Do Giang Nam is a lecturer at the Civil Law Department, School of Law, Vietnam National University, Ha Noi, Viet Nam. He graduated from Viet Nam National University as a Valedictorian for undergraduate class of 2005-2009. He continued his LLM in Comparative Law in SMU Dedman School of Law, the USA in 2012 before earning his PhD degree at Utrecht University, the Netherlands in 2017. His research interest includes contract law, property law, comparative law, consumer protection law and legal education.
Pacta sunt servanda under Vietnamese contract law
Abstract:
Corresponding to the profound social, political and economic changes in Vietnamese society, Vietnamese contract law has experienced fundamental changes during the 20th century. The first wave of change is the adoption of the 1995 Vietnamese Civil Code (VCC), which explicitly recognized the principle of freedom of contract and its sister principle of pacta sunt servandaas core pillars of Vietnamese contract law. In the 1995 VCC, the doctrine of force majeure was recognised as a single major exception of the principle of pacta sunt servanda. Apart from such force majeure events causing the impossibility of performance, it was, until recently, irrelevant under Vietnamese contract law if a supervening event only made performance severely onerous to a contracting party. Thus, the position of Vietnamese contract law up until the introduction of the 2015 VCC can be referred to as a “all-or-nothing” model: either performance is made impossible and the debtor is exempted from damages on the ground of force majeure, or the contract would be performed at whatever cost. However, it was argued that the traditional “all-or-nothing” approach is too rigid to satisfy the demand of a modern economy where parties are daily faced with unforeseeable change of circumstances in comparison with the circumstance that existed at the time of formation of contract. On the occasion of re-codifying Vietnamese private law, the Vietnamese government has made numerous efforts to establish a new doctrine of change of circumstances in order to protect the rights of the affected party in hardship. However, even scholars who supported this doctrine, still powerfully raised their concerns that the unwise design of such provision would lead to the undesired effect of thwarting legal certainty- one of the value pillars of Vietnamese contract law which Vietnamese legal community have been tirelessly struggled for more than 20 years. Against this backdrop, this chapter will examine the historical development and the legal significance of the principle of pacta sunt servanda under Vietnamese modern contract law.