions between the guardian and his/her ward in connection with the latter’s property shall be void.

  1. The guardian of a person with limited cognition and behavior control shall manage the property of the ward specified in the decision of a court according to guardianship scope prescribed in Clause 1 of this Article.

Article 60. Replacement of guardians

  1. A guardian may be replaced in any of the following cases:
  2. a) The guardian no longer meets all of the requirements specified in Article 49 or 50 of this Code;
  3. b) The guardian being a natural person dies or is declared by court limited cognition or behavior control, limited legal capacity, incapacitated, missing or the guardian being a juridical person cease to exist;
  4. c) The guardian seriously violates a guardian’s obligation;
  5. d) The guardian proposes his/her replacement and another person agrees to assume the guardianship.
  6. In case of replacing a natural guardian, the persons defined in Article 52 and Article 53 of this Code shall assume the role of a natural guardian; if there is no natural guardian, the appointment of a guardian shall comply with the provisions of Article 54 of this Code.
  7. The procedures for replacing a guardian shall comply with law on civil status affairs.

Article 61. Transfer of guardianship

  1. Upon replacement of a guardian, the person who formally conducted the guardianship must transfer the guardianship to the new replacement within fifteen days as from the date the new guardian is found.
  2. The transfer of guardianship must be made in writing, specifying the reason for the transfer and the status of the ward’s property at the time of transfer. The agency which appointed the guardian and the guardianship supervisor shall witness the transfer of the guardianship.
  3. With regard to replacement of guardian prescribed in Clause 1 Article 60 of this Code, the agency which appointed the guardian shall make a record thereon, clearly stating the status of the ward’s property and the rights and obligations which have arisen in the course of performing the guardianship for transfer to the new guardian with the witness of the guardianship supervisor.

Article 62. Termination of guardianship

  1. A guardianship shall be terminated in any of the following cases:
  2. a) The ward attains full legal capacity;
  3. b) The ward dies;
  4. c) The ward’s father and/or mother have/has fully met the conditions to exercise his/her rights or fulfill his/her obligations;
  5. d) The ward has been adopted.
  6. The procedures for termination of guardianship shall comply with law on civil status affairs.

Article 63. Consequences of the termination of guardianship

  1. When a ward attains full legal capacity, the guardian shall settle the property with the ward and transfer all rights and obligations arising from civil transactions concluded by the guardian on behalf of that ward within 15 days from the date of termination of guardianship.
  2. If a ward dies, the guardian must settle up the property with the ward’s heirs or transfer the property to the estate administrator of the ward, or transfer all rights and obligations arising from the civil transactions on behalf of the ward within three months as from the date on which the guardianship terminates; if the ward’s heirs are unidentifiable upon the expiry of such time limit, the guardian shall continue to manage the property of the ward until the property has been settled in accordance with the provisions of law on inheritance and shall notify such to the People’s Committee of the commune where the ward resides.
  3. With regard to termination of guardianship prescribed in Point c and Point d Clause 1 Article 62 of this Code, the guardian shall settle up the property and transfer all rights and obligations arising from the civil transactions on behalf of the ward to the ward’s parent within 15 days from the date of termination of guardianship.
  4. The settlement of property and transfer of rights and obligations prescribed in this Article must be made in writing under supervision of the guardianship supervisor.

Section 5. NOTICE OF SEARCH FOR PERSONS WHO ARE ABSENT FROM THEIR PLACES OF RESIDENCE, DECLARATION OF MISSING PERSONS AND DECLARATION OF DEATH
Article 64. Request for notice of search for persons who are absent from their places of residence and the management of their property
When a person has disappeared for six consecutive months or longer, any person with related rights or interests may request a court to issue a notice of search for the person absent from his/her place of residence under the provisions of civil procedure law and may request the court to apply measures for management of the property of the absent person in accordance with the provisions of Article 65 of this Code.
Article 65. Management of property of person absent from his/her place of residence

  1. At the request of a person with related rights or interests, a court shall hand over the property of a person absent from his/her place of residence to one of the following persons for management:
  2. a) With respect to property of which the management has been authorized to person by the absent person, such person shall continue to manage the property;
  3. b) With respect to joint property, the remaining co-owner(s) shall manage the property;
  4. c) The property being currently managed by the spouse’s absent person shall continue to be managed by such spouse; if that spouse dies or that spouse is legally incapacitated, has limited cognition or behavior control or has limited legal capacity, his/her adult children or parents shall manage the property.
  5. If there is no person defined in Clause 1 of this Article, a court shall appoint a person among the relatives of the absent person to manage his/her property; if the absent person does not have any relative, the court shall appoint another person to manage the property.

Article 66. Obligations of persons managing property of person absent from his/her place of residence

  1. Keep and preserve the property of the absent persons as if it were his/her own property.
  2. Sell immediately any property being crops or other products being in danger of decay;
  3. Perform the absent persons’ obligations to pay maintenance their dependents and/or pay due debts or financial obligations with such persons’ property under the court’s decisions.
  4. Return the property to the absent persons upon their return and to notify a court thereof; or compensate for any damage caused during the course of management of the property due to his/her fault.

Article 67. Rights of persons managing property of person absent from his/her place of residence

  1. Manage the property of the absent persons.
  2. Deduct a portion from the property of the absent person in order to perform the obligations of such person to pay maintenance to his/her dependents, due debts or financial obligations.
  3. Receive payment of all necessary expenditures on management of the property of the absent person.

Article 68. Declaration of person missing

  1. When a person has disappeared for two consecutive years or longer and there is no reliable information on whether such person is still alive or dead even though notification and search measures have been fully applied in accordance with the civil procedure law, a court may, at the request of a person with related rights or interests, declare such person is missing.

The two-year time limit shall commence from the date the last information on such person is obtained; if the date of the last information cannot be determined, this time limit shall commence from the first day of the month succeeding the month when the last information is received; if the date and month of the last information cannot be determined, this time limit shall commence from the first day of the year succeeding the year when the last information is received.

  1. In cases where the wife or the husband of a person who has been declared missing files for a divorce, a court shall grant the divorce as prescribed in law on marriage and family.
  2. The decision on declaration of a missing person issued by a court must be sent to the People’s Committees of commune where the missing person last resides for record as prescribed in law on civil status affairs.

Article 69. Management of property of persons declared missing
The person currently managing the property of a person absent from his/her place of residence as provided for in Article 65 of this Code shall continue to manage the property of such person when he/she is declared missing by a court and such person shall have the rights and obligations specified in Article 66 and Article 67 of this Code.
If a court has granted divorce to the wife or the husband of the person who has been declared missing, the property of the missing person shall be handed over to the adult children or to the parents of the missing person for management. If there is no such person, the property shall be handed over to a relative of the missing person for management; if there is no relative, the court shall appoint another person to manage the property.
Article 70. Annulment of decision declaring person missing

  1. When a person who has been declared missing returns or when there is reliable information that such person is still alive, a court shall, at the request of such person or a person with related rights or interests, issue a decision on annulment of the decision declaring the person missing.
  2. A person who has been declared missing shall, upon his/her return, be permitted to receive his/her property back from the person managing the property after paying the management expenses.
  3. If the wife or the husband of a person who has been declared missing has been granted a divorce, the decision granting the divorce shall retain legal effect notwithstanding the return of the person who has been declared missing or the reliable information that such person is still alive.
  4. The decision on annulment of a decision declaring a person missing issued by a court must be sent to the People’s Committees of commune where the missing person resides for record as prescribed in law on civil status affairs.

Article 71. Declaration of person dead

  1. A person with related rights or interests may request a court to issue a decision declaring that a person is dead in any of the following cases:
  2. a) After three years from the effective date of a court’s decision declaring a person missing, there is still no reliable information that such person is alive;
  3. b) The person has disappeared during a war and there is still no reliable information that such person is alive for five years from the end of the war;
  4. c) The person met with an accident, catastrophe or a natural disaster and there is still no reliable information that such person is alive for two years from the end of such accident, catastrophe or natural disaster, unless otherwise provided for by law;
  5. d) The person has been missing for five consecutive years or longer and there is no reliable information that such person is still alive; this time limit shall be calculated in accordance with Clause 1 Article 68 of this Code.
  6. A court shall, according to the cases specified in Clause 1 of this Article, determine the date of death of a person declared dead.
  7. The decision on declaration of a dead person issued by a court must be sent to the People’s Committees of commune where the dead person resides for record as prescribed in law on civil status affairs.

Article 72. Personal relations and property relations of persons declared dead by courts

  1. When a decision of a court declaring that a person is dead becomes legally effective, all marriage and family relations and other personal relations of such person shall be resolved in the same manner as if the person were dead.
  2. The property relations of a person who is declared dead by a Court shall be resolved in the same manners as if such person were dead; the property of such person shall be dealt with in accordance with the law on inheritance.

Article 73. Annulment of decision declaring person dead

  1. When a person who has been declared dead returns or when there is reliable information that such person is still alive, a court shall, at the request of such person or a person with related rights or interests, issue a decision on annulment of the decision declaring the person dead.
  2. The personal relations of the person who has been declared dead shall be restored when a court issues a decision on annulment of the decision which declared that such person was dead, except for the following cases:
  3. a) If the wife or the husband of the person who has been declared dead was permitted by the Court for her or his divorce in accordance with the provisions of Clause 2 Article 68 of this Code, the decision granting the divorce shall remain legally effective;
  4. b) If the wife or the husband of the person who has been declared dead has married to another person, such marriage shall remain legally effective.
  5. A person who has been declared dead but is still alive shall have the right to claim his/her property from the persons who received that his/her inheritance and/or the value of the remaining property.

If the heir of a person whom a court has declared dead is aware that such person is still alive, but intentionally conceals such information for the purpose of enjoying the inheritance, he/she must return all of the property received, including any benefits and income derived; if any damage has been caused, he/she must also pay compensation therefor.

  1. Property relations between spouses shall be dealt with in accordance with this Code and the Law on marriage and families.
  2. The decision on annulment of a decision declaring a person dead issued by a court must be sent to the People’s Committees of commune where the dead person resides for record as prescribed in law on civil status affairs.

Chapter IV
JURIDICAL PERSONS
Article 74. Juridical persons

  1. An organization shall be recognized as a juridical person if it meets all of the following conditions:
  2. a) It is legally established as prescribed in this Code and relevant laws;
  3. b) It has an organizational structure prescribed in Article 83 of this Code;
  4. c) It has property independent from other natural and juridical persons and bears liability by recourse to its property;
  5. d) It participates independently in legal relations in its own name.
  6. Every natural or juridical person has the right to establish a juridical person, otherwise provided for by law.

Article 75. Commercial juridical persons

  1. Commercial juridical person means a juridical person whose primary purpose is seeking profits and its profits shall be distributed to its members.
  2. Commercial juridical persons include enterprises and other business entities.
  3. The establishment, operation and termination of commercial juridical person shall comply with regulations of this Code, Law on enterprises and other relevant laws.

Article 76. Non-commercial juridical persons

  1. Non-commercial juridical person means a juridical person whose primary purpose is not seeking profits and its possible profits may not distributed to its members.
  2. Commercial juridical persons include regulatory agencies, people’s armed units, political organizations, socio-political organizations, political-socio-professional organizations, social organizations, socio-professional organizations, social funds, charitable funds, social enterprises and other non-commercial organizations.
  3. The establishment, operation and termination of non-commercial juridical persons shall comply with regulations of this Code, laws on organizational structure of the state and other relevant laws.

Article 77. Charters of juridical persons

  1. A juridical person must have a charter if it is required by law.
  2. A charter of a juridical person must contain the following primary contents:
  3. a) Name of juridical person;
  4. b) Purpose and scope of its operation;
  5. c) Head office; branches or representative offices (if any);
  6. d) Charter capital (if any);
  7. dd) Legal representative;
  8. e) Organizational structure, the procedures for nomination, election, appointment, discharge from office and dismissal; duties and powers of the positions in the managing body and other bodies;
  9. g) Membership requirements, if the judicial person has members;
  10. h) Rights and obligations of the members, if the judicial person has members;
  11. i) Procedures for ratifying decisions of the judicial person; rules for internal settlement of disputes;
  12. k) Procedures for amending and supplementing the charter;
  13. l) Conditions for consolidation, acquisition, total division, partial division or dissolution the juridical person.

Article 78. Names of judicial persons

  1. Each judicial person’s name must be in Vietnamese.
  2. The name of a judicial person must clarify its type of organization and distinguish it from other judicial persons in the same field of activities.
  3. Each juridical person must use its own name in civil transactions.
  4. The name of a juridical person shall be recognized and protected by law.

Article 79. Head offices of judicial persons

  1. The head-office of a juridical person is the place where its executive body is located.

Any change of the judicial person’s head office must be announced.

  1. The contact address of a juridical person shall be the address of its head-office. The juridical person may select another place as its contact address.

Article 80. Nationality of judicial persons
Each juridical person established in accordance with Vietnamese law shall be a Vietnamese juridical person.
Article 81. Property of judicial persons
Property of a juridical person includes contributed capital of its owners, founders, members and other kinds of property that the juridical person has established its ownership as prescribed in this Code or relevant laws.
Article 82. Establishment and registration of juridical persons

  1. A juridical person may be established on the initiative of an individual or another juridical person, or under a decision of a regulatory agency.
  2. Registration of juridical person includes registration of establishment, modification to registration and other registration as prescribed by law.
  3. The registration of juridical person must be announced.

Article 83. Organizational structure of juridical persons

  1. Each juridical person must have an executive body. The organization, duties and powers of the executive body of a juridical person shall be stipulated in its charter or establishment decision.
  2. Each juridical person may have other bodies as decided itself or as prescribed by law.

Article 84. Branches and representative offices of juridical persons

  1. Each branch and/or representative office is an affiliate other than a juridical person.
  2. Each branch shall perform all or part of the functions of the juridical person.
  3. Each representative office shall perform its duties as authorized by the in accordance with within the authorized scope and for the juridical person’s interests.
  4. The establishment or termination of a branch or a representative office of a juridical person must be registered as prescribed by law and announced.
  5. The head of each branch or representative office shall perform his/her duties as authorized by the juridical person within the authorized scope and for the authorized duration.
  6. A juridical person shall have civil rights and obligations arising from civil transactions established and performed by its representative offices and/or branches.

Article 85. Representatives of juridical persons
The representative of a juridical person may be a legal representative or an authorized representative. The representative of a juridical person must comply with regulations on representation in Chapter IX of this Part.
Article 86. Legal personality of juridical persons

  1. The legal personality of a juridical person is its capability to have civil rights and civil obligations.

The legal personality of a juridical person shall not be restricted, unless otherwise provided for in this Code or relevant laws.

  1. The legal personality of a juridical person arises from it is established or authorized to establish by a competent authority; if a juridical person is required to register of operation, its legal personality shall arise from the time in which its name is included in a register book.
  2. Legal personality of a juridical person terminates from the time of termination of such juridical person.

Article 87. Civil liability of juridical persons

  1. Each juridical person must bear civil liability for the civil rights and obligations established and performed in the name of the juridical person by its representative.

The juridical person shall bear the civil liability for obligations assumed by its founder or founder’s representative to establish and/or register the juridical person, unless otherwise agreed or prescribed by law.

  1. Each juridical person must bear civil liability by recourse to its property; shall not bear civil liability for its members with respect to civil obligations established and performed by such members not in the name of the juridical person, unless otherwise prescribed by law.
  2. A member of a juridical person shall not bear civil liability of the juridical person for the civil obligations established and performed by such juridical person, unless otherwise prescribed by law.

Article 88. Consolidation of juridical persons

  1. Juridical persons may consolidate into a new juridical person.
  2. After consolidation, the former juridical persons shall cease to exist from the time of establishment of the new juridical person; the civil rights and obligations of the former juridical persons shall be transferred to the new juridical person.

Article 89. Acquisition of juridical persons

  1. A juridical person (hereinafter referred to as acquired juridical person) may be merged into another juridical person (hereinafter referred to as acquiring juridical person).
  2. After acquisition, the acquired juridical person shall cease to exist; the civil rights and obligations of the acquired juridical person shall be transferred to the acquiring juridical person.

Article 90. Total division of juridical persons

  1. A juridical person may be totally divided to multiple juridical persons.
  2. After total division, the transferor juridical person shall cease to exist; the civil rights and obligations of the transferor juridical person shall be transferred to new juridical persons.

Article 91. Partial division of juridical persons

  1. A juridical person may be partially divided to multiple juridical persons.
  2. After partial division, the transferor juridical person and transferee juridical persons shall perform their civil rights and obligations in accordance with their own operation objectives.

Article 92. Conversion of forms of juridical persons

  1. The form of a juridical person may be converted into another form.
  2. After conversion of form, the converting juridical person shall cease to exist from the time of establishment of the converted juridical person, the civil rights and obligations of the converting juridical person shall be transferred to the converted juridical person.

Article 93. Dissolution of juridical persons

  1. A juridical person shall be dissolved in any of the following cases:
  2. a) In accordance with the provisions of its charter;
  3. b) Pursuant to a decision of a competent authority;
  4. c) Upon expiry of its term of operation as provided in its charter or in the decision of the competent authority;
  5. d) Other cases as prescribed by law.
  6. Prior to dissolution, a juridical person must fulfill all of its property obligations.

Article 94. Settlement of property of dissolved juridical persons

  1. The property of a dissolved juridical person shall be settled according to the following order:
  2. a) Dissolution expenses of the juridical person;
  3. b) Unpaid salaries, severance pay, social insurance, health insurance for employees as prescribed by law, other benefits of employees according to collective bargaining agreement and signed employment contracts;
  4. c) Tax debts and other debts.
  5. After all debts and dissolution costs are paid, the remaining value shall be received by the juridical person’s owner, capital contributors, except for the case prescribed in Clause 3 of this Article or otherwise prescribed by law.
  6. In case a dissolved social fund or charity fund has paid fully dissolution expenses and other debts prescribed in Clause 1 of this Article, the remaining property shall be transferred to another fund with the same purpose.

If there is no fund with the same purpose that receives the property or the above fund is dissolved because of its violation against to prohibition of law or contrary to social ethics, its property shall vest in the State.
Article 95. Bankruptcy of juridical persons
The bankruptcy of each juridical person shall comply with regulations of law on bankruptcy.
Article 96. Termination of juridical persons

  1. A juridical person shall terminate in any of the following cases:
  2. a) Consolidation, acquisition, total division, conversion of legal, or dissolution prescribed in Articles 88, 89, 90, 92 and 93 of this Code;
  3. b) Declaration of bankruptcy in accordance with law on bankruptcy.
  4. A legal person shall terminate from the time its name is removed from the juridical person registry or as from the time stated in a decision of competent authority.
  5. When a juridical person terminates, its property shall be resolved in accordance with this Code and relevant laws.

Chapter V
THE SOCIALIST REPUBLIC OF VIETNAM, CENTRAL AND LOCAL REGULATORY AGENCIES IN CIVIL RELATIONS
Article 97. The Socialist Republic of Vietnam, central and local regulatory agencies in civil relations
When the Socialist Republic of Vietnam or a central or local regulatory agency engages in a civil relation, it shall have the equality with other entities and bear civil responsibility as prescribed in Article 99 and 100 of this Code.
Article 98. Representatives in civil relations
The representation of the Socialist Republic of Vietnam or a central or local regulatory agency engaging in civil relations shall comply with regulations of law in terms of functions, tasks, powers and organizational structure of regulatory agencies. The representation by other natural or juridical persons may only permitted in the cases and procedures prescribed by law.
Article 99. Liability for civil obligations

  1. The Socialist Republic of Vietnam, central and local regulatory agencies shall bear liability for their civil obligations by recourse to the property whose ownership for which they represent and take centralized management, other than the case that the property is transferred to the juridical person prescribed in Clause 2 of this Article.
  2. The juridical persons established by the Socialist Republic of Vietnam, or a central or local regulatory agency shall not bear liability for civil obligations of the Socialist Republic of Vietnam, or such central or local regulatory agency.
  3. The Socialist Republic of Vietnam, a central or local regulatory agency shall not bear liability for civil obligations of the juridical persons established themselves, including state-owned enterprises, unless the Socialist Republic of Vietnam or such central or local regulatory agency has acted as a guarantee for those juridical persons as prescribed by law.
  4. A central or local regulatory agency shall not bear liability for civil obligations of the juridical persons of the Socialist Republic of Vietnam, or other central or local regulatory agencies, unless otherwise prescribed by law.

Article 100. Liability for civil obligations of the Socialist Republic of Vietnam, a central or local regulatory agency in civil relation in which a foreign state, natural or juridical person is a party

  1. The Socialist Republic of Vietnam, a central or local regulatory agency shall bear liability for its civil obligations arising from the following cases with a foreign state, natural or juridical person is a party:
  2. a) An international agreement to which the Socialist Republic of Vietnam is a signatory has regulations on waiving immunity;
  3. b) An agreement on waiving immunity concluded by the parties in such civil relation;
  4. c) The Socialist Republic of Vietnam, the central or local regulatory agency waives the immunity.
  5. The liability for civil obligations of a foreign state, natural or juridical person with the Socialist Republic of Vietnam, Vietnamese central or local regulatory agencies, natural or juridical persons shall apply Clause 1 of this Article.

Chapter VI
HOUSEHOLDS, CO-OPERATIVE GROUPS AND OTHER NON-JURIDICAL PERSONS IN CIVIL RELATIONS
Article 101. Entities in civil relations with the participation of households, co-operative groups and other non-juridical persons

  1. In case a household, co-operative group or another non-juridical person engages in a civil relation, the entities establishing or performing civil transactions for such household, co-operative group or the other organization shall be its member or a representative authorized. The authorization must be made in writing, unless otherwise agreed. If there is any change of representative, it is required to keep the other party informed about the change.

If a member of a household, co-operative group or another non-juridical person, without authorization from other members to act as a representative, engages in a civil relation, he/she shall be the entity of such civil relation.

  1. The entities of civil relations with the participation of households using land shall be determined as prescribed in the Law on land.

Article 102. Common property of members of households, co-operative groups and other non-juridical persons

  1. Common property of members of a household and their rights and obligations to such property shall be determined as prescribed in Article 212 of this Code.
  2. Common property of members of a co-operative group and their rights and obligations to such property shall be determined as prescribed in Article 506 of this Code.
  3. Common property of members of another non-juridical person and their rights and obligations to such property shall be determined as agreed, unless otherwise prescribed by law.

Article 103. Civil liability of members of households, co-operative groups and other non-juridical persons

  1. Civil obligations arising from the engaging in civil relations by households, co-operative groups, other organizations as non-juridical person shall be fulfilled by recourse their common property.
  2. If all members have no property or not enough property to fulfill their common obligations, the obligee may request those members to fulfill the obligations as prescribed in Article 288 of this Code.
  3. If the members have no agreement, co-operative contract or not otherwise prescribed by law, they must bear the civil liability as prescribed in Clause 1 and Clause 2 of this Article in proportion to each member’s contribution, if it fails to determine particular proportions, each member shall have the same proportion.

Article 104. Consequences of civil transactions established and/or performed by unauthorized persons or by representatives beyond scope of representation

  1. If an unauthorized member, on behalf of other members of a household, co-operative group or another non-juridical person, establish or perform a civil transaction, or a representative establish or perform a civil transaction beyond his/her scope of representation, the legal consequences of such transaction shall apply provisions of Articles 130, 142 and 143 of this Code.
  2. If a civil transaction established and/or performed by an authorized member or by a representative beyond his/her scope of representation cause damage to other members of the household, co-operative group or the non-juridical persons or a third party, such person must compensate for the infringed person.

Chapter VII
PROPERTY
Article 105. Property

  1. Property comprises objects, money, valuable papers and property rights.
  2. Property includes immovable property and movable property. Immovable property and movable property may be existing property or off-plan property.

Article 106. Registration of property

  1. Ownership and other rights to immovable property shall be registered in accordance with this Code and law on registration of property.
  2. Ownership and other rights to movable property shall not be required to be registered, unless otherwise prescribed by law.
  3. The registration of property must be public.

Article 107. Immovable property and movable property

  1. Immovable property includes:
  2. a) Land;
  3. b) Houses and constructions attached to land;
  4. c) Other property attached to land, houses and constructions;
  5. d) Other property as prescribed by law.
  6. Moveable property is property which is not immovable property.

Article 108. Existing property and off-plan property

  1. Existing property means a property which is formed and to which an entity has established his/her ownership rights and other rights before or at the time of transaction establishment.
  2. Off-plan property includes:
  3. a) Non-formed property;
  4. b) Formed property that the entity has established his/her ownership rights after the time of transaction establishment.

Article 109. Yield and income

  1. Yield means natural products brought by property.
  2. Income means a profit earned from the development of the property.

Article 110. Primary objects and auxiliary objects

  1. A primary object is an independent object the utility of which can be exploited according to its functions.
  2. An auxiliary object is an object which directly supports the exploitation of the utility of a primary object and which is part of the primary object but which may be separated from it.
  3. Upon performance of an obligation to transfer a primary object, any auxiliary objects must also be transferred, unless otherwise agreed.

Article 111. Divisible objects and indivisible objects

  1. A divisible object is an object which, after being divided, retains its original characteristics and usage.
  2. An indivisible object is an object which, after being divided, is not able to retain its original characteristics and usage.

When an indivisible object needs to be divided, it must be valued in money for the purpose of division.
Article 112. Consumable objects and non-consumable objects

  1. A consumable object is an object which, after being having been used once, loses or is not capable of retaining its original characteristics, appearance and usage.

A consumable object may not be the object of a lease contract or of a lending contract.

  1. A non-consumable object is an object which, after being having been used many times, substantially retains its original characteristics, appearance and usage.

Article 113. Fungible objects and distinctive objects

  1. Fungible objects are objects which have the same appearance, characteristics and usage and which can be determined by units of measurement.

Fungible objects of the same quality may be interchangeable.

  1. A distinctive object is an object which is distinguishable from other objects by its own characteristics regarding markings, appearance, color, material, nature or position.

An obligation to transfer a distinctive object is only able to fulfill by transferring that particular distinctive object.
Article 114. Integrated objects
An integrated object is an object comprised of components or parts which fit together and are connected with each other to make up a complete from whereby one of the parts or components is missing, or if there is a part or component which is not of the right specification or category, it is not able to be used or its utility value is decreased.
An obligation to transfer an integrated object must be fulfilled by transferring all parts or components thereof, unless otherwise agreed.
Article 115. Property rights
Property rights are rights which are able to be valued in money, including property rights to subjects of intellectual property rights, right to use land and other property rights.
Chapter VIII
CIVIL TRANSACTIONS
Article 116. Civil transactions
Civil transaction is a contract or a unilateral legal act which gives rise to, changes or terminates civil rights and/or obligations.
Article 117. Conditions for effective civil transactions

  1. A civil transaction shall be effective when it satisfies all of the following conditions:
  2. a) Participants in the transaction have legal personality and/or legal capacity in conformity with such transaction;
  3. b) Participants in the transaction act entirely voluntarily;
  4. c) The purpose and contents of the transaction are not contrary to the law and/or social ethics.
  5. The forms of civil transactions shall be the conditions for its effectiveness in cases where it is so provided for by law.

Article 118. Objectives of civil transactions
The objectives of a civil transaction are legitimate interests which the parties wish to achieve at the time when they enter into such transaction.
Article 119. Forms of civil transactions

  1. A civil transaction shall be expressed verbally, in writing, or through specific acts.

Civil transactions by way of electronic means in form of data messages prescribed in law on electronic transactions shall be deemed to be written civil transactions.

  1. In cases where it is provided for by law that a civil transaction must be expressed in writing, notarized, authenticated, registered or permitted, such provisions must be complied with.

Article 120. Conditional civil transactions

  1. In cases where the parties have agreed on the conditions which shall give rise to or terminate a civil transaction, such civil transaction shall arise or be terminated upon the occurrence of such conditions.
  2. In cases where the conditions which give rise to or terminate a civil transaction cannot occur due to the direct or indirect action of deliberate impeding of one party, such conditions shall be considered having occurred; if the direct or indirect efforts of one of the parties promotes deliberately promote the occurrence of conditions so as to give rise to or terminate the civil transaction, such conditions shall be deemed not to have occurred.

Article 121. Interpretation of civil transactions

  1. In cases where a civil transaction may be understood in different ways, such transaction must be interpreted in the following order:
  2. a) In accordance with the real intention of the parties at the time when the transaction was entered into;
  3. b) In a manner consistent with the objective of the transaction;
  4. c) In accordance with the customary practice of the place where the transaction was entered into.
  5. The interpretation of civil contracts shall comply with the provisions of Article 404 of this Code and the interpretation of the contents of testaments shall comply with the provisions of Article 648 of this Code.

Article 122. Invalid civil transactions
Civil transactions which fail to satisfy any one of the conditions specified in Article 117 of this Code shall be invalid.
Article 123. Invalidity of civil transactions due to breach of legal prohibitions or contravention of social ethics
Civil transactions with objectives and contents which breach legal prohibitions or which contravene social ethics shall be invalid.
Legal prohibitions mean provisions of law which do not permit entities to perform certain acts.
Social ethics are common standards of conduct as between persons in social life, which are recognized and respected by the community.
Article 124. Invalidity of civil transactions due to falsification

  1. If the parties falsely enter into a civil transaction for the purpose of concealing another transaction, the false transaction shall be invalid and the concealed transaction remains valid, unless it is also invalid under the provisions of this Code or relevant laws.
  2. If the parties enter into a civil transaction falsely for the purpose of evading responsibilities to a third person, such transaction shall be invalid.

Article 125. Invalidity of civil transactions established and performed by minors or legally incapacitated persons or persons with limited cognition and behavior control or persons with limited legal capacity

  1. When a civil transaction is established or performed by a minor, a legally incapacitated person, a person with limited cognition and behavior control, or a person with limited legal capacity, a court shall, at the request of the representative of that person, declare such transaction invalid, if it is provided for by law that such transaction must be established and performed by or with the consent of the representative of that person, except for the cases prescribed in Clause 2 of this Article.
  2. A civil transaction of a person prescribed in Clause 1 of this Article shall not be invalid in any of the following cases:
  3. a) The civil transaction of a child less than 6 years of age or a legally incapacitated person established for his/her daily needs;
  4. b) The civil transaction only either arising rights or exempting from obligations for the minor, the legally incapacitated person, the person with limited cognition and behavior control, the person with limited legal capacity and their contracting parties;
  5. c) The civil transaction of which validity is recognized by the person established such transaction that become an adult or restore his/her legal capacity.

Article 126. Invalidity of civil transactions due to misunderstanding

  1. If there is a misunderstanding in a civil transaction that make a party or the parties fails to meet the objectives of the transaction establishment, the mistaken party shall have the right to request a court to declare such transaction invalid, except for the case prescribed in Clause 2 of this Article.
  2. A civil transaction having misunderstanding shall not be invalid if the parties may meet the objectives of the transaction establishment or the parties may correct the misunderstanding resulting in the achievement of the objectives of the transaction establishment.

Article 127. Invalidity of civil transactions due to deception, threat or compulsion
Any party entering into a civil transaction as a result of deception, threat or compulsion has the right to request a court to declare such transaction invalid.
Deception in a civil transaction means an intentional act of a party or a third person for the purpose of misleading the other party as to the subject, the nature of the entity or contents of the civil transaction which has caused the other party to enter into such transaction.
Threat or compulsion in a civil transaction means an intentional act of a party or a third person which compels the other party to conduct the civil transaction in order to avoid danger to the life, health, honor, reputation, dignity and/or property or that of its relatives.
Article 128. Invalidity of civil transactions established by person lacking in cognition and behavior control
A person who has legal capacity but has entered into a civil transaction at the time of he/she is lacking in cognition and behavior control shall have the right to request a court to declare such civil transaction invalid.
Article 129. Invalidity of civil transactions due to non-compliance with form
A civil transaction violating conditions for validity pertaining to form shall be invalid, except for any of the following cases:

  1. If the form of a civil transaction, required to be established in writing, does not comply with regulations of law, but a party or the parties has/have fulfill at least two third of the obligations in the transaction, a court, at his/her/their request(s), shall issue a decision on recognition of the validity of such transaction.
  2. If the form of a civil transaction, required to be established in writing, violates against regulations on notarizing or authorization, but a party or the parties has/have fulfill at least two third of the obligations in the transaction, a court, at his/her/their request(s), shall issue a decision on recognition of the validity of such transaction. In this case, the parties need not perform the notarizing or authorization.

Article 130. Partially invalid civil transactions
A civil transaction shall be partially invalid when one part of the transaction is invalid but such invalidity does not affect the validity of the remaining parts.
Article 131. Legal consequences of invalid civil transactions

  1. An invalid civil transaction shall not give rise to, change or terminate any civil rights and obligations of the parties as from the time the transaction is entered into.
  2. When a civil transaction is invalid, the parties shall restore everything to its original state and shall return to each other what they have received.

If the restitution is not able to make in kind, it may paid in money.

  1. A bona fide person in receiving yield and/or income is not required to return such yield and/or income.
  2. The party at fault which caused damage must compensate therefore.
  3. The settlement of consequences of invalid civil transactions regarding personal rights shall be prescribed in this Code and relevant laws.

Article 132. Time limit for requesting court to declare civil transactions invalid

  1. The time limit within which a request may be made to a court to declare a civil transaction invalid as specified in Articles 125 thru 129 of this Code shall be two years as from the date on which:
  2. a) The representative of a minor, a legally incapacitated person, a person with limited cognition and behavior control or a person with limited legal capacity knows and should know the ward established and/or performed the transaction himself/herself.
  3. b) The mistaken or cheated person in a transaction knows and should know that such transaction is established due to misunderstanding or cheating;
  4. c) The person that threatened or compelled other persons in a transaction put an end to such acts;
  5. d) The person lacking in cognition and behavior control establishes his/her transaction;
  6. dd) The civil transaction is established in non-compliance with form.
  7. After the time limit prescribed in Clause 1 of this Article, if there is still no request for declaring civil transaction invalid, such transaction still remains valid.
  8. For civil transactions specified in Articles 123 and 124 of this Code, the time limit for requesting a court to declare such civil transactions invalid shall not be restricted.

Article 133. Protection of the interests of bona fide third parties with regard to invalid civil transactions

  1. In cases where a civil transaction is invalid but the transacted property being a moveable property is not required to be registered and such property has already been transferred to a bona fide third party through another transaction, the transaction with the third party shall remain valid, except for the case specified in Article 167 of this Code.
  2. In cases where a civil transaction is invalid but the transacted property is registered at a competent authority and such property has already been transferred to a bona fide third party through another transaction which is established according to that registration, such transaction shall remain valid.

In cases where the transacted property which is required to be registered has not registered at a competent authority, the transaction with the third party shall be invalid, except for cases the bona fide third party received such property through an auction or a transaction with an another party being the owner of such property pursuant to a judgment or decision of a competent authority but thereafter such person is not the owner of the property as a result of the judgment or decision being amended or annulled.

  1. The owner of a property shall have no right to reclaim the property from the bona fide third party if the transaction with such party remains valid as prescribed in Clause 2 of this Article, but the owner may proceed against the party at fault to refund appropriate expenses and compensate for his/her damage.

Chapter IX
REPRESENTATION
Article 134. Representation

  1. Representation means a person (hereinafter referred to as the representative) acting in the name and for the benefit of another person (hereinafter referred to as the principal) enters into and performs a civil transaction within the scope of representation.
  2. Each natural or juridical person may enter into and/or perform civil transactions through a representative. A natural person may not allow another person to represent him/her; if the law provides for that they must personally enter into and perform such transaction.
  3. The representative, if required by law, must have legal personality and/or legal capacity in accordance with the transactions that he/she enters into and performs.

Article 135. Basis for establishment of representation rights
Representation rights shall be established according to a power of attorney between a principal and a representative (hereinafter referred to as authorized representation); according to a decision of a competent authority, a charter of a juridical person or as prescribed by law (hereinafter referred to as legal representation).
Article 136. Legal representatives of natural persons

  1. The father and/or mother with respect to a minor.
  2. The guardian with respect to a ward. The guardian of a person with limited cognition and behavior control is a legal representative if appointed by a court.
  3. The person appointed by a court in case where it is not able to determine the representative prescribed in Clause 1 and Clause 2 of this Article.
  4. The person appointed by a court with respect to a person with limited legal capacity.

Article 137. Legal representatives of juridical persons

  1. Legal representatives of juridical persons include:
  2. a) The person appointed by the juridical person according to its charter;
  3. b) The person competent to represent as prescribed by law;
  4. c) The person appointed by a court during the proceedings at the court.
  5. Each juridical person may have multiple legal representatives and each representative is entitled to represent the juridical person as prescribed in Articles 140 and 141 of this Code.

Article 138. Authorized representatives

  1. Each natural or juridical person may authorize another natural or juridical person to enter into and perform a civil transaction.
  2. Members of a household, co-operative group or a non-juridical person may agree to authorize another natural or juridical person to enter into and perform a civil transaction related to their common property.
  3. A person aged from fifteen years to below eighteen years may be an authorized representative, except where the law provides for that the civil transaction must be entered into and performed by a person who has reached eighteen years of age.

Article 139. Legal consequences of representative acts

  1. A civil transaction entered into and performed with a third person by a representative in accordance with his/her scope of authorization shall give rise to rights and obligations of the principal.
  2. The representative is entitled to enter into and/or perform necessary acts to attain the objectives of the authorization.
  3. In case where a representative still enters into or performs a civil transaction although he/she knew or should know the establishment of authorization due to misunderstanding, deception, threat or compulsion, such civil transaction shall not give rise to rights and obligations of the principal, except for the case that the principal knew or should know such misunderstanding, deception, threat or compulsion without any objection.

Article 140. Term of representation

  1. The term of representation shall be determined according to a power of attorney, a decision of a competent authority, and a charter of a juridical person or as prescribed by law.
  2. If it fails to determine the term of representation prescribed in Clause 1 of this Article, the term of representation shall be determined as follows:
  3. a) If the representation right is determined according to a specific civil transaction, the time limit for representation shall be determined until the time of termination of such civil transaction;
  4. b) If the representation right is not determined according to a specific civil transaction, the term of representation is 1 year, from the time of arising representation right.
  5. The authorized representation shall terminate in any of the following cases:
  6. a) Upon an agreement;
  7. b) Upon expiry of the term of authorization;
  8. c) Upon completion of the authorized tasks;
  9. d) The principal or the representative unilaterally revokes the authorization;
  10. dd) The principal or the representative being natural person dies; the principal or the representative being juridical person ceases to exist;
  11. e) The representative does not meet the conditions prescribed in Clause 3 Article 134 of this Code;
  12. g) Upon another basis that causes the failure of the representation.
  13. The legal representation shall terminate in any of the following cases:
  14. a) The principal being natural person becomes an adult or has his/her legal capacity restored;
  15. b) The principal being person dies;
  16. c) The principal being juridical person ceases to exist;
  17. d) Upon another basis as prescribed in this Code and relevant laws.

Article 141. Scope of representation

  1. Each representative may only enter into and/or perform civil transactions within his/her scope of representation according to any of the following bases:
  2. a) The decision of the competent authority;
  3. b) The charter of the juridical person;
  4. c) Contents of authorization;
  5. d) Other regulations as prescribed by law.
  6. If it fails to determine the specific scope authorization prescribed in Clause 1 of this Article, the legal representative has the right to enter into and perform all civil transactions in the interests of the principal, unless otherwise prescribed by law.
  7. A natural or juridical person may represent multiple natural or juridical persons but he/she/it may not, on behalf of the principal, enter into and perform a civil transaction with him/her/it or with a third party that he/she/it also acts as a representative therefor, unless otherwise prescribed by law.
  8. The representative must inform the parties of the scope of his/her representation.

Article 142. Consequences of civil transactions entered into and performed by unauthorized persons

  1. A civil transaction entered into and performed by an unauthorized person representative shall not give rise to rights and obligations of the principal, except for any of the following cases:
  2. a) The principal recognizes the transaction;
  3. b) The principal knows it without any objection within an appropriate time limit;
  4. c) It is the principal’s fault that the other party does not know or is not able to know that the person entering into and performing the civil transaction therewith was unauthorized.
  5. If a civil transaction entered into and performed by an unauthorized person does not give rise to rights and obligations with respect to the principal, the unauthorized person must fulfill the obligations to the person with which he/she transacted, unless such person knew or should have known that the representative was unauthorized.
  6. A person having transacted with an unauthorized person has the right to terminate unilaterally the performance of or to terminate the civil transaction entered into and to demand compensation for any damage, except where such person knew or should have known that the representative was unauthorized or the case prescribed in Point a Clause 1 of this Article.
  7. If the unauthorized person and the other party in a civil transaction deliberately enter into and perform such transaction and thereby cause damage to the principal, they must jointly compensate for the damage.

Article 143. Consequences of civil transactions entered into and performed by representatives beyond scope of representation

  1. A civil transaction entered into and performed by a representative beyond his or her scope of representation shall not give rise to rights and obligations of the principal with respect to that part of the transaction which exceeded the scope of representation, except for any of the following cases:
  2. a) The principal gives consent;
  3. b) The principal knows it without any objection within an appropriate time limit;
  4. c) It is the principal’s fault that the other party does not know or is not able to know that the person entering into and performing the civil transaction therewith was beyond his/her scope of representation.
  5. If a civil transaction entered into and performed by a representative beyond his/her scope of representation does not give rise to rights and obligations of the principal with respect to that part of the transaction, the representative must fulfill the obligations owning to the person with which he/she transacted in respect of the part of transaction which is beyond the scope of representation, unless such person knew or should have known that the scope of representation was exceeded.
  6. A person having transacted with such representative has the right to terminate unilaterally the performance of or to terminate the civil transaction with respect to that part which is beyond the scope of representation or with respect to the entire transaction and to demand compensation for any damage, except where such person knew or should have known that the scope of representation was exceeded or the case prescribed in Point a Clause 1 of this Article.
  7. Where a person and a representative enter into and perform a civil transaction deliberately beyond the scope of representation of the representative and thereby cause damage to the principal, they shall be jointly liable to compensate for the damage.

Chapter X
TIME LIMITS AND LIMITATION PERIODS
Section 1. TIME LIMITS
Article 144. Time limits

  1. Time-limit means a length of time calculated from one point of time to another point of time.
  2. A time-limit may be calculated by reference to minutes, hours, days, weeks, months or years, or by reference to the happening of an event.

Article 145. Methods for calculating time-limits

  1. The method for calculating a time-limit shall be apply in accordance with the provisions of this Code, unless otherwise agreed or otherwise provided by law.
  2. A time-limit shall be calculated according to the solar calendar, unless otherwise agreed.

Article 146. Detailed provisions on time-limits and point of time for calculating time-limits

  1. Where the parties have agreed on a time-limit which is one year, half of one year, one month, half of one month, one week, one day, one hour or one minute, but such length of time is not continuous, the time-limit shall be calculated as follows:
  2. a) One year shall be three hundred and sixty five (365) days;
  3. b) Half of one year shall be six months;
  4. c) One month shall be thirty (30) days;
  5. d) Half of one month shall be fifteen (15) days;
  6. dd) One week shall be seven days;
  7. e) One day shall be twenty four (24) hours;
  8. g) One hour shall be sixty (60) minutes;
  9. h) One minute shall be sixty (60) seconds.
  10. Where the parties have agreed on a point of time which is at the beginning of a month, the middle of a month or the end of a month, such point of time shall be determined as follows:
  11. a) The beginning of a month shall be the first day of that month;
  12. b) The middle of a month shall be the fifteenth day of that month;
  13. c) The end of a month shall be the last day of that month.
  14. Where the parties have agreed on a point of time which is at the beginning of the year, the middle of a year or the end of a year, such point of time shall be determined as follows:
  15. a) The beginning of a year shall be the first day of January;
  16. b) The middle of a year shall be the last day of June;
  17. c) The end of a year shall be the last day of December.

Article 147. Commencement of time-limits

  1. Where a time-limit is stated by reference to minutes or hours, it shall commence from a defined moment of time.
  2. Where a time-limit is stated by reference to days, weeks, months or years, the first day of the time-limit shall not be taken into account and the time-limit shall commence from the day following the defined date.
  3. Where a time-limit is stated by reference to the happening of an event, the date on which the event happens shall not be taken into account and the time-limit shall commence from the day following the date on which the event happened.

Article 148. End of time-limits

  1. Where a time-limit is stated by reference to days, the time-limit shall end at the last moment of the last day of the time limit.
  2. Where a time-limit is stated by reference to weeks, the time-limit shall end at the last moment of the corresponding day of the last week of the time limit.
  3. Where a time limit is stated by reference to months, the time-limit shall end at the last moment of the corresponding day of the last month of the time-limit. If the month in which the time-limit ends does not have a corresponding day, the time-limit shall end on the last day of such month.
  4. Where a time-limit is stated by reference to years, the time-limit shall end at the last moment of the corresponding day and month of the last year of the time-limit.
  5. Where the last day of a time-limit falls on a weekend or a public holiday, the time-limit shall end at the last moment of the next working day following such day.
  6. The last moment of the last day of a time-limit shall be precisely twelve o’clock midnight on that day.

Section 2. LIMITATION PERIODS
Article 149. Limitation periods

  1. Limitation period means a time-limit provided by law where, upon its expiry, a legal consequence arises as prescribed by law.

The limitation periods shall apply as prescribed in this Code and relevant laws.

  1. A court only applies provisions in terms of limitation periods at the request of a party or the parties provided that such request is filed before the first trial court of first instance gives a judgment and/or a decision on settlement.

The person benefiting from the application of the limitation period may refuse to apply such limitation period, unless such refusal is aimed at evading his/her obligations.
Article 150. Types of limitation periods

  1. A limitation period for enjoying civil rights is the time limit where, upon its expiry, an entity enjoys civil rights.
  2. A limitation period for a release from civil obligations is the time limit where, upon its expiry, a person with civil obligations is released from the fulfillment of those civil obligations.
  3. A limitation period for initiating legal action is the time-limit within which an entity has the right to initiate legal action to request a court to resolve a civil case to protect the infringed legal rights or interests of the entity. When such time-limit expires, the right to initiate such legal action shall be lost.
  4. A limitation period for requesting resolution of a civil case is the time-limit within which an entity has the right to request a court to resolve a civil case in order to protect the legal rights and interests of natural persons, juridical persons, public interest and/or the interest of the State. When such time-limit expires, the right to request shall be lost.

Article 151. Method for calculating limitation periods
A limitation period shall be calculated from the first moment of time of the first day and shall end at the last moment of time of the last day of the period.
Article 152. Effectiveness of limitation periods for enjoyment of civil rights and release from civil obligations
Where the law provides for that a subject may enjoy civil rights or be released from civil obligations by reference to a limitation period, the enjoyment of civil rights or the release from civil obligations shall take effect only upon expiry of the limitation period.
Article 153. Continuity of limitation periods for enjoyment of civil rights and release from civil obligations

  1. The limitation period for enjoyment of civil rights or release from civil obligations shall continue uninterrupted from its beginning to its expiry. If there is an event causing an interruption, the limitation period shall recommence from the moment when the event causing the interruption ends.
  2. The limitation period for enjoyment of civil rights or release from civil obligations shall be suspended upon occurrence of any of the following events:
  3. a) A competent authority makes a resolution with respect to the civil rights and obligations which are the subject of the limitation period;
  4. b) Civil rights or obligations which are the subject of a limitation period are disputed by a person with related rights or obligations and they are settled by an effective judgment or decision issued by a court.
  5. The limitation period shall continue uninterrupted where the enjoyment of civil rights or the release from civil obligations or the right to initiate legal action is lawfully transferred to another person.

Article 154. Commencement of limitation periods for initiating legal action for civil cases and limitation periods for requesting resolution of civil cases

  1. The commencement of the limitation period for initiating legal action for a civil case shall be calculated from the date on which the eligible person knows or should know that his/her legal rights or interests are infringed, unless otherwise provided by law.
  2. The commencement of the limitation period for requesting resolution of a civil case shall be calculated from the date when the right to request arises, unless otherwise provided by law.

Article 155. Non-applicability of limitation periods
A limitation period for initiating legal action for a civil case shall not apply in any of the following cases:

  1. Request for the protection of personal rights not associated with property;
  2. Request for the protection of ownership rights, unless otherwise provided by this Code or relevant laws.
  3. Dispute over land use right as prescribed in the Law on land;
  4. Other cases as provided by law.

Article 156. Time periods excluded from limitation periods for initiating legal action for civil cases and from limitation periods for requesting resolution of civil cases
The time period during which one of the following events occurs shall be excluded from limitation periods for initiating legal action for civil cases and from limitation periods for requesting resolution of civil cases:

  1. An event of force majeure or other objective hindrance which renders the person with the right to initiate legal action for a civil case or make the request not able to do so within the limitation period.

An event of force majeure is an event which occurs in an objective manner which is not able to be foreseen and which is not able to be remedied by all possible necessary and admissible measures being taken.
An objective hindrance is a hindrance which in an objective context results in a person with civil rights or obligations not knowing that his or her lawful rights and interests have been infringed or not being able to exercise his or her rights or fulfill his or her civil obligations;

  1. The person with the right to initiate legal action for a civil case or to make the request is a minor or a legally incapacitated person, a person with limited cognition and behavior control or a person with limited legal capacity, and does not yet have a representative.
  2. The representative of a minor or a legally incapacitated person, a person with limited cognition and behavior control or a person with limited legal capacity has not yet been replaced in any of the following cases:
  3. a) The representative being natural person dies or the representative being juridical person ceases to exist;
  4. b) The representative, for good reasons, cannot continue his/her representation.

Article 157. Re-commencement of limitation period for initiating legal action for civil cases

  1. The limitation period for initiating legal action for a civil case shall re-commence in any of the following cases:
  2. a) The obligor has acknowledged part or all of its obligations to the plaintiff;
  3. b) The obligor has acknowledged or fulfilled part of its obligations to the plaintiff;
  4. c) The parties have become reconciled.
  5. The limitation period for initiating legal action for a civil case shall re-commence from the date following the date on which the event provided in clause 1 of this Article occurs.

PART TWO
OWNERSHIP RIGHTS AND OTHER PROPERTY-RELATED RIGHTS
Chapter XI
GENERAL PROVISIONS
Section 1. Rules for establishing and exercising ownership rights and other property-related rights
Article 158. Ownership rights
Ownership rights comprise the rights of an owner to possess, use and dispose of the property of the owner in accordance with law.
Article 159. Other property-related rights

  1. Other property-related rights mean rights of entities directly hold or control the property belonging to ownership rights of another entity.
  2. Other property-related rights include:
  3. a) Right to adjacent immovable property;
  4. b) Usufruct right;
  5. c) Surface rights.

Article 160. Rules for establishing and exercising ownership rights and other property-related rights

  1. Ownership rights and other property-related rights shall be established and exercised if they are prescribed in Code and relevant laws.

Other property-related rights shall remain valid although the ownership right have been transferred, otherwise provided by this Code or relevant laws.

  1. Each owner is entitled to perform all acts on his willpower to the property but it is not contrary to the provisions of the law, damage or adversely affects national interests, ethnicity, public interests, rights and legitimate interests of other people.
  2. Each holder of other property-related rights is entitled to perform all acts within the scope prescribed in this Code and relevant laws but it is not contrary to the provisions of the law, damage or adversely affects national interests, ethnicity, public interests, rights and legitimate interests of the owner or other people.

Article 161. Time of establishing ownership rights and other property-related rights

  1. The time of establishing ownership rights and other property-related rights shall be determined as prescribed in this Code and relevant laws; if there is no relevant regulations of law, the agreement of the parties shall prevail; if there is no either relevant regulations of law or agreement of the parties, the time of establishing ownership rights and other property-related rights shall be the time when the property is transferred.

The time when the property is transferred is the time when the obligee or his/her legal representative possesses the property.

  1. In case where the property which has been not transferred arise yield or income, such yield or income shall belong to the transferor, unless otherwise agreed.

Article 162. Bearing risks of property

  1. Each owner shall bear all risks of the property under his/her ownership, unless otherwise agreed or unless otherwise prescribed by this Code or relevant laws.
  2. Each holder of other property-related rights shall bear risks of the property within his/her right scope, unless otherwise agreed with the owner of the property or unless otherwise prescribed by this Code or relevant laws.

Section 2. PROTECTION OF OWNERSHIP RIGHTS AND OTHER PROPERTY-RELATED RIGHTS
Article 163. Protection of ownership rights and other property-related rights

  1. No one may be illegally restricted in or deprived of his/her ownership rights or other property-related rights to his/her property.
  2. In case of extreme necessity for reasons of national defense, security or national interests, the State shall affect a compulsory purchase or requisition with compensation of the property of organizations or individuals in accordance with the market prices.

Article 164. Measures for protection of ownership rights and other property-related rights

  1. Each owner or holder of other property-related rights is entitled to self-protect and prevent anyone from infringing his/her rights by measures in accordance with regulations of law.
  2. Each owner or holder of other property-related rights shall have the right to request a court or another competent authority to compel the person infringing upon their rights to return the property and terminate the acts of illegally obstructing the exercise of their ownership rights or other property-related rights, and to request compensation for any damage.

Article 165. Possession with a legal basis

  1. Possession with a legal basis is the possession of a property in any of the following cases:
  2. a) The owner possesses the property;
  3. b) A person is authorized by the owner to manage the property;
  4. c) A person to whom the right to possession has been transferred through a civil transaction in accordance with the provisions of law;
  5. d) A person who discovers and keeps derelict property, property with unidentified owners, property which has been let drop on the ground, left over out of inadvertence, buried or sunken in accordance with this Code and/or relevant laws.
  6. dd) A person who discovers and keeps stray domestic animals, poultry or raised aquatic animals in accordance with this Code and/or relevant laws;
  7. e) Other cases as prescribed by law.
  8. A possession of property which does not comply with the provisions of Clause 1 of this Article is a possession without a legal basis.

Article 166. The right to reclaim property

  1. Owners and/or holders of other property-related rights shall have the right to request the persons possessing, using or receiving benefits from the property without a legal basis to return such property.
  2. The owner of a property has no right to reclaim such property that is in the possession of a holder of other property-related rights.

Article 167. The right to reclaim movable property not subject to ownership right registration from bona fide possessors
Owners may reclaim movable property not subject to ownership right registration from bona fide possessors in cases where such bona fide possessors have acquired such property through unindemifiable contracts with persons who have no right to dispose of the property; in case of indemifiable contracts, the owners may reclaim the movable property if such movable property has been stolen, lost or other cases of possession against the owners’ will.
Article 168. The right to reclaim movable property subject to ownership right registration or immovable property from bona fide possessors
Owners may reclaim their movable property subject to ownership right registration and immovable property, except for cases prescribed in Clause 2 Article 133 of this Code.
Article 169. The right to request the prevention of acts of illegally obstructing the exercise of ownership rights and other property-related rights
When exercising their ownership rights or other property-related rights, the owners or holders shall have the right to request persons committing acts of illegally obstructing the exercise of their lawful ownership rights or possession rights to terminate such acts or request a court or another competent authority to compel such persons to terminate their violations.
Article 170. The right to request compensation for damage
Owners or holders of other property-related rights are entitled to request persons infringing upon their ownership rights or other property-related rights to compensate for any damage.
Section 3. RESTRICTIONS ON PROTECTION OF OWNERSHIP RIGHTS AND OTHER PROPERTY-RELATED RIGHTS
Article 171. Rights and obligations of owners and holders of other property-related rights in emergency circumstances

  1. An emergency circumstance is a circumstance where in order to avert a danger actually and directly threatening the interests of the State or of a collective, or the legitimate rights or interests of their own or of other persons, a person has no alternative but to take an act which would cause lesser damage than the damage to be prevented.
  2. In an emergency circumstance, the owner and holder of other property-related rights to a property must not hinder another person from using his/her own property or hinder another person from causing damage to such property in order to prevent or abate the greater danger or damage that threatens to happen.
  3. The causing of damage in an emergency circumstance is not the act of infringing upon ownership rights or other property-related rights. The owner or the holder of other property-related rights shall be compensated for damage in accordance with the provisions of Article 595 of this Code.

Article 172. Obligations to protection of the environment
When exercising ownership rights and/or other property-related rights, the owner or the holder must comply with the provisions of law on environmental protection; if he/she causes environmental pollution, the owner shall have to terminate the acts which cause the pollution, to take measures to remedy the consequences and to compensate for damage.
Article 173. Obligations to respect and ensure social order and safety
When exercising ownership rights and/or other property-related rights, the owner or the holder must respect and ensure social order and safety and must not abuse his/her ownership rights to cause social disorder or unsafety, causing damage to the State interests, public interests or legitimate rights and interests of other persons.
Article 174. Obligation to respect building regulations
When constructing a project, the owners and holders of other property-related rights must comply with the law on construction, ensure safety. It may not build beyond the height and distance specified by the law on construction and infringes the legitimate rights and interests of owners of adjoining and surrounding immovable properties.
Article 175. Boundaries between immovable properties

  1. The boundaries between adjoining immoveable properties shall be determined in accordance with the agreement of the owners or in accordance with a decision of the competent authority.

The boundaries may also be determined in accordance with customary practice or according to boundaries which have existed for thirty (30) or more years without dispute.
The land user may not encroach upon the boundary or change the boundary markers, including boundaries being canals, irrigation ditches, trenches, gutters or boundaries of rice fields. Each entity must respect and maintain the common boundaries.

  1. A person having land use rights may use the airspace and the sub-surface according to the vertical dimensions of the boundaries around the land as prescribed by law and may not interfere with the use by other persons of the adjoining land.

A land user may only plant trees and performs other activities within the area covered by its land use rights and according to the defined boundaries. If the roots and branches of trees extend beyond the boundaries, such person must clip and prune the parts of the trees beyond the boundaries, except as otherwise agreed.
Article 176. Boundary markers separating immovable property

  1. An owner of adjoining immoveable property may only erect boundary stakes and fences and build separating walls on the area covered by its land use rights.
  2. Adjoining land users may agree to the erection of boundary stakes and fences, the building of separating walls and the planting of trees on the boundary for use as boundary markers between the immoveable properties, and the boundary markers shall be under the multiple ownership of such persons.

Where a boundary marker is erected on the boundary by only one party with the consent of the owner of the adjoining immoveable property, such boundary marker shall be multiple ownership property and the construction expenses shall be borne by the party having erected the marker, unless otherwise agreed. If the owner of the adjoining immoveable property does not give consent and has legitimate reason, the owner having erected the boundary stake or fence or built the separating wall must remove it.

  1. With respect to boundary markers which are common house walls, the owner of the adjoining immoveable property may not cut out a window or air ventilating hole or drill the wall in order to install building structures, except with the consent of the owner of the adjoining property.

Where houses are separately built, but with adjoining walls, an owner may only drill and install building structures up to the space between the adjoining walls.
With respect to trees which are common boundary markers, the parties have equal obligations to protect the trees, and the fruits from the trees shall be distributed equally, unless otherwise agreed.
Article 177. Safety guarantee with regard to trees or constructions posing risks of causing damage

  1. Where there is a danger that a tree or a construction will collapse onto an adjoining immoveable property, the owner must cut down the tree or repair or demolish the construction at the request of the owners of adjoining immovable property or a competent authority. If such person does not cut down the tree or demolish the construction, the owner of an adjoining immoveable property may request a competent authority to procure that the tree be cut down or the structure be demolished. The expenses for cutting down the tree or demolishing the construction shall be borne by the owner of the tree or the structure.
  2. When digging a well or a pond or constructing underground structures, the owner of the project must do so at the distance away from the boundaries provided by the law on construction.

When constructing a hygiene construction work, a storehouse of hazardous materials and other construction works likely to cause environmental pollution, the owner of that property must build it a distance far from the markers and in reasonable location, ensure hygiene and safety and do not affect the owners of other immovable properties.

  1. If damage is caused to the owners of adjoining or neighboring properties prescribed in Clauses 1 and 2 of this Article, compensation must be made.

Article 178. Installing doors and windows opening onto adjacent immovable property

  1. A house owner may only install entry and exit doors and windows opening onto adjacent houses or opposite houses and common walkways in accordance with the law on construction.
  2. The underside of awnings above entry and exit doors or the underside of awnings of windows opening onto common walkways must be at least two point five (2.5) meters above the ground.

Chapter XII
POSSESSION
Article 179. Concept of possession

  1. Possession means that an entity holds and controls a property directly or indirectly as holder of rights to such property.
  2. Possession includes possession of owners and possession of non-owners.

The possession of non-owners may not be the basis for establishment of ownership, except for the cases prescribed in Articles 228, 229, 230, 231, 232, 233 and 236 of this Code.
Article 180. Possession in good faith
Possession in good faith means the possession that the possessor has bases to believe that he/she has the right to the property under his/her possession.
Article 181. Possession not in good faith
Possession not in good faith means that the possession that the possessor knew or should have known that he/she has no right to the property under his/her possession.
Article 182. Continuous possession

  1. Continuous possession of property is possession of property which occurs over a period of time without dispute relating to such property or with dispute but no effective judgment or decision on settlement of such dispute is issued, including the case when the property is delivered to another person for possession.
  2. The non-continuous possession shall not be treated as the basis for presuming status and rights of possessors prescribed in Article 184 of this Code.

Article 183. Overt possession

  1. Possession of property shall be deemed to be overt possession when it occurs in a transparent manner, without concealment; when property currently being possessed is used in accordance with its functions and usage and is preserved and retained by the possessor as if it were his or her own property.
  2. The overt possession shall not be treated as the basis for presuming status and rights of possessors prescribed in Article 184 of this Code.

Article 184. Presuming status and rights of possessors

  1. Each possessor shall be presumed in good faith. If a person believes that such possessor is not in good faith, he/she must prove it.
  2. If there is a dispute over the rights to a property, the possessor of such property shall be presumed to have those rights. The disputing person must prove that the possessor have no right.
  3. A person possessing in good faith, continuously and overtly shall be eligible for limitation periods for enjoying the rights and enjoy the yield and income derived from the property as prescribed in this Code and relevant laws.

Article 185. Protection of possession
When the possession is violated by another person, the possessor is entitled to, personally or through a court or a competent authority, compels the violator to terminate his/her violation, make restitution, return the property and compensate for any damage.
Chapter XIII
OWNERSHIP RIGHTS
Section 1. Contents of ownership rights
Sub-section 1. RIGHT TO POSSESS
Article 186. Right to possess of owners
Where an owner possesses its own property, such owner may do all things to keep and manage the property in accordance with his or her wishes provided that it is not contrary to law or social morals to do so.
Article 187. Right to possess of persons managing property under authorization of owner

  1. When an owner authorizes another person to manage his or her property, the authorized person shall exercise the right to possess such property within the scope, in the manner and for the duration determined by the owner.
  2. A person authorized to manage property is not able to become the owner of the property delivered as prescribed in Article 236 of this Code.

Article 188. Right to possess of persons to which property is delivered through civil transactions

  1. Where an owner delivers property to another person through a civil transaction which does not include the transfer of ownership rights, the person to whom the property is delivered must undertake the possession of such property in a manner consistent with the purpose and content of the transaction.
  2. The person to which the property is delivered has the right to use such property and is entitled to transfer the right to possess and use the property to another person if the owner so agrees.
  3. The person to whom the property is delivered is not able to become the owner of that property as prescribed in Article 236 of this Code.

Sub-section 2. RIGHT TO USE
Article 189. Right to use
Right to use means the right to exploit the usage of, and to enjoy the yield and income derived from, property.
The right to use may be transferred to another person upon an agreement or as prescribed by law.
Article 190. Right to use of owners
The owner has the right to use property in conformity with his/her wishes provided that this will not cause damage to or adversely affect the interests of the State or the public or the legal rights and interests of other persons.
Article 191. Right to use of non-owners
A non-owner shall have the right to use a property as agreed with the owner or as prescribed by law.
Sub-section 3. RIGHT OF DISPOSAL
Article 192. Right of disposal
Right of disposal means the right to transfer ownership rights, renounce ownership rights, right to use, or destruct the property.
Article 193. Conditions for disposal
Disposal of property must be performed by a person with legal capacity in accordance with law.
Where the law provides formalities and procedures for disposal of property, such formalities and procedures must be complied with.
Article 194. Right of disposal of owners
Owners shall have the right to sell, exchange, give, loan, bequeath, renounce or ownership rights, right to use, destruct or implement other forms of disposal in conformity with the law on property.
Article 195. Right of disposal of non-owners
A non-owner of property shall only have the right to dispose of the property pursuant to authorization from the owner or in accordance with provisions of the law.
Article 196. Restrictions on right of disposal

  1. The right of disposal shall only be restricted in cases where the law so provides.
  2. Where a property for sale is an historic or cultural relic as prescribed in law on cultural heritage, the State shall have the right of first refusal to purchase.

Where a natural or juridical person has the right of first refusal to purchase certain property in accordance with law, upon the sale of such property, the owner must grant such right of first refusal to purchase to such person.
Section 2. FORMS OF OWNERSHIP
Sub-section 1. THE PEOPLE’S OWNERSHIP
Article 197. Property under the people’s ownership
Land, water resources, mineral resources, resources in the waters, airspace and other natural resources and the assets invested and/or managed by the State belong to the entire people with the representation and centralized management of the State.
Article 198. Exercise of right of owner with respect to the people-owned property

  1. The State of the Socialist Republic of Vietnam is a representative that exercises the rights of the owner with respect to the people-owned property.
  2. The Government shall manage centrally and ensure the appropriate, efficient and economic use of the people-owned property.

Article 199. Possession, use and disposal of the people-owned property
The possession, use and disposal of the people-owned property shall be performed within the scope and in accordance with the procedures provided by law.
Article 200. Exercise of the people ownership rights with respect to property invested in enterprises

  1. Where the people-owned property is invested in an enterprise, the State shall exercise the rights of the owner with respect to such property in accordance with the law on enterprises, management and use of state capital investing in business at enterprises and relevant laws.
  2. Enterprises have the right to manage and use capital, land, natural resources and other property invested by the State in accordance with the relevant laws.

Article 201. Exercise of the people ownership rights with respect to property allocated to regulatory agencies and units of armed forces

  1. Where property in the category of the people-owned property is allocated to a regulatory agency or unit of the armed forces, the State shall exercise the right to inspect the management and use of such property.
  2. The regulatory agency or unit of the armed forces shall manage and use the property allocated by the State for the correct purpose in accordance with law.

Article 202. Exercise of the people ownership rights with respect to property allocated to political organizations, socio-political organizations, and socio-political professional organizations, social organizations and socio-professional organizations

  1. Where property in the category of the people-owned property is allocated to a political organization, socio-political organization or socio-political professional organization, social organization or socio-professional organization, the State shall exercise the right to inspect the management and use of such property.
  2. The political organization, socio-political organization or socio-political professional organization, social organization or socio-professional organization has the right to manage and use the property allocated to it by the State for the correct purpose, within the scope and in accordance with the methods and procedures provided by law, and consistent with the functions and duties of such organization as provided in its charter.

Article 203. Rights of natural and juridical persons with respect to use of property in category of the people-owned property
Natural and juridical persons may use land and extract aquatic resources, natural resources and other properties in the category of the people-owned property for the correct purpose and effectively and must fulfill all of their obligations to the State in accordance with law.
Article 204. Property in category of the people-owned property not having been allocated to natural and juridical persons for management
With respect to property in the category of the people-owned property which has not been allocated to a natural and juridical person for management, the Government shall organize protection, investigation and survey, and formulation of zoning in order to make such property available for use.
Sub-section 2. PRIVATE OWNERSHIP
Article 205. Private ownership and property under private ownership

  1. Private ownership means the ownership by a natural person or a juridical person.
  2. The quantity and value of a property under lawful private ownership shall not be restricted.

Article 206. Possession, use and disposal of property under private ownership

  1. An owner has the right to possess, use and dispose of property under his or her ownership for the purpose of satisfying the needs of daily life, consumption or business activities and other purposes in accordance with law.
  2. The possession, use and disposal of property under private ownership must not cause damage to or adversely affect the interests of the State or the public or the legal rights and interests of other persons.

Sub-section 3. MULTIPLE OWNERSHIP
Article 207. Multiple ownership and types of multiple ownership

  1. Multiple ownership means ownership of property by more than one owner.
  2. Multiple ownership comprises ownership in common and joint ownership.

Article 208. Establishment of multiple ownership rights
Multiple ownership rights shall be created as agreed by the owners or in accordance with provisions of the law or in accordance with customary practice.
Article 209. Ownership in common

  1. Ownership in common is multiple ownership whereby each owner’s share of the ownership rights with respect to the multiple ownership property is specified.
  2. Each of the owners in common has rights and obligations with respect to the multiple ownership property corresponding to its share of the ownership rights, unless otherwise agreed.

Article 210. Joint ownership

  1. Joint ownership means multiple ownership whereby each owner’s share of the ownership rights with respect to the multiple ownership property is not specified.

Joint ownership includes divisible joint ownership and indivisible joint ownership.

  1. Joint owners have equal rights and obligations with respect to the multiple ownership property.

Article 211. Multiple ownership between communities

  1. Multiple ownership between a community is the ownership by a family line, hamlet, village, tribal village, mountainous hamlet, ethnic hamlet, religious community or other community of property which is formed in accordance with customary practice, which is jointly contributed to and raised by the members of the community or which was given to the whole community, and property which is obtained from other lawful sources for the purpose of satisfying the common lawful interests of the entire community.
  2. Members of a community shall jointly manage, use and dispose of multiple ownership property in the interests of the community as agreed or in accordance with customary practice, but not inconsistent with the law or social morals.
  3. Multiple ownership property by a community is indivisible joint property.

Article 212. Multiple ownership between family members

  1. Property of family members living together includes property that they contributed or made together and other properties whose ownership rights are established in accordance with this Code and relevant laws.
  2. The possession, use and disposal of multiple ownership property by family members shall be conducted as mutually agreed. With respect to disposal of an immovable property, a movable property required registration, or a property being the primary income of the family, the agreement between all family members being adults with full legal capacity is required, unless otherwise prescribed by law.

If there is no agreement, the regulations on ownership in common prescribed in this Code and relevant laws shall apply, except for the case prescribed in Article 213 of this Code.
Article 213. Multiple ownership between husbands and wives

  1. Multiple ownership between a husband and wife is divisible joint ownership.
  2. A husband and wife jointly create and develop their marital property through their efforts and have equal rights to possess, use and dispose of such property.
  3. A husband and wife shall discuss, agree on or authorize each other in relation to the possession, use and disposal of the marital property.
  4. The marital property may be divided as agreed or pursuant to a decision of a court.
  5. If a husband and wife select the regulations on property under agreement as prescribed in law on marriage and families, the marital property shall apply those regulations.

Article 214. Multiple ownership in apartment buildings

  1. The areas, equipment and furnishings which are for common use in an apartment building prescribed in the Law on Housing are under multiple ownership of all owners of the apartments in the apartment building and are indivisible, unless otherwise provided by law or unless all of the owners reach some other agreement.
  2. The owners of the apartments in an apartment building have equal rights and obligations with respect to the management and use of common areas and equipment prescribed in Clause 1 of this Article, unless otherwise agreed or prescribed by law.
  3. Where an apartment building is destroyed, the rights of the owners of the apartment building shall be exercised in accordance with law.

Article 215. Mixed multiple ownership

  1. Mixed multiple ownership means ownership of property in respect of which owners from different economic sectors contribute capital for the purpose of conducting production and business for profit-making purposes.
  2. Property which is formed from sources being capital contribution by owners, lawful profits derived from production and business activities or other lawful sources in accordance with law is mixed multiple ownership property.
  3. The possession, use and disposal of property under mixed multiple ownership must comply with the provisions of Article 209 of this Code and other relevant laws relating to capital contribution; to the organization and operation of production and business activities; to the administration and management of property; and to the liability for property and distribution of profits.

Article 216. Management of multiple ownership property
The owners of multiple ownership property shall manage jointly such property in accordance with the principle of unanimity, unless otherwise agreed or otherwise provided by law.
Article 217. Use of multiple ownership property

  1. Each owner in common has the right to exploit, and to enjoy the yield and income derived from, the multiple ownership property in proportion to its share of the ownership rights, unless otherwise agreed or otherwise provided by law.
  2. Joint owners have equal rights to exploit and to enjoy the yield and income derived from, the multiple ownership property, unless otherwise agreed.

Article 218. Disposal of multiple ownership property

  1. Each owner in common has the right to dispose of its share of the ownership rights.
  2. Disposal of joint property shall be implemented as agreed by the owners of the property or as provided by law.
  3. Where an owner of multiple ownership property sells its share of the ownership rights, the other owners of the property have the right of first refusal to purchase such share.

Such owner may sell such share to other persons if no other owner purchases within three months in the case of immoveable property, or within one month in the case of moveable property, from the date on which the other owners received notice of the sale and the conditions of the sale. The notice must be made writing and conditions for sale applying to other owners in common shall be similar to those applying to non-owners in common.
In the case where there is a sale of a share of the multiple ownership rights in breach of this regulation on priority purchase right, within the time-limit of three months from the date of discovery of the breach, any one of the multiple owners has the right to request a court to transfer to it the rights and obligations of the purchaser; and the party at fault which caused damage shall be liable to compensate for damage.

  1. Where one of the owners of immovable property renounces its share of the ownership rights or where such person dies without leaving an heir, its share of the ownership rights shall belong to the State, except in the case of multiple ownership between communities where the share of ownership rights shall belong to the remaining members.
  2. Where one of the owners of movable property renounces its share of the ownership rights or where such person dies without leaving an heir, its share of the ownership rights shall belong to the remaining members.
  3. Where all owners renounce their ownership rights with respect to multiple ownership property, the ownership rights shall be established as prescribed in Article 228 of this Code.

Article 219. Division of multiple ownership property

  1. Where multiple ownership property is divisible, each owner has the right to request the property to be divided. If the property must be maintained within a certain period of time as agreed by all owners or as prescribed by law, each owner only has the right to request the property to be divided upon expiry of that period. Where the property is not able to be divided in kind, it shall be valued in terms of money for the purposes of division, unless otherwise agreed.
  2. Where a person requests one of the owners of multiple ownership property to fulfill a payment obligation and such owner does not have private property or sufficient private property to make the payment, the requesting person has the right to request that the multiple ownership property be divided in order to receive monetary payment and such person shall be entitled to participate in the division of the property, unless otherwise provided by law.

If the shares of ownership rights are not able to be divided in kind or if such a division is opposed by the remaining owners, the requesting person has the right to request the owner with the obligation to sell to sell its share of ownership rights in order to fulfill the payment obligation.
Article 220. Termination of multiple ownership
Multiple ownership shall terminate in any of the following circumstances:

  1. The multiple ownership property has been divided;
  2. One of the owners of the multiple ownership property is entitled to enjoy the property in its entirety;
  3. The multiple ownership property no longer exists;
  4. Other cases as provided by law.

Section 3. CREATION AND TERMINATION OF OWNERSHIP RIGHTS
Sub-section 1. CREATION OF OWNERSHIP RIGHTS
Article 221. Basis for establishing ownership rights
Ownership rights are created with respect to property in any of the following cases:

  1. Through labour, lawful production and business activities, or creation of subjects of intellectual property rights;
  2. Transfer of ownership rights as agreed or pursuant to a decision of a competent authority;
  3. Receipt of yield and/or income;
  4. Formation of new objects through merging, mixing or processing;
  5. Inheritance of property;
  6. Acquisition in accordance with law on objects of which owner is unidentified, buried or sunken objects; lost or mislaid objects, stray poultry or livestock or aquaculture stock.
  7. Possession and gain from property prescribed in Article 236 of this Code;
  8. Other cases as provided by law.

Article 222. Establishment of ownership rights with respect to property earned from labour and lawful business and production activities or creation of subjects of intellectual property rights
Workers and persons conducting lawful business and production activities have ownership rights with respect to property earned from labour and the lawful business and production activities from the time when such property is earned.
Person conducting creation activities has ownership rights to the property gained from those activities as prescribed in the Law on intellectual property.
Article 223. Establishment of ownership rights under agreements
A person to which property has been transferred through a contract of sale and purchase or by a gift, exchange or loan or another contract of transfer of ownership rights has the right to own such property as provided by law.
Article 224. Establishment of ownership rights with respect to yield and income
An owner or a user of property has ownership rights with respect to the yield and income derived from such property as agreed or in accordance with law from the time when such yield and income are derived.
Article 225. Establishment of ownership rights in case of merger

  1. Where property of more than one owner is merged to form an indivisible object and it is not possible to determine whether the property which is merged is a primary object or an auxiliary object, the newly formed object shall be the multiple ownership property of such owners. If the property which is merged consists of a primary object and an auxiliary object, the newly formed object shall belong to the owner of the primary object from the time when the new object is formed. The owner of the new property must pay the value of the auxiliary object to its owner, unless otherwise agreed.
  2. Where a person merges the moveable property of another person with his/her own moveable property, even though he/she knew or should have known that such property was not his/her own and he/she did not have the consent of the owner of the property which was merged, the owner of the property which is merged shall have one of the following rights:
  3. a) Request the person having merged the property to deliver the new property to it and to pay the value of the property;
  4. b) Request the person having merged the property to pay the value of the merged property and to compensate for any damage if the owner of the property which is merged does not wish to take the new property.
  5. c) Other rights as provided by law.
  6. Where a person merges the moveable property of another person with his/her own immoveable property, even though he/she knew or should have known that such property was not his/her own and he/she did not have the consent of the owner of the property which was merged, the owner of the property which is merged shall have one of the following rights:
  7. a) Request the person having merged the property to pay the value of the merged property and to compensate for any damage;
  8. b) Other rights as provided by law.
  9. Where a person merges the immoveable property of another person with his/her own moveable property, the owner of the immovable property has the right to request such person to demolish the illegally merged property and compensate for any damage, or retain the property and pay the value of the merged property to such person, unless otherwise agreed.

Article 226. Establishment of ownership rights in case of mixing

  1. Where the property of more than one owner is mixed to form a new indivisible object, the new object shall be the multiple ownership property of such owners from the moment of mixing.
  2. Where a person has mixed the property of another person with its own property, even though it knew or should have known that such property is not its own and it does not have the consent of the owner of the property which has been mixed, the owner of the property which has been mixed may:
  3. a) Request the person having mixed the property to deliver the new property to it and pay such person the value of the property of such person;
  4. b) If the owner of the property which has been mixed does not wish to take the new property, request the person having mixed the property to pay the value of the property of the owner and to compensate for any damage.

Article 227. Establishment of ownership rights in case of processing

  1. An owner of raw materials which are processed to form a new object is also the owner of the newly formed object.
  2. A person using raw materials under the ownership of another person for processing who acts in good faith shall become the owner of the new property, but must pay the value of the raw materials to the owner and compensate it for any damage.
  3. Where a person processes raw materials not in good faith, the owner of the raw materials has the right to request that the new object be delivered to it. Where the raw materials are owned by more than one person, such persons shall become the owners of the newly formed object in proportion to the value of the raw materials owned by each person. The owners of the raw materials processed not in good faith may request the person carrying out the processing to compensate for any damage.

Article 228. Ownership rights are established with respect to abandoned objects and objects the owner of which is not able to be identified

  1. An abandoned object is an object in respect of which the owner has renounced its ownership rights.

A person finding an abandoned object which is moveable property shall have the right to own such property, unless otherwise prescribed by law. If the found object is immoveable property, it shall belong to the State.

  1. A person finding an object the owner of which is not able to be identified must inform or deliver the object to the people’s committee or police station of the nearest commune in order that a public announcement may be made notifying the owner to reclaim the object.

The delivery of the object must be recorded, specifying the surnames, given names and addresses of the finder and the receiver and the condition, quantity and volume of the property delivered.
The people’s committee or police station of commune which received the object must notify the finder of the results of their inquiries in order to determine the owner.
Where the object, the owner of which is not able to be identified, is moveable property, if the owner of the object is still not able to be identified after one year from the date of the public announcement, such property shall be under the ownership of the finder in accordance with law.
Where the object is immoveable property, if the owner is still not able to be identified after five years from the date of the public announcement, such property shall belong to the State. The finder shall be entitled to enjoy a monetary reward in accordance with law.
Article 229. Establishment of ownership rights with respect to buried or sunken objects which are found

  1. A person finding an object which is buried or sunken must notify and return to the owner; if the owner is not able to be identified, he/she must inform or deliver the object to the people’s committee or police station of the nearest commune or a competent authority in accordance with regulations of law.
  2. Ownership rights with respect to a buried or sunken object which is found, but which has no owner or the owner of which is not able to be identified, shall be determined, after deducting search and maintenance expenses, as follows:
  3. a) A found object which is an historic or cultural relic shall belong to the State as prescribed in Law on cultural heritage and the finder shall be entitled to enjoy a monetary reward in accordance with law.
  4. b) A found object which is not an historic or cultural relic as prescribed in Law on cultural heritage, and which has a value equivalent up to ten-month base salary provided for by the State, shall belong to the finder; if the value of the found object is more than the equivalent of ten-month base salary provided for by the State, the finder shall be entitled to the value of ten-month base salary plus fifty (50) per cent of the remaining value of the object in excess of the ten-month base salary provided for by the State, with the remaining value belonging to the State.

Article 230. Establishment of ownership rights with respect to objects which other persons have lost or mislaid

  1. A person finding an object which another person has lost or mislaid and being aware of the address of the person having lost or mislaid the object must inform or return the object to such person. If the finder is not aware of the address of the person having lost or mislaid the object, it must inform or deliver the object to the people’s committee or police station of the nearest commune in order that a public announcement may be made notifying the owner to reclaim the object.

The people’s committee or police station of commune which received the object must notify the finder of the results of their inquiries in order to determine the owner.

  1. If, after one year from the date of the public announcement of the object having being found, the owner of the object is still not able to be identified or the owner does not claim the object, the ownership rights with respect to such property shall be determined as follows:
  2. a) If the value of lost or mislaid object is up to ten-month base salary provided for by the State, it shall belong to the finder as prescribed in this Code and relevant laws; if the value of the found object is more than the equivalent of ten-month base salary provided for by the State, the finder shall be entitled to the value of ten-month base salary, deducted from preservation expenses, and plus fifty (50) per cent of the remaining value of the object in excess of the ten-month base salary provided for by the State, with the remaining value belonging to the State.
  3. b) A lost or mislaid object which is an historic or cultural relic as prescribed in the Law on cultural heritage shall belong to the State. The finder shall be entitled to enjoy a monetary reward in accordance with law.

Article 231. Establishment of ownership rights with respect to stray domestic livestock

  1. A person capturing a stray domestic livestock must take care of it and notify the people’s committee of the commune in which such person resides in order that a public announcement may be made notifying the owner to reclaim the stray domestic livestock. After 6 months or after 1 year, with regard to domestic livestock allowed to roam according to customary practice, from the date of the public announcement, the ownership rights with respect to domestic livestock and any offspring born thereof shall belong to the capturer.
  2. If the owner reclaims the stray domestic livestock, he/she must pay care remuneration and other expenses for the capturer. During the period of feeding and taking care of the stray domestic livestock, the capturer shall be entitled to half of or 50% of value any offspring born. Such person must compensate for any damage if it intentionally causes the death of the stray domestic livestock.

Article 232. Establishment of ownership rights with respect to stray domestic poultry

  1. Where the domestic poultry of a person is lost and captured by another person, the person having captured the stray domestic poultry must make a public announcement notifying the owner to reclaim such poultry. If no one reclaims the stray domestic poultry after one month from the date of the public announcement, it shall be under the ownership of the person having captured it.
  2. An owner reclaiming the stray poultry must remunerate the person having captured it for feeding and taking care of the stray domestic poultry and any other expenses incurred. During the period of feeding and taking care of the stray domestic poultry, the person having captured it shall enjoy the benefits from the stray domestic poultry. Such person must compensate for any damage if it intentionally causes the death of the stray domestic poultry.

Article 233. Establishment of ownership rights with respect to aquaculture stock
Where the aquaculture stock of a person moves naturally into the field, pond or lake of another person, the stock shall be under the ownership of the person having such field, pond or lake. Where the aquaculture stock has special marks which make it possible to determine that it is not under the ownership of the person having such field, pond or lake, such person must make a public announcement notifying the owner to reclaim the stock. If no one reclaims the stock after one month from the date of the public announcement, it shall be under the ownership of the person having such field, pond or lake.
Article 234. Establishment of ownership rights due to inheritance
An heir shall have ownership rights with respect to inherited property in accordance with Part Four of this Code.
Article 235. Establishment of ownership rights in accordance with judgment or decision of court or in accordance with decision of another competent authority
Ownership rights may also be created on the basis of an effective judgment or decision of a court or an effective decision of another competent authority.
Article 236. Establishment of ownership rights resulting from limitation periods with respect to possession or deriving benefits from property unlawfully
A person unlawfully but in good faith possessing, or deriving benefits from, property continuously and in an overt manner for ten (10) years with respect to moveable property, and for thirty (30) years with respect to immoveable property, shall become the owner of such property from the moment of commencement of possession, unless otherwise prescribed by this Code and relevant laws.
Sub-section 2. TERMINATION OF OWNERSHIP RIGHTS
Article 237. Bases for terminating ownership rights
Ownership rights terminate in any of the following cases:

  1. The owners transfers his or her ownership rights to another person;
  2. The owner renounces his or her ownership rights;
  3. The property is consumed or destroyed;
  4. The property is realized in order to fulfill the obligations of the owner;
  5. The property is requisitioned;
  6. The property is confiscated;
  7. Other persons have established ownership rights with respect to property in accordance with this Code;
  8. Other bases as provided by law.

Article 238. Transfer of ownership rights by owner
Where an owner transfers its ownership rights to another person through a contract for sale and purchase, by exchange, gift or loan, or through inheritance, the ownership rights of the owner with respect to the property shall terminate from the time when the ownership rights of the transferee arise.
Article 239. Renunciation of ownership rights
An owner may terminate ownership rights with respect to its property by publicly declaring, or by performing certain acts evidencing, its renunciation of the right to possess, use and dispose of such property.
With respect to property the renunciation of which may harm social order or security or cause environmental pollution, the renunciation of ownership rights must comply with the law.
Article 240. Property in respect of which other persons have established ownership rights
When a person has, in accordance with Article 228 through 233 of this Code, lawfully established ownership rights with respect to an object the owner of which is not able to be identified; a buried or sunken objects; a lost or mislaid object or stray domestic livestock, poultry or aquaculture stock, the ownership rights of the person formerly having the property shall terminate.
When the ownership rights of a possessor or a person benefiting from property have been created in accordance with Article 236 of this Code, the ownership rights of the person who formally had the property shall terminate.
Article 241. Realization of property in order to fulfill obligations of owner

  1. Ownership rights with respect to property shall terminate when such property is realized in order to fulfill the obligations of the owner pursuant to a decision of a court or another competent authority, unless otherwise provided by law.
  2. Property which the law provides is not able to be seized may not be realized in order to fulfill the obligations of the owner.
  3. The ownership rights with respect to property realized in order to fulfill the obligations of the owner shall terminate at the time when the ownership rights of the recipient of such property arise.
  4. The realization of land use rights shall be carried out in accordance with the law on land.

Article 242. Destroyed property
When property is destroyed, the ownership rights with respect to such property shall terminate.
Article 243. Property which is compulsorily acquired
Where property is compulsorily acquired as prescribed by law, the ownership rights of the owner shall terminate from the time when the decision of the competent authority becomes legally effective.
Article 244. Confiscated property
Where property of an owner is confiscated and paid into the State Budget due to the owner committing a crime or an administrative offence, the ownership rights of the owner with respect to such property shall terminate from the time when the judgment or decision of the court or the decision of the competent authority becomes legally effective.
Chapter XIV
OTHER PROPERTY-RELATED RIGHTS
Section 1. Right to adjoining immovable property
Article 245. Right to adjoining immovable property
Right to adjoining immovable property means a right to be exercised on an immovable property (hereinafter referred to as obliged immovable property) to serve the exploitation of another immovable property under ownership of another person (hereinafter referred to as entitled immovable property).
Article 246. Bases for establishment of right to adjoining immovable property
The right to adjoining immovable property shall be established according to natural terrain, as prescribed by law, according to agreement or will.
Article 247. Effect of right to adjoining immovable property
The right to adjoining immovable property shall take effect to every natural and juridical person and it is transferred concurrently with the transferred immovable property, unless otherwise prescribed by law.
Article 248. Rules for exercising right to adjoining immovable property
The right to adjoining immovable property shall be exercised as agreed by the parties. If the parties fail to agree, the rules below must be followed:

  1. Ensure the appropriate exploitation of the entitled immovable property in conformity with the use purposes of both entitled and obliged immovable property;
  2. Do not abuse the right to the obliged immovable property;
  3. Do not obstruct or hassle the exercising of right to the entitled immovable property.

Article 249. Change of exercising right to adjoining immovable property
In case the change of use or exploitation of the obliged immovable property leading the change of exercising of right to the entitled immovable property, the owner of the former immovable property must notify the owner of the latter immovable property within an appropriate period. The owner of the obliged immovable property must enable the owner of the entitled immovable property to adapt to such change.
Article 250. Obligation of owners relating to draining of rainwater
An owner of house or construction works must install water drain pipes in order that the rainwater from its roof does not run onto any adjoining immoveable properties.
Article 251. Obligation of owners relating to draining of waste water
An owner of house or construction work must install underground drains or water drainage channels to discharge waste water to the prescribed location in order that the waste water does not run and spill onto any adjoining immoveable properties or onto public streets or public places.
Article 252. Rights relating to supply and drainage of water through adjoining immoveable property
Where, due to the natural location of immoveable property, the supply and drainage of water must pass through another immoveable property, the owner of the immoveable property through which the water flows must provide an appropriate channel for the supply and drainage of water and may not hinder or prevent the flow of water.
The person using the water supply and drainage channel must minimize to the lowest possible extent any damage to the owner of the immoveable property through which the water flows when installing the water channel. If damage is caused, compensation must be made. Where water flows naturally from a higher position to a lower position and causes damage to the owner of the property through which the water flows, the person using the water supply and drainage channel shall not be liable to compensate for any damage.
Article 253. Rights relating to irrigation and water drainage in cultivation
A person having the right to use land for cultivation has the right to request neighboring land users to provide a reasonable and convenient water channel for irrigation and drainage. A person having been so requested has the obligation to grant such request. If the person using such water channel causes damage to neighboring land users, compensation must be made.
Article 254. Right of passage

  1. An owner of immoveable property which is surrounded by immoveable properties of other owners such that there is no exit has the right to request one of the owners of adjoining immoveable properties to provide it with a passage to a public road on their land.

The passage shall be opened in the adjoining immoveable property which is deemed to be the most convenient and reasonable, taking into consideration the special characteristics of the location, the interests of the immoveable property which does not have an exit, and what will cause the least damage to the immoveable property through which the passage is created.
The owner of the immovable property eligible for the passage must compensate for the obliged immovable property, unless otherwise agreed.

  1. The location and the length, width and height of the passage shall be agreed by the owners in order to ensure convenient passage and minimize inconvenience to the parties. If there are any disputes regarding the passage, the parties may request the authorized State body to resolve.
  2. Where immoveable property is divided into more than one portion for different owners or users, upon division, necessary passages must be provided, without compensation, to persons in the interior as provided in Clause 2 of this Article.

Article 255. Right to install electricity transmission cables and communication cables through other immoveable properties
An owner of immoveable property has the right to install electricity transmission cables and communication cables in a reasonable manner through the immoveable property of other owners, but must ensure the safety and convenience of such owners. If damage is caused, compensation must be made.
Article 256. Termination of easements over adjoining immoveable property
An easement over adjoining immoveable property shall terminate in the following circumstances:

  1. The entitled immovable property and the obliged immovable property belong to ownership rights of a person;
  2. The use and exploitation of the immovable property do not arise the needs of enjoying rights;
  3. Upon agreement of contracting parties;
  4. Other bases as provided by law.

Section 2. USUFRUCT RIGHT
Article 257. Usufruct right
Usufruct right means the right to use a property, under ownership of another entity, and enjoy its yield or income in a specific period of time.
Article 258. Bases for establishment of usufruct right
The usufruct right shall be established as prescribed by law, according to agreement or will.
Article 259. Effect of usufruct right
The usufruct right shall be established from the time of transfer of the property, unless otherwise agreed or otherwise prescribed by law.
The established usufruct right shall take effect to every natural and juridical person, unless otherwise prescribed by law.
Article 260. Time limit of usufruct right

  1. The time limit of usufruct right shall be agreed by the parties or prescribed by law provided that its maximum length is the full life of the first usufructary being natural person or the period of time for which the first usufructary being juridical person exists as long as it does not exceed 30 years.
  2. The usufructary has the right to lease the usufruct right within a specific period of time prescribed in Clause 1 of this Article.

Article 261. Rights of usufructary

  1. On his/her own or permit another person exploit, use and enjoy yield and/or income from the object of the usufruct right.
  2. Request the owner of the property perform obligation to repair the property as prescribed in Clause 4 Article 263 of this Code; if the usufructary performs the obligation on behalf of the owner of property is entitled to request the owner to refund the expenses.
  3. Lease the usufruct right to the property.

Article 262. Obligations of usufructary

  1. Receive property under current conditions and register it if required by law.
  2. Exploit the property for appropriate purposes.
  3. Preserve property as if it is his/her own property.
  4. Maintain and repair property periodically to ensure the normal use; restore the status of the property and remedy the bad consequences of property due to his/her poor performance of obligations in line with technical requirements or by custom of property preservation.
  5. Return the property to the owner of the expiration of usufruct time limit.

Article 263. Rights and obligations of property owner

  1. Dispose property without any change of the usufruct right which has been established.
  2. Request a court to deprive usufruct right from a usufructary who seriously breaches his/her obligations.
  3. Do not obstruct or hassle or otherwise violate the legitimate rights and interests of the usufructary.
  4. Perform obligation to repair property to ensure that there is no significant decline leading the property cannot be used or lost all its utility and value.

Article 264. Right to enjoy yield and income

  1. Each usufructary has ownership right to the yield and income derived from the property being the object of the usufruct right during its effective period of time.
  2. If the usufruct right cease to exist before the harvest time of yields and income, the usufructary shall, upon the harvest time, be entitled to enjoy the value of yield and income received corresponding the time that person is entitled to such usufruct right.

Article 265. Termination of usufruct right
The usufruct right shall terminate in any of the following cases:

  1. The time limit of usufruct right has expired;
  2. As agreed by the parties;
  3. The usufructary becomes the owner of the property being the subject of the usufruct right;
  4. The usufructary waives or fails to exercise the usufruct right during a time limit prescribed by law;
  5. The property being subject of the usufruct right no longer exists;
  6. Pursuant to a decision of a court;
  7. Pursuant to other provisions of law.

Article 266. Returning property upon termination of usufruct right
The property being subject of usufruct right must be returned to the owner upon the termination of usufruct right, unless otherwise agreed or otherwise prescribed by law.
Section 3. SURFACE RIGHTS
Article 267. Surface rights
Surface rights mean an entity’s rights to the ground, water surface, space thereon and earth bowel of the land whose land use rights belong to another entity.
Article 268. Bases for establishment of surface rights
Surface rights shall be established by law, according to agreement or will.
Article 269. Effect of surface rights
Surface rights shall take effect from the point of time when the holder of land use rights transfer ground, water surface, space thereon and earth bowel of the land to the holder of surface rights, unless otherwise agreed or otherwise prescribed by law.
Surface rights shall take effect to every natural and juridical person, unless otherwise prescribed by relevant laws.
Article 270. Time limit of surface rights

  1. The time limit of surface rights shall be established by law, according to agreement or will provided that it does not exceed the time limit of land use rights.
  2. If the agreement or will does not mention the time limit of surface rights, each party is entitled to terminate any time provided that it provides a written notification to the other party within 6 months.

Article 271. Contents of surface rights

  1. Each holder of surface rights has the right to exploit and use ground, water surface, space thereon, the water and the earth bowel of the land whose land use rights belong to another entity for construction, planting or cultivation provided that it is not contrary to the provisions of this Code, the law on land, construction, planning, resources, minerals and other provisions of relevant laws.
  2. The holder of surface rights has the ownership rights to every property derived as prescribed in Clause 1 of this Article.
  3. If part of the whole of surface rights is transferred, the transferee shall inherit the surface rights according to conditions and within the scope in proportion to the part or the whole transferred surface rights.

Article 272. Termination of surface rights
The surface rights shall terminate in any of the following cases:

  1. The time limit of surface rights has expired;
  2. The holder of surface rights and the holder of land use rights shall be the same;
  3. The holder of surface rights waives his/her rights;
  4. Surface rights of land use rights are appropriated as prescribed in law on land;
  5. As agreed by the parties or as prescribed by law.

Article 273. Realization of property upon termination of surface rights

  1. Upon the termination of surface rights, its holder must return ground, water surface, space thereon and earth bowel of the land to the holder of land use rights, unless otherwise agreed or otherwise prescribed by law.
  2. The holder of surface rights must realize the property under ownership upon its termination, unless otherwise agreed.

If the holder of surface rights must realize the property under ownership upon its termination, the ownership of such property shall be transferred to the holder of land use rights from the termination time, unless the latter holder refuse such property.
If the holder of land use rights refuses the property while the property is required to be realized, the holder of surface rights must pay the property realization expenses.
PART THREE
OBLIGATIONS AND CONTRACTS
Chapter XV.
GENERAL PROVISIONS
Section 1. Bases for giving rise to and subject matter of obligations
Article 274. Obligations
Obligations means acts whereby one or more entities (hereinafter referred to as obligors) must transfer objects, transfer rights, pay money or provide valuable papers, perform other acts or refrain from performing certain acts in the interests of one or more other subjects (hereinafter referred to as obligees).
Article 275. Bases for giving rise to obligations
Obligations arise from the following bases:

  1. Contracts;
  2. Unilateral legal acts;
  3. Unauthorized performance of acts;
  4. Unlawful possession or use of or receipt of benefits from property;
  5. Causing damage through unlawful acts;
  6. Other bases as provided by law.

Article 276. Subject matter of obligations

  1. The subject matter of an obligation may be property or acts which must be performed or acts which must not be performed.
  2. The subject matter of an obligation must be defined precisely.

Section 2. Performance of obligations
Article 277. Places for performing obligations

  1. The place for performing an obligation shall be agreed by the parties.
  2. Where the parties do not have an agreement, the place for performance of the obligation shall be:
  3. a) The location of the immoveable property, if the subject matter of the obligation is immoveable property;
  4. b) The place of residence or head office of the obligee, if the subject matter of the obligation is not immoveable property.

Where the obligee changes its place of residence or head office, it must notify the obligor of the change and must bear any increase in expenses resulting from the change in residence or head office, unless otherwise agreed.
Article 278. Time-limits for performing obligations

  1. The time-limit for performing an obligation shall be as agreed by the parties or as provided by law.
  2. The obligor must perform the obligation strictly in accordance with the relevant time-limit, unless otherwise prescribed by this Code or relevant laws.

If the obligor performs the obligation prior to the time-limit and the obligee accepts such performance, the obligation shall be deemed to have been fulfilled on time.

  1. Where the parties do not have an agreement and the time-limit for the performance of a civil obligation is not identifiable prescribed in Clause 1 of this Article, a party may fulfill the obligation or demand the fulfillment of the obligation as the case may be at any time, but must give reasonable prior notice to the other party.

Article 279. Performance of obligations to deliver objects

  1. A person having the obligation to deliver an object must take care of and preserve the object until the time of delivery.
  2. Where an object to be delivered is a distinctive object, the obligor must deliver that particular object in the same condition as agreed. If the object is a fungible object, it must be delivered in accordance with the quality and quantity agreed. If there is no agreement as to the quality, the object delivered must be of average quality. If the object is an integrated object, the whole integrated object must be delivered.
  3. An obligor must bear all expenses related to the delivery of an object, unless otherwise agreed.

Article 280. Performance of obligations to pay money

  1. An obligation to pay money shall be performed in full, strictly on time, at the place and by the method as agreed.
  2. The obligation to pay money shall include the payment of interest on principal, unless otherwise agreed.

Article 281. Performance of obligations to perform acts or not to perform acts

  1. Obligation to perform an act means an obligation whereby the obligor must perform that particular act.
  2. Obligation not to perform an act means an obligation whereby the obligor must not perform that particular act.

Article 282. Performance of obligations in stages
An obligation may be performed in stages if so agreed or so provided by law or pursuant to a decision of a competent authority.
The late performance of one stage of an obligation shall be deemed to be late performance of the obligation.
Article 283. Performance of obligations through third parties
With the consent of the obligee, an obligor may authorize a third person to perform an obligation on behalf of the obligor provided that the obligor shall be liable to the obligee if the third person fails to perform or performs incorrectly the obligation.
Article 284. Conditional performance of obligations

  1. Where the parties have agreed on conditions for the performance of a civil obligation or where the law provides certain conditions for the performance of an obligation, the obligor must perform the obligation when such conditions are satisfied.
  2. If the conditions do not occur or occur resulting from the influence of a party, Clause 2 Article 120 of this Code shall apply.

Article 285. Performance of obligations having optional subject matters

  1. Obligation having an optional subject matter means an obligation the subject matter of which is one of several different items of property or acts from which the obligor may select at its discretion, except where it is agreed or provided by law that the right to select is reserved to the obligee.
  2. The obligor must notify the obligee of the property or act selected in order to perform the obligation. In the case where the obligee has fixed a time-limit for performance of the obligation with a selected subject matter, the obligor must fulfill the obligation on time.
  3. Where there remains only one property or one act to select, the obligor must deliver that particular property or perform that particular act.

Article 286. Performance of substitutable civil obligations
Substitutable obligation means an obligation whereby if the obligor fails to perform the original obligation, it may perform a different obligation as agreed by the obligee as a substitute for the original obligation.
Article 287. Performance of severable obligations
Where more than one person jointly performs an obligation and each person has a clearly defined share of the obligation which is severable from that of the other person, each person must perform only its own share of the obligation.
Article 288. Performance of joint obligations

  1. Joint obligation means an obligation which must be performed by more than one person and which the obligee may request any one of the obligors to perform in its entirety.
  2. When one person has performed an obligation in its entirety, such person may require the other joint obligors to make payment for their respective shares of the joint obligation to such person.
  3. Where an obligee designates one person from amongst the joint obligors to perform an entire obligation and later releases that person, the other obligors shall also be released from performing the obligation.
  4. Where an obligee releases one of the joint obligors from its share of the joint obligation, the other obligors must, nevertheless, perform jointly their respective shares of the obligation.

Article 289. Performance of obligations for joint obligees

  1. Civil obligation for joint obligees means an obligation whereby each joint obligee may require the obligor to perform the obligation in its entirety.
  2. An obligor may perform its obligation with respect to any one of the joint obligees.
  3. Where one of the joint obligees releases the obligor from performing the share of the obligation owed to such joint obligee, the obligor must, nevertheless, perform the remaining shares of the obligation owed to the other joint obligees.

Article 290. Performance of divisible obligations

  1. Divisible obligation means an obligation the subject matter of which is a divisible object or an act which is able to be divided into portions for the purpose of performance.
  2. An obligor may perform the obligation in stages, unless otherwise agreed.

Article 291. Performance of indivisible obligations

  1. Indivisible obligation means an obligation the subject matter of which is an indivisible object or an act which must be performed in its entirety at the one time.
  2. Where several persons must perform an indivisible obligation, they must perform the obligation in its entirety at the same time.

Section 3. SECURITY FOR PERFORMANCE OF OBLIGATIONS
Sub-section 1. GENERAL PROVISIONS
Article 292. Types of security for performance of obligations
Types of security for the performance of obligations comprise the following:

  1. Pledge of property;
  2. Mortgage of property;
  3. Deposit;
  4. Security collateral;
  5. Escrow deposit;
  6. Title retention;
  7. Guarantee;
  8. Fidelity guarantees;
  9. Lien on property.

Article 293. Scope of security for performance of obligations

  1. An obligation may be fully or partly secured, as agreed or as provided by law. If there is no agreement on or if the law does not provide, the scope of the security, the obligation, including the obligation to pay interest and to compensate for any damage, shall be deemed to be fully secured.
  2. Secured obligations may comprise current obligations, future obligations and conditional obligations.
  3. With respect to a future obligation which is going to arise within a guaranteed time limit, it shall be the secured obligation, unless otherwise agreed.

Article 294. Security for performance of future obligations

  1. With respect to a future obligation, the parties may agree on the scope of the secured obligation and the deadline by which the secured obligation must be performed, unless otherwise prescribed by law.
  2. When the future obligation arises, the parties are not required to re-establish the security for such obligation.

Article 295. Collateral

  1. Collateral must be under the ownership rights of the securing party, except for the cases of lien on property or title retention.
  2. Collateral may be described generally but must be identified.
  3. Collateral may be existing property or off-plan property.
  4. The value of collateral may be greater, equal or smaller than the value of the secured obligation.

Article 296. Single item of property used as security for performance of several obligations

  1. A single item of property may be used as security for performance of several obligations if, at the time of establishment of the security transaction, the value of such property is greater than the total aggregate value of the secured obligations, unless otherwise agreed or otherwise provided by law.
  2. Where a single item of property is used as security for performance of several obligations, the securing party must notify the later secured party that the security property is being used as security for performance of other obligations. The provision of security on each occasion must be made in writing.
  3. Where the security property must be realized in order to satisfy one obligation which has fallen due, the other obligations which have not yet fallen due shall also be deemed due and all secured parties shall be entitled to take part in the realization. The secured party which provided notice of realization of the property shall be responsible for realizing the property, unless otherwise agreed by the secured parties.

If the parties wish to continue to fulfill the obligations which have not yet fallen due, they may agree that the securing party will use other property as security for performance of the obligation which has fallen due.
Article 297. Effectiveness against third parties

  1. Security shall take effect against a third party from the time of registration of such security or the secured party keeps or possess the collateral.
  2. When the security takes effect against a third party, the secured party is entitled to reclaim the collateral and the payment prescribed in Article 308 of this Code and relevant laws.

Article 298. Registration of security

  1. Security shall be registered as agreed by the parties or provided by law.

The registration shall be the condition for a secured transaction become valid only the case as prescribed by law.

  1. A registered security shall take effect against third party from the time of registration.
  2. The registration of security shall comply within regulations of law on registration of security.

Article 299. Cases of realization of collateral

  1. An obligator fails to perform or perform not as agreed an obligation when it falls due.
  2. An obligator must perform the secured obligation before time limit due to his/her violation against the obligation as agreed or prescribed by law.
  3. Other cases as agreed by the parties or prescribed by law.

Article 300. Notification of realization of collateral

  1. Before a collateral is realized, a secured party must notify the securing party and other secured parties of the realization of the collateral within a reasonable time limit.

If the collateral at risk of being damaged resulting in diminished value or lose the entire value, a secured party may realize it immediately and notify the securing party and other secured parties of the realization of such asset.

  1. If the secured party does not notify the realization of collateral as prescribed in Clause 1 of this Article that cause damage to the securing party and/or other secured parties, compensation must be made.

Article 301. Giving collateral for realization
The holder of collateral is obliged to give it to the secured party for realization in any of the cases prescribed in Article 299 of this Code.
If the holder of collateral fails to give the asset, the secured party is entitled to request a court for settlement, unless otherwise prescribed by relevant laws.
Article 302. Right to reclaim collateral
The securing party may reclaim the collateral if, before the realization of the collateral, it completely performs its obligations and pay all expenses incurred for the late performance of obligations, unless otherwise prescribed by law.
Article 303. Methods of realizing collateral

  1. The securing party and the secured party may agree any of the following methods of realizing collateral:
  2. a) Put collateral up for an auction;
  3. b) The secured party sells collateral itself;
  4. c) The secured party accepts the collateral as substitutions for the performance of obligations of the securing party;
  5. d) Other methods.
  6. If there is no agreement on methods of realizing collateral as prescribed in Clause 1 of this Article, the collateral shall be put up for auction, unless otherwise prescribed by law.

Article 304. Selling collateral

  1. The collateral shall be put up for auction as prescribed by law on property auction.
  2. The collateral sold by the secured party must comply with the regulations on property sale in this Code and the regulations below:
  3. a) The payment amount derived from the realization of collateral shall comply with Article 307 of this Code;
  4. b) The owner of collateral and the person competent to realize the collateral, upon the completion of the sale, shall comply with procedures for transfer of ownership rights to the buyer.

Article 305. Acceptance of the collateral as substitution for the performance of obligations of the securing party

  1. The secured party may accept the collateral as substitution for the performance of obligations of the securing party if agreed by the parties.
  2. If there is no agreement prescribed in Clause 1 of this Article, the secured party may only accept the collateral as substitution for the performance of obligations of the securing party with the written consent of the securing party.
  3. Where the value of the collateral is greater than the value of the secured obligation, the secured party must pay the difference amount to the securing party; where the value of the collateral is less than the value of the secured obligations then the unpaid obligations become unsecured obligations.
  4. The securing party is obliged to follow the procedures for transfer of ownership rights to the secured party as prescribed by law.

Article 306. Valuation of collateral

  1. The securing party and the secured party may agree on collateral prices or have the collateral valuated by an asset valuation organization upon the realization of the collateral.

If there is no agreement mentioned above, the collateral shall be valuated by an asset valuation organization.

  1. The valuation of the collateral must be objective and in conformity with market price.
  2. The asset valuation organization must compensate for any damage to the securing party and/or the secured party during the process of valuation due to its legal violations.

Article 307. Payment of the sum of money obtained from the realization of collateral

  1. The sum of money obtained from the realization of the collateral after deducting from the cost of preservation, capture and realization of the collateral shall be paid in order of priority specified in Article 308 of this Code.
  2. Where the sum of money obtained from the realization of the collateral, after deducting from the cost of preservation, seizure and realization of the collateral is greater than the value of secured obligations, the difference amount must be paid to the securing party.
  3. Where the sum of money obtained from the realization of the collateral, after deducting from the cost of preservation, seizure and realization of the collateral is less than the value of secured obligations, part of the unpaid obligations are defined as unsecured obligations, unless the parties otherwise agree additional collateral. The secured party may request the obligor to perform the unpaid secured obligations.

Article 308. Order of priority for payment between joint secured parties

  1. When an asset is used to secure the performance of many obligations, payment priority order between the joint secured parties shall be determined as follows:
  2. a) If all types of security take effect against a third party, the order of priority for payment shall be determined according to the order of effect against the third party;
  3. b) If there are some types of security take effect against a third party while some types of security do not take effect against the third party, the payment of obligations with security taking effect against the third party shall be given priority;
  4. c) If all types of security do not take effect against a third party, the order of priority for payment shall be determined according to the order of establishment of types of security.
  5. The order of priority for payment prescribed in Clause 1 of this Article may be changed as agreed by the parties. The subrogating party of the right to priority of payment shall only be given priority within the secured extent of the subrogated party.

Sub-section 2. PLEDGE OF PROPERTY
Article 309. Pledge of property
Pledge of property means the delivery by one party (hereinafter referred to as the pledgor) of property under its ownership to another party (hereinafter referred to as the pledgee) as security for the performance of an obligation.
Article 310. Effectiveness of pledge of property

  1. Agreement on pledge of property shall take effect from the time of concluding, unless otherwise agreed or prescribed by law.
  2. Pledge of property shall take effect against third party from the time at which the pledgee keeps the pledged property.

If an immovable property is the subject of pledge as prescribed in law, the pledge on immovable property shall take effect against third party from the time of registration.
Article 311. Obligations of pledgors

  1. Deliver the pledged property to the pledgee as agreed.
  2. Notify the pledgee of any third person rights with respect to the pledged property. In the case of failure to provide such notice, the obligee shall have the right to cancel the contract of pledge of property and demand compensation for damage or the right to maintain the contract and agree on the rights of the third person with respect to the pledged property.
  3. Pay the pledgee reasonable expenses for taking care of and preserving the pledged property, unless otherwise agreed.

Article 312. Rights of pledgors

  1. Require the pledgee to suspend use of the pledged property in cases provided in Clause 3 of Article 314 of this Code if the pledged property is in danger of losing its value or depreciating in value as a result of such use.
  2. Require the pledgee to hold the pledged property to return the pledged property and related documents after the obligation secured by the pledge has been fulfilled.
  3. Require the pledgee to compensate for any damage caused to the pledged property.
  4. Sell, substitute, exchange, or give the pledged property to other property if so agreed by the pledgee or prescribed by law.

Article 313. Obligations of pledgees

  1. Take care of and preserve the pledged property; if the pledgee loses or damages the pledged property, the pledgee must compensate the pledgor for the damage.
  2. Do not sell, exchange, give or use the pledged property as security for the performance of another obligation.
  3. Do not lease, lend, exploit the yield or income derived from, the pledged property, unless otherwise agreed.
  4. Return the pledged property and related documents upon fulfillment of the secured obligation or where the pledge is substituted with another security.

Article 314. Rights of pledgees

  1. Require a person unlawfully possessing or using the pledged property to return the property.
  2. Demand the realization of the pledged property in accordance with the methods as agreed or as provided by law.
  3. Lease, lend, exploit, and to enjoy the yield and income derived from, the pledged property if so agreed.
  4. Receive reimbursement of reasonable expenses incurred in taking care of the pledged property upon returning the pledged property to the pledgor.

Article 315. Termination of pledges on property
A pledge of property shall terminate in any of the following cases:

  1. The obligation secured by the pledge has terminated;
  2. The pledge has been cancelled or substituted with another security;
  3. The pledged property has been realized;
  4. As agreed by the parties.

Article 316. Return of pledged property
Where a pledge of property is terminated in accordance with Clause 1 or Clause 2 of Article 315 of this Code or as agreed by parties, the pledged property and documents evidencing the ownership rights with respect to the property shall be returned to the pledgor. Any yield and income derived from the pledged property shall also be returned to the pledgor, unless otherwise agreed.
Sub-section 3. MORTGAGES ON PROPERTY
Article 317. Mortgage of property

  1. Mortgage of property means the use by one party (hereinafter referred to as the mortgagor) of property under the ownership of the obligor as security for the performance of an obligation to the other party (hereinafter referred to as the mortgagee) without transferring such property to the mortgagee.
  2. The mortgaged property shall be held by the mortgagor. The parties may agree to deliver the mortgaged property to a third person to hold.

Article 318. Mortgaged property

  1. Where entire immoveable property or moveable property having auxiliary objects is mortgaged, such auxiliary objects shall also form part of the mortgaged property, unless otherwise agreed.
  2. Where a portion of immoveable property or moveable property having auxiliary objects is mortgaged, such auxiliary objects shall also form part of the mortgaged property, unless otherwise agreed by the parties.
  3. With respect to mortgage on land use rights that property on land is owned by the mortgagor, such property shall also part of the mortgaged property, unless otherwise agreed.
  4. Where mortgaged property is insured, the mortgagee must notify the insurer that the insured property is being mortgaged. The insurer shall pay the insured sum directly to the mortgagee upon occurrence of an insured event.

If the mortgagee failed to notify the insurer that the insured property was mortgaged, the insurer shall pay the insured sum in accordance with the insurance contract and the mortgagor shall be obliged to make payment to the mortgagee.
Article 319. Effectiveness of mortgage of property

  1. Agreement on mortgage of property shall take effect from the time of concluding, unless otherwise agreed or prescribed by law.
  2. The mortgage of property shall take effect against third party from the time of registration.

Article 320. Obligations of mortgagor

  1. Transfer documents related to the mortgaged property, unless otherwise agreed or prescribed by law.
  2. Take care of and preserve the mortgaged property.
  3. If the mortgaged property is in danger of losing its value or depreciating in value due to its exploitation, to take necessary remedial measures, including ceasing the exploitation of the mortgaged property.
  4. When the mortgaged property is damaged, the mortgagor is obligated to, within a reasonable period, repair or substitute another property with equivalent value, unless otherwise agreed.
  5. Provide information about the actual condition of the mortgaged property to for the mortgagee.
  6. Deliver the mortgaged property to the mortgagee for realization in one of the cases prescribed in Article 299 of this Code.
  7. Notify the mortgagee of any third person rights with respect to the mortgaged property (if any). In the case of failure to provide such notice, the mortgagee shall have the right to cancel the contract of mortgage of property and demand compensation for damage or the right to maintain the contract and agree on the rights of the third person with respect to the mortgaged property.
  8. Do not sell, exchange or give the mortgaged property, except in the cases provided in Clauses 4 and 5 of Article 321 of this Code.

Article 321. Rights of mortgagor

  1. Exploit, and to enjoy the yield and income derived from, the property, except where the yield and income also form part of the mortgaged property as agreed.
  2. Invest in order to increase the value of the mortgaged property.
  3. Recover the mortgaged property and related documents held by a third person when the obligation secured by the mortgage is terminated or is substituted by other security.
  4. Sell or replace mortgaged property being goods rotating during the production and business process. In the case of a sale of mortgaged property being goods rotating during the production and business process, the right to require the purchaser to pay money, the proceeds received or the assets formed from the proceeds received shall form the mortgaged property in substitution for the property which was sold.

When a warehouse is mortgaged, the mortgagor may substitute goods in the warehouse but must ensure the value of the goods in the warehouse remains the value agreed.

  1. Sell, exchange or give mortgaged property not being goods rotating during the production and business process with the consent of the mortgagee or as prescribed by law.
  2. Lease or lend the mortgaged property provided that notice must be provided to the lessee and the borrower that the property is being mortgaged and that the mortgagee must also be notified that such notice has been provided.

Article 322. Obligations of mortgagees

  1. Where the parties agree that the mortgagee will hold the documents relating to the mortgaged property, to return to the mortgagor such documents upon termination of the mortgage.
  2. Follow procedures for realization of mortgaged property in accordance with regulations of law.

Article 323. Rights of mortgagees

  1. Examine and inspect directly the mortgaged property provided that such examination and inspection does not hinder or cause difficulty to the use and exploitation of the mortgaged property.
  2. Require the mortgagor to provide information on the current status of the mortgaged property.
  3. Require the mortgagor to apply necessary measures to preserve the property and the value of the property if there is a danger that use and exploitation of the mortgaged property will cause loss of value or depreciation in value of the property.
  4. Conduct the registration of mortgage as prescribed by law.
  5. Require the mortgagor or a third person holding the mortgaged property to deliver it to the mortgagee for realization if, upon expiry of the term for fulfillment of the obligation, the obligor has failed to perform or performed incorrectly the obligation.
  6. Hold documents related to mortgaged property as agreed by parties, unless otherwise prescribed by law
  7. Follow procedures for realization of mortgaged property as prescribed in Article 299 of this Code.

Article 324. Rights and obligations of third parties holding mortgaged property

  1. A third person holding mortgaged property has the following rights:
  2. a) Exploit the property if so agreed;
  3. b) Receive remuneration and be reimbursed for expenses incurred in taking care of and preserving the mortgaged property, unless otherwise agreed.
  4. A third person holding mortgaged property has the following obligations:
  5. a) Take care of and preserve the mortgaged property, and to compensate for any damage if the third person loses the mortgaged property or causes the mortgaged property to lose its value or depreciate in value;
  6. b) Cease the exploitation of the property if it is in danger of losing its value or depreciating in value;
  7. c) Return the mortgaged property to the mortgagee or mortgagor as agreed or prescribed by law.

Article 325. Mortgage on land use rights without mortgage of property on land

  1. With respect to mortgage on land use rights without mortgage property on that land but the land user is also the owner of the property on land; such property shall also part of the realized property, unless otherwise agreed.
  2. With respect to mortgage on land use rights that the land user is not also the owner of the property on land, such owner may keep using such land within his/her rights and obligations during the realization of the land use rights. The rights and obligations of the mortgagor in relation with the owner of the property on land shall be transferred to the transferee of the land use rights, unless otherwise agreed.

Article 326. Mortgage of property on land without mortgage on land use rights

  1. With respect to mortgage of property on land without mortgage on land use rights but the owner of the property on land is also the land user, such land use rights shall also part of the realized property, unless otherwise agreed.
  2. With respect to mortgage of property on land without mortgage on land use rights that the owner of the property on land is not also the land user, the transferee of property on land may keep using such property within the transferred rights and obligations from the owner of the property on land during the realization of the land use rights, unless otherwise agreed.

Article 327. Termination of property mortgages
A mortgage of property shall terminate in any of the following cases:

  1. The obligation which is secured by the mortgage has terminated;
  2. The mortgage of the property has been cancelled or substituted with another security;
  3. The mortgaged property has been realized;
  4. As agreed by the parties.

Sub-section 4. DEPOSIT, SECURITY COLLATERAL, ESCROW DEPOSIT
Article 328. Deposit

  1. Deposit is an act whereby one party (hereinafter referred to as the depositor) transfers to another party (hereinafter referred to as the depositary) a sum of money or precious metals, gemstones or other valuable things (hereinafter referred to as the deposited property) for a period of time as security for the entering into or performance of a contract.
  2. Upon a contract being entered into or performed, any deposited property shall be returned to the depositor, or deducted from the amount of an obligation to pay money. If the depositor refuses to enter into or perform the contract, the deposited property shall belong to the depositary. If the depositary refuses to enter into or perform the contract, it must return the deposited property and pay an amount equivalent to the value of the deposited property to the depositor, unless otherwise agreed.

Article 329. Security collateral

  1. Security collateral is an act whereby a lessee of a movable property transfers a sum of money or precious metals, gems or other valuable things (hereinafter referred to as security collateral property) to the lessor for a specified time limit to secure the return of the leased property.
  2. In cases where the leased property is returned, the lessee shall be entitled to reclaim the security collateral property after pay the rental; if the lessee does not return the leased property, the lessor shall be entitled to reclaim the leased property; if the leased property is no longer available for the return, the security collateral property shall belong to the lessor.

Article 330. Escrow deposit

  1. Escrow deposit is an act whereby an obligor deposits a sum of money, precious metals, gems or valuable papers into an escrow account at a credit institution to secure the performance of an obligation.
  2. In cases where the obligor has failed to perform or has improperly performed an obligation, the obligee shall be entitled to receive payment and compensation for damage caused by the obligor from the bank where the escrow deposit is affected, after deducting the bank service charges.
  3. The procedures for making deposits and making payments shall be as provided by the law.

Sub-section 5. TITLE RETENTION
Article 331. Title retention

  1. In a sale contract, the ownership of property of the seller may remain until the buyer pays the purchase price in full.
  2. Title retention must be made in a separate document or included in the sale contract.
  3. The title retention shall take effect against third party from the time of registration.

Article 332. Right to reclaim property
If the buyer fails to fulfill the payment obligation for the seller as agreed, the seller is entitled to reclaim the property. The seller shall refund the paid amount by the buyer deducted from the depreciated value due to use. Where the buyer lost or damaged property, the seller has the right to claim damages.
Article 333. Rights and obligations of the buyer

  1. Using the property and enjoying the yield and income derived therefrom within the effective term of title retention.
  2. Facing the risks of the property within the effective term of the title retention, unless otherwise agreed.

Article 334. Termination of title retention
The title retention shall terminate in any of the following cases:

  1. Payment obligation fulfilled completely by the buyer;
  2. The seller receives the property under title retention back;
  3. As agreed by the parties.

Sub-section 6. GUARANTEES
Article 335. Guarantees

  1. Guarantee means an undertaking made by a third person (hereinafter referred to as the guarantor) to an obligee (hereinafter referred to as the creditor) to perform an obligation on behalf of an obligor (hereinafter referred to as the principal debtor) if the obligation falls due and the principal fails to perform or performs incorrectly the obligation.
  2. The parties may agree that the guarantor shall only be obliged to perform the obligation if the principal debtor is incapable of performing it.

Article 336. Scope of guarantees

  1. A guarantor may guarantee an obligation in whole or in part on behalf of a principal debtor.
  2. A guaranteed obligation includes interest on the principal, penalties and compensation for any damage and interest on late payment, unless otherwise agreed.
  3. The parties may agree on using security as property to secure the performance of guaranteed obligation.
  4. If the obligation to guarantee is an obligation arising in the future, the scope of guarantee is exclusive of any obligations arising after the guarantor being natural person dies or the guarantor being juridical person ceases to exist.

Article 337. Remuneration
The guarantor shall be entitled to receive remuneration if so agreed by the guarantor with the principal debtor.
Article 338. Joint guarantors
When more than one person guarantee an obligation, those persons must perform jointly the guarantee, except where it is agreed or provided by law that the guarantee comprises separate portions. The obligee may require any of the joint guarantors to perform the obligation in its entirety.
Where one of the joint guarantors has performed the entire obligation on behalf of the principal debtor, the guarantor may require the other guarantors to perform their respective portions of the obligation with respect to that guarantor.
Article 339. Relationship between guarantors and creditors

  1. If the principal fails to perform or performs incorrectly the obligation, the creditor is entitled to request the guarantor to fulfill the guaranteed obligation , unless contracting parties has agreed that the guarantor only be required to perform the obligation on behalf of the principal debtor in case of the failure to perform obligation by the principal debtor.
  2. A creditor may not require a guarantor to perform an obligation on behalf of the principal debtor until the obligation falls due.
  3. Where a guarantor is able to offset an obligation with a principal debtor, a guarantor does not have to perform the guaranteed obligation.

Article 340. Rights to require of guarantors
Each guarantor may require the principal debtor to indemnify the guarantor to the extent of the guarantee, unless otherwise agreed.
Article 341. Discharge from guaranteed obligations

  1. Where the guarantor must perform the guaranteed obligation but the creditor discharges the guarantor from an obligation, the principal debtor is discharged from performance of the obligation with respect to the creditor, except where it is agreed or provided by law.
  2. Where one person from amongst the joint guarantors is discharged from the performance of its portion of the guaranteed obligation, the other joint guarantors must, nevertheless, perform their portion of the guaranteed obligation.
  3. Where one person from amongst the joint creditors discharge the guarantor from the performance of its portion of the guaranteed obligation, the guarantor must, nevertheless, perform their portion of the guaranteed obligation with respect to remaining joint creditors.

Article 342. Civil liability of guarantor

  1. If the principal debtor fails to perform or perform incorrectly the obligation, the guarantor is obligated to perform such obligation.
  2. If the guarantor performs incorrectly the guaranteed obligation, the creditor is entitled to request the guarantor to pay the value of the breached obligation and compensate for any damage.

Article 343. Termination of guarantees
A guarantee shall terminate in any of the following cases:

  1. The obligation secured by the guarantee terminates;
  2. The guarantee is cancelled or is substituted by another security;
  3. The guarantor has satisfied the guaranteed obligation;
  4. As agreed by the parties.

Sub-section 7. FIDELITY GUARANTEES
Article 344. Fidelity guarantees provided by socio-political organizations
A socio-political organization at the grassroots level may provide a fidelity guarantee in order that poor individuals and households are able to borrow sums from banks or other credit institutions for purposes of production, business or provision of services in accordance with the regulations of law.
Article 345. Formalities and contents of fidelity guarantees
A loan guaranteed by a fidelity guarantee must be made in writing with certification of a socio-political organization in terms of conditions and circumstances of the borrower.
The agreement on fidelity guarantee must specify the loan amount, the purpose of loan, the term of loan, the interest rate, and the rights, obligations and responsibilities of the borrower, the lending bank or credit institution and the guarantor organization.
Sub-section 8. LIEN ON PROPERTY
Article 346. Lien on property
Lien on property means that the obligee (hereinafter referred to as the lienor) who is legally possessing the property being an object of a bilateral contract is entitled to retain the property when the obligor fails to perform the obligations or has performed the obligations not strictly as agreed upon.
Article 347. Establishment of lien on property

  1. Lien on property shall arise from the due time for performance of obligation that the obligor failed to perform or perform incorrectly the obligation.
  2. Lien on property shall take effect against third party from the time of possession of the possessor.

Article 348. Rights of lienors

  1. Request the obligor to fulfill completely the obligations arising from a bilateral contract.
  2. Require the obligor to pay expenses necessary for taking care of and keeping such property.
  3. Exploit the property to obtain yield and income therefrom with the consent of the obligor.

The value of benefits from the exploitation of the property shall be offset against the value of the obligation of the obligor.
Article 349. Obligations of lienors

  1. Take care and preserve the property
  2. Do not change the status of the property.
  3. Do not transfer or use the property without the consent of the obligor.
  4. Return the property upon the complete performance of the obligation.
  5. Compensate for lost or damaged property.

Article 350. Termination of lien on property
A lien on property shall terminate in any of the following cases:

  1. The lienor actually no longer retains the property;
  2. Contracting parties shall agree on another security instead of retain on property;
  3. upon the complete performance of the obligation;
  4. The property ceases to exist;
  5. As agreed by the parties.

Section 4. CIVIL LIABILITY
Article 351. Civil liability arising from breach of civil obligations

  1. An obligor which fails to perform or performs incorrectly an obligation has civil liability to the obligee.

Breach of obligations means that the obligor fails to perform the obligations on time, perform the obligations incompletely or incorrectly.

  1. Where an obligor is not able to perform a civil obligation due to an event of force majeure, it shall not have civil liability, unless otherwise agreed or otherwise provided by law.
  2. An obligor shall not have civil liability if it is able to prove that failure to perform an obligation is due entirely to the fault of the obligee.

Article 352. Responsibility for continuing performing obligations
When an obligor perform its obligations improperly, the obligee is entitled to request the obligor to continue perform such obligations.
Article 353. Late performance of civil obligations

  1. Late performance of a civil obligation is the failure to have performed the civil obligation in whole or in part as at the expiry of the time-limit for the performance of such obligation.
  2. The party being late in performance of a civil obligation must notify immediately the obligee about the failure to have performed the civil obligation in a timely manner.

Article 354. Postponement of performance of civil obligations

  1. When it is not possible to perform a civil obligation on time, the obligor must inform immediately the obligee and may suggest postponement of performance of the civil obligation.

In the case of failure to notify the obligee, the obligor must compensate for any damage arising, unless otherwise agreed or unless it was impossible to provide notification due to objective reasons.

  1. The obligor may postpone the performance of the obligation only if the obligee consents. The performance of the civil obligation in this case of postponement shall be deemed to be performance in a timely manner.

Article 355. Late acceptance of performance of civil obligations

  1. The late acceptance of the performance of a civil obligation is where the time-limit for the fulfillment of the civil obligation has expired and the obligor has already fulfilled the civil obligation as agreed but the obligee does not accept the performance of such obligation.
  2. When the subject matter of late acceptance of performance of a civil obligation is property, the obligor may hand over the property to a bailee must or take the necessary measures to take care of the property and is entitled to demand reimbursement of reasonable expenses. If the property is kept by a bailee, the obligor must notify the obligee.
  3. The obligor has the right to sell property which is in danger of being damaged or of deteriorating, and shall pay the proceeds of sale of such property to the obligee after deducting necessary expenses for the preservation and sale of the property.

Article 356. Civil liability for failure to perform obligations to deliver objects

  1. Where an obligor fails to deliver a distinctive object, the obligee has the right to require the obligor to deliver that particular object. If the object no longer exists or is damaged, the obligor must pay the value of the object.
  2. Where an obligor fails to deliver a fungible object, the obligee has the right to require the obligor to deliver another fungible object. If there is no fungible object, the obligor must pay the value of the object.
  3. Where an obligor fails to perform an obligation as provided in clauses 1 and 2 of this article and causes damage to the obligee, the obligor must compensate for any damage.

Article 357. Liability for late performance of the obligation to pay

  1. Where the obligor makes late payment, then it must pay interest on the unpaid amount corresponding to the late period.
  2. Interest arising from late payments shall be determined by agreement of the parties, but may not exceed the interest rate specified in paragraph 1 of Article 468 of this Code; if there no agreement mentioned above, the Clause 2 of Article 468 of this Code shall apply.

Article 358. Civil liability for failure to perform obligations to perform acts or not to perform acts

  1. Where an obligor fails to perform an act which it must perform, the obligee has the right to request the obligor to perform the act, or the obligee may perform the act or assign the performance of the act to another person and to require the obligor pay reasonable expenses incurred and compensate for any damage.
  2. Where a person has an obligation not to perform an act but, nevertheless, performs such act, the obligee has the right to require the obligor to cease performing the act, make restitution and compensate for any damage.

Article 359. Liability for late acceptance of performance of civil obligations
An obligee which is late in accepting the performance of a civil obligation, and thereby causes damage to the obligor, must compensate the obligor for any damage and shall accept all risks arising from the time when acceptance fell due, unless otherwise agreed or otherwise provided by law.
Article 360. Liability for compensation due to breach of obligations
With respect to damage caused by breach of an obligation, the obligor must compensate for the whole damage, unless otherwise agreed or prescribed by law.
Article 361. Damage caused by breach of obligations

  1. Damage caused by breach of obligations comprises physical damage and spiritual damage.
  2. The physical damage means those actual physical losses, comprising loss of property, reasonable expenses to prevent, mitigate or restore damage, and the actual loss or reduction of income.
  3. Spiritual damage means losses related to life, health, honor, dignity or reputation and other personal benefits of an entity.

Article 362. The obligation to prevent or limit damage
The obligee must adopt the necessary and reasonable measures to prevent or limit its damage.
Article 363. Compensation for damages in case of the aggrieved party at fault
Where the breach of the obligations and damage incurred due to part of the fault of the aggrieved party, the violating party only be required to pay damages corresponding to its degree of fault.
Article 364. Fault in civil liability
Fault in civil liability includes intentional fault and unintentional fault.
Intentional fault means that a person is fully aware that its act will cause damage to another person but, nevertheless, performs the act and, irrespective of whether or not it so wishes, allows the damage to occur.
Unintentional means that a person does not foresee that its act is capable of causing damage, even though it knows or should know that the damage will occur, or where it does foresee that such act is capable of causing damage but believes that the damage will not occur or will be able to be prevented.
Section 5. TRANSFER OF RIGHT TO DEMAND AND TRANSFER OF CIVIL OBLIGATIONS
Article 365. Transfer of right to demand

  1. A party having the right to demand the performance of a civil obligation may transfer such right to demand to a subrogatee of the obligee as agreed, except in the following cases:
  2. a) The right is the right to demand support or the right to demand compensation for any damage resulting from harm to life, health, honor, dignity or reputation;
  3. b) The obligee and the obligor agree that the right to demand may not be transferred;
  4. Where a person having a right to demand transfers such right to a subrogatee, the subrogatee of the obligee shall become the person having the right to demand. The transfer of right to demand does not require the consent of the obligor.

A person transferring a right must notify the obligor in writing of the transfer of the right to demand, unless otherwise agreed. If the person transferring the right fails to notify the obligor thereby the obligor incurs expenses, the person transferring the right must pay for those expenses.
Article 366. Obligation to provide information and documents

  1. A person transferring a right to demand must provide the necessary information and the relevant documents to the subrogatee of the obligee.
  2. A person transferring a right to demand and breaching the provisions in Clause 1 of this Article, thereby causing damage, must compensate for such damage.

Article 367. No liability after transfer of right to demand
A person transferring a right to demand shall not be liable for the capability of the obligor to perform the obligation, unless otherwise agreed.
Article 368. Transfer of right to demand performance of secured civil obligations
Where a right to demand the performance of a secured civil obligation is transferred, the transfer of the right to demand shall include the security.
Article 369. Right to refuse of obligors

  1. Where the obligor is not notified of the transfer of the right to demand or where the subrogatee of the obligee does not prove the authenticity of the transfer of the right to demand, the obligor has the right to refuse to perform the obligation with respect to the subrogatee of the obligee.
  2. Where the obligor is not notified of the transfer of the right to demand and has already fulfilled the obligation with respect to the person having transferred the right to demand, the subrogatee of the obligee may not demand the obligor to perform the obligation with respect to that subrogatee.

Article 370. Transfer of civil obligations

  1. An obligor may transfer a civil obligation to a subrogatee of the obligor with the consent of the obligee, except where the obligation is personal to the obligor or where the law provides that the obligation may not be transferred.
  2. Upon a transfer of the obligation, the subrogatee of the obligor shall become the obligor.

Article 371. Transfer of secured civil obligations
Where a secured civil obligation is transferred, the security shall terminate, unless otherwise agreed.
Section 6. TERMINATION OF CIVIL OBLIGATIONS
Section 372. Termination of civil obligations
A civil obligation shall terminate in any of the following cases:

  1. The obligation is fulfilled;
  2. The parties so agree;
  3. The obligee waives performance of the obligation;
  4. The obligation is substituted by another civil obligation;
  5. The obligation is offset;
  6. The obligee and the obligor merge;
  7. The limitation period for a release from the civil obligation has expired;
  8. The obligor being a natural person dies, or the obligor being a juridical person ceases to exist, and the obligation must be performed by that particular natural person or juridical person;
  9. The obligee being a natural person dies and the right to demand does not form part of the bequeathed estate, or the obligee being a juridical person ceases to exist and the right to demand is not able to be transferred to another juridical person;
  10. A distinctive object which is the subject matter of the civil obligation no longer exists and is substituted by another civil obligation.
  11. Other cases as provided by law.

Article 373. Fulfillment of civil obligations
The civil obligation shall be deemed to be have been fulfilled when the obligor has performed the obligation in its entirety, or has performed a portion of the obligation and the obligee waives any further performance.
Article 374. Fulfillment of civil obligations where obligees are late in accepting subject matter of obligations
When an obligee is late in accepting the subject matter of an obligation which is an object, the obligation to deliver an object shall be fulfilled at the moment when the object is deposited for bailment as prescribed in Clause 2 Article 355 of this Code.
Article 375. Termination of civil obligations by agreement
Parties may agree to terminate a civil obligation at any time but must not cause damage to the interests of the State or the public or the legal rights or interests of other persons.
Article 376. Termination of civil obligations due to waiver

  1. A civil obligation shall terminate when the obligee waives the obligation of the obligor, unless otherwise provided by law.
  2. When a secured civil obligation is waived, the security arrangement shall also terminate.

Article 377. Termination of civil obligations by substitution

  1. Where parties agree to substitute an original civil obligation with another civil obligation, the original civil obligation shall terminate.
  2. A civil obligation shall also terminate if the obligee has accepted another property or the performance of another act as a substitute for the property or act previously agreed.
  3. Where a civil obligation is an obligation to support others or to compensate for any damage due to harm to life, health, honor, dignity or reputation, or another personal obligation which is not able to be transferred to other persons, such obligation may not be substituted with another obligation.

Article 378. Termination of civil obligations where obligations are offset

  1. Where parties have reciprocal obligations with respect to fungible objects, when both obligations fall due, the parties shall not be required to perform their obligations to each other, and the obligations shall be deemed to have terminated, unless otherwise provided by law.
  2. Where the values of properties or acts are not equivalent, the parties shall settle with each other the difference in value.
  3. Objects having monetary value may be used to offset an obligation to pay money.

Article 379. Cases where civil obligations may not be offset
A civil obligation may not be offset in the following cases:

  1. The civil obligation is in dispute;
  2. The obligation is to compensate for harm to life, health, dignity, honor or reputation;
  3. The obligation is to support others;
  4. Other obligations as provided by law.

Article 380. Termination of civil obligations upon merger of obligor and obligee
A civil obligation of an obligor shall terminate when the obligor becomes the obligee with respect to that particular obligation.
Article 381. Termination of civil obligations due to expiry of duration of waiver of civil obligation
Upon expiry of the duration of waiver of a civil obligation, the obligation shall terminate.
Article 382. Termination of civil obligations when obligor being natural person dies or when obligor being juridical person ceases to exist
Where parties have agreed or the law provides that an obligation must be performed by a particular obligor, when such natural person dies or such juridical person ceases to exist, the obligation shall terminate.
Article 383. Termination of civil obligations when distinctive objects no longer exist
An obligation to deliver a distinctive object shall terminate when such distinctive object no longer exists.
Parties may agree on the substitution of such object with another object or on compensation for any damage.
Article 384. Termination of civil obligations in cases of bankruptcy
In cases of bankruptcy, civil obligations shall terminate in accordance with the Law on bankruptcy.
Section 7. CONTRACTS
Sub-section 1. ENTERING INTO CIVIL CONTRACTS
Article 385. Definition of civil contract
Civil contract means an agreement between parties in relation to the establishment, modification or termination of civil rights and obligations.
Article 386. Offers to enter into civil contracts

  1. Offer to enter into a contract means a clear expression by the offeror of its intention to enter into a contract and to be bound by such offer made to another specific party or the public (hereinafter referred to as the offeree).
  2. Where an offer to enter into a contract has specified the time for reply and the offeror enters into a contract with a third person during the time-limit for reply by the offeree, if the offeror fails to enter into the contract with the offeree and the offeree suffers damage, the offeror must compensate the offeree for such damage.

Article 387. Information in entering into contracts

  1. Each party must notify the other party of any piece of information affecting the acceptance of offer to enter into the contract by the latter party.
  2. When a party receives any secret information from the other party during the process of entering into the contract, it must protect that information and may not use it for its own purposes or other illegal purposes.
  3. Any party violating Clause 1 or Clause 2 of this Article thereby causes damage must compensate for it.

Article 388. Time-limit within which offer to enter into contract remains effective

  1. The time-limit within which an offer to enter into a contract remains effective shall be determined as follows:
  2. a) Where an offeror has specified such time-limit;
  3. b) Where an offeror has not specified the time-limit, the offer to enter into the contract is effective as from the time the offeree receives the offer.
  4. The following cases shall be deemed to be receipt of an offer to enter into a contract:
  5. a) The offer is delivered to the place of residence if the offeree is a natural person, or the offer is delivered to the head office if the offeree is a juridical person;
  6. b) The offer is placed into the official information system of the offeree;
  7. c) When the offeree knows about the offer to enter into a contract by way of other means.

Article 389. Modification or withdrawal of offers to enter into contracts

  1. An offeror may modify or withdraw an offer to enter into a contract in the following cases:
  2. a) If the offeree receives notice of modification or withdrawal of the offer prior to or at the same time as receipt of the offer;
  3. b) The offeror clearly specified the circumstances in which the offer could be modified or withdrawn and such circumstances have in fact arisen.
  4. When the offeror modifies the contents of the offer, that offer shall be deemed to be a new offer.

Article 390. Rescission of offers to enter into contracts
If the offeror exercises the right to rescind the offer to enter into a contract on the ground that such right was specified in the offer, the offeror must notify the offeree and such notice shall only be effective if the offeree receives the notice prior to the offeree providing its acceptance of the offer to enter into the contract.
Article 391. Termination of offers to enter into contracts
An offer to enter into a civil contract shall terminate in the following cases:

  1. The offeree replies that the offer is accepted.
  2. The offeree replies that the offer is not accepted;
  3. The time-limit for acceptance has expired;
  4. When notice of modification or withdrawal of the offer becomes effective;
  5. When notice of rescission of the offer becomes effective;
  6. As agreed by the offeror and the offeree within the time-limit within which the offer to enter into a contract remains effective.

Article 392. Amendment of offer proposed by offeree
When an offeree accepts the offer to enter into a contract but specifies conditions or amendments to the offer, the offeree shall be deemed to have made a new offer.
Article 393. Acceptance of offers to enter into contracts

  1. Acceptance of an offer to enter into a contract means a reply by the offeree to the offeror accepting the entire contents of the offer.
  2. The silence of the offeree shall not mean an acceptance of the offer to enter into the contract, unless it is agreed upon or habit established by the parties.

Article 394. Time-limits for acceptance of offers to enter into civil contracts

  1. Where an offeror has specified a time limit for reply, a reply accepting shall only be effective if it is made within that time limit. If the offeror receives an acceptance after the time-limit has expired, such acceptance shall be deemed to be a new offer from the party which is late in replying.

When the offeror does not specify the time limit for reply, the reply accepting shall only be effective if it is made within reasonable period.

  1. If a notice of acceptance of an offer to enter into a contract arrives late for objective reasons which the offeror knows or should know, such notice shall still be effective, unless the offeror immediately replies that it does not agree with such acceptance by the offeree.
  2. Where the parties communicate directly, including conversations by telephone or other means of communication, the offeree must reply immediately as to whether or not it will accept, except where there is an agreement on the time-limit for reply.

Article 395. Cases where offeror dies or lacks of legal capacity or has limited cognition and behavior control
Where the offeror dies or lacks of legal capacity or has limited cognition and behavior control after the offeree has replied accepting the offer, the offer to enter into a contract shall still be valid, unless the contents of contract is associated with the personal identity of the offeror.
Article 396. Cases where offeree dies or lacks of legal capacity or has limited cognition and behavior control
Where the offeree dies or lacks of legal capacity or has limited cognition and behavior control after the offeree has replied accepting the offer, the offer to enter into a contract shall still be valid, unless the contents of contract is associated with the personal identity of the offeror.
Article 397. Withdrawal of notice of acceptance to enter into contract
The offeree may withdraw notice of acceptance to enter into a contract if such notice arrives prior to or at the same time as the offeror receives the reply accepting the offer to enter into a contract.
Article 398. Contents of contracts

  1. The contracting parties may agree on the contents of a contract.
  2. A contract may have the following contents:
  3. a) Subject matter of the contract;
  4. b) Quantity and quality;
  5. c) Price and method of payment;
  6. d) Time-limit, place and method of performing the contract;
  7. dd) Rights and obligations of the parties;
  8. e) Liability for breach of contract;
  9. g) Methods of settlement of disputes.

Article 399. Places for entering into contracts
The place where a contract is entered into shall be as agreed by the parties; if there is no agreement, such place shall be the residence of the individual, or the head office of the legal entity, having made the offer to enter into the contract.
Article 400. Time when contracts are entered into

  1. A contract is entered into at the time when the offeror receives the reply accepting to enter into the contract.
  2. If the parties have agreed that silence shall constitute an acceptance within a time limit, the contract shall also be deemed to be entered into when such time-limit has expired.
  3. The time when an oral contract is entered into is the time when the parties have reached agreement on the contents of the contract.
  4. The time when a written contract is entered into shall be the time when the last party signs the contract or by other forms of written acceptance.

If a contract is entered into orally and then it is made in writing, the time when the contract is entered into shall be determined as prescribed in Clause 3 of this Article.
Article 401. Effectiveness of contracts

  1. A contract legally entered into shall take effect from the time when it is entered into, unless otherwise agreed or otherwise provided by law.
  2. From the effective date of the contract, contracting parties must mutually exercise rights and perform obligations as agreed. A contract may be amended or terminated as agreed by the parties or prescribed by law.

Article 402. Principal types of contracts
Contracts comprise the following principal types:

  1. A bilateral contract is a contract whereby each party has an obligation to the other;
  2. A unilateral contract is a contract whereby only one party has an obligation;
  3. A principal contract is a contract the effectiveness of which does not depend on another contract;
  4. An ancillary contract is a contract the effectiveness of which depends on a principal contract;
  5. A contract for the benefit of a third person is a contract whereby contracting parties must perform obligations for the benefit of a third person and the third person enjoys benefits from such performance;
  6. A conditional contract is a contract the performance of which depends on the occurrence, modification or termination of a specified event.

Article 403. Appendices to contracts

  1. Appendices providing details on certain terms and conditions of a contract may be attached to the contract. The appendices shall have the same effectiveness as the contract. The contents of the appendices shall not contradict the contents of the contract.
  2. If the terms and conditions of the appendices contradict the terms and conditions of the contract, such terms and conditions of the appendices shall be ineffective, unless otherwise agreed. If the parties agree that the terms and conditions of the appendices contradict the terms and conditions of the contract, the terms and conditions of the contract which are contradicted shall be deemed to have been amended.

Article 404. Interpretation of contracts

  1. Where a contract contains terms and conditions which are unclear, the interpretation of such terms and conditions shall be based not only on the wording of the contract but also on the mutual intentions of the parties during the process prior to and after the time of establishment and performance of the contract.
  2. Where a term of a contract may be interpreted in different ways, it shall be interpreted in the way which, when effective, will best benefit the parties.
  3. Where the wording of a contract may be interpreted in different ways, such wording shall be interpreted in the way most appropriate to the nature of the contract.
  4. Where a contract contains a term or wording which is difficult to understand, such term or wording shall be interpreted in accordance with the customary practice of the place where the contract was entered into.
  5. Where there is a conflict between the mutual intentions of the parties and the wording used in the contract, the mutual intentions of the parties shall be used in order to interpret the contract.
  6. Where the party in a powerful position inserts into the contract contents which are disadvantageous to the party in a weak position, the contract shall be interpreted in a manner favoring the party in a weak position.

Article 405. Standard form contracts

  1. Standard form contract means a contract containing terms and conditions which are prepared by a party based on a standard form requiring the other party to reply within a reasonable period of time. If the offeree accepts, it shall be deemed to have accepted the entire contract provided by the offeror.

The standard form contract must be public in order for the parties to know or should know the contents of the contract.
Procedures for announcement of standard form contract shall comply with regulations of law.

  1. Where a standard form contract contains terms and conditions which are unclear, such terms and conditions shall be interpreted in a manner favoring the offeree.
  2. Where a standard form contract contains provisions exempting the party providing such standard form contract from liability, or increasing the liability of or waiving legitimate interests of the other party, such provisions shall be ineffective, unless otherwise agreed.

Article 406. General trading conditions in concluding contracts

  1. General trading conditions are stable terms announced by a party to apply to the offeree; if the offeree accepts the contract is then deemed to accept these terms.
  2. General trading conditions shall be effective only with the parties as long as these conditions have been publicly in order for the parties to know or should know them.

The procedures for announcement of general trading conditions shall comply with regulations of law.

  1. The general trading conditions must ensure equality between the parties. If the general trading conditions contain provisions on discharge of liability from the party giving the general trading conditions, increase of responsibility or removal of the legitimate interests of the other party, these provisions do not take effect, unless otherwise agreed.

Article 407. Invalid civil contracts

  1. The provisions on invalid civil transactions in Articles 123 to 138 inclusive of this Code shall also govern invalid contracts.
  2. Invalidity of a principal contract shall terminate an ancillary contract, unless the parties agree that the ancillary contract replaces the principal contract. This provision shall not apply with respect to security for the performance of civil obligations.
  3. Invalidity of an ancillary contract shall not terminate the principal contract, unless the parties agree that the ancillary contract is an inseparable part of the principal contract.

Article 408. Invalidity of civil contracts due to impossibility of performing subject matter

  1. If, immediately as from the time a contract is signed, it is impossible to perform the subject matter of the contract for objective reasons, the contract shall be invalid.
  2. If, when entering into a contract, one party knew or should have known that it was impossible to perform the subject matter of the contract for objective reasons but failed to notify the other party which entered into the contract, the former party must compensate the latter party for damage, unless the latter party knew or should have known that it was impossible to perform the subject matter of the contract.
  3. The provision in Clause 1 and Clause 2 of this Article shall also apply to a contract containing one or more parts with subject matter which is impossible to perform, but the remaining parts of the contract shall remain valid.

Sub-section 2. PERFORMANCE OF CONTRACTS
Article 409. Performance of unilateral contracts
With respect to a unilateral contract, the obligor must perform the obligation strictly as agreed. The obligor may only perform the obligation prior to or after the time-limit with the consent of the obligee.
Article 410. Performance of bilateral contracts

  1. With respect to a bilateral contract, where the parties have agreed on a time limit for the performance of an obligation, each party must perform its obligation when the obligation falls due. One party may not postpone performance by reason of the other party not having performed the obligations owed to the former party, except in the cases provided in Articles 411 and 413 of this Code.
  2. Where the parties have no agreement on which party will perform its obligation first, the parties must perform their obligations concurrently; where obligations are not able to be performed concurrently, the obligation the performance of which will take longer shall be performed first.

Article 411. Right to postpone performance of civil obligations in bilateral contracts

  1. The party which is required to perform its obligation first has the right to postpone the performance of such obligation, if the property of the other party has substantially decreased in value such that its obligation is not able to be performed as undertaken, until the other party is able to perform its obligation or has a guarantor.
  2. The party which is required to perform its obligation last has the right to postpone the performance of such obligation when it falls due if the party which was required to perform its obligation first failed to do so when such obligation fell due.

Article 412. Lien on property in bilateral contracts
If the obligor fails to perform his/her obligations, the obligee shall establish the right to lien on property of the obligor as prescribed in Article 346 to Article 350 of this Code.
Article 413. Obligations not able to be performed due to fault of obligee
With respect to a bilateral contract, when one party is not able to perform its obligations due to the fault of the other party, the former party has the right to demand the latter party to continue to perform its obligation with respect to the former party or has the right to cancel the contract and demand compensation for damage.
Article 414. Failure to perform obligations not due to fault of parties
With respect to a bilateral contract, when one party is not able to perform its obligations but there is no fault of any party, the party not being able to perform does not have the right to demand the other party to perform its obligation with respect to the former party. When one party has performed part of its obligations, such party has the right to demand the other party to perform its corresponding obligation with respect to the former party.
Article 415. Performance of contracts for benefit of third parties
Where a contract is performed for the benefit of a third person, the third person has the right to demand personally the obligor to perform the obligations with respect to such third person. If there is a dispute between the parties over the performance of the contract, the third person does not have the right to demand performance until the dispute is resolved.
An obligee also has the right to demand the obligor perform a contract for the benefit of a third person.
Article 416. Right to waive of third persons

  1. Where a third person waives its right to benefits prior to the performance of an obligation by an obligor, the obligor shall not be required to perform the obligation but must notify the obligee, the contract shall be deemed to be cancelled, and each party shall return anything it has received from the other party.
  2. If a third person waives its [right to] benefits after the obligor has performed the obligation, the obligation shall be deemed to have been fulfilled and the obligee must perform its undertakings with respect to the obligor. In this case, benefits derived from the contract shall be enjoyed by a party that should have been the beneficiary if the contract is performed for the interests of a third party, unless otherwise agreed.

Article 417. No amendment or cancellation of contracts for benefit of third persons
Where a third person has agreed to receive a benefit, the parties to the contract may not amend or cancel the contract, even where the contract is yet to be performed, except with the consent of the third person.
Article 418. Agreements on fines against violations

  1. Agreements on fines for violations are reached by the parties to a contract which requires the violating party to pay a fine to the aggrieved party.
  2. The fine levels shall be agreed among the parties, unless otherwise prescribed by relevant laws.
  3. The parties may reach an agreement that the violating party has to pay only a fine for violations and is not liable to any compensation for damage, or has to pay both a fine for violations and a compensation for damage.

In case the parties have an agreement on fines against violation which does not specify that the violating party has to pay both a find for violations and a compensation for damage, then the violating party has to pay only the fine for violations.
Article 419. The damage to be compensated for breach of contract

  1. The damage to be compensated for breach of contractual obligations is determined in accordance with Clause 2 of this Article, Article 13 and Article 360 ​​of this Code.
  2. The obligee may demand compensation for damage to its supposed benefits that will be enjoyed by the contract offer. The obligee also may request the obligor to pay the costs incurred due to its non-fulfillment of contractual obligations which do not overlap with the compensation for damages for contractual benefits.
  3. At the request of the obligee, a court may compel the obligor to pay spiritual damages to the obligee. The damages shall be decided by the court according to contents of case.

Article 420. Performance of contract upon the basic change of circumstances

  1. The change of circumstances shall be deemed basic when it meets all following conditions:
  2. a) The circumstances change due to objective reasons occurred after the conclusion of the contract;
  3. b) At the time of concluding the contract, the parties could not foresee a change in circumstances;
  4. c) The circumstances change such greatly that if the parties know in advance, the contract has not been concluded or are concluded, but with completely different content;
  5. d) The continuation of the contract without the change in the contract would cause serious damage to one party;
  6. dd) The party having interests adversely affected has adopted all the necessary measures in its ability, in accordance with the nature of the contract, cannot prevent or minimize the extent of effect.
  7. In the case of basic circumstances change, the affected party may request the other party to the re-negotiate the contract in a reasonable period of time.
  8. If the parties cannot reach an agreement on amending the contract within a reasonable period of time, any of the parties may request a court to:
  9. a) Terminate the contract at a specific time;
  10. b) Amend the contract to balance the lawful rights and interests of the parties due to basic change of circumstances.

The court may only decide to amend the contract in the event that the termination of the contract would cause greater damage than the cost to perform the contract if it is modified.

  1. In the process of negotiating amendments and termination of the contract and the court handling the case, the parties must continue to perform its obligations under the contract, unless otherwise agreed.

Sub-section 3. AMENDMENT AND TERMINATION OF CONTRACTS
Article 421. Amendment to contracts

  1. Parties may agree to amend a contract.
  2. Each contract may be amended as prescribed in Article 420 of this Code.
  3. Each amended contract must also comply which the formalities of the initial contract.

Article 422. Termination of contracts
A civil contract shall terminate in any of the following cases:

  1. The contract has been completed;
  2. The parties so agree;
  3. Where a contract is only able to be performed by a particular natural person or juridical person having entered into the contract, and that particular natural person dies or that juridical person ceases to exist.
  4. The contract is cancelled or unilaterally terminated;
  5. The contract is not able to be performed because the subject matter of the contract no longer exists;
  6. The contract terminates as prescribed in Article 420 of this Code;
  7. Others circumstances as provided by law.

Article 423. Cancellation of contracts

  1. A party has the right to cancel a contract and shall not be liable to compensate for damage in any of the following cases:
  2. a) A violation of contract by the other party gives rise to cancellation as agreed by the parties;
  3. b) The other party seriously violates the obligations in the contract;
  4. c) Others circumstances as provided by law.
  5. Serious violation means the failure to fulfill obligations properly by a party leading the failure to achieve the purposes of entering into contract by the other party.
  6. A party cancelling a contract must notify the other party immediately of the cancellation [and] must compensate if the failure to notify causes damage.

Article 424. Cancellation of the contract due to late performance of obligations

  1. Where the obligor fails to perform the obligations that the obligee requests in a reasonable period of time but the obligor still fails to perform, the obligee may cancel the contract.
  2. If, due to the nature of the contract or by the will of the parties, the contract will not achieve the objective if it is not performed within a certain time limit, but the obligor fails to perform that contract upon the expiry date of such time limit, the obligee has the right to cancel the contract without adherence to Clause 1 of this Article.

Article 425. Cancellation of the contract due to inability to perform
Where the obligor cannot perform part or all of its obligations to make the purpose of the obligee may not be reached, the obligee party can cancel the contract and claim damages.
Article 426. Cancellation of the contract in the case of lost or damaged property
Where a party losses or causes damage to property being the subject of a contract that cannot be refunded or compensated by other property or cannot be repaired or replaced with the same type of property, the other party may cancel contract.
The violating party shall compensate in cash equal to the value of lost or damaged property, unless otherwise agreed or stipulated in Clause 2, Clause 3, Article 351 and Article 363 of this Code.
Article 427. Consequences of cancellation of contracts

  1. When a contract is canceled, the contract is void from the time of signing; the parties do not have to fulfill the obligations agreed upon, except for agreement on fines against violations, compensation and settlement of disputes.
  2. The parties must return to each other what they have received after deducting from the reasonable costs of contract performance and cost of preservation and development of property.

The refund is made in kind. In case it cannot be returned in kind, it is worth the money to repay.
Where the parties are jointly obliged to refund, the refund must be made at the same time, unless otherwise agreed or otherwise provided by law.

  1. The aggrieved party shall be compensated due to breach of obligations of the other party.
  2. The settlement of the consequences of the cancellation of the contract relating to personal rights shall comply with this Code and other relevant law provisions.
  3. In case of canceling the contract without grounds specified in Articles 423, 424, 425 and 426 of this Code, the cancellation of the contract is determined as the violating party to perform its obligations and responsibilities to comply with its obligations under the provisions of this Code, other relevant laws.

Article 428. Unilateral termination of performance of contracts

  1. A party has the right to terminate unilaterally the performance of a contract without any compensation for damage when a party violates its obligations seriously if so agreed by the parties or so provided by law.
  2. A party terminating unilaterally the performance of a contract must notify the other party immediately of its termination of the contract and must compensate if the failure to notify causes damage.
  3. Where the performance of a contract is terminated unilaterally, it shall terminate from the time when the other party is notified of the termination. In such case, the parties are not required to continue to perform their obligations, except for agreement on fines for violations, compensation for damage and settlement of disputes. A party which has already performed its obligation may demand the other party to make payment for the performed obligation.
  4. The aggrieved party shall receive a compensation for damage caused by the improper performance of obligation by the violating party.
  5. If a contract is terminated unilaterally without any basis prescribed in Clause 1 of this Article, the party terminating unilaterally the performance of the contract shall be deemed to be the violating party and must perform civil liability as prescribed in this Code and relevant laws.

Article 429. Limitation period for initiating legal action with respect to contracts
The limitation period for initiating legal action to request a court to resolve a dispute relating to a contract is three years from the date on which the party entitled to request knows or should know that their lawful rights and interests are infringed.
Chapter XVI
COMMON CONTRACTS
Section 1. SALE CONTRACTS OF PROPERTY
Article 430. Sale contract of property
Sale contract means an agreement between parties whereby a seller is obligated to transfer the ownership rights of property to the purchaser and the purchaser is obligated to make a payment to the seller.
Sale contracts of houses or sale contracts of houses for other purposes shall comply with this Code, the Law on Housing and relevant laws.
Article 431. Subject matter of sale contracts

  1. Each property prescribed in this Code may be the subject matter of a sale contract. If a property is banned or restricted from transfer as prescribed by laws, it shall become a subject matter of a sale contract if it complies with the regulations of such laws.
  2. The property is under ownership of the seller and the seller has the right to sell it.

Article 432. Quality of objects for sale

  1. The quality of an object for sale and purchase shall be as agreed by the parties.
  2. Where the quality of an object has been proclaimed or is provided by a competent authority, the quality of the object agreed by the parties shall not be lower than the quality proclaimed standard or the stipulations of the competent authority.
  3. Where parties have not agreed on or agree unclearly on the quality of the object for sale, its quality shall conform to requirements pertaining to quality of the object proclaimed or prescribed by a competent authority or by industry standards.

If there is no quality standard, regulations of a competent authority and industry standard in terms of an object for sale, its quality shall be determined according to normal standards or separate standards in conformity with the purposes of entering into contract and as prescribed in the Law on consumers’ right protection.
Article 433. Price and method of payment

  1. Price shall be as agreed by the parties or as determined by a third person at the request of the parties. With respect to property in a transaction for which a competent authority has provided price and method of payment, the parties shall reach an agreement in accordance with such regulations.
  2. Where parties reach no agreement or reach an agreement with unclear terms about price and method of payment, the price shall be determined according to the market price and the method of payment shall be determined according to the customary practice at the time and place of entering into the contract.

Article 434. Time limits for performance of sale contracts

  1. The time limit for performance of a sale contract shall be as agreed by the parties. The seller must deliver the property to the purchaser at the agreed time. The seller may only deliver the property prior to the time limit with the consent of the purchaser.
  2. Where the parties have not agreed on a time limit for delivery of the property, the purchaser has the right to demand, at any time, the seller to deliver the property and the seller also has the right to demand, at any time, the purchaser to accept the property, but the parties must give an advanced reasonable notice to each other.
  3. The purchaser shall make the payment according to the agreed time. Where the parties have no agreement or have an unclear agreement on the time-limit for payment, the purchaser must pay immediately upon receipt of the property or documents proving the ownership of the property.

Article 435. Place for delivery of property
The place for delivery of the property shall be as agreed by the parties. If there is no agreement, Clause 2 of Article 277 of this Code shall apply.
Article 436. Method for delivery of property

  1. Property shall be delivered by the method as agreed by the parties. If there is no agreement on the method for delivery of the property, the property shall be delivered at one time directly to the purchaser.
  2. If the parties agreed that the seller shall deliver property to the purchaser many times, but the seller violates obligation of delivery in a certain time, the purchaser may cancel the part of contract related to such violation and claim compensation.

Article 437. Liability in respect of delivery of objects in incorrect quantities

  1. Where a seller delivers objects in a quantity which is more than that agreed, the purchaser has the right to accept or not to accept the excess. If it accepts the excess, payment shall be made in accordance with the agreement on the excess.
  2. Where a seller delivers objects in a quantity which is less than that agreed, the purchaser has one of the following rights:
  3. a) Accept the amount delivered and set a time-limit for the seller to deliver the amount outstanding;
  4. b) Accept the amount delivered and demand compensation for damage;
  5. c) Cancel the contract and demand compensation for damage if the violation prevents the purchaser from achieving the purposes of enter into the contract.

Article 438. Liability in respect of delivery of incomplete integrated objects

  1. Where an integrated object is delivered incomplete, thereby rendering the object unusable, the purchaser has one of the following rights:
  2. a) Accept the object and demand the seller to deliver the remaining parts, demand compensation for damage, and postpone payment in respect of the parts received until the missing parts are delivered;
  3. b) Cancel the contract and demand compensation for damage.
  4. Where a purchaser has paid for, but not yet accepted, the delivery of an incomplete integrated object, the purchaser shall be paid interest on the amount pre-paid as agreed by the parties provided it does not exceed the interest rate prescribed in Clause 1 Article 468 of this Code. If the parties do not agree the interest rate, Clause 2 Article 468 of this Code shall apply and the purchaser may demand the seller to compensate for damage due to the delivery of the incomplete integrated object from the time when the contract is required to be performed to the time when the complete integrated object is delivered.

Article 439. Liability in respect of delivery of objects of incorrect type
Where an object delivered is of an incorrect type, the purchaser has one of the following rights:

  1. Accept the object and pay the agreed price;
  2. Demand delivery of an object of the correct type and compensation for damage;
  3. c) Cancel the contract and demand compensation for damage if the delivery of incorrect type prevents the purchaser from achieving the purposes of enter into the contract.

With regard to an object including many types, if the seller fails to deliver it in conformity with the agreement, the purchaser may cancel the part of contract related to such object and claim compensation.
Article 440. Obligation to make payment

  1. A purchaser must pay the full price at the agreed place and time.
  2. If the parties only agree on time limit for delivery of object, the time limit for payment shall be determined equivalent to the time limit for delivery of object. If the parties do not agree on time limit for delivery of object and payment, the purchaser must make payment upon the receipt of the object.
  3. If the purchaser fails to make payment, he/she/it must pay interest on the late payment as prescribed in Article 357 of this Code.

Article 441. Transfer of risks

  1. The seller shall bear all risks of the property until the property is delivered to the purchaser, the purchaser shall bear all risks of the property from the time of acceptance of the property, unless otherwise agreed or prescribed by law.
  2. Where the law requires that ownership rights with respect to property which is the subject matter of a contract for sale and purchase must be registered, the seller bear all risks until the completion of the registration procedures and the purchaser bear all risks from the completion of the registration procedures, unless otherwise agreed.

Article 442. Transport costs and costs related to transfer of ownership rights

  1. Transport costs and costs related to transfer of ownership rights shall be agreed by the parties, unless otherwise prescribed by law.
  2. Where the parties do not reach an agreement or reach an unclear agreement on transport costs and costs related to transfer of ownership rights, those costs shall be determined according to the costs proclaimed or prescribed by a competent authority or industry standards.
  3. If there is no basis prescribed in Clause 1 and Clause 2 of this Article, the transport costs and costs related to transfer of ownership rights shall be determined according to normal standards or separate standards in conformity with the purposes of entering into contract.
  4. Where the parties have not agreed on and the law does not provide transport costs and costs related to transfer of ownership rights, the seller shall be liable for the costs of transportation to the place of delivery of the property and the costs related to the transfer of the ownership rights.

Article 443. Obligation to provide information and instructions for use
A seller has the obligation to provide a purchaser with necessary information on the property for sale and instructions on the use of the property. If the seller fails to perform this obligation, the purchaser has the right to require the seller to perform such obligation within a reasonable time limit and, if the seller still fails to perform such obligation that prevents the purchaser from achieving the purposes of entering into the contract, the purchaser has the right to cancel the contract and demand compensation for damage.
Article 444. Assurances as to ownership rights of purchasers with respect to purchased property

  1. A seller has the obligation to assure that the ownership rights with respect to the property sold to a purchaser are not disputed by a third person.
  2. Where ownership rights with respect to property are disputed by a third person, the seller must support the purchaser in protecting the interests of the purchaser. If a third person has the ownership rights with respect to all or part of the property for sale and purchase, the purchaser has the right to cancel the contract and require the seller to compensate for damage.
  3. Where a purchaser knows or should know that property for sale and purchase is under the ownership of a third person but, nevertheless, purchases the property, the purchaser must return the property to the owner and does not have the right to demand compensation for damage.

Article 445. Assurances as to quality of objects for sale

  1. A seller must assure the utility value or the characteristics of the object for sale and purchase. If, after having purchased an object, a purchaser discovers defects which cause the object to lose its value or diminish its utility value, the purchaser must notify the seller immediately