CIVIL CODE

Pursuant to the 1992 Constitution of the Socialist Republic of Vietnam, which was amended and supplemented under Resolution No. 51/2001/QH10 of December 25, 2001, of the 10th National Assembly, the 10th session;

This Code provides for civil affairs.

PART ONE

GENERAL PROVISIONS

Chapter I

TASKS AND EFFECT OF THE CIVIL CODE

Article 1.- Tasks and governing scope of the Civil Code

The Civil Code provides the legal status, legal standards for the conduct of individuals, legal persons, other subjects; the rights and obligations of subjects regarding personal identities and property in civil, marriage and family, business, trade, labor relations (hereinafter referred collectively to as civil relations).

The Civil Code has the tasks of protecting legitimate rights and interests of individuals and organizations, State interests and public interests; ensuring legal equality and safety in civil relations, contributing to the creation of conditions for meeting the material and spiritual demands of people, and to the promotion of socio-economic development.

Article 2.- Effect of the Civil Code

1. The Civil Code shall apply to civil relations established from the effective date of this Code, unless otherwise provided for by this Code or the National Assembly’s resolution.

2. The Civil Code shall apply in the territory of the Socialist Republic of Vietnam.

3. The Civil Code shall apply to civil relations involving foreign elements, unless otherwise provided for by treaties to which the Socialist Republic of Vietnam is a contracting party.

Article 3.- Application of practices, analogy of law

In cases where it is neither provided for by law nor agreed upon by the parties, practices can be applied; if practices are unavailable, analogy of law may be applied. Practices and analogy of law must not contravene the principles provided in this Code.

Chapter II

BASIC PRINCIPLES

Article 4.- Principles of free and voluntary undertaking and agreement

The right to freely undertake or agree on the establishment of civil rights and obligations shall be guaranteed by law, if such undertaking or agreement is not banned by law and/or not contrary to social ethics.

In civil relations, the parties shall act entirely voluntarily and neither party may impose, prohibit, coerce, threaten or hinder the other party.

Lawful undertakings or agreements shall be binding on the parties and must be respected by individuals, legal persons and other subjects.

Article 5.- The principle of equality

In civil relations, the parties shall be equal and shall not invoke differences in ethnicity, gender, social status, economic situation, belief, religion, educational level and occupation as reasons to treat each other unequally.

Article 6.- The principle of goodwill and honesty

In civil relations, the parties must act in goodwill and honesty in establishment and performance of civil rights and obligations; neither party shall deceive the other party.

Article 7.- The principle of bearing civil liability

The parties shall strictly perform their own civil obligations and shall themselves be liable for the non-performance or the incorrect performance of obligations; if a party does not voluntarily perform, it shall be forced to perform its obligations in accordance with the provisions of law.

Article 8.- The principle of respect for good morals and traditions

The establishment and performance 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.

Ethnic minority people shall be given favorable conditions in civil relations so as to step by step improve their material and spiritual life.

The task of assisting elderly persons, young children and persons with disabilities in the performance of civil rights and obligations shall be encouraged.

Article 9.- The principle of respect for, protection of, civil rights

1. All the civil rights of individuals, legal persons or other subjects shall be respected and protected by law.

2. When the civil rights of a subject are infringed upon, he/she/it shall have the right to protect such rights by him/her/itself in accordance with the provisions of this Code or request competent agencies or organizations to:

a/ Recognize his/her/its civil rights;

b/ Order the termination of the act of violation;

c/ Order a public apology and/or rectification;

d/ Order the performance of civil obligations;

e/ Order compensation for damage.

Article 10.- The principle of respect for State interests, public interests and legitimate rights and interests of other persons

The establishment and performance of civil rights and obligations must not infringe upon State interests, public interests and legitimate rights and interests of other persons.

Article 11.- The principle of compliance with law

The establishment and performance of civil rights and obligations must comply with the provisions of this Code and other provisions of law.

Article 12.- The principle of conciliation

In civil relations, conciliation between the parties in accordance with the provisions of law shall be encouraged.

No one may use force or threaten to use force when participating in civil relations and/or resolving civil disputes.

Article 13.- Bases for establishment of civil rights and obligations

Civil rights and obligations shall be established on the following bases:

1. Lawful civil transactions;

2. Decisions of courts or other competent state agencies;

3. A legal event which is specified by law;

4. Creation of spiritual values which are intellectual property objects;

5. Legitimate possession of property;

6. Damage caused by an illegal act;

7. Performance of a task without authorization;

8. Illegal possession and use of assets or illegal gain therefrom;

9. Other bases specified by law.

Chapter III

INDIVIDUALS

Section 1. CIVIL LEGAL CAPACITY, CIVIL ACT CAPACITY OF INDIVIDUALS

Article 14.- Civil legal capacity of individuals

1. The civil legal capacity of an individual is his/her capability to have civil rights and civil obligations.

2. All individuals shall have the same civil legal capacity.

3. The civil legal capacity of an individual shall exist from the time he/she is born and terminate when he/she dies.

Article 15.- Contents of the civil legal capacity of an individual

An individual shall have the following civil rights and obligations:

1. Personal rights not associated to property, and personal rights associated to 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 16.- No restrictions on the civil legal capacity of an individual

The civil legal capacity of an individual shall not be restricted, unless otherwise provided for by law.

Article 17.- The civil act capacity of an individual

The civil act capacity of an individual is his/her capability to establish and perform civil rights and obligations through his/her acts.

Article 18.- Adults and minors

Persons who are full eighteen years old or older are adults. Persons who are not yet full eighteen years old are minors.

Article 19.- The civil act capacity of an adult

An adult shall have full civil act capacity, except the cases specified in Article 22 and Article 23 of this Code.

Article 20.- The civil act capacity of minors who are between full six years old and under full eighteen years old

1. Persons who are between full six years old and under full eighteen years old must have the consents of their representatives at law when establishing and performing civil transactions, except those transactions to meet their daily-life needs suitable to their age group or otherwise provided for by law.

2. In cases where a person who is between full fifteen years old and under full eighteen years old has his/her own property to ensure the performance of obligations, such person may establish and perform civil transactions by him/herself without the consent of his/her representative at law, unless otherwise provided for by law.

Article 21.- Persons without civil act capacity

Persons who are under full six years old shall not have civil act capacity. All civil transactions of persons under full six years of age must be established and performed by their representatives at law.

Article 22.- Loss of civil act capacity

1. When a person is incapable of cognizing or controlling his/her acts due to mental disease or other ailments, the Court may, at the request of the person(s) with related rights or interests, issue a decision to declare such a person as having lost his/her civil act capacity, based on the conclusion of a competent medical examination body.

When there is no longer a basis for declaring a person as having lost his/her civil act capacity, the Court shall, at the request of such person him/herself or of a person with related rights or interests, issue a decision to revoke the decision declaring the loss of civil act capacity.

2. Civil transactions of persons who have lost their civil act capacity shall be established and performed by their representatives at law.

Article 23.- Restrictions on civil act capacity

1. Persons whose addiction to narcotics/drugs or to other stimulants leads to the squandering of their families’ property may be declared by decision of the Court to be persons with a restricted civil act capacity, at the request of persons with related rights or interests or of relevant agencies or organizations.

2. The at-law representatives of persons with a restricted civil act capacity and the scope of such representation shall be decided by the Court. Civil transactions related to the property of persons with a restricted civil act capacity must have the consents of their representatives at law, except for transactions to meet their daily-life needs.

3. When there is no longer a basis for declaring that a person has a restricted civil act capacity, the Court shall, at the request of such person him/herself or a person with related rights or interests, make a decision to revoke the decision having declared the restriction on his/her civil act capacity.

Section 2. PERSONAL RIGHTS

Article 24.- Personal rights

Personal rights specified in this Code are civil rights inherent to each individual, which cannot be transferred to other persons, unless otherwise provided for by law.

Article 25.- Protection of personal rights

When a personal right of an individual is infringed upon, such person shall have the right to:

1. Make rectification him/herself;

2. Request the infringer or request competent agencies, organizations to order the infringer to terminate the infringement and make a public apology and/or rectification;

3. Request the infringer or request competent agencies or organizations to order the infringer to pay compensation for damage.

Article 26.- The right with respect to family and given names

1. Each individual has the right to have a family name and a given name. The family and given names of a person shall be the family and given names in the birth certificate of such person.

2. An individual shall establish and exercise civil rights and perform civil obligations in his/her family and given names which have been recognized by a competent state agency.

3. The use of pseudonyms and pen names must not cause damage to the rights and interests of other persons.

Article 27.- The right to change family and given names

1. Individuals shall have the right to request competent state agencies to recognize the change of their family and/or given names in the following cases:

a/ Where it is so requested by the person who has a family or given name the use of which causes confusion or affects the feelings of his/her family, the honor, legitimate rights and interests of such person;

b/ Where an adoptive father or mother requests to change the family and/or given name of an adopted child or when an adopted child ceases to be an adopted child and he/she or his/her biological father or mother requests to reclaim the family and/or given name which was given to him/her by the biological father or mother;

c/ Where it is so requested by the biological father or mother or the child when identifying the father and/or mother of the child;

d/ Where there is a change of the family name of a child from that of the father to that of the mother or vice versa;

e/ Where there is a change of the family name and/or given name of a person who was lost from his/her childhood and has discovered the origin of his/her bloodline;

f/ Where there is a change of the family name and/or given name of a person whose gender has been re-determined;

g/ Other cases specified by law on civil status.

2. The change of the family name and/or given name of a person who is full nine years or older must be consented by that person.

3. The change of the family name and/or given name of an individual shall neither change nor terminate the civil rights and obligations which have been established under the former family name and/or given name.

Article 28.- The right to determine ethnicity

1. An individual upon his/her birth may have his/her ethnicity determined in accordance with the ethnicity of his/her biological mother and father. In cases where the biological father and mother belong to two different ethnicities, the ethnicity of the child shall be determined as the ethnicity of the father or the ethnicity of the mother in accordance with practices or in accordance with the agreement of the biological father and mother.

2. A person who has attained adulthood, the biological father and mother or guardian of a minor may request competent state agencies to re-determine his/her ethnicity in the following cases:

a/ To re-determine his/her ethnicity in accordance with the ethnicity of the biological father or mother, if the father and mother belong to two different ethnicities;

b/ To re-determine his/her ethnicity in accordance with the ethnicity of his/her biological father and/or mother in circumstances where he/she is the adopted child of a person belonging to a different ethnicity and has had his/her ethnicity determined in accordance with the ethnicity of his/her adoptive father and/or mother due to the unidentification of his/her biological father and/or mother.

3. Where the biological father or mother or the guardian of a minor requests the re-determination of the ethnicity of a minor who is full fifteen years or older under the provisions of Clause 2 of this Article, the consent of such minor is required.

Article 29.- The right to registration of birth

Individuals, when born, shall have the right to have their births registered.

Article 30.- The right to registration of death

1. When a person dies, his/her next of kin, the house owner or the agency or organization to which the dead person belonged must register the death of such person.

2. If a newborn infant dies after birth, the infant’s birth and death must be registered; if the infant dies before or immediately upon birth, the infant’s birth and death must not be registered.

Article 31.- The right of an individual with respect to his/her picture

1. An individual shall have the right with respect to his/her picture.

2. The use of a picture of an individual must have his/her consent; where such person has died, lost his/her civil act capacity or is under full fifteen years old, the consent of his/her father, mother, husband, wife, adult children or representative is required, unless it is for State interests, public interests or otherwise provided for by law.

3. It is strictly forbidden to use pictures of other persons to infringe upon their honor, dignity and/or prestige.

Article 32.- The right to safety of life, health and body

1. Individuals shall shave have the right to safety of life, health and body.

2. When a person discovers another person who has got an accident or is sick whereby his/her life is threatened, the person who discovers him/her shall have the responsibility to deliver such person to a medical establishment; the medical establishment must not refuse to provide treatment to the person and shall have to utilize all available means and capabilities to cure him/her.

3. The application of new curative methods on the body of a person and the anesthetization, surgery, amputation, implantation and grafting of body organs must have his/her consent; if the person is a minor, has lost the civil act capacity or is an unconscious patient, the consent of his/her father, mother, guardian or next of kin is required; in cases where there is a threat to the life of a patient which cannot wait for the opinions of the above-said persons, a decision of the head of the medical establishment is required.

4. A post-mortem operation shall be performed in the following cases:

a/ Where it is so consented by the decedent before his/her death;

b/ Where it is so consented by the decedent’s father, mother, wife, husband, adult children or guardian when there is no opinion of the decedent before he/she dies;

c/ Where it is so decided by a competent medical organization or a competent state agency in case of necessity.

Article 33.- The right to donation of body organs

Individuals shall have the right to donate their body organs for the purpose of medical treatment of other persons or scientific research.

The donation and use of body organs shall comply with the provisions of law.

Article 34.- The right to donation of corpses, body organs after death

Individuals shall have the right to donate their corpses, body organs after they die for the purpose of medical treatment of other persons or scientific research.

The donation and use of corpses, body organs of dead persons shall comply with the provisions of law.

Article 35.- The right to receive body organs

Individuals shall have the right to receive body organs of other persons for their medical treatment.

It is strictly forbidden to receive and use body organs of other persons for commercial purposes.

Article 36.- The right to re-determination of gender

Individuals shall have the right to the re-determination of their gender.

The re-determination of gender of a person shall be performed in cases where his/her gender is affected with inborn defects or has not been properly shaped, which needs the medical intervention to clearly determine the gender.

The re-determination of gender shall comply with the provisions of law.

Article 37.- The right to protection of honor, dignity and prestige

Individuals’ honor, dignity and prestige shall be respected and protected by law.

Article 38.- The right to personal secrets

1. An individual’s rights to personal secrets shall be respected and protected by law.

2. The collection and publication of information and materials on the private life of an individual must be consented by that person; in cases where that person has died, lost his civil act capacity or is under full fifteen years, the consent of his/her father, mother, wife, husband, adult children or representative is required, except for cases where the collection and publication of information and materials are made by decision of a competent agency or organization.

3. Letters, telephones, telegrams, other forms of electronic information of individuals shall be safely and confidentially guaranteed.

The inspection of an individual’s letters, telephones, telegrams and/or other forms of electronic information may be performed only in cases where it is so provided for by law and decided by competent state agencies.

Article 39.- The right to marriage

Males and females who have fully met the conditions for marriage in accordance with the law on marriage and family shall have the right to marriage at their free will.

The freedom of marriage between persons belonging to different ethnicities and/or religions, between religious and non-religious persons and between Vietnamese citizens and foreigners shall be respected and protected by law.

Article 40.- The right to equality between husband and wife

Husband and wife are equal to each other, shall have the same rights and obligations in all respects in family and in civil relations and shall together build a plentiful, equitable, progressive, happy and lasting family.

Article 41.- The right to enjoy mutual care among family members

The members of a family shall have the right to enjoy mutual care and assistance in accordance with the fine moral traditions of the Vietnamese family.

Children and grandchildren who are minors shall benefit from the care and upbringing of the mother, father and grandparents; children and grand-children shall have the duty to respect, care for and support their parents and grandparents.

Article 42.- The right to divorce

A wife or husband or both the wife and the husband shall have the right to request the Court to solve their divorce.

Article 43.- The right to recognize or not to recognize a father, mother or child

1. A person who is not recognized as a father, mother or child of another person shall have the right to request a competent state agency to determine him/her as father, mother or child of that person.

2. A person who is recognized as a father, mother or child of another person shall have the right to request a competent state agency to determine him/her as not being father, mother or child of that person.

Article 44.- The right to adopt a child and the right to be accepted as an adoptive child

An individual’s right to adopt a child and right to be accepted as an adoptive child shall be recognized and protected by law.

The adoption of a child and the process of being accepted as an adoptive child shall comply with the provisions of law.

Article 45.- The right to citizenship

An individual shall have the right to have a citizenship.

The recognition of, change to, the naturalization or relinquishment of the Vietnamese citizenship shall comply with the provisions of law on citizenship.

Article 46.- The inviolable right to place of residence

Individuals shall have the inviolable right to their places of residence.

The entry into the place of residence of a person must be consented by that person.

The search of a place of residence of a person shall be performed only in cases where it is so provided for by law and where there is a warrant from a competent state agency; the search must comply with the order and procedures specified by law.

Article 47.- The right to freedom of belief and religion

1. Individuals shall have the right to freedom of belief and religion, and to adhere to or not to adhere to a religion.

2. No one may infringe upon the freedom of belief and religion, or abuse beliefs or religions to infringe upon State interests, public interests or legitimate rights and interests of other persons.

Article 48.- The right to freedom of movement, freedom of residence

1. Individuals shall have the right to freedom of travel and freedom of residence.

2. An individual’s freedom of travel and/or freedom of residence may be restricted only by decision of a competent state agency and in accordance with the order and procedures specified by law.

Article 49.- The right to work

Individuals shall have the right to work.

Every person shall have the right to work, the freedom to choose a job or occupation without being discriminated against on the ground of his/her ethnicity, sex, social status, belief or religion.

Article 50.- The right to freedom of business

Individuals’ right to freedom of business shall be respected and protected by law.

Individuals shall have the right to choose the forms, areas and lines of business, to establish enterprises, to freely enter into contracts and hire labor, and other rights in accordance with the provisions of law.

Article 51.- The right to freedom of research, creation

1. Individuals shall have the right to freedom of scientific and technical research, inventions, innovations to improve techniques and rationalize production; the right to literary and art creation and critique, and to participation in other activities of research and/or creation.

2. The right to freedom of research and/or creation shall be respected and protected by law. No one shall have the right to hinder or restrict an individual’s right to freedom of research and creation.

Section 3. PLACE OF RESIDENCE

Article 52.- Place of residence

1. The place of residence of an individual is the place where such person permanently lives.

2. In cases where it is impossible to identify 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 currently lives.

Article 53.- 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 permanently lives.

2. A minor may have a place of residence separate from the place of residence of his/her father and mother, if it is so agreed by his/her parents or so provided for by law.

Article 54.- 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 it is so agreed by the guardian or so provided for by law.

Article 55.- Place of residence of husband and wife

1. The place of residence of a husband and a wife is the place where the husband and the wife permanently live together.

2. A husband and a wife may have separate places of residence, if they so agree upon.

Article 56.- Place of residence of military personnel

1. The place of residence of military personnel currently performing his/her military obligations is the place where the military personnel’s unit is stationed.

2. The place of residence of an army officer, professional military personnel, defense worker or official is the place where his/her unit is stationed, except in cases where he/she has a place of residence as specified in Clause 1, Article 52 of this Code.

Article 57.- 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, except for cases where he/she has a place of residence specified in Clause 1, Article 52 of this Code.

Section 4. GUARDIANSHIP

Article 58.- Guardianship

1. Guardianship is a task whereby 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 person who has lost his/her civil act capacity (hereinafter referred collectively to as ward).

2. Wards include:

a/ Minors who have lost their mothers and fathers, whose parents are unidentifiable, or whose parents have both lost their civil act capacity or have had their capacity for civil acts restricted, whose parents have had their parental rights restricted by the Court, or whose parents are still alive but have no conditions to take care of and to educate such minors, and if their parents so request;

b/ Persons who have lost their civil act capacity.

3. Persons who are under full fifteen years old as provided for at Point a, Clause 2 of this Article and persons defined at Point b, Clause 2 of this Article must have guardians.

4. A person may be a guardian for more than one person, but a person may be a ward of only one guardian, except in cases where the guardian is his/her father, mother or grandfather, grand-mother as specified in Clause 2 of Article 61 or Clause 3 of Article 62 of this Code.

Article 59.- Supervision of guardianship

1. The next of kin of wards shall have the responsibility to appoint their representatives to supervise the guardianship in order to monitor, urge, inspect the guardians in the performance of their guardianship, consider and settle in time the guardians’ proposals and/or petitions related to the guardianship.

The wards’ next of kin are their spouses, parents, children; if none of these people is available, the wards’ next of kin shall be their grandparents, siblings; if none of these persons is available, the wards’ next of kin shall be their uncles and ants.

2. In cases where a ward has none of his/her next of kin or his/her next of kin cannot nominate any one to supervise the guardianship as provided for in Clause 1 of this Article, the People’s Committee of the commune, ward, or district township where the guardian resides shall appoint a person to supervise the guardianship.

3. The persons who supervise the guardianship must be those who have full civil act capacity.

Article 60.- Requirements for individuals to be guardians

Persons who meet all of the following requirements may act as guardians:

1. Having full civil act capacity;

2. Having good virtues; being not examined for penal liability or having had their criminal records written off after having been sentenced for one of the crimes of intentionally infringing upon the life, health, honor, dignity or property of other persons;

3. Having necessary conditions to ensure the performance of the guardianship.

Article 61.- The natural guardian of a minor

The natural guardian of a minor who has lost both his/her mother and father, whose parents are unidentifiable, or whose parents have both lost their civil act capacity or have had their civil act capacity restricted, whose parents have had their parental rights restricted by the Court, or whose parents do not have conditions to take care of and to educate the minor, and if the parents so request, shall be determined as follows:

1. In cases where it is not otherwise agreed upon by the biological siblings, the eldest brother or sister shall be the guardian for his/her younger siblings who are minors; if the eldest brother or sister does not fully meet the conditions for being a guardian, the next eldest brother or sister shall be the guardian;

2. In cases where there are no biological siblings or where the biological siblings do not fully meet the requirements to be a guardian, the paternal grandfather, grandmother or the maternal grandfather, grandmother shall be the guardian; if none of these persons fully meet the conditions to be a guardian, the uncle or ant of that person shall be the guardian.

Article 62.- The natural guardian of a person who has lost his/her civil act capacity

1. In cases where the wife has lost her civil act capacity, her husband shall be her guardian; if the husband has lost his civil act capacity, his wife shall be his guardian.

2. In cases where the father and mother have both lost their civil act capacity or where either of them has lost the civil act capacity while the other does not fully meet the 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. In cases where an adult who has lost his/her civil act capacity has no wife or husband, no children or his wife or her husband or children do not fully meet the requirements to be a guardian, his/her father and/or mother shall be the guardian.

Article 63.- Appointment of a guardian

In cases where a minor or a person who has lost his/her civil act capacity does not have a natural guardian as provided for in Article 61 and Article 62 of this Code, the People’s Committee of the commune, ward or district township where the ward resides shall have the responsibility to appoint a guardian or propose an organization to assume the guardianship.

Article 64.- Procedures for appointing a guardian

1. The appointment of a guardian must be made in writing, clearly stating the reason for appointing the guardian, the specific rights and obligations of the guardian and the status of the ward’s property.

2. The appointment of a guardian must be consented by the person who is appointed to be a guardian.

Article 65.- Obligations of guardians towards wards aged under full fifteen years

The guardian of a person aged under full fifteen years shall have the following obligations:

1. To take care of and educate the ward;

2. To represent the ward in civil transactions, except where it is provided for by law that wards aged under full fifteen years can establish and perform civil transactions by themselves;

3. To manage the property of the ward;

4. To protect legitimate rights and interests of the ward.

Article 66.- Obligations of guardians towards wards aged between full fifteen years and under full eighteen years

The guardian of a person aged between full fifteen years and under full eighteen years shall have the following obligations:

1. To represent the ward in civil transactions, except where it is provided for by law that wards who are aged between full fifteen years and under full eighteen years can establish and perform civil transactions by themselves;

2. To manage the property of the ward;

3. To protect legitimate rights and interests of the ward.

Article 67.- Obligations of guardians towards wards who have lost their civil act capacity

The guardian of a person who has lost his/her civil act capacity shall have the following obligations:

1. To take care of and ensure the medical treatment for the ward;

2. To represent the ward in civil transactions;

3. To manage the property of the ward;

4. To protect legitimate rights and interests of the ward.

Article 68.- Rights of guardians

A guardian shall have the following rights:

1. To use the property of the ward in order to take care of and pay for the needs of the ward;

2. To be paid for all expenses necessary for the management of the ward’s property;

3. To represent the ward in the establishment and performance of civil transactions in order to protect legitimate rights and interests of the ward.

Article 69.- Management of property of wards

1. Guardians must manage the property of their wards as if it were their own property.

2. Guardians may perform transactions related to the property of their wards in the interests of the wards. The sale, exchange, lease, lending, pledge, mortgage, deposit and other transactions involving the property of wards, which has a large value, must be consented by the guardianship supervisors.

Guardians must not donate the property of their wards to other persons.

3. Civil transactions between guardians and their wards in connection with the latter’s property shall be invalid, except for cases where such transactions are performed in the interests of the wards and agreed upon by the guardianship supervisors.

Article 70.- Replacement of guardians

1. A guardian may be replaced in the following cases:

a/ The guardian no longer meets all of the requirements specified in Article 60 of this Code;

b/ The guardian being an individual dies or has been declared missing by the Court or being an organization which has terminated its operation;

c/ The guardian seriously violates a guardian’s obligations;

d/ The guardian proposes his/her replacement and another person agrees to assume the guardianship.

2. In case of changing a natural guardian, the persons defined in Article 61 and Article 62 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 63 of this Code.

3. The procedures for changing an appointed guardian shall comply with the provisions of Article 64 and Article 71 of this Code.

Article 71.- Transfer of the guardianship by the appointed guardian

1. Upon the change of an appointed guardian, the person who has performed the guardianship shall have to transfer the guardianship to his/her replacement within fifteen days as from the date a new guardian is found.

2. The transfer of guardianship must be made in writing, clearly stating the reason for the transfer and the status of the ward’s property at the time of transfer. The person who appointed the guardian and the person who supervises the guardianship shall witness the transfer of guardianship.

3. In case of change of a guardian for the reason that the guardian being an individual has died, or been declared by the court as having his/her civil act capacity restricted, losing his/her civil act capacity or as missing; or that the guardian being an organization has terminated its operation, the person who 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 to the witness of the guardianship supervisor.

4. The transfer of guardianship must be recognized by the People’s Committee of the commune, ward or district township where the new guardian resides.

Article 72.- Termination of guardianship

A guardianship shall be terminated in the following cases:

1. The ward has obtained full civil act capacity;

2. The ward has died;

3. The ward’s father and/or mother have/has fully met the conditions to perform their rights and obligations;

4. The ward has been adopted.

Article 73.- Consequences of the termination of guardianship

1. When a guardianship is terminated, the guardian must settle up the property with the ward or with the mother and/or father of the ward within three months from the time the guardianship terminates.

In cases where the ward dies, the guardian must settle up the property with the ward’s heirs within three months as from the time 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, ward or district township where the ward resides.

The settlement of property shall be carried out under the supervision of the guardianship supervisors.

2. The rights and obligations arising from civil transactions in the interest of a ward shall be performed by the guardian as follows:

a/ To transfer them to the ward when the ward has obtained full civil act capacity;

b/ To transfer them to the ward’s father and/or mother in cases specified in Clause 3 and Clause 4, Article 72 of this Code;

c/ To transfer them to the ward’s heir(s) when the ward dies.

Section 5. NOTICE OF SEARCH FOR PERSONS WHO ARE ABSENT FROM THEIR PLACES OF RESIDENCE, DECLARATION OF MISSING PERSONS AND DECLARATION OF DEATH

Article 74.- 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 more, the person with related rights or interests shall have the right to request the 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 75 of this Code.

Article 75.- Management of the property of a person who is absent from his/her place of residence

1. At the request of the person with related rights or interests, the Court shall hand over the property of a person absent from his/her place of residence to one of the following persons for management:

a/ The person who has been authorized by the absent person to manage the latter’s property shall continue to manage such property;

b/ For a common property, the remaining co-owner(s) shall manage such property;

c/ The property being currently managed by the wife or the husband shall continue to be managed by the wife or the husband; if the wife or the husband dies or loses her/his civil act capacity or has her/his civil act capacity restricted, a child who has attained adulthood or the father and/or mother of the absent person shall manage the latter’s property.

2. In cases where there are none of the persons defined in Clause 1 of this Article, the Court shall appoint a person among the next of kin of the absent person to manage his/her property; if the absent person does not have any next of kin, the Court shall appoint another person to manage the property.

Article 76.- Duties of the persons managing the property of persons absent from their places of residence

The persons managing the property of persons absent from their places of residence shall have the following duties:

1. To keep and preserve the property of the absent persons as if it were their own property;

2. To immediately sell the property being subsidiary food crops or other products being in danger of decay;

3. To perform the absent persons’ obligations to support their dependents and/or to pay due debts with such persons’ property under the Court’s decisions;

4. To hand back the property to the absent persons upon their return and to notify the Court thereof; if they are at fault in the management of property thereby causing damage, they must pay compensations therefor.

Article 77.- Rights of the persons managing the property of persons absent from their places of residence

The persons managing the property of persons absent from their places of residence shall have the following rights:

1. To manage the property of the absent persons;

2. To deduct a portion from the property of the absent persons in order to perform the latter’s obligations to support their dependents and/or obligations to pay due debts;

3. To be paid for all expenses necessary for the management of the property.

Article 78.- Dclaration of a person to be missing

1. When a person has disappeared for two consecutive years or more 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, the Court may, at the request of a person with related rights or interests, declare such person missing. The two-year time limit shall be counted 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 be counted from the first day of the month following the month when the last information is received; if the date and month of the last information cannot be determined, this time limit shall be counted from the first day of the year following the year when the last information is received.

2. In cases where the wife or the husband of a person who has been declared missing files for a divorce, the Court shall grant the divorce.

Article 79.- Management of the property of persons who have been declared missing

The persons currently managing the property of the persons who are absent from their places of residence as provided for in Clause 1, Article 75 of this Code shall continue to manage the property of such persons when they are declared missing by the Court and have the rights and duties specified in Article 76 and Article 77 of this Code.

In cases where a Court has resolved to permit the wife or the husband of the person who has been declared missing to divorce, the property of the missing person shall be handed over to the child(ren) who has/have attained adulthood or to the mother and/or father of the missing person for management; if there is no such person, the property shall be handed over to the next of kin of the missing person for management; if there is no next of kin, the Court shall appoint another person to manage the property.

Article 80.- Annulment of the decision declaring a person missing

1. When a person who has been declared missing returns or when there is reliable information that such person is still alive, the Court shall, at the request of such person or a person with related rights or interests, issue a decision to annul the decision declaring a person missing.

2. A person who has been declared missing shall, upon his/her return, be permitted to take back his/her property handed to him/her by the property manager after paying the management expenses.

3. In cases where the wife or the husband of a person who has been declared missing has been granted a divorce, the decision permitting the divorce shall still be legally effective, despite the return of the person who has been declared missing or the reliable information that such person is still alive.

Article 81.- Declaration of a person to be dead

1. A person with related rights or interests may request the Court to issue a decision declaring that a person is dead in the following cases:

a/ After three years as from the date the Court’s decision declaring a person missing takes legal effect there is still no reliable information that such person is alive;

b/ The person has disappeared during a war and five years from the end of the war, there is still no reliable information that such person is alive;

c/ The person was hit by an accident, catastrophe or a natural disaster and one year from the end of such accident, catastrophe or natural disaster, there is still no reliable information that such person is alive, unless otherwise provided for by law;

d/ The person has disappeared for five consecutive years or more and there is no reliable information that such person is still alive; this time limit shall be counted in accordance with the provisions of Clause 1, Article 78 of this Code.

2. The Court shall, on a case-by-case basis, determine the date of death of a person who has been declared dead, based on the cases specified in Clause 1 of this Article.

Article 82.- Personal relations and property relations of persons who have been declared dead by the Court

1. When a decision of the 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 as if a person had died.

2. The property relations of a person whom the Court has declared dead shall be resolved as if such person had died; the property of such person shall be settled in accordance with the law on inheritance.

Article 83.- Annulment of the decision declaring that a person is dead

1. When a person who has been declared dead returns or when there is reliable information that such person is still alive, the Court shall, at the request of such person or of a person with related rights or interests, issue a decision to annul the decision which declared that such person was dead.

2. The personal relations of the person who has been declared dead shall be restored when the Court issues a decision to annul the decision which declared that such person was dead, except for the following cases:

a/ Where 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 78 of this Code, the decision permitting the divorce shall remain legally effective;

b/ Where the wife or the husband of the person who has been declared dead has married another person, such marriage shall remain legally effective.

3. A person who has been declared dead but is still alive shall have the right to demand that the persons who received his/her inheritance to return the property that still remains.

In cases where the heir of a person whom the Court has declared dead is aware that such person is still alive, but deliberately conceals such for the purpose of enjoying the inheritance, he/she must return the entire property which he/she has received, including yields and profits; if causing damage, he/she must pay compensation therefor.

Chapter IV

LEGAL PERSONS

Section 1. GENERAL PROVISIONS ON LEGAL PERSONS

Article 84.- Legal persons

An organization shall be recognized as a legal person when it meets all the following conditions:

1. Being established lawfully;

2. Having a well-organized structure;

3. Possessing property independent from that of individuals and other organizations, and bearing its own liability with such property;

4. Independently entering into legal relations in its own name.

Article 85.- Establishment of legal persons

A legal person may be established on the initiative of an individual or an organization, or under a decision of a competent state agency.

Article 86.- The civil legal capacity of legal persons

1. The civil legal capacity of a legal person is its capability to have civil rights and obligations consistent with the purpose of its operation.

2. The civil legal capacity of a legal person shall arise from the time it is established and shall terminate from the time it ceases to be a legal person.

3. The representative at law or the authorized representative of a legal person shall act in the name of the legal person in civil relations.

Article 87.- The name of a legal person

1. A legal person must have its own name in the Vietnamese language, which shall clearly indicate the legal person’s organizational form and distinguish it from other legal persons operating in the same domain.

2. A legal person must use its own name in civil transactions.

3. The name of a legal person shall be recognized and protected by law.

Article 88.- The charter of a legal person

1. In cases where it is provided for by law that a legal person must have a charter, the charter of the legal person must be approved by the founding members or the members’ congress; the charter of the legal person must be recognized by a competent state agency, if it is so provided for by law.

2. The charter of a legal person shall have the following principal contents:

a/ Name of the legal person;

b/ Purpose and scope of its operation;

c/ Its head-office;

d/ Its charter capital, if any;

e/ Its organizational structure, the procedures for nomination, election, appointment, relief from office and dismissal; duties and powers of the positions in the managing body and other bodies;

f/ Rights and obligations of the members;

g/ Procedures for amending and supplementing the charter;

h/ Conditions for consolidating, merging, dividing, separating or dissolving the legal person.

3. Amendments and supplements to the charter of a legal person must be recognized by a competent state agency, if it is so provided for by law.

Article 89.- The managing body of a legal person

1. A legal person must have its managing body.

2. The organization, tasks and powers of the managing body of a legal person shall be provided for in the charter of such legal person or in the decision on its establishment.

Article 90.- The head-office of a legal person

The head-office of a legal person is the place where its managing body is located.

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

Article 91.- The representative of a legal person

1. The representative of a legal person may be a representative at law or an authorized representative. The representative of a legal person must abide by the provisions on represen-tation in Chapter VII, Part One of this Code.

2. The representative at law of a legal person shall be provided in the legal person’s charter or the decision on the establishment of the legal person.

Article 92.- Representative offices and branches of legal persons

1. Legal persons may establish representative offices and/or branches at places other than their head- offices.

2. Representative offices are dependent units of legal persons, having the tasks of representing under authorization the interests of the legal persons and protecting such interests.

3. Branches are dependent units of legal persons, having the tasks of performing all or part of the functions of the legal persons, including the function of representation under authorization.

4. Representative offices and branches are not legal persons. The heads of representative offices or branches shall perform tasks under authorization of their legal persons within the authorization scope and duration.

5. Legal persons shall have civil rights and obligations arising from civil transactions established and performed by their representative offices and/or branches.

Article 93.- Civil liability of legal persons

1. A legal person shall bear civil liability for the exercise of its civil rights and performance of its civil obligations established and performed by its representative in the name of the legal person.

2. A legal person shall bear civil liability with its own 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 legal person.

3. Members of a legal person shall not bear civil liability for the legal person with respect to civil obligations estab-lished and performed by the legal person.

Article 94.- Consolidation of legal persons

1. Legal persons of the same type may consolidate with one another to form a new legal person under the provisions of the charters, the agreement among such legal persons or under the decision of a competent state agency.

2. After the consolidation, the former legal persons shall terminate; the civil rights and obligations of such legal persons shall be transferred to the new legal person.

Article 95.- Merger of legal persons

1. A legal person may be merged (hereinafter referred to as the merged legal person) into another legal person of the same type (hereinafter referred to as the merging legal person) under the provisions of the charter, the agreement among such legal persons or under the decision of a competent state agency.

2. After the merger, the merged legal person shall terminate; the civil rights and obligations of such legal person shall be transferred to the merging legal person.

Article 96.- Division of legal persons

1. A legal person may be divided into many legal persons under the provisions of its charter or the decision of a competent state agency.

2. After division, the divided legal person shall terminate; the civil rights and obligations of such legal person shall be transferred to the new legal persons.

Article 97.- Separation of legal persons

1. A legal person may be separated into many legal persons under the provisions of its charter or the decision of a competent state agency.

2. After separation, the separated legal person and the separating legal persons shall perform their rights and obligations in accordance with the purposes of their respective operations.

Article 98.- Dissolution of legal persons

1. A legal person may be dissolved in the following cases:

a/ Under the provisions of its charter;

b/ By the decision of a competent state agency;

c/ Upon the expiration of the term of operation stated in its charter or in the decision of a competent state agency.

2. Before being dissolved, a legal person must fulfill its property obligations.

Article 99.- Termination of legal persons

1. A legal person shall terminate in the following cases:

a/ Being consolidated, merged, divided or dissolved under the provisions of Articles 94, 95, 96 and 98 of this Code;

b/ Being declared bankrupt under the provisions of law on bankruptcy.

2. A legal person shall terminate from the time its name is deleted from the legal person register or from the time determined in the decision of a competent state agency.

3. When a legal person terminates, its property shall be settled under the provisions of law.

Section 2. TYPES OF LEGAL PERSON

Article 100.- Types of legal person

1. State agencies, units of the armed forces;

2. Political organizations, socio-political organizations;

3. Economic organizations;

4. Socio- political and professional organizations; social organizations, socio-professional organizations

5. Social funds, charity funds;

6. Other organizations which meet all the conditions specified in Article 84 of this Code.

Article 101.- Legal persons being state agencies or armed force units

1. State agencies or armed force units which have been allocated property by the State for the performance of state management functions and other functions not for business purposes shall be legal persons when participating in civil relations.

2. State agencies or armed force units shall bear civil liability related to the performance of their functions and tasks with funds allocated from the State budget.

3. In cases where state agencies or armed force units engage in activities generating revenues in accordance with the provisions of law, they shall bear civil liability for revenue-generating activities with the property obtained from such activities.

Article 102.- Legal persons being political organizations or socio-political organizations

1. Political organizations or socio-political organizations, which manage, use or dispose of property under their respective ownership for the purpose of achieving the political or social objec-tives in accordance with their respective charters, shall be legal persons when participating in civil relations.

2. The property of a political organization or socio-political organization cannot be divided to its members.

3. Political organizations or socio-political organizations shall bear civil liability with their own property, except those, which, according to the provisions of law, cannot be used for bearing civil liability.

Article 103.- Legal persons being economic organizations

1. State enterprises, co-operatives, limited liability companies, joint-stock companies, foreign-invested enterprises and other economic organizations which meet all the conditions stipulated in Article 84 of this Code shall be legal persons.

2. Economic organizations must have their own charters.

3. Economic organizations shall bear civil liability with their own property.

Article 104.- Legal persons being socio-political and professional organizations, social organizations or socio-professional organizations

1. Socio-political and professional organizations, social organizations or socio-professional organizations, which are permitted to be established and have their charters recognized by competent state agencies, and have members being individuals or organizations that voluntarily contribute property or membership fees with a view to serving the purposes of the organizations and the common needs of the members, shall be legal persons when participating in civil relations.

2. Socio-political and professional organizations, social organizations or socio-professional organizations shall bear civil liability with their own property.

3. Where socio-political and professional organizations, social organizations or socio-professional organizations terminate their operation, their property must not be divided to their members but be settled according to the provisions of law.

Article 105.- Legal persons being social funds or charity funds

1. Social funds or charity funds, which are permitted to be established and have their charters recognized by competent state agencies and operate for the purpose of promoting cultural and/or scientific development, charity and other social and humanitarian purposes, which do not aim to gain profits, shall be legal persons when participating in civil relations.

2. The property of the social funds or charity funds shall be managed, used and disposed of in accordance with the provisions of law and in conformity with such funds’ operation purposes specified by their respective charters.

3. Social funds and charity funds shall be permitted to carry out only activities stipulated in their respective charters recognized by competent state agencies and within the limit of their property and must bear civil liability with such property.

4. The organization which estab-lishes a social fund or a charity fund shall not bear civil liability with the property under its ownership for the activities of the fund and must not divide up the property of the fund in the course of the fund’s operation.

In cases where social funds or charity funds terminate their operations, their property shall not be divided to their founding members but must be settled in accordance with the provisions of law.

Chapter V

FAMILY HOUSEHOLDS AND COOPERATIVE GROUPS

Section 1. FAMILY HOUSEHOLDS

Article 106.- Family households

Family households in which members have common property and jointly contribute their efforts and labor to their common economic activities in agricultural, forestry or fishery produc-tion or in a number of other production and/or business domains defined by law shall be subjects when participating in civil relations in such domains.

Article 107.- Representatives of family households

1. The head of a family household shall be the representative of the household in civil transactions for the common interests of the household. The father, mother or another adult member may be the head of the household.

The head of a family household may authorize another adult member to represent the household in civil relations.

2. Civil transactions established and performed in the common interest of a family household by the representative of the household shall give rise to the rights and obligations of the entire family households.

Article 108.- Common property of family households

The common property of a family household shall comprise land use rights, the forest and/or planted forest use rights of the family household, the property contributed or jointly created by household members or presented as a common gift, or jointly inherited and other property which the members agree to be the common property of the household.

Article 109.- Possession, use, disposal of the common property of family households

1. Family household members shall possess and use the common property of their households by mode of agreement.

2. The disposal of property being means of production, common property of great value of family households must be agreed upon by members aged full fifteen years or older; for other common property, the disposal thereof must be agreed upon by the majority of members aged full fifteen years or older.

Article 110.- Civil liability of family households

1. Family households must bear civil liability for the exercise of civil rights and the performance of civil obligations, which are established and performed in the name of the family households by their respective representatives.

2. Family households shall bear civil liability with their common property; if the common property is insufficient to fulfill their respective common obligations, their members must bear joint liability with their own property.

Section 2. COOPERATIVE GROUPS

Article 111.- Cooperative groups

1. Cooperative groups, which are formed on the basis of cooperation contracts certified by commune/ward/township People’s Committees and which are entered into by three or more individuals who jointly contribute property and labor in order to perform certain tasks and to jointly enjoy benefits and jointly bear liabilities, shall be subjects in civil relations.

Cooperative groups, which meet all the conditions to become legal persons in accordance with the provisions of law, shall register their activities in the capacity of legal persons at competent state agencies.

2. A cooperation contract shall have the following principal contents:

a/ The purpose and term of the cooperation contract;

b/ The full names and places of residence of the head and other members of the group;

c/ The levels of property contribution, if any; the mode of distributing the yields and profits among the group members;

d/ The rights, obligations and responsibilities of the head and the members of the group;

e/ The conditions for accepting new group members or leaving the cooperative group;

f/ The conditions for terminating the cooperative group;

g/ Other agreements.

Article 112.- Members of cooperative groups

Cooperative group members shall be individuals who are full eighteen years or older and have full civil act capacity.

Cooperative groups shall have the right to enter into labor contracts with persons who are not their members to perform certain tasks.

Article 113.- Representatives of cooperative groups

1. The representatives of cooperative groups in civil transactions shall be their heads appointed by the group members.

The heads of cooperative groups may authorize group members to perform certain tasks necessary for the groups.

2. Civil transactions established and performed by the representatives of cooperative groups for the purpose of the groups’ operations under decisions of a majority of the group members shall give rise to the rights and obligations of the entire cooperative groups.

Article 114.- Property of cooperative groups

1. The property contributed or jointly created by group members and the property donated to the whole groups shall be the common property of such cooperative groups.

2. The group members shall manage and use the property of the cooperative groups in accordance with the agreed mode.

3. The disposal of property being the means of production of the cooperative groups must be consented by all the group members; for other common property, the consent of a majority of the group members is required.

Article 115.- Obligations of group members

Group members shall have the following obligations:

1. To implement cooperation on the principles of equality, mutual benefit, mutual assistance and assurance of the common interests of the cooperative group;

2. To compensate for damage caused to their cooperative group as a result of their own fault.

Article 116.- Rights of group members

Group members shall have the following rights:

1. To enjoy yields and profits gained from the operations of their cooperative group as agreed upon;

2. To participate in deciding on matters relevant to the operations of their cooperative group and in inspecting the operations of the cooperative group.

Article 117.- Civil liability of cooperative groups

1. Cooperative groups must bear civil liability for the performance of civil rights and obligations established and performed by their representatives in the name of the cooperative groups.

2. Cooperative groups shall bear civil liability with their common property; if the common property is insufficient to perform their common obligations, their group members must jointly bear civil liability with their own property proportional to their respective contributions.

Article 118.- Acceptance of new group members

Cooperative groups may accept new group members, if so consented by a majority of the group members, unless otherwise agreed upon.

Article 119.- Leaving cooperative groups

1. Group members shall have the right to leave their cooperative groups under the agreed conditions.

2. Group members leaving their cooperative groups shall have the right to request the return of the property which they have contributed to the cooperative groups and to be distributed their share of the property in the common property and must discharge their obligations towards the cooperative groups as agreed upon; if the distribution of property in kind affects the continuation of the groups’ operation, the property shall be valued in money for distribution.

Article 120.- Termination of cooperative groups

1. A cooperative group shall terminate in the following cases:

a/ Upon the expiry of the term stated in the cooperation contract;

b/ The purpose of the cooperation has been achieved;

c/ The group members agree to terminate the cooperative group.

In case of termination, cooperative groups must report thereon to the commune/ward/township People’s Committees which authenticated the cooperation contracts.

2. Cooperative groups shall terminate under decisions of competent state agencies in cases specified by law.

3. Upon their termination, cooperative groups must settle their debts; if the common property is insufficient to repay the debts, the group members’ own property must be used for the settlement in accordance with the provisions of Article 117 of this Code.

In cases where all debts have been repaid and the group is still left with common property, such property shall be divided to the group members in proportion to each person’s contribution, unless otherwise agreed upon.

Chapter VI

CIVIL TRANSACTIONS

Article 121.- Civil transactions

A civil transaction is a contract or unilateral legal act which gives rise to, changes or terminates civil rights and/or obligations.

Article 122.- Conditions for civil transactions to become effective

1. A civil transaction shall be effective when it meets all the following conditions:

a/ The persons participating in the transaction have the civil act capacity;

b/ The purpose and contents of the transaction do not violate prohibitory provisions of law and are not contrary to social ethics;

c/ The persons participating in the civil transaction act completely voluntarily;

2. The forms of civil transactions shall be the conditions for such transactions to be effective in cases where it is so provided for by law.

Article 123.- Objectives of civil transactions

The objectives of civil transactions are legitimate interests which the parties wish to obtain when establishing such transactions.

Article 124.- Forms of civil transactions

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

Civil transactions through electronic means in form of data messages shall be considered transactions in writing.

2. 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 125.- Conditional civil transactions

1. In cases where the parties have agreed on the conditions which shall give rise to or cancel a civil transaction, the civil transaction shall arise or be cancelled upon the occurrence of such conditions.

2. In cases where the conditions which give rise to or cancel a civil transaction cannot occur due to the act of intentional hindrance of one party or a third person, such conditions shall be considered having occurred; if one party or a third person exerts impacts to deliberately promote the occurrence of conditions so as to give rise to or cancel the civil transaction, such conditions shall be considered having not occurred.

Article 126.- 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:

a/ According to the true aspirations of the parties when the transaction is established;

b/ According to the meaning consistent with the objective of the transaction;

c/ According to the practices of the locality where the transaction is established.

2. The interpretation of civil contracts shall comply with the provisions of Article 409 of this Code and the interpretation of the contents of testaments shall comply with the provisions of Article 673 of this Code.

Article 127.- Invalid civil transactions

Civil transactions which fail to satisfy one of the conditions specified in Article 122 of this Code shall be invalid.

Article 128.- Civil transactions which are invalid due to violation of prohibitory provisions of law or contravention of social ethics

Civil transactions with purposes and contents violating prohibitory provisions of law or contravening social ethics shall be invalid.

Prohibitory provisions of law mean the provisions of law which do not permit subjects to perform certain acts.

Social ethics are common standards of conduct among people in social life, which are recognized and respected by the community.

Article 129.- Civil transactions invalid due to falsity

When the parties falsely establish a civil transaction in order to conceal another transaction, the false transaction shall be invalid and the concealed transaction remains valid, except in cases where it is also invalid under the provisions of this Code;

In cases where a false transaction is established with a view to shirking the responsibility toward a third person, such transaction shall also be invalid.

Article 130.- Civil transactions invalid due to establishment or performance by minors or persons having lost their civil act capacity or having had their civil act capacity restricted

When a civil transaction is established or performed by a minor or by a person who has lost his/her civil act capacity or whose civil act capacity is restricted, the 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 the representative of that person.

Article 131.- Civil transactions invalid due to mistakes

When a party has established a transaction due to its misunderstanding of the contents of the transaction due to unintentional mistakes made by the other party, it shall have the right to request the other party to change the contents of such transaction; if the other party does not accept such request, the mistaken party shall have the right to request the Court to declare the transaction invalid.

The cases where a party has intentionally made mistakes, thus making the other party misunderstand the contents of the transaction shall be settled in accordance with the provisions of Article 132 of this Code.

Article 132.- Civil transactions invalid due to deception or intimidation

When a party participates in a civil transaction due to being deceived or intimidated, it shall have the right to request the Court to declare such civil transaction invalid.

Deception in a civil transaction means an intentional act of a party or a third person, aiming to induce the other party to misunderstand the subject, the nature of the object or the content of the civil transaction and thus to agree to enter into such transaction.

Intimidation in a civil transaction means an intentional act of a party or a third person, thus compelling the other party to perform the civil transaction in order to avoid damage to the life, health, honor, reputation, dignity and/or property of his/her own or of his/her father, mother, wife, husband or children.

Article 133.- Civil transactions invalid due to establishment by persons incapable of being aware of and controlling their acts

A person who has the civil act capacity but established a civil transaction at a time he/she was incapable of being aware of and controlling his/her acts shall have the right to request the Court to declare such civil transaction invalid.

Article 134.- Civil transactions invalid due to non-compliance with the prescribed forms

In cases where it is provided for by law that the forms of civil transactions are conditions for civil transactions to be valid but the parties fail to comply therewith, the Court or another competent state agency shall, at the request of one or all of the parties, compel the parties to comply with the provisions on forms of transactions within a given period of time; past that time limit, if they still fail to comply with such provisions, the transactions shall be invalid.

Article 135.- Partially invalid civil transactions

A civil transaction shall be partially invalid when one part of the transaction is invalid, provided that such part does not affect the validity of the remaining parts of the transaction.

Article 136.- The statute of limitations for requesting the Court to declare a civil transaction invalid

1. The statute of limitations for requesting the Court to declare a civil transaction invalid as specified in Articles 130 thru 134 of this Code shall be two years, counting from the date the civil transaction is established.

2. For civil transactions specified in Articles 128 and 129 of this Code, the statute of limitations for requesting the Court to declare such civil transactions invalid shall not be restricted.

Article 137.- Legal consequences of invalid civil transactions

1. Invalid civil transactions shall not give rise to, change or terminate any civil rights and obligations of the parties from the time of establishment thereof.

2. When a civil transaction is invalid, the parties shall be restored to the original status and shall return to each other what they have received; if the return cannot be made in kind, it shall be made in money, except for cases where the transacted property, gained yields and/or profits are confiscated under the provisions of law. The party at fault, which caused damage, must compensate therefore.

Article 138.- Protection of the interests of a bona fide third party when a civil transaction is invalid

1. In cases where a civil transaction is invalid but the transacted property being a moveable not subject to ownership registration has already been transferred to a bona fide third party through another transaction, the transaction with the third party shall still be valid, except for the case specified in Article 257 of this Code.

2. In cases where the transacted property being an immoveable or a moveable subject to ownership registration has already been transferred to a bona fide third party through another transaction, the transaction with the third party shall be invalid, except for cases the bona fide third party receives such property through auction or transaction with a person who, under court judgment or decision of a competent state agency, was the owner of the property, but later is not the owner of the property as the court judgment or decision is cancelled or modified.

Chapter VII

REPRESENTATION

Article 139.- Representation

1. Representation is the act of a person (hereinafter referred to as the representative) to establish and perform a civil transaction in the name and interests of another person (hereinafter referred to as the represented person) within the scope of representation.

2. Individuals, legal persons or other subjects may establish and/or perform civil transactions through their representatives. Individuals must not allow other persons to represent them, if the law provides that they must establish and perform the transactions themselves.

3. Representation relations shall be established under law or under authorization.

4. The represented persons shall have rights and obligations arising from the civil transactions established by their representatives.

5. The representatives must have full civil act capacity, except for the cases specified in Clause 2, Article 143 of this Code.

Article 140.- Representation at law

Representation at law is the representation provided for by law or decided by a competent state agency.

Article 141.- Representatives at law

Representatives at law shall include:

1. Fathers and/or mothers with respect to children who are minors;

2. Guardians with respect to wards;

3. Persons appointed by the Court with respect to persons with a restricted capacity for civil acts;

4. Heads of legal persons as prescribed by the charters of the legal persons or decided by competent state agencies;

5. Heads of family households with respect to family households;

6. Heads of cooperative groups with respect to cooperative groups;

7. Other persons as specified by law.

Article 142.- Representation under authorization

1. Representation under authorization is the representation established under an authorization between the representative and the represented person.

2. Forms of authorization shall be agreed upon by the parties, except for cases where it is provided for by law that authorization must be made in writing.

Article 143.- Representatives under authorization

1. Individuals, representatives at law of legal persons may authorize other persons to establish and/or perform civil transactions.

2. Persons aged between full fifteen years and under eighteen years may be representatives under authorization, except for cases where it is provided for by law that civil transactions must be established and/or performed by persons aged full eighteen years or more.

Article 144.- Scope of representation

1. Representatives at law shall have the right to establish and perform all civil transactions in the interests of the represented persons, unless otherwise provided for by law.

2. The scope of representation under authorization shall be established in accordance with the authorization.

3. Representatives may only perform civil transactions within the scope of representation.

4. Representatives must inform the third party in civil transactions of the scope of their representation.

5. Representatives must not establish and/or perform civil transactions with themselves or with the third party whom they also represent, unless otherwise provided for by law.

Article 145.- Consequences of civil transactions established and/or performed by persons without the authority of representation

1. Civil transactions established and/or performed by persons without the authority of representation shall not give rise to rights and obligations of the represented persons, except in cases where the representatives or the represented persons give consent thereto. The persons who effected transactions with the persons having no authority of representation must notify such to the represented persons or their representatives in order to get their replies within the prescribed time limit; upon the expiry of such time limit, if no reply is given, such transactions shall not give rise to rights and/or obligations for the represented persons, but the persons having no authority of representation must still fulfill the obligations towards the persons with whom they have effected the transactions, except in cases where such persons knew or should have known about the unauthorized representation.

2. Persons who effected transactions with persons having no authority of representation shall be entitled to unilaterally terminate the performance of, or annul, the established civil transactions and to demand compensation for damage, except in cases where such persons knew or should have known about the unauthorized representation and still effected the transactions.

Article 146.- Consequences of civil transactions established and/or performed ultra vires by representatives

1. Civil transactions established and/or performed ultra vires by representatives shall not give rise to rights and/or obligations of the represented persons for the portions of transactions performed ultra vires, except in cases where the represented persons give consent thereto or know but do not oppose it; if consent is not given, the representatives shall have to fulfill the obligations towards the persons with whom they have effected the transactions for the portions of the civil transaction beyond the scope of their representation.

2. Persons who have effected transactions with such representatives shall have the right to unilaterally terminate the performance of, or annul, the portions of civil transaction performed ultra vires or the entire civil transactions and shall have the right to demand compensation for damage, except in cases where such persons knew or should have known that the authority of representation was usurped, and still effected the transactions.

3. In cases where the representatives and the persons involved in the transactions with the representatives intentionally establish and/or perform civil transactions ultra vires, thereby causing damage to the represented persons, the representatives and such persons shall be jointly liable for compensation.

Article 147.- Termination of representation of individuals

1. The representation at law of an individual shall terminate in the following cases:

a/ The represented person has attained adulthood or has had his/her civil act capacity restored;

b/ The represented person dies;

c/ Other cases specified by law.

2. The representation under authorization of individuals shall terminate in the following cases:

a/ The authorization time limit has expired or the authorized work has been completed;

b/ The authorizing persons revoke the authorization, or the authorized persons refuse the authorization;

c/ The authorizing persons or the authorized persons die, have been declared by the Court as having lost their civil act capacity, having their civil act capacity restricted, having been missing or dead.

Upon the termination of the authorized representation, the representatives must fulfill the property obligations towards the represented persons or the heirs of the represented persons.

Article 148.- Termination of representation of legal persons

1. The representation at law of legal persons shall terminate when such legal persons cease to exist.

2. The representation under authorization of legal persons shall terminate in the following cases:

a/ The authorization time limit has expired or the authorized work has been completed;

b/ The representatives at law of the legal persons revoke the authorization or the authorized persons refuse the authorization;

c/ The legal persons cease to exist or the authorized persons die, have been declared by the Court as having lost their civil act capacity, having their civil act capacity restricted, having been missing or dead.

Upon the termination of representation under authorization, the representatives must fulfill the property obligations towards the authorizing legal persons or inheriting legal persons.

Chapter VIII

TIME LIMITS

Article 149.- Time limit

1. A time limit is a period of time determined from one point of time to another point of time.

2. A time limit may be determined by the minute, hour, day, week, month, year or by an event which may occur.

Article 150.- Application of the method of calculating a time limit

1. The method of calculating a time limit shall comply with the provisions of this Code, unless otherwise agreed upon or provided for by law.

2. Time limits shall be calculated according to the solar calendar.

Article 151.- Provisions on time limits and the point of time for calculating a time limit

1. In cases where the parties have agreed that the time limit shall be one year, half a year, a month, half a month, a week, a day, an hour or a minute and where the lengths of time do not take place consecutively, such time limit shall be calculated as follows:

a/ One year means 365 days;

b/ Half a year means six months;

c/ One month means 30 days;

d/ Half a month means 15 days;

e/ One week means 7 days;

f/ One day means 24 hours;

g/ One hour means 60 minutes;

h) One minute means 60 seconds.

2. In cases where the parties have agreed on the point of time to be at the beginning of a month, the middle of a month, or the end of a month, such point of time shall be defined as follows:

a/ The beginning of a month is the first day of the month;

b/ The middle of a month is the 15th day of the month;

c/ The end of a month is the last day of the month.

3. In cases where the parties have agreed on the point of time to be at the beginning of a year, the middle of a year, or the end of a year, such point of time shall be defined as follows:

a/ The beginning of a year is the first day of January;

b/ The middle of a year is the last day of June;

c/ The end of a year is the last day of December.

Article 152.- The point of time at which a time limit commences

1. When a time limit is determined by the minute or hour, such time limit shall begin from the pre-determined point of time.

2. When a time limit is determined by the day, week, month or year, the time limit must not be counted from the first day but shall be counted from the day following the determined date.

3. When a time limit begins from the occurrence of an event, the day on which the event occurs shall not be counted, and the time limit shall be counted from the day following the date of occurrence of the event.

Article 153.- The end of a time limit

1. When a time limit is calculated by the day, the time limit shall end at the moment which ends the last day of the time limit.

2. When a time limit is calculated by the week, the time limit shall end at the moment which ends the corresponding day of the last week of the time limit.

3. When a time limit is calculated by the month, the time limit shall end at the point of time which ends 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. When a time limit is calculated by the year, the time limit shall end at the moment which ends the corresponding day and month of the last year of the time limit.

5. When the last day of a time limit falls on a weekend or a public holiday, the time limit shall end at the moment which ends the working day following such holiday.

6. The point of time which ends the last day of a time limit shall be at exactly twelve o’clock at night on that day.

Chapter IX

STATUTE OF LIMITATIONS

Article 154.- Statute of limitations

A statute of limitations is a time limit specified by law upon the expiration of which a subject may enjoy civil rights, be released from civil obligations or lose the right to initiate a civil lawsuit or the right to request the settlement of civil matters.

Article 155.- Types of statute of limitations

1. The statute of limitations for enjoying civil rights is the time limit upon the expiration of which the subject shall enjoy civil rights.

2. The statute of limitations for release from civil obligations is the time limit upon the expiration of which the person with the civil obligations shall be released from performing such obligations.

3. The statute of limitations for initiating a lawsuit is the time limit within which a subject shall have the right to initiate a lawsuit in order to request a Court to settle a civil case for the protection of legitimate rights and interests which are infringed upon; after such time limit expires, the right to initiate a lawsuit shall be lost.

4. The statute of limitations for requesting a civil matter is the time limit within which a subject shall have the right to request a Court to settle a civil matter for the protection of legitimate rights and interests of individuals, agencies or organizations, public interests, or the State’s interests; after such time limit expires, the requesting right shall be lost.

Article 156.- Method of calculating a statute of limitations

A statute of limitations shall be calculated from the point of time which begins the first day of the statute of limitations and shall end at the point of time which ends the last day of the statute of limitations.

Article 157.- Effectiveness of the statute of limitations for enjoyment of civil rights and for release from civil obligations

1. Where it is provided for by law that a subject may enjoy civil rights or be released from civil obligations under the statute of limitations, such enjoyment of civil rights or release from civil obligations shall take effect only after the statute of limitations ends.

2. The statute of limitations for enjoyment of civil rights shall not be applicable in the following cases:

a/ The possession of property under state ownership without legal bases;

b/ The enjoyment of personal rights which are not associated with property.

3. The statute of limitations for release from civil obligations shall not be applicable to the performance of civil obligations towards the State, unless otherwise provided for by law.

Article 158.- Continuity of the statute of limitations for enjoyment of civil rights or for release from civil obligations

1. The statute of limitations for enjoyment of civil rights or for release from civil obligations shall be continuous from its beginning to its expiration; if there is an event which causes an interruption, the statute of limitations must be re-calculated ab initio, after the event which caused the interruption terminates.

2. The statute of limitations for enjoyment of civil rights or for release from civil obligations shall be interrupted upon the occurrence of one of the following events:

a/ There is a resolution from a competent state agency with respect to the civil rights or obligations to which the statute of limitations currently applies;

b/ The civil rights or obligations to which the statute of limitations currently applies are disputed by a person with related rights or obligations.

3. The statute of limitations shall run continuously in cases where the enjoy-ment of civil rights or the release from civil obligations is legally transferred to another person.

Article 159.- Commencement of the statute of limitations for initiating a civil case, the statute of limitations for requesting the settlement of a civil matter

1. The statute of limitations for initiating a civil case shall be counted from the date the legitimate rights and/or interests are infringed upon, unless otherwise provided for by law.

2. The statute of limitations for requesting the settlement of a civil matter shall be counted from the date on which the requesting right arises, unless otherwise provided for by law.

Article 160.- Non-application of the statute of limitations for initiating civil cases

The statute of limitations for initiating civil cases shall not apply in the following cases:

1. Requesting to restitute property under the state ownership;

2. Requesting to protect personal rights which are infringed upon, unless otherwise provided for by law;

3. Other cases specified by law.

Article 161.- A period of time not calculated into the statute of limita-tions for initiating civil cases, the statute of limitations for requesting the settlement of civil matters

A period of time which shall not be calculated into the statute of limitations for initiating a civil case or the statute of limitation for requesting the settlement of a civil matter is a period of time within which one of the following events occurs:

1. A force majeure or an objective hindrance, which renders a subject with the right to initiate a lawsuit or to request unable to exercise this right within the statute of limitations.

A force majeure means an event which occurs objectively and unpredictably and cannot be overcome though all necessary measures have been applied and all the permitted capabilities have been used.

Objective hindrances means obstacles created under the impacts of objective circumstances, which render the persons with related civil rights or civil obligations unable to know that their legitimate rights and/or interests have been infringed upon or unable to exercise their civil rights or perform their civil obligations.

2. The unavailability of a representative in cases where the person with the right to initiate a lawsuit or the person with the right to request has not yet attained adulthood, lost his/her civil act capacity or has his/her civil act capacity restricted.

3. The unavailability of a new representative for replacement, or discontinuity of representation for plausible reasons in cases where the representative of a minor or of a person who has lost his/her civil act capacity or has his/her civil act capacity restricted dies.

Article 162.- Re-commencement of the statute of limitations for initiating civil cases

1. The statute of limitations for initiating a civil case shall re-commence in the following cases:

a/ The obligor has acknowledged a part or all of his/her/its obligations towards the person initiating the lawsuit;

b/ The obligor has fulfilled a portion of his/her/its obligations towards the person initiating the lawsuit;

c/ The parties have reconciled with each other.

2. The statute of limitations for initiating a civil case shall re-commence from the date following the date upon which an event specified in Clause 1 of this Article occurs.

PART TWO

PROPERTY AND OWNERSHIP RIGHTS

Chapter X

GENERAL PROVISIONS

Article 163.- Property

Property comprises tangible things, money, valuable papers and property rights.

Article 164.- Ownership rights

Ownership rights comprise an owner’s rights to possession, to use and to disposition of his/her property in accordance with the provisions of law.

Owners are individuals, legal persons or other subjects, having all three rights which are the right to possession, the right to use and the right to disposition of their property.

Article 165.- The principle for exercising ownership rights

Owners may perform all acts on their own will with respect to their property without causing damage to or affecting State interests, public interests or legitimate rights and interests of other persons.

Article 166.- Bearing of risks with respect to property

Owners must bear risks when their property is destroyed or damaged due to force majeure events, unless otherwise agreed upon or otherwise provided for by law.

Article 167.- Registration of property ownership rights

Ownership rights to immoveables shall be registered in accordance with the provisions of this Code and the law on registration of immoveables. Ownership rights to moveables must not be registered, unless otherwise provided for by law.

Article 168.- Time of transferring property ownership rights

1. The transfer of ownership rights to immoveables shall take effect from the time of registering the ownership rights, unless otherwise provided for by law.

2. The transfer of ownership rights to moveables shall take effect from the time the moveables are transferred, unless otherwise provided for by law.

Article 169.- Protection of ownership rights

1. Ownership rights of individuals, legal persons or other subjects shall be recognized and protected by law.

2. No one may be illegally restricted in or deprived of his/her ownership rights to his/her property.

Owners shall have the right to protect their ownership rights by themselves, to prevent any person from infringing upon their ownership rights, to search for and reclaim the property which has been possessed, used or disposed of by other persons without legal bases.

3. In case of extreme necessity for reasons of national defense, security or national interests, the State shall effect a compulsory purchase or requisition with compensation of the property of individuals, legal persons or other subjects in accordance with the provisions of law.

Article 170.- Bases for establishing ownership rights

Ownership rights to property shall be established in the following cases:

1. Through labor or lawful production and business activities;

2. Ownership rights are transferred under an agreement or a decision of a competent state agency;

3. Yields and profits gained;

4. A new thing created from merger, mixture or processing;

5. Inheritance of property;

6. Possession under the conditions specified by law of ownerless things, things which have been let drop on the ground or have been left over out of inadvertence or buried, stray domestic animals or poultry, or raised aquatic animals which naturally move in;

7. Possession of a property without a legal basis but in good faith, continuously and openly in accordance with the statute of limitations specified in Clause 1, Article 247 of this Code;

8. Other cases specified by law.

Article 171.- Bases for termination of ownership rights

Ownership rights shall terminate in the following cases:

1. The owner transfers his/her ownership rights to another person;

2. The owner renounces his/her ownership rights;

3. The property is destroyed;

4. The property is disposed of for the discharge of the owner’s obligations;

5. The property is compulsorily purchased;

6. The property is confiscated;

7. Where other persons have established their ownership rights under the conditions specified by law of things which have been let drop on the ground or have been left over out of inadvertence; stray domestic animals or poultry or raised aquatic animals which naturally move in; the property over which other persons have established their ownership rights in accordance with the provisions of Clause 1, Article 247 of this Code;

8. Other cases specified by law.

Article 172.- Forms of ownership

On the basis of the regime of ownership by the entire people, collective ownership and private ownership, the forms of ownership shall include state ownership, collective ownership, private ownership, common ownership, ownership by political organizations or socio-political organizations, and ownership by socio-political-professional organizations, social organizations or socio-professional organizations.

Article 173.- Rights of non-owners of property

1. Non-owners of property shall only have the right to possess, use and dispose of the property which is not under their ownership when it is so agreed upon by the owners of such property or provided for by law.

2. The rights of non-owners of property shall include:

a/ Land use rights;

b/ The right to the restricted use of adjacent real estates;

c/ Other rights as agreed upon or provided for by law.

3. The transfer of property ownership rights by owners to other persons does not constitute a basis for termination of the property non-owners’ rights specified in Clause 2 of this Article.

4. The property non-owners’ rights shall be protected under the provisions of Article 261 of this Code.

5. The property non-owners’ rights which must be registered shall include land use rights, the right to restricted use of adjacent real estates under agreement and other rights specified by law.

Chapter XI

TYPES OF PROPERTY

Article 174.- Immovables and movables

1. Immovables shall include:

a/ Land;

b/ Houses and constructions annexed to the land, including properties attached to such houses and constructions;

c/ Other properties annexed to the land;

d/ Other properties specified by law.

2. Movables are properties other than immovables.

Article 175.- Yields and profits

1. Yields are natural products which property generates.

2. Profits are incomes derived from the exploitation of property.

Article 176.- Primary objects and auxiliary objects

1. A primary object is an independent object of which the utility can be exploited according to its functions.

2. An auxiliary object is an object, which directly serves the exploitation of the utility of a primary object, is a part of the primary object but can be separated from the primary object.

When performing an obligation to transfer a primary object, the auxiliary object must also be transfered, unless otherwise agreed upon.

Article 177.- Divisible objects and indivisible objects

1. A divisible object is an object which still retains its original properties and functions when it is divided.

2. An indivisible object is an object which cannot retain its original properties and functions when it is divided.

When an indivisible object needs to be divided, such object must be valued in money for the division.

Article 178.- Expendable objects and non-expendable objects

1. An expendable object is an object which, after having been used once, loses or no longer retains its original properties, shape and functions.

An expendable object cannot be the object of a lease contract or a lending contract.

2. A non-expendable object is an object which still essentially retains its original properties, shape and functions after it has been used many times.

Article 179.- Fungible objects and distinctive objects

1. Fungible objects are objects which have the same shape, properties and functions and which can be determined by units of measurement.

Fungible objects of the same quality may be interchangeable.

2. A distinctive object is an object which is distinguishable from other objects by its own characteristics regarding symbol, shape, color, material, properties or position.

When performing an obligation to transfer a distinctive object, none other than such object must be transferred.

Article 180.- Integrative objects

An integrative object is an object comprising components or parts which fit together and are connected with each other to form a complete whole in which if any component or part is missing, or if the components or parts are not of the right specifications or the same category, it cannot be used or its utility value will be decreased.

When performing the obligation of transfering an integrative object, all the components or parts of the object must be transferred, unless otherwise agreed upon.

Article 181.- Property rights

A property right is a right which can be valued in money and may be transferred in civil transactions, including intellectual property rights.

Chapter XII

CONTENTS OF OWNERSHIP RIGHTS

Section 1. THE RIGHT TO POSSESSION

Article 182.– The right to possession

The right to possession is the right to keep and manage the property.

Article 183.- Possession with a legal basis

Possession with a legal basis is the possession of a property in the following cases:

1. The owner possesses the property;

2. A person is authorized by the owner to manage the property;

3. A person to whom the right to possession has been transferred through a civil transaction in accordance with the provisions of law;

4. 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 the conditions specified by law;

5. A person who discovers and keeps stray domestic animals, poultry or raised aquatic animals in accordance with the conditions specified by law;

6. Other cases specified by law.

Article 184.- Owner’s right to possession

In cases where an owner possesses property under his/her ownership, he/she may conduct all acts on his/her own will to keep and manage the property, provided that such acts are not contrary to law or social ethics.

An owner’s possession shall not be restricted or interrupted in terms of time, except in cases where he/she transfers the possession to another person or otherwise provided for by law.

Article 185.- The right to posse-ssion of a person who is authorized by the owner to manage the property

1. When an owner authorizes another person to manage his/her property, the authorized person shall exercise the right to possession of such property within the scope and in accordance with the method and time limit specified by the owner.

2. The person authorized to manage a property cannot become owner of the transferred property by virtue of the statute of limitations specified in Clause 1, Article 247 of this Code.

Article 186.- The right to posse-ssion of a person to whom a property is handed over through a civil transaction

1. When an owner hands over a property to another person through a civil transaction which does not include the transfer of ownership rights, the person to whom the property is handed over must possess such property according to the purpose and contents of the transaction.

2. The person to whom the property is handed over shall have the right to use such property and to transfer the right to possession and use of the property to another person if the owner so agrees.

3. The person to whom the property is handed over cannot become owner of the transferred property by virtue of the statute of limitations specified in Clause 1, Article 247 of this Code.

Article 187.- The right to possession of property which has been let drop on the ground, left over out of inadvertence, buried or sunken, and property the owners of which are unidentifiable

1. A person who discovers a property which has been let drop on the ground, left over out of inadvertence, buried or sunken must immediately notify or return it to the owner; if the owner is unknown, such person must notify or hand over the property to the People’s Committee of the commune, ward or township or the nearest police station or another competent state agency in accordance with the provisions of law.

A person who discovers a property the owner of which cannot be identified, or a property which has been let drop on the ground, left over out of inadvertence, buried or sunken shall be entitled to possess such property from the time of discovery to the time the property is returned to its owner or handed over to a competent state agency.

2. With respect to a property which has been dispersed by another person in order to hide an act of violation of law or to evade the performance of a civil obligation, the person who discovers it must forthwith notify or hand over the property to a competent state agency defined in Clause 1 of this Article.

Article 188.- The right to possession of stray domestic animals, poultry, raised aquatic animals

Persons who discover and keep stray domestic animals, poultry or raised aquatic animals must immediately notify or return them to their owners; if the owners cannot be identified, they are entitled to possess such property from the time of discovery to the time of returning them to their owners.

Article 189.- Possession without legal bases but in good faith

A possession of property which does not comply with the provisions of Article 183 of this Code is a possession without a legal basis.

A person who possesses a property without a legal basis but in good faith means a possessor who does not know or could not have known that the possession of such property is without a legal basis.

Article 190.- Continuous possession

The possession of property which takes place within a period of time without dispute over such property means a continuous possession, even when this property is transferred to another person for possession.

Article 191.- Overt possession

A possession is regarded as overt when it is performed in an explicit manner, without concealment; the property being currently possessed is used in accordance with its functions and utility and is preserved and kept by the possessor as if it were his/her own property.

Section 2. THE RIGHT TO USE

Article 192.- The right to use

The right to use means the right to exploit the utility of, and to enjoy the yields and profits from, the property.

Article 193.- Owner’s right to use

In cases where the owner directly exercises the right to use a property under his/her ownership, he/she may exploit the utility of, and enjoy the yields and profits from, the property in accordance with his/her will, but must not cause damage to, or affect State interests, public interests or legitimate rights and interests of other persons.

Article 194.- Non-owner’s right to use

1. The right to use a property may be transferred to another person through a contract or in accordance with the provisions of law.

A non-owner of a property shall have the right to use the property in accordance with its functions, utility and mode.

2. A possessor without a legal basis but in good faith may also have the right to exploit the utility of, and enjoy the yields and profits from, the property in accordance with the provisions of law.

Section 3. THE RIGHT TO DISPOSITION

Article 195.- The right to disposition

The right to disposition means the right to transfer property ownership rights or to renounce such ownership rights.

Article 196.- Conditions for disposition

The disposition of property must be performed by persons having the civil act capacity in accordance with the provisions of law.

In cases where the order and procedures for disposition of property are specified by law, such order and procedures must be complied with.

Article 197.- Owner’s right to disposition

Owners shall have the right to sell, exchange, donate, lend, bequeath, abandon or dispose of their property in other forms in accordance with the provisions of law.

Article 198.- Non-owner’s right to disposition

Property non-owners shall only have the right to dispose of property under owners’ authorization or under the provisions of law.

Persons who are authorized by owners to dispose of the latter’s property must effect the disposition in accordance with the will and interests of the owners.

Article 199.- Restrictions on the right to disposition

1. The right to disposition shall be restricted only in cases where it is so provided for by law.

2. When the property put up for sale is a historical or cultural relic, the State shall have the pre-emptive right to purchase such property.

In cases where legal persons, individuals or other subjects have the pre-emptive right to purchase with respect to a certain property in accordance with the provisions of law, the owners, when selling the property, must reserve such right for those subjects.

Chapter XIII

FORMS OF OWNERSHIP

Section 1. STATE OWNERSHIP

Article 200.- Property under state ownership

Property under state ownership shall include land, natural forests, forests planted with the source of state budget capital, mountains, rivers, lakes, water sources, underground natural resources, resources from the sea, continental shelf and airspace, and the capital and property invested by the State in enterprises and facilities in the branches and fields of economy, culture, social affairs, science, technique, foreign affairs, national defense and security, and other properties specified by law.

Article 201.- Exercise of owner’s rights to property under state ownership

1. The Socialist Republic of Vietnam State shall exercise owner’s rights to property under state ownership.

2. The Government shall perform the unified management of the property under state ownership and ensure its efficient and thrifty use for the defined purposes.

Article 202.- Management, use and disposition of property under state ownership

The management, use and disposi-tion of property under state ownership shall be performed within the scope and according to the order specified by law.

Article 203.- Exercise of state ownership rights to property invested in state enterprises

1. When a property under state ownership is invested in a state enterprise, the State shall exercise owner’s rights over such property in accordance with the provisions of law on enterprises.

2. State enterprises shall be entitled to manage and use capital, land, natural resources and other property invested by the State in accordance with the provisions of law on enterprises

Article 204.- Exercise of state ownership rights to property allocated to state agencies, armed force units

1. When the property under state ownership is assigned to state agencies or armed force units, the State shall exercise the right to inspect and supervise the management and use of such properties.

2. State agencies or armed force units shall have the right to manage and use the State-allocated property for the defined purposes and in accordance with the provisions of law.

Article 205.- Exercise of state ownership rights to property assigned to political organizations, socio-political organizations, socio-political-professional organizations

1. When the property under state ownership is allocated to political organizations, socio-political organizations or socio-political-professional organizations, the State shall exercise the right to inspect and supervise the management and use of such property.

2. Political organizations, socio-political organizations and socio-political-professional organizations shall have the rights to manage and use the State-allocated property for the defined purposes, according to the scope, mode and order provided for by law in accordance with the functions and tasks specified in their respective charters

Article 206.- Rights of enterprises, households, cooperative groups and individuals to use and exploit property under state ownership

In cases where it is so provided for by law and so permitted by competent state agencies, enterprises, households, cooperative groups or individuals may use land, exploit aquatic resources and other natural resources under state ownership and must use, exploit them efficiently and for the defined purposes, and fulfill their obligations towards the State in accordance with the provisions of law.

Article 207.- Property under state ownership which has not been allocated to organizations or individuals for management

The Government shall organize and exercise the protection, investigation and survey on, and work out plans to exploit the property under state ownership which has not been allocated to organizations or individuals for management.

Section 2. COLLECTIVE OWNERSHIP

Article 208.- Collective ownership

Collective ownership means ownership by cooperatives or other stable economic entities in which individuals and/or households jointly contribute capital and labor for production and business cooperation to achieve common goals stated in their charters and on the principles of voluntariness, equality, democracy and joint management and mutual benefit.

Article 209.- Property under collective ownership

Property constituted from the contributions of members, legitimate income from production and business, supports from the State or other sources that accord with the provisions of law shall be property under the ownership of such collectives.

Article 210.- Possession, use and disposition of property under collective ownership

1. The possession, use and disposition of property under collective ownership must comply with law, accord with the charters of the collectives and ensure the stable development of collective ownership.

2. Property under collective ownership may be assigned to members for exploitation of the utility thereof by their labor in production and business activities in order to serve the common need for production expansion and economic development as well as the interests and needs of the members.

3. The members of a collective shall have the pre-emptive right to purchase, lease or package- lease property under collective ownership.

Section 3. PRIVATE OWNERSHIP

Article 211.- Private ownership

Private ownership means ownership of individuals over their lawful property.

Private ownership comprises personal ownership by individuals, ownership by small business owners and private capitalist ownership.

Article 212.- Property under private ownership

1. Legitimate income, savings, residential houses, means of daily life, means of production, capital, yields and profits and other lawful properties of an individual constitute property under private ownership.

Lawful property under private ownership shall not be limited in quantity and value.

2. An individual cannot be the owner of a property which cannot, as provided for by law, come under private ownership.

Article 213.- Possession, use and disposition of property under private ownership

1. Individuals shall have the right to possession, use and disposition of property under their respective ownership to meet the needs of daily life, consumption or production and business and other purposes in accordance with the provisions of law.

2. The possession, use and disposition of property under private ownership must not cause damage to or affect State interests, public interests or legitimate rights and interests of other persons.

Section 4. COMMON OWNERSHIP

Article 214.- Common ownership

Common ownership means ownership of property by more than one owner.

Common ownership comprises common ownership by shares and common ownership by integration.

A property under common ownership is a common property.

Article 215.- Establishment of common ownership right

A common ownership right is established under the agreement of the owners, under the provisions of law or in accordance with practices.

Article 216.- Common ownership by shares

1. Common ownership by shares means common ownership in which each owner’s share of the ownership right to the common property is determined.

2. Each of the owners of property under common ownership by shares shall have his/her rights and obligations to such property corresponding to his/her share of the ownership right, unless otherwise agreed upon.

Article 217.- Common ownership by integration

1. Common ownership by integration means common ownership in which each owner’s share of the ownership right to the common property is not determined.

Common ownership by integration comprises divisible common ownership by integration and indivisible common ownership by integration.

2. Owners of property under common ownership by integration shall have equal rights and obligations to the property under common ownership.

Article 218.- Mixed common ownership

1. Mixed common ownership means ownership over the property contributed as capital by owners of different economic sectors for production and/or business to gain profits.

2. Property created from the sources of contributed capital of owners, lawful profits from production and/or business activities or from other sources in accordance with the provisions of law is the property under mixed common ownership.

3. The possession, use and disposition of property under mixed common ownership must comply with the provisions of Article 216 of this Code and relevant provisions of law on capital contribution, organization, production and/or business operation, management, administration, property liability and profit division.

Article 219.- Common ownership by husband and wife

1. Common ownership by husband and wife is common ownership by integration.

2. Husband and wife who jointly establish and develop the common property through the efforts of each shall have equal rights in the possession, use and disposition of such property.

3. Husband and wife shall discuss, agree or authorize each other to the possession, use and disposition of the common property.

4. The common property of husband and wife may be divided by their agreement or by a decision of the Court.

Article 220.- Common ownership by a community

1. Common ownership by a community means ownership by a family line, hamlet, village, mountain village, religious community or other population communities over the property estab-lished in accordance with practices and the property jointly contributed and raised by community members or given to the whole community or from other sources in accordance with the provisions of law for meeting the common legitimate interests of the entire community.

2. The members of a community shall jointly manage, use and dispose of the common property for the interests of the community as agreed upon or according to practices, but not in contravention of law and social ethics.

3. The common property of a community is the property under common ownership by integration.

Article 221.- Possession of common property

Owners of property under common ownership shall jointly manage the common property according to the principle of unanimity, unless otherwise agreed upon or provided for by law.

Article 222.- Use of common property

1. Each owner of property under common ownership by shares shall have the right to exploit the utility of, and enjoy the yields and profits from, the common property corresponding to his/her share in the ownership right, unless otherwise agreed upon or provided for by law.

2. Owners of property under common ownership by integration shall have equal rights to exploit the utility of, and enjoy the yields and profits from, the common property, unless otherwise agreed upon.

Article 223.- Disposition of common property

1. Each owner of property under common ownership by shares shall have the right to dispose of his/her own share in the ownership right as agreed upon or provided for by law.

2. The disposition of property under common ownership by integration shall be performed in accordance with the agreement of the co-owners or the provisions of law.

3. In cases where an owner of property under common ownership sells his/her share in the ownership right, the other co-owners shall have the pre-emptive right to purchase such share. If within three months from the date they are notified of the sale and conditions of the sale, for an immovable property or one month for a movable property none of the co-owners wants to buy it, then such owner shall have the right to sell his/her share to other persons.

In cases where the sale of ownership right shares violates the pre-emptive right to purchase, any of the co-owners of the property under common ownership by shares shall, within three months from the date of detecting the violation of the pre-emptive right to purchase, have the right to request the Court to transfer to him/her the rights and obligations of the purchaser; the party at fault in causing damage must pay compensation therefor.

4. In cases where one of the co-owners renounces his/her share in the ownership right or where such person dies without any heir(s), such share of the ownership right shall belong to the State, except for the case of common ownership by community where such share shall come under common ownership of the remaining co-owners.

Article 224.- Division of property under common ownership

1. In case of divisible common ownership, each co-owner shall have the right to request a division of the common property; if the co-owners have agreed not to divide the common property within a certain time limit, then each co-owner shall only have the right to demand a division of the common property after the expiration of that time limit; when the common property cannot be divided in kind, it should be valued in money for division.

2. In cases where a person requests one of the co-owners to discharge his/her payment obligations when the latter has no private property or his/her private property is not enough for payment, the requesting person shall have the right to request a division of the common property so as to receive monetary payment and to participate in the division of the common property, unless otherwise provided for by law.

If the ownership right share in kind cannot be divided or such division is protested against by the remaining co-owners, the requesting person shall have the right to request the obligator to sell his/her ownership right share for the performance of his/her payment obligations

Article 225.- Common ownership in a condominium

1. The areas, equipment and furnishings, which are for common use, in a condominium are under common ownership of all the apartment owners in that condominium and cannot be divided, unless otherwise provided for by law or otherwise agreed upon by all owners.

2. The apartment owners in a condominium shall have equal rights and obligations in the management and use of common areas and equipment.

3. In cases where a condominium is destroyed, the apartment owners in the condominium shall have the right to use the ground area of the condominium in accordance with the provisions of law.

Article 226.- Termination of common ownership

A common ownership shall terminate in the following cases:

1. The common property has been divided;

2. One of the co-owners is entitled to the entire common property;

3. The common property no longer exists;

4. Other cases specified by law.

Section 5. OWNERSHIP BY POLITICAL ORGANIZATIONS, SOCIO-POLITICAL ORGANIZATIONS

Article 227.- Ownership by political organizations, socio-political organizations

Ownership by political organizations or socio-political organizations means ownership by such organizations for the purpose of achieving the common objectives specified in their charters.

Article 228.- Property under ownership by political organizations, socio-political organizations

1. Property constituted from the sources of contributions of members, property donated or presented to the whole organizations and property from other sources in accordance with the provisions of law is the property under ownership by political organizations or socio-political organizations.

Property under state ownership, over which the ownership has been transferred to political organizations or socio-political organizations, shall be the property under ownership by such organizations.

2. Property under state ownership which has been assigned to political organizations or socio-political organizations for management and use shall not come under ownership by such organizations.

Article 229.- Possession, use, disposition of property under ownership by political organizations, socio-political organizations

Political organizations or socio-political organizations shall exercise the rights to possession, use and disposition of property under their respective ownership in accordance with the provisions of law and the operation purposes stipulated in their charters.

Section 6. OWNERSHIP BY SOCIO-POLITICAL-PROFESSIONAL ORGANIZATIONS, SOCIAL ORGANIZATIONS, SOCIO-PROFESSIONAL ORGANIZATIONS

Article 230.- Ownership by socio-political- professional organizations, social organizations, socio-professional organizations

Ownership by socio-political-professional organizations, social organizations or socio-professional organizations means ownership by such organizations for the purpose of achieving the common objectives of members as specified in their respective charters.

Article 231.- Property under ownership by socio-political-professional organizations, social organizations, socio-professional organizations

Property constituted from the sources of contributions by members, property donated or presented to the whole organizations or from other sources in accordance with the provisions of law shall be the property under ownership by such socio-political-professional organizations, social organizations or socio-professional organizations.

Article 232.- Possession, use, disposition of property under ownership by socio-political-professional organizations, social organizations, socio-professional organizations

Socio-political-professional organizations shall exercise their rights to possession, use, disposition of property under their respective ownership in accordance with the provisions of law and the operation purposes specified in their respective charters.

Chapter XIV

ESTABLISHMENT AND TERMINATION OF OWNERSHIP RIGHTS

Section 1. ESTABLISHMENT OF OWNERSHIP RIGHTS

Article 233.- Establishment of ownership rights to property acquired from labor, lawful business and/or production activities

Workers or persons who conduct lawful production and/or business activities shall have the rights of ownership over property acquired from their labor or lawful production and/or business activities as from the time such property is acquired.

Article 234.- Establishment of ownership rights by an agreement

A person to whom a property has been transferred through a contract for purchase and sale, donation, exchange or lending shall have the right to own such property as from the time of transferring the property, unless otherwise agreed upon by the parties or provided for by law.

Article 235.- Establishment of ownership rights to yields and profits

Property owners and/or users shall have the rights of ownership over the yields and profits as from the time such yields and profits are obtained, as agreed upon or provided for by law.

Article 236.- Establishment of ownership rights in case of merger

1. In cases where the property of different owners is merged together to form an indivisible object which is impossible to determine whether the merged property is primary or auxiliary object, the newly formed object shall be the property under common ownership of such owners; if the merged property is primary object and auxiliary object, the newly formed object shall belong to the owner of the primary object from the time the new object is formed; the owner of the new property must pay to the owner of the auxiliary object for the value of the such auxiliary object, unless otherwise agreed upon.

2. When a person merges the movable property of another person to his/her own movable property even though he/she knew or should have known that such property is not his/her own, and also does not have the consent of the owner of the property being merged, then the owner of the property being merged shall have one of the following rights:

a/ To request the person who merges the property to hand over to him/her the new property, and pay to that person the value of that person’s property;

b/ To request the person who merges the property to pay the value of the portion of his/her own property and to compensate for any damage, if he/she refuses to take the new property.

3. When a person merges the movable property of another person into his/her own immoveable property even though he/she knew or should have known that such property is not his/her own and also does not have the consent of the owner of the property being merged, the owner of the property being merged shall have the right to request the person who merges the property to pay the value of the portion of his/her own property and compensate for damage.

Article 237.- Establishment of ownership rights in case of mixture

1. In cases where the property of various owners are mixed together to form a new indivisible object, the new object shall be the property under common ownership of such owners as from the time of mixture.

2. When a person mixes the property of another person into his/her own property even though he/she knew or should have known that such property is not his/her own, and does not have the consent of the owner of the property which has been mixed, then the owner of the property which has been mixed shall have one of the following rights:

a/ To request the person who has mixed the property to hand over to him/her the new property and to pay to the person who has mixed the property the value of that person’s property;

b/ To request the person who has mixed the property to pay the value of the portion of his/her own property and to compensate for any damage, if he/she refuses to take the new property.

Article 238.- Establishment of ownership rights in case of processing

1. An owner of materials and/or raw materials, which are processed to create a new object, is also the owner of the newly created object.

2. A bona fide user of materials and/or raw materials owned by another person for processing shall become owner of the new property, but must pay the value of materials and/or raw materials and compensate for any damage to the owner of such materials and/or raw materials.

3. In cases where the processor does not act in good faith, the owner of materials and/or raw materials shall have the right to request the hand-over of the new object; if there are many owners of materials and/or raw materials, they shall be the co-owners of the newly created object by shares, corresponding to the value of the materials and/or raw materials of each person. The owners of materials and/or raw materials which have been processed not in good faith shall have the right to request the processor to compensate for any damage.

Article 239.- Establishment of ownership rights to derelict objects and objects whose owners are unidentifiable

1. A derelict object is an object the owner of which has renounced his/her ownership rights to it.

The person who has discovered a derelict object which is a movable property shall have the right to own such property in accordance with the provisions of law; if the discovered object is an immovable property, it shall belong to the State.

2. A person who has discovered an object the owner of which is unidentifiable must notify or submit it to the People’s Committee of the commune, ward or township, or the nearest police station for public announcement so that the owner may be aware of such and reclaim it.

The submission of the object must be recorded in an official report, which shall clearly state the full names and addresses of the submitter and the receiver, and the conditions, quantity and volume of the property submitted.

The People’s Committee or the police station, which received the object must notify the discoverer of the results of the effort to identify its owner.

In cases where the object the owner of which is unidentifiable is a movable property and its owner remains unidentifiable after one year from date of public announcement, such movable property shall belong to the discoverer as provided for by law; if the object is an immovable property and its owner remains unidentifiable even after five years from the date of public announcement, such immovable property shall belong to the State; the discoverer shall be entitled to enjoy a monetary reward as provided for by law.

Article 240.- Establishment of ownership rights to buried or sunken objects which are found

Ownership rights to a discovered, buried or sunken object without an owner or with its owner being unidentifiable, after deducting expenses for search and preservation, shall be determined as follows:

1. The found object, which is a historical or cultural relic, shall belong to the State; the person who found such object shall be entitled to a monetary reward as provided for by law.

2. The found object, which is not a historical or cultural relic but has the value of up to ten months’ minimum salary set by the State, shall come under ownership of the discoverer; if the found object is valued higher than ten months’ minimum salary set by the State, the discoverer shall be entitled to a value equal to ten months’ minimum salary set by the State and 50% of the value of the portion in excess of ten months’ minimum salary set by the State, and the remainder shall belong to the State.

Article 241.- Establishment of ownership rights to objects which have been let drop on the ground or left over out of inadvertence by other persons

1. A person who finds an object which another person has let drop on the ground or left over out of inadvertence and knows the latter’s address must notify or return the object to such person; if he/she does not know the address of the latter, he/she must notify or submit such object to the People’s Committee of the commune, ward or township or the nearest police station in order to make a public announcement for the owner to be aware thereof and reclaim it.

The local People’s Committee or the police station, which has received the object, must notify the person who has submitted it of the results of identification of the owner.

2. If after one year from the date of public announcement of the found object, it is not possible to identify the owner or the owner does not come to reclaim the object, such object shall belong to the finder, if the object has the value of up to ten months’ minimum salary set by the State; if the object’s value is greater than ten months’ minimum salary set by the State, after deducting the expenses for preserva-tion, the finder shall be entitled to a value equal to ten months’ minimum salary set by the State and 50% of the value of the portion in excess of ten months’ minimum salary set by the State, and the remaining value shall belong to the State.

3. If the object which has been let drop on the ground or left over out of inadvertence is a historical or cultural relic and its owner is unidentifiable or no one comes to reclaim the object, the object shall belong to the State; the finder of the object shall be entitled to a monetary reward as provided for by law.

Article 242.- Establishment of ownership rights to stray domestic animals

A person who captures a stray domestic animal must care for it and notify the People’s Committee of the commune, ward or township where he/she resides in order to make a public announcement for the owner to be aware thereof and reclaim the animal. The owner who reclaims the stray domestic animal must pay a remuneration for the care for the animal and other expenses to the person who captured it.

If after six months from the date of public announcement no one comes to reclaim it, the animal shall belong to the person who captured it; if the captured animal is a free-ranging animal according to practices, this time limit shall be one year.

During the period of caring for the stray domestic animal, the person who captured it shall be entitled to half of the number of offsprings born, if any, and must compensate for any damage if he/she is at fault in intentionally causing the death of the stray animal.

Article 243.- Establishment of ownership rights to stray poultry

In cases where a person’s poultry has strayed and is captured by another person, the person who captured the poultry must make a public announcement for the owner to be aware thereof and reclaim it. The owner who reclaims the stray poultry must pay a remuneration for the care therefore and other expenses to the person who captured the poultry.

If after one month from the date of public announcement no one comes to reclaim the stray poultry, it shall belong to the person who captured it.

During the period of caring for the stray poultry, the person who captured it shall be entitled to the yields generated from the stray poultry and must compensate for any damage if he/she is at fault in intentionally causing the death of the poultry.

Article 244.- Establishment of ownership rights to raised aquatic animals

When a person’s raised aquatic animal moves naturally into the field, pond or lake of another person, it shall belong to the person having such field, pond or lake. Where an aquatic animal has specific marks which make it possible to determine that it does not belong to him/her, the person having such field, pond or lake must make a public announcement for the owner to be aware thereof and reclaim it. If after one month from the date of public announcement no one comes to reclaim the raised aquatic animal, it shall belong to the person having such field, pond or lake.

Article 245.- Establishment of ownership rights from inheritance

Heirs shall have the rights of ownership over the inherited property as provided for in Part Four of this Code.

Article 246.- Establishment of ownership rights in accordance with judgments or decisions of Courts or decisions of other competent state agencies

Ownership rights may be established based on judgments or decisions of Courts or decisions of other competent state agencies.

Article 247.- Establishment of ownership rights by virtue of a statute of limitations

1. A person who possesses or a person who enjoys benefits from a property without a legal basis but in good faith and in an overt and continuous manner for a period of ten years with respect to a movable property or thirty years with respect to an immovable property, shall become owner of such property from the time of commencement of possession, except for the cases specified in Clause 2 of this Article.

2. A person who possesses a property under state ownership without a legal basis shall not become owner of such property, even if it is in good faith, continuous and overt possession regardless of the duration of possession.

Section 2. TERMINATION OF OWNERSHIP RIGHTS

Article 248.- Transfer by owners of ownership rights to other persons

When an owner transfers his/her ownership rights to another person through a purchase and sale, exchange, donation or loan contract or through bequeathal, the former’s rights of ownership over the property shall terminate as from the time the ownership rights of the transferee arise.

Article 249.- Renunciation of ownership rights

An owner may him/herself terminate ownership rights to his/her property by a public declaration or certain acts indicating his/her renunciation of the rights to possession, use and disposition of such property.

The renunciation of ownership rights to property must comply with the provisions of law if such renunciation may cause harm to social order and safety or environmental pollution.

Article 250.- Property to which another person has established ownership rights

When another person has established ownership rights to an object which has been let drop on the ground or left over out of inadvertence, a stray domestic animal or poultry, or a naturally moving raised aquatic animal in accordance with the provisions of Articles from 241 to 244 of this Code, the ownership rights of the person who previously owned such property shall terminate.

When the ownership rights of a possessor have been established according to the provisions of Clause 1, Article 247 of this Code, the ownership rights of the person whose property is being possessed shall terminate.

Article 251.- Disposal of property to fulfill the obligations of owners

1. The rights of ownership over a property shall terminate when such property is disposed of to fulfill its owner’s obligations by a decision of the Court or another competent state agency, unless otherwise provided for by law.

2. The disposal of property to fulfill its owner’s obligations shall not be applicable to property not subject to distrainment as provided for by law.

3. The rights of ownership over a property which is disposed of to fulfill its owner’s obligations shall terminate at the time the ownership rights of the recipient of such property arise.

4. The disposal of land use rights shall comply with the provisions of land law.

Article 252.- Property which is destroyed

When a property is destroyed, the ownership rights to such property shall terminate.

Article 253.- Property which is compulsorily purchased

When a property is compulsorily purchased under decision of a competent state agency for defense or security reasons and for national interests, the owner’s ownership rights to such property shall terminate as from the time the decision of the competent state agency takes legal effect.

Article 254.- Property which is confiscated

When a property of an owner is confiscated and placed in the State fund due to his/her criminal conviction or administrative violation, his/her rights of ownership over such property shall terminate as from the time the judgment or decision of a Court, or the decision of another competent state agency takes legal effect.

Chapter XV

PROTECTION OF OWNERSHIP RIGHTS

Article 255.- Measures for protection of ownership rights

Lawful owners and possessors shall have the right to request Courts or other competent agencies or organizations to compel the persons infringing upon their ownership rights or possession rights to return the property and terminate the acts of illegally obstructing the exercise of their ownership rights or possession rights, and to request compensation for any damage.

Lawful owners and possessors shall have the right to protect by themselves the property under their ownership or the property currently in their lawful possession by measures provided for by law.

Article 256.- The right to reclaim property

Lawful owners and/or possessors shall have the right to request the persons possessing, using or receiving benefits from the property under their lawful ownership or possession rights without a legal basis to return such property, except for the cases specified in Clause 1, Article 247 of this Code. In cases where the property is in the possession of a bona fide possessor, Articles 257 and 258 of this Code shall apply.

Article 257.- 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 258.- 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 where the third party possessing the property in good faith has received such property through auctions or transactions with the persons who, under judgments of courts or decisions of competent state agencies, were owners of the property but later are not owners as such judgments or decisions have been cancelled or modified.

Article 259.- The right to request the prevention or termination of acts of illegally obstructing the exercise of lawful ownership rights and possession rights

When exercising their ownership rights or possession rights, lawful owners or possessors 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; if the offenders do not willingly terminate such acts, the owners or possessors shall have the right to request the Court or other competent agencies or organizations to compel such persons to terminate their violation acts.

Article 260.- The right to request compensation for damage

Lawful owners or possessors shall have the right to request persons infringing upon their ownership rights or possession rights to compensate for any damage.

Article 261.- Protection of rights of possessors who are not owners

The rights defined in Articles from 255 thru 260 of this Code shall also belong to the persons who, though being not owners, possess the property on the basis of land use rights, the right to restricted use of adjacent immovable property or on other bases provided for by law or agreed upon.

Chapter XVI

OTHER PROVISIONS ON OWNERSHIP RIGHTS

Article 262.- Obligations of owners 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 of 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. The owners shall be compensated for damage in accordance with the provisions of Clause 3, Article 614 of this Code.

Article 263.- Obligations of owners in the protection of the environment

When using, preserving and renouncing his/her property, an owner 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 264.- Obligations of owners to respect and ensure social order and safety

When exercising his/her rights to possession, use or disposition of his/her own property, an owner 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 265.- The obligation to respect the boundaries between immovable properties

1. The boundaries between adjoining immovable properties shall be determined under the agreement between the owners or the decisions of competent state agencies.

The boundaries may also be determined in accordance with practices or the boundaries which have existed for thirty years or more without disputes.

2. A person with land use rights may use the air space and underground area perpendicular to the boundaries of the land area in accordance with the construction planning specified by a competent state agency, and without affecting the use of the adjoining land of other persons.

A land user may plant trees and conduct other activities only within the land area under his/her own use rights and within the boundaries which have been determined; if tree roots and/or branches extend beyond the boundaries, he/she must clip the extending roots and/or prune the extending branches, unless otherwise agreed upon.

3. In cases where the boundary is a canal, irrigation ditch, trench, gutter or the boundary of a rice field, the land user shall have the obligation to respect and maintain the common boundary; he/she must not encroach upon the boundary or change the boundary markers.

Article 266.- Ownership rights to boundary markers separating immovable properties

1. Owners of adjoining immovable properties may put up boundary stakes, fences or partition walls only on the portion of land under their land use rights. Persons using adjoining lands may mutually agree on the putting up of boundary stakes, fences or partition walls and planting of trees on the boundary as boundary markers between the immovable properties; these boundary markers shall be under their common ownership.

In cases where a boundary marker is put up on the boundary by only one party and with the consent of the owner of the adjoining immovable property, such boundary marker shall be under common ownership and the construction expenses shall be borne by the party who puts up the marker, unless otherwise agreed upon; if the owner of the adjoining immovable property does not give his/her consent for justifiable reasons, the owner who has put up the boundary stake, fence or partition wall must remove it.

With respect to trees as common boundary markers, the parties shall all have the obligation to protect them; the yields from the trees shall be shared equally, unless otherwise agreed upon.

2. With respect to common house walls as boundary markers, the owner of the adjoining immovable property shall not install a window or air ventilating hole or drill the wall in order to install building structures, except where it is so consented by the owner of the adjoining immovable property.

In cases where houses are separately built but have adjoining walls, an owner may drill and install building structures only up to his/her boundary wall.

Article 267.- The obligation to respect building codes

1. When constructing a project, the project owner must comply with the law on construction, ensure safety, must not build beyond the height and distance specified by the law on construction and must not infringe upon legitimate rights and interests of owners of adjoining and surrounding immovable properties.

2. When there is a danger of an incident occurring to the construction project, which would affect the adjoining and surrounding immovable properties, the project owner must immediately stop the construction and make repairs or dismantle the construction at the request of owners of adjoining and surrounding immovable properties or at the request of a competent state agency; if damage is caused, compensation must be made.

3. When building a sanitation project, a toxic chemical storehouse or another project the use of which may cause environmental pollution, the owner must build it at a reasonable site and distance from the boundaries, and must ensure sanitation and safety and not affect owners of adjoining and surrounding immovable properties.

Article 268.- The obligation to ensure safety for adjoining construction projects

When drilling wells, digging ponds or constructing other subterranean projects, project owners must dig or build them at distances from the boundaries as specified by the law on construction.

In cases where the projects are in danger of threatening the safety of adjoining and surrounding immovable properties, the project owners must immediately take remedial measures; if damage is caused to owners of adjoining and surrounding properties, compensation must be made.

Article 269.- Obligations of owners in draining rainwater

House owners must install water drainage conduits so that rainwater from their house roofs will not run down onto the immovable properties of owners of adjoining immovable properties.

Article 270.- Obligations of owners in draining waste water

House owners must install under-ground drains or water drainage sewers to discharge waste water to the prescribed location, so that the waste water will not spill onto the immovable property of owners of adjoining immovable property or onto public roads or public places, thus causing environmental pollution.

Article 271.- Restrictions on the right to install doors/windows

1. House owners shall only install doors and/or windows swinging over to adjacent houses or opposite houses and common paths in accordance with the provisions of law on construction.

2. The awnings above doors or windows swinging into common paths must be at least 2.5m above the ground.

Article 272.- The right to request the repair or removal of adjoining immovable property

In cases where a tree or a construction project is in danger of collapsing onto an adjoining immovable property or a public facility, the owner must cut down the tree, repair or demolish such construction project.

The owner of an adjoining immovable property shall have the right to request the owner of the tree or the construction project, which is in danger of collapsing, to cut down the tree, or demolish the construction project; if the latter does not cut down the tree or demolish the construction project, the owner of an adjoining immovable property shall have the right to request a competent state agency to permit the cutting down of the tree, or demolition of the construction project. The expenses for cutting down the tree or demolishing the construction project shall be borne by the owner of the tree or the construction project.

Article 273.- The right to an easement over adjoining immovable property

A house owner or a land user shall have the right to use in a reasonable manner an adjoining immovable property under the ownership of another person for his/her own needs for passageway, water supply and drainage, gas supply, electricity transmission wires, communication lines and other necessary needs, but must compen-sate, unless otherwise agreed upon.

Article 274.- Establishment of the right to an easement over adjoining immovable property

1. The right to an easement over adjoining immovable property shall be established as agreed upon or provided for by law.

2. In cases where the right to an easement over an adjoining immovable property has been established for the house owner or land user, the successive house or land use right transferee shall also be entitled to such right.

Article 275.- The right regarding the passageway through adjoining immovable property

1. The owner of an immovable property surrounded by immovable properties of other owners from which there are no exits shall have the right to request one of the owners of the adjoining immovable properties to reserve for him/her a convenient and reasonable passageway leading to a public path; the requested person shall have the obligation to meet such request. The person for whom a passageway is reserved must compensate the owner of the adjoining immovable property, unless otherwise agreed upon.

The passageway shall be opened on the adjoining immovable property which is considered most convenient and reasonable, with the specific characteristics of the locations and interests of the surrounded immovable property being taken into account, and with the least damage caused to the immovable property on which the passageway is opened.

2. The position, the extent of length, width and height of the passageway shall be agreed upon by the parties to ensure the convenience for the ingress and egress and to minimize inconvenience to the parties; if there is a dispute over the passageway, the parties shall have the right to request a competent state agency to determine it.

3. In cases where an immovable property is divided into different parts to different owners and/or users, upon such division, a necessary passageway must be reserved for the person(s) in the interior in accordance with the provisions of Clause 2 of this Article, without any compensation.

Article 276.- The right to install electricity transmission wires and communication wires through adjoining immovable property

An owner of an immovable property shall have the right to install electricity transmission wires and communication wires in a reasonable manner through the immovable property of other owners, but must ensure the safety and convenience for such owners; if damage is caused, compensation must be made.

Article 277.- The right regarding the water supply and drainage through adjoining immovable property

In cases where due to the natural position of an immovable property the water supply and drainage pipes must run through another immovable property, the owner of the immovable property through which the water flows must reserve an appropriate channel for the water supply and drainage and must not hinder or prevent the flow of water. The user of the water supply and drainage channel must minimize to the lowest possible extent any damage to the owner of the immovable property through which the water flows when installing water conduits; if damage is caused, compensation must be paid. In cases where the water flowing naturally from a higher position to a lower position causes damage to the owner of the immovable property through which the water flows, the user of the water supply and drainage channel shall not have to compensate for any damage.

Article 278.- The right regarding irrigation and water drainage in cultivation

A person who is entitled to use land for cultivation shall have the right to request persons using the surrounding land to reserve for him/her a channel suitable and convenient for irrigation and water drainage; the requested person shall have the obligation to meet such request; if the user of the water channel causes damage to the neighboring land users, he/she must pay compensation therefore.

Article 279.- Termination of the right to easement over adjoining immovable property

The right to easement over adjoining immovable property shall terminate in the following cases:

1. The adjoining immovable property and the immovable property of an owner currently exercising the right to easement over such immovable property are integrated into one property;

2. The house owner or land user no longer needs an easement over the adjoining immovable property.

PART THREE

CIVIL OBLIGATIONS AND CIVIL CONTRACTS

Chapter XVII

GENERAL PROVISIONS

Section 1. CIVIL OBLIGATIONS

Article 280.- Civil obligations

A civil obligation is a task under which a subject or more than one subject (hereinafter referred collectively to as the obligors) must transfer an object, transfer rights, pay money or return valuable papers, perform other tasks or refrain from doing certain tasks in the interest of one or a number of other subjects (hereinafter referred collectively to as the obligees).

Article 281.- Bases upon which civil obligations arise

A civil obligation shall arise on the following bases:

1. A civil contract;

2. A unilateral legal act;

3. Performance of a task without authorization;

4. Possession and use of property or enjoyment of benefits from property without a legal basis;

5. Causing damage by performing an illegal act;

5. Performance of a task without authorization;

6. Other bases specified by law.

Article 282.- Objects of civil obligations

1. An object of a civil obligation may be a property or a task which must or must not be performed.

2. An object of a civil obligation must be specifically determined.

3. Only those property which are be alienable and tasks which can be performed but are not prohibited by law and not contrary to social ethics may be objects of civil obligations.

Section 2. PERFORMANCE OF CIVIL OBLIGATIONS

Article 283.- The principle for performance of civil obligations

An obligor must perform his/her obligation in an honest manner, in the spirit of cooperation, in a manner faithful to his/her commitment and not contrary to law and social ethics.

Article 284.- Places for performance of civil obligations

1. The place for the performance of a civil obligation shall be agreed upon by the parties.

2. In cases where there is no agreement, the place for performance of a civil obligation shall be determined as follows:

a/ It is the location of the immovable property, if the object of the civil obligation is an immovable property;

b/ It is the place of residence or head office of the obligee, if the object of the civil obligation is not an immovable property.

When the obligee changes his/her place of residence or head office, he/she must notify the obligor of the change and must bear extra expenses resulting from the change of the place of residence or head office, unless otherwise agreed upon.

Article 285.- Time limit for performance of civil obligations

1. The time limit for performing a civil obligation shall be agreed upon by the parties or provided for by law.

The obligor must perform his/her civil obligation on time; may perform the civil obligation before the specified time limit only if the obligee so consents; if the obligor has performed the obligation before the specified time limit at his/her own will and the obligee has accepted such performance, the obligation shall be considered to have been performed on time.

2. In cases where the time limit for the performance of a civil obligation has not been agreed upon by the parties or specified by the law, the parties may perform the obligation or request the performance of the obligation at any time, but must notify each other in advance within a reasonable period of time.

Article 286.- Delay in performance of civil obligations

1. The delay in performance of a civil obligation means the obligation has not been performed yet or has been partially performed upon the expiration of the time limit for performance of the obligation.

2. The party that delays the performance of a civil obligation must immediately notify the obligee of the non-performance of the obligation on time.

Article 287.- Postponement of performance of civil obligations

1. When it is impossible to fulfill a civil obligation on time, the obligor must immediately inform the obligee thereof and propose the postponement of the performance of the obligation.

In case of failure to inform the obligee, the obligor must compensate for the arising damage, except in cases where it is otherwise agreed upon or the notification cannot be made due to objective causes.

2. The obligor may postpone the performance of an obligation if the obligee so agrees. The postponed performance of a civil obligation shall still be considered a timely performance.

Article 288.- Delay in acceptance of performance of civil obligations

1. The delay in acceptance of the performance of a civil obligation means that, upon the expiration of the time limit for the fulfillment of the civil obligation, the obligor has already fulfilled the civil obligation as agreed upon, but the obligee does not accept the performance of such obligation.

2. In case of delay in accepting the civil obligation’s object being a property, the obligor must take necessary measures to preserve the property and shall be entitled to request the reimbursement of reasonable expenses.

3. With respect to a property which is in imminent danger of decay, the obligor shall have the right to sell such property and return the proceeds from the sale of such property to the obligee after deducting necessary expenses for the preservation and sale of such property.

Article 289.- Performance of the obligation to hand over objects

1. The person obliged to hand over an object must preserve and maintain the object until the hand-over thereof.

2. When the object to be handed over is a distinctive object, the obligor must hand over the exact object in the exact conditions as committed; if the object to be handed over is a fungible object, it must be handed over in the exact quality and quantity as agreed upon. If there is no agreement regarding the quality, the object to be handed over must be of average quality; if it is an integrative object, it must be handed over in sets.

3. The obligor must bear all expenses related to the hand-over of the object, unless otherwise agreed upon.

Article 290.- Performance of the obligation to pay money

1. The obligation to pay money must be performed in full amount, on time, at the right place and by the right mode agreed upon.

2. The obligation to pay money shall cover the payment of interests on principals, except otherwise agreed upon.

Article 291.- The obligation to perform or not to perform a task

1. The obligation to perform a task is the obligation under which the obligor is obliged to perform that very task.

2. The obligation not to perform a task is the obligation under which the obligor is obliged not to perform that very task.

Article 292.- Periodic performance of a civil obligation

A civil obligation can be performed periodically, if so agreed upon or provided for by law.

The delay in periodic performance of a civil obligation shall also be considered the delay in performance of the civil obligation.

Article 293.- Performance of a civil obligation through a third party

With the obligee’s consent, the obligor may delegate a third party to perform the civil obligation on his/her/its behalf but shall still be accountable to the obligee if the third party does not perform or performs the civil obligation improperly.

Article 294.- Conditional performance of a civil obligation

In cases where the conditions for the performance of a civil obligation are agreed upon by the parties or provided for by law, the obligor must perform the obligation when such conditions arise.

Article 295.- Performance of a civil obligation with optional objects

1. A civil obligation with an optional object means an obligation with an object being one of many different properties or tasks, which the obligor may choose at his/her/its free will, unless where it is agreed upon or it is provided for by law that the right of choice is reserved for the obligee.

2. The obligor must notify the obligee of the property or task selected for the performance of the obligation. Where the obligee has determined the time limit for performance of the selected obliga-tion, the obligor must fulfill it on time.

3. In cases where only one property or one task is left, the obligor must hand over such property or perform such task.

Article 296.- Performance of a substitutable civil obligation

A substitutable civil obligation is an obligation whereby if the obligor cannot perform the original obligation, he/she/it may perform another obligation accepted by the obligee as a substitute for such civil obligation.

Article 297.- Separate performance of a civil obligation

When many obligors jointly perform a civil obligation but each obligor has a certain part of the obligation separate from each other’s, each obligor shall only have to perform his/her/its own part of the obligation.

Article 298.- Performance of a joint civil obligation

1. A joint civil obligation is an obligation which must be performed by many obligors and the obligee may request any one of the obligors to perform the entire obligation.

2. In cases where an obligor has fulfilled the entire obligation, he/she/it shall have the right to request the other joint obligors to fulfill their respective parts of the joint obligation towards him/her/it.

3. In cases where the obligee has already designated one of the joint obligors to perform the entire obligation, but later exempts that obligor from performing that obligation, the remaining obligors shall also be exempted from performing the obligation.

4. In cases where the obligee exempts only one of the joint civil obligors from performing his/her/its own part of the obligation, the remaining obligors shall still have to fulfill their own parts of the obligation.

Article 299.- Performance of a civil obligation for joint obligees

1. A civil obligation for many joint obligees is an obligation whereby each obligee may request the obligor to perform the entire obligation.

2. The obligor may perform his/her/its own obligation toward any of the joint obligees.

3. In cases where one of the joint obligees exempts the obligor from performing the part of the obligation toward him/her/it, the obligor must still perform the remainder of the obligation toward the other joint obligees.

Article 300.- Performance of divisible civil obligations

1. A divisible civil obligation is an obligation whereby the object of the obligation is a divisible thing or a task which can be divided into parts for performance.

2. The obligor may perform the obligation part by part, unless otherwise agreed upon.

Article 301.- Performance of indivisible civil obligations

1. An indivisible civil obligation is an obligation whereby the object of the obligation is an indivisible thing or a task which must be performed simultaneously.

2. In cases where many obligors must jointly perform an indivisible obligation, they must perform the obligation simultaneously.

Section 3. CIVIL LIABILITY

Article 302.- Civil liability for breach of civil obligations

1. An obligor that fails to perform or performs improperly his/her/its obliga-tion must bear civil liability to the obligee.

2. In cases where an obligor cannot perform a civil obligation due a force majeure event, he/she/it shall not have to bear any civil liability, unless otherwise agreed upon or provided for by law.

3. The obligor shall not have to bear civil liability if he/she/it can prove that the failure to perform the obligation is due entirely to the fault of the obligee.

Article 303.- Civil liability for failure to perform the obligation to hand over objects

1. When the obligor fails to perform the obligation to hand over a distinctive object, the obligee is entitled to demand the obligor to hand over that exact object; if the object no longer exists or is damaged, the obligor must pay for the value of the object.

2. When the obligor fails to perform the obligation to deliver a fungible object, he/she/it must pay for the value of the object.

3. Where the obligor cannot perform the obligation as provided for in Clauses 1 and 2 of this Article and cause damage to the obligee, apart from paying for the value of the object, he/she/it must also pay compensation for damage to the obligee.

Article 304.- Civil liability for failure to perform an obligation to perform or not to perform a task

1. In cases where the obligor fails to perform a task he/she/it must perform, the obligee may request the obligor to keep performing it or perform the task him/her/itself or assign another person to perform such task and demand the obligor to pay for the reasonable expenses incurred and to pay compensation for damage.

2. When the obligor is not allowed to perform a task but still performs such task, the obligee is entitled to demand the obligor to terminate such performance, restore the initial condition and pay compensation for damage.

Article 305.- Civil liability for delayed performance of civil obligations

1. When the performance of a civil obligation is delayed, the obligee may extend the time limit so that the obligor can fulfill the obligation; if this time limit has expired and the obligation remains unfulfilled, the obligor must, at the request of the obligee, still perform the obligation and pay compensation for damage; if the performance of the obligation is no longer necessary to the obligee, the obligee shall have the right to refuse to accept the performance of the obligation and demand compen-sation for damage.

2. In cases where the obligor delays making payments, such obligor must pay the interests on the unpaid amount at the basic interest rate announced by the State Bank at the time of payment corresponding to the period of delayed payment, unless otherwise agreed upon or provided for by law.

Article 306.- Civil liability for delayed acceptance of the performance of civil obligations

The obligee that delays accepting the performance of a civil obligation, thus causing damage to the obligor, must compensate the obligor for the damage and bear all the risks arising as from the time of delaying the acceptance, unless otherwise agreed upon or provided for by law.

Article 307.- Liability to compen-sate for damage

1. The liability to compensate for damage includes the liability to compen-sate for material damage and the liability to compensate for mental damage.

2. The liability to compensate for material damage is the liability to make up for the actual material losses caused by the breaching party, which can be calculated in money and include the loss of property, reasonable expenses incurred in preventing, mitigating and/or redressing the damage and the actual loss or reduction of income.

3. A person causing mental damage to another person by infringing upon the life, health, honor, dignity or prestige of such person shall have to pay pecuniary compensation to the victim in addition to stopping the infringement, offering an apology and making public rectification.

Article 308.- Fault in civil liability

1. A person who does not perform or performs improperly a civil obligation must bear civil liability if he/she is at fault either intentionally or unintentionally, unless otherwise agreed upon or provided for by law.

2. Intentionally causing damage means a situation in which a person is fully aware that his/her act will cause damage to another person and still performs the act, thereby allowing the damage to occur whether intentionally or unintentionally.

Unintentionally causing damage means a situation in which a person does not foresee that his/her act may cause damage, though he/she must have known or can know in advance that such damage will occur, or foresees that his/her act may act cause damage but believes that the damage would not occur or can be prevented.

Section 4. TRANSFER OF THE RIGHT TO DEMAND AND TRANSFER OF CIVIL OBLIGATIONS

Article 309.- Transfer of the right to demand

1. An obligee having the right to demand the improperly of a civil obligation may transfer that right to a transferee under agreement, except for the following cases:

a/ The right to demand support payment and to demand compensation for damage caused by infringement upon his/her life, health, honor, dignity or prestige;

b/ The obligee and the obligor have agreed not to transfer the right to demand;

c/ Other cases provided for by law.

2. When an obligee transfers the right to demand to a transferee, the later shall become the obligee holding the right to demand.

The transferor of the right to demand must notify the obligor in writing of the transfer of the right to demand. The transfer of the right to demand does not require the consent of the obligor, unless otherwise agreed upon or provided for by law.

Article 310.- Forms of transfer of the right to demand

1. The transfer of the right to demand shall be expressed in writing or orally.

2. In cases where it is provided for by law that the transfer of the right to demand must be expressed in writing, notarized, or authenticated, registered or permitted, such provisions must be complied with.

Article 311.- The obligation to provide information and transfer papers

1. The transferor of the right to demand must provide necessary information and transfer the relevant papers to the transferee.

2. The transferor of the right to demand who breaches the obligation provided for in Clause 1 of this Article and causes damage shall have to compensate for the damage.

Article 312.- Non-liability after transferring the right to demand

The transferor of the right to demand shall not have to bear liability for the obligor’s capability to perform the obliga-tion, unless otherwise agreed upon.

Article 313.- Transfer of the right to demand with measures to secure the performance of civil obligations

In cases where the right to demand the performance of civil obligations involves security measures, the transfer of the right to demand shall also include such security measures.

Article 314.- The obligor’s right of refusal

1. In cases where the obligor is not notified of the transfer of the right to demand or the transferee cannot prove the authenticity of the transfer of the right to demand, the obligor shall have the right to refuse the performance of obligation toward the transferee.

2. In cases where the obligor is not notified of the transfer of the right to demand and has already performed the obligation toward the transferor of the right to demand, the transferee must not demand the obligor to perform the obligation toward him/her/it.

Article 315.- Transfer of civil obligations

1. The obligor may transfer a civil obligation to a substitute obligor, if it is so consented by the obligee, except in cases where the obligation is connected with the personal identity of the obligor or where it is provided for by law that such obligation must not be transferred.

2. When being transferred an obligation, the substitute obligor shall become the obligor.

Article 316.- Forms of transfer of civil obligations

1. The transfer of a civil obligation shall be expressed either in writing or orally.

2. Where it is provided for by law that the transfer of obligation must be expressed in writing, notarized or authenticated, registered or permitted, such provisions must be complied with.

Article 317.- Transfer of civil obligations with security measures

In cases where a secured civil obligation is transferred, the security measures shall terminate, unless otherwise agreed upon.

Section 5. SECURITY FOR THE PERFORMANCE OF CIVIL OBLIGATIONS

I. GENERAL PROVISIONS

Article 318.- Measures to secure the performance of civil obligations

1. The measures to secure the performance of civil obligations include:

a/ Pledge of property;

b/ Mortgage of property;

c/ Deposit;

d/ Security collateral;

e/ Escrow account;

f/ Guaranty;

g/ Pledge of trust.

2. In cases where the security measures are agreed upon by the parties or provided for by law, the obligor must implement those security measures.

Article 319.- Scope of security for the performance of a civil obligation

1. A civil obligation may be partially or fully secured as agreed upon or as provided for by law; if the scope of security is not agreed upon or provided for by law, the obligation shall be regarded as fully secured, including the obligation to pay interests and compensation for damage.

2. The parties may agree on measures to secure the performance of civil obligations in order to secure the performance of assorted obligations, including current obligations, future obligations or conditional obligations.

Article 320.- Objects used to secure the performance of civil obligations

1. Objects used to secure the performance of civil obligations must be under the ownership rights of the securing party and be permitted for transaction.

2. Objects used to secure the performance of civil obligations are the existing objects or objects to be formed in the future. Objects to be formed in the future are movable property or immovable property under the ownership of the securing party after the time the obligations are established or the security transactions are entered into.

Article 321.- Monies, valuable papers used to secure the performance of civil obligations

Monies, bonds, shares, promissory notes and other valuable papers can be used to secure the performance of civil obligations.

Article 322.- Property rights used to secure the performance of civil obligations

1. Property rights owned by the securing party, including property rights arising from copyrights, industrial property rights, rights to plant varieties, the right to claim debts, the right to receive insurance indemnities for secured objects, property rights to capital amounts contributed to enterprises, property rights arising from contracts and other property rights of the securing party, may all be used to secure the performance of civil obligations.

2. Land use rights may be used to secure the performance of civil obligations in accordance with the provisions of this Code and the law on land.

3. The right to exploit natural resources shall be used to secure the performance of civil obligations in accordance with the provisions of this Code and the law on natural resources.

Article 323.- Registration of secured transactions

1. Secured transactions are civil transactions for which, as agreed upon by the parties or provided for by law, the application of security measures defined in Clause 1, Article 318 of this Code, is required.

2. The registration of secured transactions shall be carried out in accordance with the provisions of law on registration of secured transactions. The registration shall constitute a condition for secured transactions to be effective only in cases where it is so provided for by law.

3. Where secured transactions are registered under the provisions of law, such secured transactions shall be legally valid for a third party as from the time of registration.

Article 324.- Property used to secure the performance of many civil obligations

1. A property can be used to secure the performance of many civil obligations, if its value at the time of establishment of the secured transaction is greater than the total value of all secured obligations, unless otherwise agreed upon or provided for by law.

2. In cases where a property is used to secure the performance of many obligations, the securing party must notify the subsequent secure that the security property is being used to secure the performance of another obligation. Each time of security must be made in writing.

3. In cases where property must be disposed of to secure the performance of a due obligation, the other obligations, though being undue, shall be considered being due and all the secures are entitled to participate in the disposal of the property. The secure that has notified the disposal of the property shall have to dispose of the property, unless otherwise agreed upon by the secures.

In cases where the parties wish to continue performing the undue obligations, they may reach agreement on the use of other property by the securing party to secure the performance of undue obligations.

Article 325.- Priority order of payment

The payment priority order under the disposal of security property shall be determined as follows:

1. In cases where the secured transactions are registered, the payment priority order upon the disposal of security property shall be determined according to the registration order;

2. In cases where one property is used to secure the performance of many civil obligations with registered secured transactions and unregistered secured transactions as well, priority shall be given to the payment of registered secured transactions;

3. In cases where one property is used to secure the performance of many civil obligations with all secured transactions being unregistered, the payment priority order shall be determined according to the order of establishment of secured transactions.

II. PLEDGE OF PROPERTY

Article 326.- Pledge of property

The pledge of a property is a transaction in which a party (hereinafter referred to as the pledgor) hands over a property to the other party (hereinafter referred to as the pledgee) to secure the performance of a civil obligation(s).

Article 327.- Forms of pledge of property

The pledge of property must be established in writing, either in a separate document or incorporated in a principal contract.

Article 328.- Effect of pledge of property

A pledge of property shall take effect as from the time of handing over the property to the pledgee.

Article 329.- Duration of pledge of property

The duration of a pledge of property shall be agreed upon by the parties. In the absence of such agreement, the pledge duration shall be counted till the termination of the obligation secured by the pledge.

Article 330.- Obligations of the property pledgor

The property pledgor shall have the following obligations:

1. To hand over the pledged property to the pledgee as agreed upon;

2. To notify the pledgee of the right of a third party to the pledged property, if any; in the absence of such notification, the pledgee shall have the right to cancel the property pledge contract and demand compensation for damage, or to maintain the contract and accept the rights of the third party to the pledged property;

3. To pay the pledgee reasonable expenses incurred for maintaining and preserving the pledged property, unless otherwise agreed upon.

Article 331.- Rights of the property pledgor

The property pledgor shall have the following rights:

1. To demand that the pledgee suspend the use of the pledged property in the cases specified in Clause 3, Article 333 of this Code, if such use puts the pledged property in danger of loss or depreciation of its value;

2. To sell the pledged property, if so agreed by the pledgee;

3. To replace the pledged property with another property, if so agreed upon;

4. To demand that the pledgee that keeps the pledged property return the pledged property when the obligation secured by the pledge has terminated;

5. To demand that the pledgee compensate for damage caused to the pledged property.

Article 332.- Obligations of the property pledgee

The property pledgee shall have the following obligations:

1. To maintain and preserve the pledged property; if causing loss of, or damage to, the pledged property, to pay compensation for damage to the pledgor;

2. Not to sell, exchange, donate, lease, or lend the pledged property; not to use the pledged property to secure the performance of another obligation;

3. Not to exploit the utility of, or enjoy the yields and/or profits from, the pledged property, if not so consented by the pledgor;

4. To return the pledged property upon the termination of the obligation which is secured by the pledge or when it is replaced by another security measure.

Article 333.- Rights of the property pledgee

The property pledgee shall have the following rights:

1. To demand that the person unlawfully possessing or using the pledged property return the property;

2. To demand that the pledged property be disposed of in the manner as agreed upon or provided for by law for the performance of an obligation;

3. To exploit the utility of, and enjoy the yields and/or profits from, the pledged property, if so agreed upon;

4. To be paid reasonable expenses for the preservation of the pledged property when returning the pledged property to the pledgor.

Article 334.- Pledge of many properties

In cases where many properties are pledged to secure the performance of one civil obligation, each property shall be determined as securing the performance of the entire obligation. The parties may also agree that each property secures the performance of a part of the obligation.

Article 335.- Cancellation of pledge of property

The pledge of a property may be cancelled, if so consented by the pledgee.

Article 336.- Disposal of pledged property

In cases where the time for performing the civil obligation becomes due and the pledgor has failed to perform or has performed the obligation not in accordance with the agreement, the pledged property shall be disposed of by the mode agreed upon by the parties or be auctioned under the provisions of law for the performance of the obligation. The pledgee shall be given priority to receive payment from the proceeds of the sale of the pledged property.

Article 337.- Disposal of pledged property involving many objects

In cases where a pledged property comprises many objects, the pledgee may choose specific property for disposal, unless otherwise agreed upon. The pledgee may only handle a number of necessary property corresponding to the value of the secured obligation; in case of disposal in excess of the number of necessary property, causing damage to the pledgor, the pledgee must pay compensation therefor to the pledgor.

Article 338.- Payment of proceeds from the sale of pledged property

The proceeds from the sale of the pledged property shall be used for fulfillment of obligations toward the pledgee after deducting the expenses for preservation and sale of the property and other necessary expenses related to the disposal of the pledged property; in cases where the secured obligation is a loan, the payment shall be made to the pledgee in the order of principal, interest, fine and pecuniary compensation for damage, if any; the remaining proceeds, if any, must be returned to the pledgor; if the sale proceeds are insufficient, the pledgor must pay the deficit.

Article 339.- Termination of pledge of property

The pledge of property shall terminate in the following cases:

1. The obligation secured by the pledge has terminated;

2. The pledge of property has been cancelled or substituted by another security measure;

3. The pledged property has been disposed of;

4. It is so agreed by the parties.

Article 340.- Return of pledged property

When the pledge of property is terminated as provided for in Clauses 1 and 2 of Article 339 of this Code, the pledged property and ownership right certificates shall be returned to the pledgor. Yields and profits received from the pledged property shall also be returned to the pledgor, unless otherwise agreed upon.

Article 341.- Pledge of property at pawn shops

The pledge of property at pawn shops shall comply with the provisions of Articles 326 thru 340 of this Code and other legal documents regarding activities of pawn shops.

III. MORTGAGE OF PROPERTY

Article 342.- Mortgage of property

1. The mortgage of property means the use by a party (hereinafter referred to as the mortgagor) of his/her/its own property to secure the performance of a civil obligation toward the other party (hereinafter referred to as the mortgagee) without transferring such property to the mortgagee.

In cases where an entire immovable or movable property containing an auxiliary object is mortgaged, the auxiliary object of such immovable or immovable property shall also belong to the mortgaged property.

In cases where only part of the immovable or movable property containing an auxiliary object is mortgaged, the auxiliary object shall belong to the mortgaged property, unless otherwise agreed upon by the parties.

The mortgaged property can also be the property to be formed in the future.

2. The mortgaged property shall be held by the mortgagor. The parties may agree to let a third party keep the mortgaged property.

3. The mortgage of land use rights shall comply with the provisions of Articles 715 thru 721 of this Code and other relevant provisions of law.

Article 343.- Forms of property mortgage

The mortgage of property must be made in writing, either in a separate document or incorporated in a principal contract. Mortgage documents must be notarized, authenticated or registered, if so provided for by law.

Article 344.- Duration of mortgage

The parties shall agree on the duration of a mortgage of property; in the absence of such agreement, the mortgage shall last until the termination of the obligation secured by the mortgage.

Article 345.- Mortgage of property currently being leased

A property that is being leased may also be mortgaged. Yields and profits received from the lease of property shall belong to the mortgaged property, if it is so agreed upon or provided for by law.

Article 346.- Mortgage of insured property

1. In cases where a mortgaged property is insured, the insurance coverage shall also belong to the mortgaged property.

2. The mortgagee must notify the insurance organization that the insured property is being used as mortgage. The insurance organization shall pay the insurance indemnities directly to the mortgagee upon the occurrence of an insured incident. In cases where the mortgagee fails to notify the insurance organization that the insured property is being used as mortgage, the insurance organization shall pay indemnities under the insurance contract and the mortgagor is obliged to make payment to the mortgagee.

Article 347.- Mortgage of many properties to secure the performance of one civil obligation

In cases where many properties are mortgaged to secure the performance of one civil obligation, each property shall be determined as securing the performance of the entire obligation. The parties may also agree that each property secures the performance of part of the obligation.

Article 348.- Obligations of the property mortgagor

The property mortgagor shall have the following obligations:

1. To preserve and maintain the mortgaged property;

2. To apply necessary remedial measures, including the cessation of the exploitation of the utility of the mortgaged property, if due to such exploitation the mortgaged property is in the danger of loss or depreciation of its value;

3. To notify the mortgagee of a third party’s rights to the mortgaged property, if any; in case of non-notification, the mortgagee may cancel the property mortgage contract and demand compensation for damage or maintain the contract and accept the third party’s rights to the mortgaged property;

4. Not to sell, exchange or donate the mortgaged property, except for the cases specified in Clauses 3 and 4, Article 349 of this Code.

Article 349.- Rights of the property mortgagor

The property mortgagor shall have the following rights:

1. To exploit the utility of, and enjoy the yields and profits from, the property, except in cases where the yields and profits also belong to the mortgaged property as agreed upon;

2. To invest so as to increase the value of the mortgaged property;

3. To sell, replace the mortgaged property if such property is a commodity circulated in the process of production and/or business;

In case of sale of the mortgaged property being a commodity circulated in the process of production and/or business, the right to demand the purchaser pay the money, the sale proceeds or the property formed from the sale proceeds shall become the mortgaged property in replacement of the sold property;

4. To sell, exchange or donate the mortgaged property other than a commodity circulated in the process of production and/or business, if so agreed by the mortgagee;

5. To lease, lend the mortgaged property but with the notification to the lessee or the borrower that the leased or lent property is being mortgaged, and to have to notify such to the mortgagee;

6. To reclaim the mortgaged property held by a third party, when the obligation secured by the mortgage is terminated or secured by another measure.

Article 350.- Obligations of the property mortgagee

The property mortgagee shall have the following obligations:

1. To return to the mortgagor the papers on the mortgaged property upon termination of the mortgage in cases where the parties agree that the mortgagee keeps the papers on the mortgaged property;

2. To request a state agency competent to register secured transactions to delete the registration in the cases specified in Articles 355, 356 and 357 of this Code.

Article 351.- Rights of the property mortgagee

The property mortgagee shall have the following rights:

1. To demand that the lessee or the borrower of the mortgaged property in the case specified in Clause 5, Article 349 of this Code terminate the use of the mortgaged property, if such use causes the loss or decrease of the value of such property;

2. To directly check and inspect the mortgaged property but not to hinder or cause difficulty to the use or exploitation of the mortgaged property;

3. To demand that the mortgagor supply information on the actual conditions of the mortgaged property;

4. To demand that the mortgagor apply necessary measures to preserve the property, the property value in cases where exists the danger of causing the loss or decrease of value of the property due to the exploitation and use thereof;

5. To demand that the mortgagor or a third party that keeps the mortgaged property return such property for disposal in cases where the time for fulfillment of the obligation becomes due while the obligagor fails to perform or improperly performs the obligation;

6. To supervise and inspect the process of property formation in case of mortgaging the property to be formed in the future;

7. To request the disposal of the mortgaged property in accordance with the provisions of Article 355 or Clause 3 of Article 324 of this Code and to be given priority in the settlement of payments.

Article 352.- Obligations of a third party holding mortgaged property

A third party holding the mortgaged property shall have the following obligations:

1. To maintain and preserve the mortgaged property; if causing loss of the mortgaged property, the loss or decrease of the value of the mortgaged property, to pay compensation therefor;

2. To discontinue the exploitation of the utility of the mortgaged property, in the case specified in Clause 1, Article 353 of this Code, if the continued exploitation thereof may put the mortgaged property in the danger of losing or decreasing its value;

3. To hand back the mortgaged property to the mortgagee or the mortgagor as agreed upon.

Article 353.- Rights of the third party holding mortgaged property

The third party holding the mortgaged property shall have the following rights:

1. To exploit the utility of, and enjoy the yields and profits from, the mort-gaged property, if it is so agreed upon;

2. To be paid the remuneration and the expenses for maintenance and preservation of the mortgaged property, unless otherwise agreed upon.

Article 354.- Replacement and repair of mortgaged property

1. The mortgagor may replace the mortgaged property only when it is so consented by the mortgagee, unless otherwise agreed upon, except for the case specified in Clause 3, Article 349 of this Code.

2. In case of mortgage of a warehouse, the mortgagor may replace commodities in the warehouse, but must strictly ensure the value of the ware-housed commodities as agreed upon.

3. When the mortgaged property is damaged, the mortgagor must repair the mortgaged property within a reasonable time or replace the mortgaged property with a similar value, unless otherwise agreed upon.

Article 355.- Disposal of mortgaged property

In cases where the time for performing a civil obligation becomes due and the obligor has failed to perform or has improperly performed the obligation, the mortgaged property shall be disposed of in accordance with the provisions of Articles 336 and 338 of this Code.

Article 356.- Cancellation of property mortgage

A property mortgage may be cancelled if the mortgagee so consents, unless otherwise provided for by law.

Article 357.- Termination of property mortgage

A property mortgage shall terminate in the following cases:

1. The obligation secured by the mortgage has been terminated;

2. The property mortgage is cancelled or replaced with another security measure;

3. The mortgaged property has been disposed of;

4. It is so agreed upon by the parties.

IV. DEPOSITS

Article 358.- Deposit

1. Deposit is an act whereby one party transfers a sum of money or precious metals, gems or other valuable things (hereinafter referred to as the deposited property) to another party for a specified time limit to secure the entry into, or the performance of, a civil contract.

Deposit must be established in writing.

2. In cases where a civil contract is entered into or performed, the deposited property shall be returned to the depositor or deducted for the performance of a payment obligation; if the depositor refuses to enter into or perform the civil contract, the deposited property shall belong to the depositary; if the depositary refuses to enter into or perform the civil contract, he/she/it must return the deposited property and pay a sum of money equivalent to the value of the deposited property to the deposi-tor, unless otherwise agreed upon.

V. SECURITY COLLATERAL

Article 359.- 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 deducting 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.

VI. ESCROW ACCOUNT

Article 360.- Escrow account

1. Escrow account is an act whereby an obligor deposits a sum of money, precious metals, gems or valuable papers into a blocked bank account to secure the performance of a civil 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 account is effected, after deducting the bank service charges.

3. The procedures for deposit and payment shall be specified by the law on banking.

VII. GUARANTY

Article 361.- Guaranty

Guaranty is an act whereby a third party (hereinafter referred to as the guarantor) commits with the obligee (hereinafter referred to as the guarantee) to perform an obligation for the obligor (hereinafter referred to as the guaranteed), when the obligation becomes due and the guaranteed has failed to perform or has improperly performed the obligation. The parties may also agree that the guarantor shall only be liable to perform the obligation when the guaranteed is incapable of performing its obligation.

Article 362.- Forms of guaranty

The guaranty must be made in writing, either in a separate document or incorporated in the principal contract. Guarantee documents must be notarized or authenticated in cases where it is so provided for by law.

Article 363.- Scope of guaranty

A guarantor may undertake to guarantee a part or whole of the obligation for the guaranteed.

The guaranty obligation includes interest on the principal, fines and damages, unless otherwise agreed upon.

Article 364.- Remuneration

The guarantor shall be entitled to remuneration if so agreed upon between the guarantor and the guaranteed.

Article 365.- Joint guarantors

When more than one person undertake to guarantee an obligation, they must perform jointly the guaranty, except in cases where they agree or it is provided for by law that the guaranty shall be in independent shares; the obligee may demand that anyone of the joint guarantors perform the entire obligation.

When one of the joint guarantors has performed the entire obligation for the guaranteed, he/she/it shall have the right to demand that the other guarantors perform their shares of the obligation to him/her/it.

Article 366.- Relationship between the guarantor and the guarantee

1. The guarantee must not demand that the guarantor perform an obligation for the guaranteed when the obligation has not become due.

2. The guarantor shall not have to perform the guaranty obligation in cases where the guarantee can offset the obligation with the guaranteed.

Article 367.- The guarantor’s right to demand

When the guarantor has fulfilled his/her/its obligation, he/she/it shall have the right to demand the guaranteed to perform his/her/its obligation towards guarantor within the scope of the guaranty, if not otherwise agreed upon.

Article 368.- Waiver of the performance of guaranty

1. In cases where the guarantee exempt the guarantor from the performance of obligation, the guaranteed shall still have to perform the obligation towards the guarantee, except in cases where it is agreed upon or provided for by law that the guaranty must be performed jointly.

2. In cases where one of the joint guarantors is exempted from performing his/her/its part of the guaranty, the other joint guarantors shall still have to perform their parts of the guaranty.

Article 369.- Disposal of the property of the guarantor

In cases when the time limit for performing the obligation for the guaranteed becomes due and the guarantor has failed to perform or has improperly performed the obligation, the guarantor must use his/her/its own property to make payments for the guarantee.

Article 370.- Cancellation of guaranty

A guaranty may be cancelled if the guarantee so consents, unless otherwise provided for by law.

Article 371.- Termination of guaranty

A guaranty shall be terminated in the following cases:

1. The obligation secured by the guaranty is terminated;

2. The guaranty is cancelled or is replaced by another security measure;

3. The guarantor has performed the guaranty obligation;

4. It is so agreed upon by the parties.

VIII. PLEDGE OF TRUST

Article 372.- Pledge of trust guaranty by socio-political organizations

Local socio-political organizations may guarantee by way of pledge of trust for poor individuals and households to borrow sums of money from banks or other credit institutions for production, business or provision of services in accordance with regulations of the Government.

Article 373.- Forms of pledge of trust guarantee

Loans involving the pledge of trust security must be made in writing, clearly stating the loan amounts, purpose of the loans, terms of the loans, interest rates, rights, obligations and responsibilities of the borrowers, the lending banks or credit institutions and the guaranteeing organizations.

Section 6. TERMINATION OF CIVIL OBLIGATIONS

Article 374.- Bases for termination of a civil obligation

A civil obligation shall terminate in the following cases:

1. The obligation is fulfilled;

2. It is so agreed upon by the parties;

3. The obligee waives the performance of the obligation;

4. The obligation is replaced by another civil obligation;

5. The obligation is offset;

6. The obligee and the obligor merge;

7. The statute of limitations for exemption from the civil obligation has expired;

8. The obligor being an individual dies or the obligor being a legal person or other subject ceases to exist while that obligation must be performed by that very individual or legal person;

9. The obligee being an individual dies and whose right to demand does not belong to the inheritance or the obligee being a legal person ceases to exist and the right to demand must not be transferred to another legal person or subject;

10. A distinctive object, as the object of the obligation, ceases to exist and is replaced by another civil obligation.

11. Other cases provided for by law.

Article 375.- Fulfillment of civil obligations

A civil obligation shall be deemed completed when the obligor has performed the entire obligation or part of the obligation but the remaining parts are exempted by the obligee from the performance.

Article 376.- Fulfillment of a civil obligation in cases where the obligee delays accepting the object of the obligation

1. When the obligee delays accepting the object of an obligation, which is an object, the obligor must preserve the object or may deposit it for safekeeping at a place of bailment and must immediately notify the obligee thereof. The party delaying the acceptance must bear all risks and expenses relating to its bailment.

The obligation to deliver an object shall be completed at the time it is bailed in accordance with the quantity, quality and other conditions agreed upon by the parties.

2. In cases where the object of an obligation is money or valuable papers and the obligee delays accepting the object of the obligation, the obligor may also deposit such object at a place of bailment and must immediately notify the obligee thereof; the obligation shall be considered having been completed at the time of bailment.

Article 377.- Termination of civil obligations by agreement

The parties may agree to terminate a civil obligation at any time, provided that such does not harm State interests, public interests or legitimate rights and interests of other persons.

Article 378.- Termination of civil obligations due to waiver of the performance of obligations

1. A civil obligation shall terminate when the obligee waives the performance of obligation for the obligor, unless otherwise provided for by law.

2. When a secured obligation is waived, the security arrangement shall also terminate.

Article 379.- Termination of a civil obligation by substitution with another civil obligation

1. In cases where the parties agree to substitute the original civil obligation with another civil obligation, the original civil obligation shall terminate.

2. The civil obligation shall also terminate if the obligee has accepted another property or another task as a substitute for the property or the task previously agreed upon.

3. In cases where the civil obligation is an obligation to provide support payment, to pay compensation for damage due to infringement on the life, health, honor, dignity and reputation, or other personal obligation which cannot be transferred to other person, then it shall not be substituted with another obligation.

Article 380.- Termination of civil obligations by offsetting obligations

1. In cases where two parties have reciprocal obligations with respect to properties of the same type and both of which are due, they shall not have to perform obligations to each other and the obligations shall be deemed terminated, except otherwise provided for by law.

2. In cases where the values of the properties or the tasks are different, the parties shall pay the difference in value to each other.

3. Objects which can be valued in money may be used to offset the payment obligation.

Article 381.- Cases where civil obligations must not be offset

A civil obligation must not be offset in the following cases:

1. The civil obligation is in dispute;

2. The obligation is to compensate for damage to life, health, dignity, honor or reputation;

3. The obligation is to provide support payment;

4. Other obligations provided for by law.

Article 382.- Termination of civil obligations when the obligor and the obligee merge

When the obligor becomes the obligee with respect to that particular obligation, the civil obligation shall terminate.

Article 383.- Termination of civil obligations due to expiration of the statute of limitations for exemption from civil obligations

When the statute of limitations for exemption from civil obligations expires, the obligations shall terminate.

Article 384.- Termination of civil obligations when the obligor being an individual dies or being a legal person, or another subject ceases to exist

When it is agreed upon by the parties or provided for by law that the obligation must be performed by the obligor him/her/itself, but such individual has died or the legal person or other subject has ceased to exist, then that obligation shall terminate.

Article 385.- Termination of civil obligations when the obligee being an individual dies or being a legal person or other subject ceases to exist

When it is agreed upon by the parties or provided for by law that the obligation shall be performed only for the individual, the legal person or the other subject, that is the obligee, but such individual has died or such legal person or other subject has ceased to exist, then that obligation shall also terminate.

Article 386.- Termination of civil obligation when distinctive objects no longer exist

The obligation to hand over an object shall terminate in cases where the object to be handed over is a distinctive object which no longer exists.

The parties may agree on the substitution with another object or compensation for damage.

Article 387.- Termination of civil obligations in case of bankruptcy

In case of bankruptcy, civil obligations shall terminate in accordance with the provisions of law on bankruptcy.

Section 7. CIVIL CONTRACTS

I. ENTRY INTO CIVIL CONTRACTS

Article 388.- Definition of civil contracts

A civil contract is an agreement between the parties to establish, change or terminate civil rights and/or obligations.

Article 389.- Principles for entering into civil contracts

The entry into a civil contract must adhere to the following principles:

1. Freedom to enter into the contract, provided that it is not contrary to law and social ethics;

2. Voluntariness, equality, goodwill, cooperation, honesty and good faith.

Article 390.- Offering to enter into civil contracts

1. Offering to enter into a contract means the expression of the intention to enter into the contract and to be bound on this offer of the offering party to the other specified party.

2. In cases where the offer to enter into a contract clearly state the time limit for reply and the offer or enters into the contract with a third party within such time limit, he/she/it must pay compensation for damage to the offeree and must not enter into the contract if damage is caused.

Article 391.- Time when an offer to enter into a civil contract takes effect

1. The time when an offer to enter into a civil contract takes effect shall be determined as follows:

a/ It is fixed by the offeror;

b/ If the offeror does not fix such time, the offer to enter into a civil contract shall take effect from the time the offeree receives such offer.

2. An offer to enter into a contract shall be considered having already been received in the following cases:

a/ The offer is transferred to the place of residence, if the offeree is an individual; to the headquarters, if the offeree is a legal person;

b/ The offer is introduced into the official information system of the offeree;

c/ When the offeree knew the offer to enter into the contract by another mode.

Article 392.- Modification, revocation of offers to enter into civil contracts

1. The offeror may modify or revoke his/her offer to enter into a contract in the following cases:

a/ If the offeree receives the notice on modification or revocation of offer before or simultaneously with the time of receiving the offer;

b/ The conditions for modification or revocation of the offer arise in cases where the offeror has clearly stated the eligibility for modification or revocation of the offer when such conditions arise.

2. When the offeror changes the contents of the offer, such offer shall be considered a new offer.

Article 393.- Cancellation of offers to enter into contracts

Where the offeror exercises the right to cancel the offer as such right has been clearly stated in the offer, he/she/it must notify the offeree thereof and such notification shall take effect only when it is received by the offeree before the offeree replies to accept the offer to enter into the contract.

Article 394.- Termination of offers to enter into contracts

An offer to enter into a contract shall terminate in the following cases:

1. The offeree replies not to accept the offer;

2. The time limit for reply of acceptance has expired.

3. When the notice on modication or revocation of the offer takes effect;

4. When the notice on cancellation of the offer takes effect;

5. It is so agreed upon by the offeror and the offeree within the time limit for reply by the offeree

Article 395.- Offer modification proposed by the offeree

When the offeree accepts to enter into a contract but states the conditions therefore or modifies the offer, he/she/it shall be considered having made a new offer.

Article 396.- Acceptance of offers to enter into contracts

The acceptance of an offer to enter into a contract is the offeree’s reply to the offeror on the acceptance of the whole contents of the offer.

Article 397.- Time limit for reply of acceptance of an offer to enter into a contract

1. When the offeror fixes a time limit for reply, the reply of acceptance shall be effective only when it is made within that time limit; if the offeror receives the reply when the time limit for reply has expired, the acceptance shall be considered a new offer of the party late in replying.

In cases where the notice on acceptance of an offer to enter into a contract arrives late for objective reasons which the offeror knew or would have known, such notice on acceptance of the offer to enter into the contract remains effective, except for cases where the offeror immediately replies not to agree with such acceptance of the offeree.

2. When the parties are in direct contact, including contacts via telephone or other means, the offeree must immediately reply whether to accept the offer or not, except for cases where there in an agreement on the time limit for reply.

Article 398.- Cases where offerors die or lose their civil act capacity

In cases where the offeror dies or loses his/her civil act capacity after the offeree accepts to enter into the contract, the offer to enter into the contract remains valid.

Article 399.- Cases where offerees die or lose their civil act capacity

In cases where the offeree dies or loses his/her civil act capacity after making his/her reply to accept the offer to enter into the contract, the reply of acceptance to enter into the contract remains valid.

Article 400.- Revocation of notice on acceptance to enter into contracts

The offeree may revoke his/her notice on acceptance to enter into a contract if such notice arrives before or simultaneously with the time the offeror receives the reply of acceptance.

Article 401.- Forms of civil contract

1. A civil contract can be made orally, in writing or by specific acts, unless a specific form for such type of contract is provided for by law.

2. In cases where it is provided for by law that a contract must be expressed in writing with notarization or authentication, must be registered or permitted, such provisions shall be complied with.

Contracts shall not be invalidated in case of form-related breaches, unless otherwise provided for by law.

Article 402.- Contents of civil contracts

Depending on each type of contract, the parties may agree on the following contents:

1. Object of the contract, which is a property to be handed over, or a task to be performed or not to be performed;

2. Quantity and quality;

3. Price and mode of payment;

4. Time limit, place and mode of performing the contract;

5. Rights and obligations of the parties;

6. Liability for breach of contract;

7. Sanction against breach of contract;

8. Other contents.

Article 403.- Places of entry into civil contracts

The place where a civil contract is entered into shall be agreed upon by the parties; in the absence of such agreement, the place of entry into a civil contract shall be the place of residence of the individual or the head-office of the legal person that has made the offer to enter into the contract.

Article 404.- Time of entry into civil contracts

1. A civil contract shall be entered into at the time when the offeror receives the reply of acceptance to enter into the contract.

2. A civil contract shall also be considered having been entered into when the time limit for reply has expired and the offeree remains silent, if it is agreed upon by the parties that silence means the reply of acceptance.

3. The time of entry into an oral contract shall be the time at which the parties have agreed on the contents of the contract.

4. The time of entry into a written contract shall be the time at which the last party signs the contract.

Article 405.- Effect of civil contracts

Contracts that are legally entered into shall take effect from the time they are entered into, unless otherwise agreed upon or provided for by law.

Article 406.- Main types of civil contract

Contracts shall have the following main types:

1. Bilateral contract, which is a contract under which a party has the obligation to the other;

2. Unilateral contract, which is a contract under which only one party has the obligation;

3. Principal contract, which is a contract the effect of which does not depend on the auxiliary contract;

4. Auxiliary contract, which is a contract the effect of which depends on the principal contract;

5. Contract for the benefit of a third party, which is a contract under which the contracting parties must perform their obligations and the third party shall enjoy benefits from the performance of such obligations;

6. Conditional contract, which is a contract the performance of which depends on the occurrence, change or termination of a certain event.

Article 407.- Standardized contracts

1. A standardized contract is a contract which contains provisions prepared by one party according to a standard contract and given to the other party for reply within a reasonable period of time; if the offeree gives its reply of acceptance, he/she/it shall be considered having accepted the entire content of the standardized contract offered by the offeror.

2. In cases where a standardized contract contains ambiguous provisions, the offeror of the standardized contract shall bear adverse consequences of the interpretation of such provisions.

3. In cases where a standardized contract contains provisions exempting the liability of the offeror of the standardized contract, while increasing the responsibility or abolishing legitimate interests of the other party, such provisions shall not be valid, unless otherwise agreed upon.

Article 408.- Appendices to contracts

1. Appendices may be attached to a contract to detail some provisions of the contract. Appendices shall be as effective as the contract. The contents of appendices shall not be contrary to the contents of the contract.

2. In cases where appendices contain provisions contrary to the contractual provisions, such provisions shall not be valid, unless otherwise agreed upon. In cases where the parties accept appendices with provisions contrary to contractual provisions, such contractual provisions shall be considered having been amended.

Article 409.- Interpretation of civil contracts

1. When a contract contains ambiguous provisions, the interpretation of such provisions shall be based not only on the wording of the contract but also on the mutual intentions of the parties.

2. When a contractual provision may be construed in several meanings, the meaning which makes the implementation of such provision most beneficial to the parties shall be selected.

3. When a contract contains wordings that may be construed in different meanings, such wordings must be interpreted according to the meaning which is most appropriate to the nature of the contract.

4. When a contract contains a provision or wording that is difficult to understand, such provision or wording must be interpreted according to practices at the place where the contract is entered into.

5. When a contract lacks some provisions, such provisions may be supplemented according to practices at the place where the contract is entered into.

6. The provisions of a contract must be interpreted in relation to each other, so that the meanings of such provisions conform to the whole contents of the contract.

7. In case of contradiction between the mutual intentions of the parties and the contractual wordings, the mutual intentions of the parties shall be used for interpretation of the contract.

8. In cases where the advantageous party includes in the contract the contents unfavorable for the disadvantageous party, the interpretation of the contract must be made along the direction of benefiting the disadvantageous party.

Article 410.- Invalid civil contracts

1. The provisions on invalid civil transactions in Articles 127 thru 138 of this Code shall also apply to invalid contracts.

2. The invalidation of principal contracts shall terminate the auxiliary contracts, except in cases where the parties agree that the auxiliary contracts can replace the principal contracts. This provision shall not apply to the security measures for performance of civil obligations.

3. The invalidation of the auxiliary contracts shall not terminate the principal contracts, except for cases where the parties agree that the auxiliary contracts constitute inseparable parts of the principal contracts.

Article 411.- Civil contracts invalidated due to the existence of objects which cannot be realized

1. In cases where a contract, right at the time it is entered into, contains an object which cannot be realized for objective reasons, such contract shall be invalidated.

2. In cases where a contract is entered into and a party knew or would have known that the contract contains an object which cannot be realized but fails to notify such to the other party that has, therefore, entered into the contract, the former must pay damages to the other party, except for cases where the other party knew or would have known the object which cannot be realized.

3. The provisions of Clause 2 of this Article shall also apply to cases where a contract contains one or many parts of an unrealizable object, while the remaining part of the contract remains legally valid.

II. PERFORMANCE OF CIVIL CONTRACTS

Article 412.- Principles for the performance of civil contracts

The performance of a civil contract must conform to the following principles:

1. It must be performed in accordance with the agreement on the object, quality, quantity, category, time limit, methods and other agreements;

2. It must be performed honestly and in the spirit of cooperation and in a manner that best benefits the parties and ensures mutual trust;

3. It must not infringe upon State interests, public interests or legitimate rights and interests of other persons.

Article 413.- Performance of unilateral contracts

With respect to unilateral contracts, the obligor must perform the obligation strictly as agreed upon and may only perform the obligation prior to or after the time limit, if the obligee so consents.

Article 414.- Performance of bilateral contracts

1. With respect to bilateral contracts where the parties have agreed upon the time limit for performing the obligations, each party must perform its obligations when they become due; must not delay the performance for the reason that the other party has not yet performed its obligations to the former, except for cases provided for in Article 415 and Article 417 of this Code.

2. In cases where the parties have no agreement on which party should perform his/her/its obligation first, the parties must concurrently perform their obligations to each other; if the obligations cannot be performed concurrently, the obligation the performance of which takes more time than others shall be performed first.

Article 415.- The right to post-pone the performance of civil obligations in bilateral contracts

1. The party that must perform its obligations first shall have the right to postpone the performance of such obligations, if the other party’s property has seriously depreciated to the extent that the obligations cannot be performed as committed until the other party has the capability to perform its obligations or has a guarantor.

2. The party that must perform its obligations later shall have the right to postpone the performance of due obligations if the party that must perform its obligations first has not yet performed its obligations when they are due.

Article 416.- Lien on property in bilateral contracts

1. 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.

2. The lienor shall have the following rights and obligations:

a/ To retain the whole or part of the property in the cases defined in Clause 1 of this Article;

b/ To enjoy yields from the property subject to a lien and use them to offset the obligations;

c/ To keep and preserve the property subject to a lien;

d/ To request the owner of the property subject to a lien to pay necessary expenses for the keeping and preservation of such property.

3. A lien shall terminate in the following cases:

a/ It is so agreed upon by the parties;

b/ The lienor violates the obligation to keep and preserve the property subject to a lien;

c/ The owner of the property subject to a lien has fulfilled their obligations.

Article 417.- Non-performance of obligations due to the obligee’s fault

When a party to a bilateral contract is unable to perform its obligations due to the fault of the other party, the former shall have the right to demand that the other party still perform its obligations toward the former or to cancel the contract and demand compensation for damage.

Article 418.- Non-performance of obligations but not due to the faults of the parties

When a party to a bilateral contract is unable to perform its obligations but the parties are not at fault, the non-performer of the obligations shall have no right to demand that the other party perform its obligations toward him/her/it. In cases where a party has performed part of the obligations, it shall have the right to demand the other party perform the corresponding part of the obligations toward it.

Article 419.- Performance of a contract for the benefit of a third party

When a contract is performed for the benefit of a third party, the third party shall have the right to directly request the obligor to perform the obligation toward it; if there appears a dispute between the parties over the performance of the contract, the third party shall not have the right to demand the performance of the obligation until the dispute is settled.

The obligee may also demand that the obligor perform the contract for the benefit of the third party.

Article 420.- A third party’s right to refuse

In cases where a third party refuses to enjoy its benefits before the obligor performs his/her/its obligations, the obligor shall not have to perform his/her/its obligations, but must notify the obligee thereof, and the contract shall be considered having been rescinded; the parties shall have to return to each other what they have received; if the third party refuses to enjoy its benefits after the obligor has performed his/her/its obligations, the obligations shall be considered having been fulfilled and the obligee must still fulfill his/her/its commitments toward the obligor.

Article 421.- No amendment or rescission of contracts for the benefits of a third party

Once the third party has agreed to enjoy the benefits, the parties to the contract must not amend or rescind the contract, even though the contract has not yet been performed, unless the third party so consents.

Article 422.- Performance of contracts with agreement on sanction against violations

1. Sanction against violation means an agreement between the contractual parties that the party violating the obligation must pay a sum of money to the violated party.

2. The sanctioning level shall be agreed upon by the parties.

3. The parties may agree that the violating party shall only pay a fine for the violation but not have to pay compensation for damage or shall have to pay both the fine for the violation and compensation for damage; in the absence of prior agreement on the level of compensation for damage, the compensation for the whole damage must be paid.

In cases where the parties have no agreement on compensation for damage, the violating party shall have to pay only the fine for the violation.

III. AMENDMENT AND TERMINATION OF CIVIL CONTRACTS

Article 423.- Amendment of civil contracts

1. The parties may agree to amend their contracts and resolve the consequences of such amendment, unless otherwise provided for by law.

2. In cases where a contract has been made in writing, notarized or authenticated, registered or permitted, the amendment of the contract must also conform to such form.

Article 424.- Termination of civil contracts

A contract shall terminate in the following cases:

1. The contract has been fulfilled;

2. It is so agreed upon by the parties;

3. The individual entering into the contract dies, or the legal person or other subjects entering into the contract cease to exist while the contract must be performed by that very individual, legal person or subjects;

4. The contract is rescinded or unilaterally suspended from performance;

5. The contract cannot be performed because its object no longer exists, and the parties may agree to substitute such object with another object or compensate for damage;

6. Other cases provided for by law.

Article 425.- Rescission of civil contracts

1. A party shall have the right to rescind a contract without having to compensate for damage if the breach of the contract by the other party is a condition for rescission, as agreed by the parties or provided for by law.

2. The party rescinding the contract must immediately notify the other party of the rescission; if failing to give notification, thereby causing damage, it shall have to pay compensation therefore;

3. When a contract is rescinded, it shall cease to be valid ad initio and the parties must return to each other the property they have received; if the property cannot be returned in kind, then it shall be paid for in money.

4. The party at fault in the rescission of the contract shall have to compensate for damage.

Article 426.- Unilateral termination of performance of civil contracts

1. A party shall have the right to unilaterally terminate the performance of a contract if so agreed upon by the parties or provided for by law.

2. The party that unilaterally terminates the performance of the contract must immediately notify the other party of the termination; if failing to give notification, thereby causing damage, it shall have to pay compensation therefore.

3. When the performance of a contract is unilaterally terminated, the contract shall terminate as from the time the other party receives the termination notice. The parties shall not have to continue to perform their obligations. The party that has already performed its obligations shall have the right to demand payment from the other party.

4. The party at fault in the unilateral termination of a contract must compensate for damage.

Article 427.- Statute of limitations for initiating lawsuits related to civil contracts

The statute of limitations for initiating lawsuits to request the courts to settle disputes over civil contracts shall be two years counting from the date legitimate rights and interests of individuals, legal persons or other subjects are infringed upon.