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Several new content of the Civil Code 2015

Civil Code No. 91/2015/QH13 was passed by the National Assembly on November 24, 2015. (“Civil Code 2015”) has 689 articles, is organized into six sections, 27 chapters with a number of new amendments and:

1.  Abrogating the regulation on person(s) without civil act capacity (Article 21 of the Civil Code 2005) and simultaneously supplementing the case of persons with limited cognition or behavior control (Article 23 of the Civil Code 2015).

2.  Clearly distinguishing “commercial juridical person” and “non-commercial juridical person.” (i) Commercial juridical person(s) include enterprises and other business entities, which means a juridical person whose primary purpose is seeking profits and its profits shall be distributed to its members; and (ii) Non-commercial juridical person(s) include regulatory agencies, people's armed units, political organizations, socio-political organizations, etc., which means a juridical person whose primary purpose is not seeking profits and should subsequent profits be made, a non-commercial juridical person may not distribute these profits to its members.

3.  The Civil Code 2015 also clarifies the rate of interest in loan agreements (Article 468) as follows:

(i) The rate of interest for a loan agreed by the parties may not exceed 20% per year, unless otherwise prescribed by law. This rate may be revised from time to time by the Standing Committee of National Assembly. If the agreed interest exceeds the maximum interest as prescribed in this law, the exceeded interest shall become invalid; and

(ii) In case the parties agree that interest will be payable but fail to specify the interest rate, or where there is a dispute as to the interest rate, the interest rate for the duration of the loan shall equal to 50% of the above-mentioned maximum interest.

4.  Performance of contract upon the basic change of circumstances is also a notable point in the 2015 Civil Code:

(i) In case of basic change of circumstances, the affected party may request the other party re-negotiate the contract within a reasonable period of time (Article 420.2); and

(ii) If the parties fail to re-negotiate the contract, any of the parties may request competent court to either terminate the contract at a specific time, or to amend the contract to balance the lawful rights and interests of the parties, which may only be implemented in case the termination of contract would cause greater damage than the cost to perform the modified contract.

The Civil Code 2015 will take effect from 01 January 2017.