Vietnamese Law on Consumer Protection (LoCP)
Contracts between traders and consumers and general trading conditions
Contracts between traders and consumers, along with general trading conditions, are addressed by Vietnamese law for the first time in the LoCP. Under Article 14 of the LoCP, the language of a written contract must be clear and easily understood. Furthermore, the language of the contract must be in Vietnamese, unless the parties or the law provides otherwise. Traders must make it easy for consumers to review electronic contracts in their entirety prior to execution.
The law also specifies clauses and general trading conditions which are invalid; for example, a clause that allows the trader to assign rights and obligations to a third party without the consumer's consent is invalid under the LoCP.
The LoCP places particular focus on standard form contracts-that is, the trader's own form of contract-and general trading conditions. If a trader conducts business in products or services that appear on a list of essential products and services promulgated by the Government, it must register its standard form contract and its general trading conditions with the State administrative body for consumer protection.5
The State administrative body for consumer protection may, at its own discretion, rescind or amend, or require the trader to rescind or amend, a standard form contract or general trading conditions which breach consumers' rights. Ten articles in chapter III of Decree 99/2011/ND-CP of the Government dated October 27, 2011, which implement articles of the LoCP ("Decree 99"), relate to standard form contracts and general trading conditions. They specify general requirements for standard form contracts and general trading conditions, along with registration procedures and forms. They also deal with control of standard form contracts and general trading conditions which are not subject to registration.
Defective products
Oddly, there is no definition of a "product" even in the LoCP. Generally, however, a "product" is an item that has been supplied by a trader, whether or not the item is manufactured in Vietnam. It includes such diverse offerings as agricultural produce, games, components, electricity, vehicles, and pharmaceutical products. As these examples show, the concept of a "product" as the term is used in the LoCP is very broad. Traders may have difficulties in determining whether the item they are offering is a "product," and may also have difficulty assessing defects of the product or determining who is liable for a defect. For example, are blood, body organs, and second-hand products considered "products"? If the answer is "yes", to what extent and in what respect can they be considered defective? Who is liable for "defects" in such a product?
The Law on Quality of Products and Goods ("LoQPG")6 mentions "defect" of products. However, the word "defect" seems to mean only "poor quality". Article 3.3 of the LoCP goes beyond this. Under the LoCP, a defective product is a product which is not safe for consumers and which can cause death, personal injury, or property damage, even if those products have been manufactured in accordance with current technical standards or specifications, and even if the manufacturer is not aware of the defects at the time the products are sold. There may be defects in the technical design of mass manufactured products. Defects may arise from the manufacture, processing, transport, or storage of singly manufactured products. Defects may also result from a failure to provide adequate instructions or warnings on potentially dangerous products.
In other words, quality is not the only factor involved in determining whether a product is defective under the LoCP. One must also consider design, whether consumers are properly instructed on use, or whether the consumer has been warned of dangers.
Who is liable for product defects?
According to Article 23 of the LoCP, traders are liable to compensate for any damage caused by defective products. In this context, traders are organizations that manufacture or import products, or hold themselves out to be manufacturers or importers by affixing their own name or trademark to the products ("brand owners"). Sellers may be liable if they fail to identify the manufacturers, importers, or brand owners of the defective products. However, the LoCP has not separated liabilities among manufacturers, importers, or brand owners. They must arrange among themselves who will ultimately be liable for defective products in their business contracts.