Goods and commercial activities

Today commercial activity is very popular. However, to understand how the Law regulates commercial activities and goods in commercial activities? LS Law Firm would like to summarize some contents as follows:

What is merchandise?

Goods as defined in Clause 2, Article 3 of the Commercial Law 2005 are “all kinds of real estate, including real estate formed in the future, things attached to land”. Real estate and movable property as defined in Article 107 of the Civil Code 2015 include:

“1. 1. Immovable shall includes:

1. a) Land;
2. b) Houses and constructions attached to the land;
3. c) Other properties attached to the land, houses and constructions;
4. d) Other properties prescribed by law.
5. Moveablesare propertiseother than immovables.”

Thus, it is possible to use the exclusion method to distinguish between real estate and immovable property. However, this poses a problem based on the concept of goods in Clause 2, Article 3 of the Commercial Law 2005, in case the two parties have signed a contract to buy and sell the property of 100 condominiums that have not built the foundation in accordance with the law. Then either party requests to cancel the contract to get the money back and in the terms of the contract also stipulates that both parties will settle the dispute at the Vietnam International Arbitration Center. Therefore, two cases will occur:

• First case:  If the two parties are Vietnamese enterprises, the settlement of the dispute by Vietnam International Arbitration Center is completely grounded.
• Second case: If either party is a foreign company, it will lead to the invalidity of the Arbitration Agreement provided by Point a, Clause 1, Article 470 of the Civil Procedure Code 2015: “1.The following civil cases involving foreign elements fall under the exclusive jurisdiction of the Vietnamese Courts:
  a/ A civil case involving the rights to a property being an immovable in the Vietnamese territory;”

Because the concept of goods under the Commercial Law 2005 is quite broad, including real estate formed in the future, the construction works are also considered goods. But the same agreement, a dispute resolution agency but with differences, will easily cause a feeling of discrimination between domestic and foreign enterprises. When Vietnam becomes a strategic partner with many countries in the world, it is necessary to adjust in accordance with the practice of the concept of goods specified in Clause 3, Article 2 of the Commercial Law 2005.

What is commercial activity?

Commercial activities shall be construed in the narrow sense specified in Clause 1, Article 3 of the Commercial Law 2005 as follows: “Commercial activities are activities for the purpose of generating profits, including: sale and purchase of goods, provision of services, investment, commercial promotion and other activities for the profit purposes”. From this concept, it poses a problem that “profit purpose” is understood as a profit purpose, so whether charitable activities, internal activities of the company such as annual tourism or buying raw materials for the purpose of improving the working space of employees, these are activities not for profit purposes. Therefore, based on the provisions of Clause 1, Article 3 of the Commercial Law 2005 not considered commercial activities, is it really worth it?. When these activities take place, the dispute is of course not considered a commercial dispute. Although the two parties make the exchange, the purchase is between the traders. Although the Commercial Law is considered as the “merchant’s law”, it is not automatically applied when both parties to the dispute are traders.

In addition, commercial activities are understood in a broader sense as business activities including the activities of buying and selling goods, providing services, investing activities for production in the form of direct investment and indirect investment, governed by various laws. Not only is it governed by the Commercial Law but it is also governed by the Investment Law, the Enterprise Law, the Real Estate Business Law, the Securities Law…

From the above analysis, we can see the difference between commercial activities understood in a broad and narrow sense because the Commercial Law 2005 only focuses on business activities in two stages such as circulation, services and not including investment and production.

Recommendation of LS Law Firm Limited and Associates “LS Law Firm”

Above are the basic contents of Goods and commercial activities based on the provisions of law at the time of implementation of the article. If you need advice on the above issues or are interested in other related legal services, please contact the experts and lawyers of LS Law Firm by Email: lslawfirm2014@gmail.com for timely advice and assistance.

Note: The above article is for reference only, all copying and uses the article as its own  evidence in any case without the consent of LS Law Firm is not allowed./.