Dang Minh Law Consultancy

31/03/2021

DETERMINATION OF COMPENSATION FOR DAMAGES WHEN THE COMPONENTS TERMINATED CONTRACT WITHOUT LAW

Situation: My company has signed a lease contract for 4 container trucks from company A, effective
from the date of signing to December 31, 2020. The tern of contract is 2 years. Around July 30, 2020, because there is no longer the need to use, my company has sent a written notice to terminate the contract ahead of time but has not been agreed by company A (there is no term in the contract terminate the contract).
Now Company A sues and requires my company to pay damages. How should my company compensate Company A?
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We would like to advise your company as follows:
According to Article 303 Law on Commerce 2005, the basis of arising of liability for damages is determined as follows:
Except for cases of liability exemption specified in Article 294 of this Law, liability for compensation Harm arises when the following factors are fully satisfied:
1. Having acts of breach of contract;
2. There is actual damage;
3. The act of breaching the contract is the direct cause of the damage.
According to the content of this case, this is a term lease contract and the parties are only allowed to terminate the lease when the term is terminated (because the parties have no agreement on terminating the contract ahead of time). Therefore, your company's unilateral termination of the contract is a breach of the contract due to the company's consent (Article 428 Law on Civil 2015 Unilateral termination of performance of contracts
Because your company's unilateral termination of the contract is the main cause to make the damage to company A - the benefit that company A is entitled to during the rest of the lease contract, so your company has to compensate company A for the damage.
Calculation of The value of damages
According to Clause 2 of Article 302 Law on Commerce, 2005 The value of damages covers the value of the material and direct loss suffered by the aggrieved party due to the breach of the breaching party and the direct profit which the aggrieved party would have earned if such breach had not been committed. Since you did not specify the details of the case, I would like to advise as follows:
In case your company only leases 4 container trucks, which means company A has no obligation to provide fuel and manpower to exploit, the compensation is determined as the benefit of the remaining 5 months of the contract.
In the case, the contract, there is a provision that company A has an obligation to supply raw materials for the use of 4 container trucks and has to allocate manpower to operate the vehicle. Thus, in order to receive the rent (the value of the contract), company A have to perform that obligation. However, the contract is terminated ahead of time so company A does not have to allocate staff to operate the vehicle so company A does not have to pay or pay less for the staff.
Besides, if in the remaining 5 months of the contract, it is assumed that after 2 months company A has found a replacement partner for the previous contract, in the remaining 3 months, they already had the rental from the new partner, so those 3 months is not considered damage. Thus, the compensation is for about 2 months when they have not found a new tenant.
In addition, there are other damages that Company A have to prove when claiming damages (Article 304 Law on Commerce, 2005 Burden of proof of loss).

From the above analysis, the compensation value that your company has to pay Company A is: The benefit of the remaining 5 months of the contract – the cost of operating the vehicle provided by company A (if any) - the benefit received for the month in which Company A has a replacement contract for the remaining 5 months of the previous contract.the benefit received for the month in which Company A has a replacement contract for the remaining 5 months of the previous contract (if any) + the other damages (if any)
If any).
In addition to the consultant above, you could refer Case law: 21/2018/AL on error and damage in case of unilateral termination of the lease of property.

11/03/2021

The Government has drafted a Decree to extend the deadline for paying taxes, and land lease in 2021 as previously proposed by the Ministry of Finance to conserve and motivate the economy because of Covid-19.
Accordingly, the total amount of extend tax payment and land lease proposed by this agency is 115.00 billion VND, including 68.800 billion VND of value-added tax, 40.500 billion VND of corporate income tax, 4.400 billion VND of land lease, 1.300 billion taxes of individuals and business households.
- To the grace period for paying taxes, and land lease, the Ministry of Finance proposes a five-month extension with the payable value-added tax amount of the tax period from January 2021 to June 2021 in the case of monthly tax declaration. In the case of quarterly tax declaration, this agency proposes to extend five months with the payable tax amount for the tax period of quarter 1-2021 and quarter 2-2021.
- To corporate income tax, this agency proposes an extension of three months with the provisional tax of the first quarter and second quarter of the tax period of 2021.
- To the land lease, the Ministry of Finance proposes an extension of the amount land lease payable in the first period of 2021 of the enterprises, organizations, business households, and individuals that are directly leased land by the State in the form of annual payments under decisions or contracts of State agencies authorization. The grace period is six months from May 31, 2021.
(Flowing to SaigonTimes )

10/03/2021

WHEN THE COMMA BECOMES THE LEGAL BATTEL.
https://www.nytimes.com/2017/03/16/us/oxford-comma-lawsuit.html?_r=0&fbclid=IwAR01yozFEICQeTseJOVeWpthLwNe2qefRyt_B9Kp5kh7dLMFFn-kE-_ktnI
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What is the difference meaning of A and B? Let us know your opinion.
-> A The canning, processing, preserving, freezing, drying, marketing, storing, packing for shipment or distribution of:
(1) Agricultural produce;
(2) Meat and fish products; and
(3) Perishable foods.
-> B The canning, processing, preserving, freezing, drying, marketing, storing, packing for shipment, or distribution of:
(1) Agricultural produce;
(2) Meat and fish products; and
(3) Perishable foods.
Read the interesting arguments of the parties to protect their legitimate rights:
https://cases.justia.com/federal/appellate-courts/ca1/16-1901/16-1901-2017-03-13.pdf?ts=1489437006

An appeals court ruling on Monday was a victory for truck drivers and punctuation pedants.

05/03/2021

Is the legal solution specified in Clause 2, Article 12 of the 2020 Enterprise Law really effective when disputes arise in the contractual relationship?

Nothing worth discussing, If, a contract is signed with a company’s charter specify the quantity, position, rights and obligations of its legal representatives. Because, It is very easy to identify who has the authority to enter into a contract. However, not all companies have specific regulations on the rights and obligations of each legal representative to help us can know who is eligible to enter into a contract. If, a contract is signed by a representative of the company that has many representatives but does not specify in the charter or the provisions are confusing or confusing about the rights and obligations of each person.
What is the legal risk for this contract when a dispute arises?
According to the Law on Enterprises, in case the division of rights and obligations of each legal representative is not specified in the company's charter, each legal representative of the company is the authorized representative of the company before a third party means anyone who has the authority to represent the company to enter into a contract and the contract is automatically valid.
In the fact, when a dispute arises, the parties will bring in a lawsuit to the Court. When studying the case file, the Court will have different viewpoint and interpretation from our understanding. So, the risk of this contract being declared invalid is relatively high because of infringement on the authority of representation.
To avoid the above risk, we advise that businesses should choose one of the followings three solutions:
(1) Requirement all legal representatives included in the company's charter to have to sign the contract;
(2) Requirement has to have a power of attorney from all of legal representatives for one representative to sign the contract;
(3) Requirement Company records specify the authority of each representative to sign the contract.
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Clause 2, Article 12 - The enterprise’s legal representative of the 2020 Enterprise Law:
"A limited liability company or joint stock company may have one or more than one legal representative. The enterprise’s charter shall specify the quantity, position, rights and obligations of its legal representatives. In case there are more than one legal representative, the charter shall specify the rights and obligations of each of them. Otherwise, each of the legal representatives shall fully representative the enterprise and take joint responsibility for any damage to the enterprise as prescribed by civil laws and relevant laws".

04/03/2021

Dang Minh law consultancy protects the client's legitimate rights in a civil case of reclaiming property at the Court of Vinhbao district in Haiphong city.