THE NATIONAL 
ASSEMBLY  
--------  SOCIALIST  REPUBLIC OF VIETNAM  
Independence - Freedom - Happiness  
---------------  
The Law No. 
91/2015/QH13  Hanoi, November 24, 2015  
  
CIVIL CODE  
Pursuant to the Constitution of the Socialist Republic of Vietnam;  
The Natio nal Assembly promulgates a Civil Code.  
PART ONE  
GENERAL PROVISIONS  
Chapter I  
GENERAL PROVISIONS  
Article 1. Scope  
The Civil Code provides the legal status, legal standards for the conduct of 
natural and juridical persons; the rights and obligations of natu ral and juridical 
person (hereinafter referred to as persons) regarding personal and property rights 
and obligations in relations established on the basis of equality, freedom of will, 
independence of property and self -responsibility (hereinafter referred to as civil 
relations).  
Article 2. Recognition, respect, protection and guarantee of civil rights  
1. In the Socialist Republic of Vietnam, all civil rights are recognized, respected, 
protected and guaranteed under the Constitution and law.  
2. Civil rights may be limited as prescribed in law in exceptional circumstances 
that due to national defense and security, social safety and order, social ethics 
and the community's health.  
Article 3. Basic principles of civil law  
1. Every person shall be equal in civil relations, may not use any reason for 
unequal treatment to others, and enjoy the same protection policies of law 
regarding moral rights and economic rights.  
2. Each person establishes, exercises/fulfills and terminates his/her civil rights 
and obligations on the basis of freely and voluntarily entering into commitments 2 
 
and/or agreements. Each commitment or agreement that does not violate 
regulations of law and is not contrary to social ethics shall be bound by 
contracting parties and must be respected by ot her entities.  
3. Each person must establish, exercise/ fulfill, or terminate his/her civil rights 
and/or obligations in the principle of goodwill and honesty.  
4. The establishment, exercise and termination of civil rights and/or obligations 
may not infrin ge national interests, pubic interests, lawful rights and interests of 
other persons.  
5. Each person shall be liable for his/her failure to fulfill or the incorrect 
fulfillment of any such civil obligations.  
Article 4. Application of the Civil Code  
1. Thi s Law is a common law that applies to civil relations.  
2. Any relevant law that applies to civil relations in specific fields may not be 
contrary to the basic principle of civil law prescribed in Article 3 of this Law.  
3. If another relevant law has no reg ulation or has regulations that infringe 
Clause 2 of this Article, the regulations of this Law shall apply.  
4. In cases where an international agreement to which the Socialist Republic of 
Vietnam is a signatory contains provisions different from the provis ions of this 
Code with regard to a same matter, the provisions of such agreement shall apply.  
Article 5.  Application of practices  
1. Practices mean rules of conduct obvious to define rights and obligations of 
persons in specific civil relations, forming a nd repeating in a long time, 
recognized and applying generally in a region, race, or a community or a field of 
civil.  
2. In cases where it is neither provided for by law nor agreed upon by the 
parties, practices may apply but they must not contravene the p rinciples 
provided for in Article 3 of this Code.  
Article 6. Application of analogy of law  
1. In cases where an issue rises under scope of civil law which it is neither 
provided for by law nor agreed upon by the parties nor, nor applied by practices, 
analo gy of law shall apply.  3 
 
2. In cases where it is impossible to apply analogy of law as prescribed in Clause 
1 of this Article, basic principles of civil law provided for in Article 3 of this 
Code, case law, and justice shall apply.  
Article 7. State policies on civil relations  
1. The establishment, performance and termination of civil rights and 
obligations must ensure the preservation of national identities, respect and 
promote good customs, practices and traditions, solidarity, mutual affection and 
cooperati on, the principle of every individual for the community and the 
community for every individual and the noble ethical values of ethnicities living 
together on Vietnamese soil.  
2. In civil relations, the conciliation between contracting parties in accordance  
with regulations of law shall be encouraged.  
Chapter II  
ESTABLISHMENT, EXERCISE AND PROTECTION OF CIVIL 
RIGHTS  
Article 8. Bases for establishment of civil rights  
Civil rights shall be established on the following bases:  
1. Contracts;  
2. Unilateral legal  acts; 
3. Decisions of courts or other competent state agencies as prescribed;  
4. Outcomes of labor, production and business; or creation of subjects of 
intellectual property rights;  
5. Possession of property;  
6. Illegal use of assets or illegal gain there from;  
7. Damage caused by an illegal act;  
8. Performance of a task without authorization;  
9. Other bases specified by law.  
Article 9. Exercise of civil rights  
1. Each person shall exercise his/her civil on his/her own will in accordance with 
Article 3 and  Article 10 of this Code.  4 
 
2. The non -exercise of civil rights does not constitute a basis for termination of 
those rights, unless otherwise prescribed by law.  
Article 10. Limitations on exercise of civil rights  
1. Each person may not abuse his/her own civ il rights to cause damage to other 
persons or violate his/her own obligations or for other unlawful purposes.  
2. If a person fails to comply with Clause 1 of this Article, a court or a 
competent agency shall, according to the nature and consequences of the  
violation, either protect part or the whole of his/her rights, compel him/her to 
given compensation and other sanctions as prescribed by law.  
Article 11. Methods for protecting civil rights  
If a person has his/her civil rights violated, he/she may protect  them 
himself/herself as prescribed in this Code, other relevant laws or request 
competent authorities to:  
1. Recognize, respect, protect and guarantee of his/her civil rights;  
2. Order the termination of the act of violation;  
3. Order a public apology and /or rectification;  
4. Order the performance of civil obligations;  
5. Order compensation for damage;  
6. Cancellation of isolated unlawful decision of competent agencies, 
organizations or persons;  
7. Other requirements specified by law.  
Article 12. Self -protection of civil rights  
The self -protection of a particular civil right must conform to the nature and 
severity of the violation against such civil right and be not contrary to basic 
principles of civil law prescribed in Article 3 of this Code.  
Article 13.  Compensation for damage  
Each person has his/her civil rights violated shall be eligible for total damage, 
unless otherwise agreed by parties or unless otherwise prescribed by law.  
Article 14. Protection of civil rights by competent authorities  
1. Each cou rt and a competent authority must respect and protect civil rights of 
persons.  5 
 
If a particular civil right is violated or is under a dispute, the protection of such 
right shall be implemented as prescribed in procedural law at the court or 
arbitrator.  
The protection of civil rights under administrative procedures shall be 
implemented as prescribed by law. A decision on settlement of case/matter 
under administrative procedures may be re -examined at a court.  
2. Each court may not refuse to settle a civil matt er or case with the season that 
there is no provision of law to apply; in this case, regulations in Article 5 and 
Article 6 of this Code shall apply.  
Article 15. Cancellation of isolated unlawful decisions of competent 
agencies, organizations or persons  
A court or a competent authority is entitled to cancel an isolated decision of 
another competent agency, organization or person, upon a request for protection 
of civil rights.  
If the isolated decision is cancelled, the civil right against which the decision  
violates shall be restored and protected by the methods prescribed in Article 11 
of this Code.  
Chapter III  
NATURAL PERSONS  
Section 1. LEGAL PERSONALITY AND LEGAL CAPACITY OF 
NATURAL PERSONS  
Article 16. Legal personality of natural persons  
1. The legal per sonality of a natural person is his/her capability to have civil 
rights and civil obligations.  
2. All individuals shall have the same legal personality.  
3. The legal personality of a natural person commences at birth and terminates at 
death.  
Article 17. Co ntents of the legal personality of a natural person  
1. Personal rights not associated with property, and personal rights associated 
with property.  
2. Ownership rights, inheritance rights and other rights with respect to property.  6 
 
3. Rights to participate i n civil relations and to assume obligations arising out of 
such relations.  
Article 18. No restrictions on the legal personality of natural persons  
The legal personality of a natural person shall not be restricted, unless otherwise 
provided for by law.  
Article 19. Legal capacity of natural persons  
The legal capacity of a natural person is his/her capability to establish and 
exercise civil rights and perform civil obligations through his/her acts.  
Article 20. Adults  
1. Adults are persons who are eighteen yea rs of age or older.  
2. Each adult shall have full legal capacity, except for the cases prescribed in 
Articles 22, 23 and 24 of this Code.  
Article 21. Minors  
1. Minors are persons who are under eighteen years of age.  
2. Civil transactions of each child un der six years of age shall be established and 
performed by his/her legal representative.  
3. Each person who is from six to under eighteen years of age must have the 
consent of his/her legal representative to enter in and perform civil transactions, 
except for civil transactions which are performed for the purpose of meeting the 
needs of daily life suitable for the age group.  
4. Each person who is from fifteen to under eighteen years of age is entitled to 
enter in and perform civil transactions by himself/he rself, except for civil 
transactions related to real estate, movables required registration and other civil 
transactions as prescribed by law that are subject to the consent of his/her legal 
representative.  
Article 22. Lack of legal capacity  
1. A court sh all, based on the opinion of forensic -psychiatric examination by any 
authorized organization and at the request of a person with related rights or 
interests or a relevant agency or organization, issue a decision to declare a 
legally incapacitated person wh o as a result of his/her mental or other illnesses 
cannot realize or conduct his/her actions.  7 
 
Where the basis on which a person has been declared incapacitated no longer 
exists, the court shall, at the request of such person or any person with related 
rights or interests, issue a decision to revoke the decision declaring the 
incapacitated person.  
2. All civil transactions of a legally incapacitated person shall be established and 
performed by his/her legal representative.  
Article 23. Persons with limited co gnition or behavior control  
1. A court shall, based on the opinion of forensic -psychiatric examination by any 
authorized organization and at the request of a person with related rights or 
interests or a relevant agency or organization, issue a decision to  declare an adult 
with limited cognition or behavior control due to his/her physical or spiritual 
condition, and appoint a legal guardian and define rights and obligations of such 
guardian.  
2. Where the basis on which a person has been declared limited cog nition or 
behavior control no longer exists, the court shall, at the request of such person or 
any person with related rights or interests, issue a decision to revoke the decision 
declaring the person with limited cognition or behavior control.  
Article 24.  Persons with limited legal capacity  
1. A court shall, at the request of a person with related rights or interests or a 
relevant agency or organization, issue a decision to declare a person with limited 
legal capacity after excessive drug consumption or o ther psychotropic 
substances, worsening material situation of the family.  
The court shall appoint a legal representative of the person with limited legal 
capacity and the representation scope.  
2. All civil transactions related to the property of a person w ith limited legal 
capacity declared by a court must obtain the consent of his/her legal 
representative, except for transactions to meet the needs of daily life.  
3. Where the basis on which a person has been declared limited capacity of 
exercise no longer e xists, the court shall, at the request of such person or any 
person with related rights or interests, issue a decision to revoke the decision 
declaring the incapacitated person.  
Section 2. PERSONAL RIGHTS  
Article 25. Personal rights  8 
 
1. Personal rights spec ified in this Code are civil rights inherent to each natural 
person, which cannot be transferred to other persons, unless otherwise provided 
for by other laws.  
2. All civil relations relating to personal rights of a minor, a legally incapacitated 
persons, or a person with limited cognition or behavior control shall be 
established and performed with the consent of his/her legal representative as 
prescribed in this Code, other relevant laws or decisions of a court.  
All civil relations relating to personal rig hts of a person declared missing or 
dead shall be established and performed with the consent of his/her spouse or 
adult children; or his/her parents if he/she has no spouse or child, unless 
otherwise provided for by this Code or other relevant laws.  
Articl e 26. Right to have family and given names  
1. Each natural person has right to have a family name and a given name 
(including a middle name, if any). The family and given names of a person shall 
be the family and given names in the birth certificate of suc h person.  
2. The family name of a person shall be passed from his/her biological father's 
or mother’s as mutually agreed between the parents; if the parents fails to agree, 
the person’s family name shall be determined according to customary practices. 
If the father of such person is undetermined, his/her family name shall be passed 
from his/her natural mother’s.  
If an abandoned child whose natural parents are unidentified is adopted, his/her 
family name shall be passed from his/her adoptive father’s or moth er’s as 
mutually agreed between the parents. If the child has either an adoptive father or 
an adoptive mother, his/her family name shall be passed from such person’s.  
If an abandoned child whose natural parents are unidentified and he/she has not 
been adop ted but has been fostered by a foster establishment or a , his/her family 
name shall be determined at the request of the head of such foster family or at 
the request of the person registering the birth of the child.  
Biological father and mother specified in this Code means a father and mother 
determined at the event of parturition; intended father and mother and the 
resulting child as prescribed in the Law on marriage and families.  
3. The naming is restricted in case it violates lawful rights and interests  of other 
people and contravenes basic principles of civil law prescribed in Article 3 of 
this Code.  9 
 
The name of each Vietnamese citizen must be in Vietnamese or other ethnic 
minority languages of Vietnam and not include any figure or any symbol other 
than a letter.  
4. Each natural person shall enter in and perform his/her civil rights and 
obligations following his/her family and given name.  
5. A person may not use his/her code name or pen name to cause damage to the 
lawful rights and interests of other pe ople.  
Article 27. Right to change family names  
1. An individual has the right to request a competent authority to recognize a 
change of a family name in any of the following cases:  
a) Changing the family name of a natural child from biological father’s to  
biological mother's or vice versa;  
b) Changing the family name of an adopted child from biological father’s or 
mother’s to adoptive father's or mother’s at the request of the adoptive parents;  
c) If a person ceases to be an adopted child and such person or his/her biological 
father or mother request to reclaim the family name which is given by the 
biological father or mother;  
d) Changing the family name of a person whose biological parents have been 
identified upon the request on that father or mother or such person;  
dd) Changing the family name of a lost person who has discovered the origin of 
his/her bloodline;  
e) Changing the family name of a person to his/her spouse’s in the marriage and 
family relations involving foreign elements in accordance with la w of the 
country in which the foreign spouse is a citizen or retrieves his/her family name 
before the change;  
g) Changing the family names of children upon the change of family names of 
their father’s or mother’s;  
h) Other cases prescribed in by law on civ il status affairs.  
2. The changing of the family name of a person who is nine years of age or older 
shall be subject to the consent of such person.  
3. The changing of a family name shall not change or terminate the civil rights 
and obligations which were e stablished in the former family name.  10 
 
Article 28. Right to change given names  
1. An individual has the right to request a competent authority to recognize the 
change of a given name in any of the following cases:  
a) Where it is so requested by the person w ho has a given name which causes 
confusion or has an adverse effect on his/her feelings or on his/her honor, 
legitimate rights and interests;  
c) Where the adoptive father or mother of the person wishes to change the given 
name of their adopted child; of if  a person ceases to be an adopted child and 
such person or his/her biological father or mother request to reclaim the given 
name which is given by the biological father or mother;  
d) Changing the given name of a person whose biological parents have been 
identified upon the request on that father or mother or such person;  
dd) Changing the given name of a lost person who has discovered the origin of 
his/her bloodline;  
dd) Change the given name of a person to his/her spouse’s in the marriage and 
family relatio ns involving foreign elements in accordance with law of the 
country in which the foreign spouse is a citizen retrieves his/her family name 
before the change;  
e) Changing of given name of a person whose gender identity is re -determined 
or a transgender pers on;  
g) Other cases prescribed in by law on civil status affairs.  
2. The changing of the given name of a person who is nine years of age or older 
shall be subject to the consent of such person.  
3. The changing of a given name shall not change or terminate the civil rights 
and obligations which were established in the former given name.  
Article 29. Right to indentify and re -identify ethnicity  
1. Each individual has the right to identify and re -identify his/her ethnicity.  
2. Each individual shall have his/her  ethnicity identified at birth in accordance 
with the ethnicity of his/her biological father and mother. Where the biological 
father and mother belong to two different ethnic groups, the ethnicity of the 
child shall be passed from the father’s or mother’s as mutually agreed between 
the parents; if the parents fail to agree, the ethnicity of the child shall be 
identified in accordance with relevant customary practices; if the customary 11 
 
practices are different, the ethnicity of the child shall be identified i n accordance 
with the customary practice of smaller ethnic minority.  
If an abandoned child whose natural parents are unidentified is adopted, his/her 
ethnicity shall be passed from his/her adoptive father’s or mother’s as mutually 
agreed between the parent s. If the child has either an adoptive father or an 
adoptive mother, his/her ethnicity shall be passed from such person’s.  
If an abandoned child whose natural parents are unidentified and he/she has not 
been adopted but has been fostered by a foster establ ishment, his/her ethnicity 
shall be identified at the request of the head of such foster family or at the 
request of the person temporarily fostering the child at the time when the birth of 
the child is registered.  
3. An individual has the right to reques t a competent authority to identify or re -
identify the ethnicity in any of the following cases:  
a) Re -identification of the ethnicity of the biological father or mother where they 
belong to two different ethnic groups;  
b) Re -identification of the ethnicity  of the biological father or mother where the 
adoptive child have their biological parents identified.  
4. The re -identification of the ethnicity of a person who is from fifteen to 
eighteen years of age shall be subject to the consent of such person.  
5. It is forbidden to abuse the ethnicity re -identification intended to profiteering 
or divisive, prejudicial to the unity of the ethnic groups of Vietnam.  
Article 30. Right to declaration of birth and death  
1. When an individual is born, he/she has the right to  have his/her birth declared.  
2. When an individual dies, he/she has the right to have his/her death declared.  
3. If a newborn dies after 24 hours or later from the time of birth, his/her birth 
and death must be declared; if he/she dies under 24 hours from  the time of birth, 
his/her birth and death are not required to be declared, unless his/her biological 
father or mother request.  
4. The declaration of birth and death shall be prescribed in by law on civil status 
affairs.  
Article 31. Right to nationality  
1. Each individual has the right to nationality.  12 
 
2. The identification, change, acquirement, renouncement, or assume of 
Vietnamese nationality shall be stipulated in the Law on Vietnamese nationality.  
3. Rights of each non -nationality resident within Vietna m’s territory shall be 
guaranteed as prescribed by law.  
Article 32. Rights of an individual with respect to his/her image  
1. Each individual has rights with respect to his/her own image.  
The use of an image of an individual must have his/her consent.  
When  an image of an individual is used for commercial purposes, that person is 
eligible for a remuneration, unless otherwise agreed.  
2. The use of image for any of the following purposes needs not the consent of 
the image’s owner or his/her legal representativ e: 
a) For national and public benefits;  
b) For public activities, including conventions, seminars, sports activities, art 
shows and other public activities that do not infringe the honor, dignity or 
prestige of the image’s owner.  
3. If the use of an image violates the regulation prescribed in this Article, the 
image’s owner has the right to request a court to issue a decision that compel the 
violator or relevant entities to revoke, destroy or terminate the use of the image, 
compensate for damage and adopt o ther measures as prescribed in law.  
Article 33. Right to life, right to safety of life, health and body  
1. Each individual has the right to life, the inviolable right to life and body, the 
right to health protection by law. No one shall be killed illegally .  
2. When any person has a life threatening accident or illness, a person who 
discovers such situation must take such person or require suitable entities to a 
nearest health facility; the health facility must provide medical examination and 
treatment in a ccordance with law on medical examination and treatment.  
3. The consent of a person is required for the anesthesia, surgery, amputation, 
transplant of his/her tissues or bodily organs; the application of new medical 
cures to that person; medical, pharmacy or scientific testing or any method of 
testing on a human body.  
If the person is a minor, a legally incapacitated person, a person with limited 
cognition or behavior control or an unconscious patient, the consent of his/her 
father, mother, spouse, grown ch ild or legal guardian is required; in cases where 13 
 
there is a threat to the life of the patient which cannot wait for the consent of the 
aforesaid persons, a decision of the head of the health facility is required.  
4. A post -mortem operation shall be perfor med in any of the following cases:  
a) The deceased person expressed consent prior to death;  
b) In the absence of such consent, the consent of a parent, spouse, grown child 
or legal guardian of the deceased was obtained;  
c) In necessary cases, pursuant to a decision of the head of the health facility or 
a competent authority as prescribed in law.  
Article 34. Right to protection of honor, dignity and prestige  
1. Honor, dignity and prestige of an individual is inviolable and protected by 
law. 
2. Each individu al has the right to request a court to reject any piece of 
information adversely affecting to his/her honor, dignity and/or prestige.  
The honor, dignity and prestige of a deceased person shall be protected at the 
request of his/her spouse or grown children ; or his/her parent if he/she has no 
spouse or child, unless otherwise prescribed by law.  
3. If a piece of information adversely affecting to the honor, dignity and prestige 
of a person is posted on a mean of mass media, that piece of information shall be 
removed or rectified by that kind of mean. If that piece of information is kept by 
an agency, organization or individual, such entity is required to cancel it.  
4. In case it is impossible to identify the person informing the information 
adversely affectin g the honor, dignity and/or prestige of a person, the latter 
person has the right to request a court to declare that such piece of information is 
incorrect.  
5. The person receiving the information adversely affected his/her honor, dignity 
and/or prestige both has the right to request rejection of such piece of 
information and has the right to require to informing person gives a public 
apology and rectification and compensation.  
Article 35. Right to donate or receive human tissues and body organs and 
donate  corpses  
1. Each individual has the right to donate his/her tissues or body organs when 
he/she is alive or donate his/her tissues, body organs or corpse after his/her death 14 
 
for the purpose of medical treatment of other persons or medical, pharmacy or 
other scientific researches.  
2. Each individual has the right to receive tissues and/or body organs of other 
persons for his/her medical treatment. Health facilities and juridical persons 
competent to scientific research have the right to receive human body or gans 
and/or corpses for the purpose of medical treatment or medical, pharmacy or 
other scientific researches.  
3. The donation or removal of human tissues and body organs and donation or 
removal of corpses must comply with statutory requirements and regulat ions of 
this Code, the Law on donation, removal and transplantation of human tissues 
and organs, and donation or removal of corpses and other relevant laws.  
Article 36. Right to re -determine gender identity  
1. An individual has the right to re -determine h is/her gender identity.  
The re -determination of the gender identity of a person is implemented where 
the gender of such person is subject to a congenital defect or has not yet been 
accurately formed and requires medical intervention in order to identify cl early 
the gender.  
2. The re -determination of the gender identity of a person shall comply with 
regulations of law.  
3. Each individual undergone re -determination of gender identity has the right 
and obligation to apply for change of civil status affairs as prescribed in law on 
civil status affairs and has the personal rights in conformity with the re -
determined gender identity as prescribed in this Code and relevant laws.  
Article 37. Sex reassignment  
The sex reassignment shall comply with regulations of law . Each surged 
transgender has the right and obligation to apply for change of civil status affairs 
as prescribed in law on civil status affairs and has the personal rights in 
conformity with the transformed gender as prescribed in this Code and relevant 
laws. 
Article 38. Right to private life, personal secrets and family secrets  
1. The private life, personal secrets and family secrets of a person are inviolable 
and protected by law.  15 
 
2. The collection, preservation, use and publication of information about the 
private life of an individual must have the consent of that person; the collection, 
preservation, use and publication of information about the secrets of family must 
have the consent of all family’s members, unless otherwise prescribed by law.  
3. The s afety of mails, telephones, telegrams, other forms of electronic 
information of an individual shall be ensured and kept confidential.  
The opening, control and keeping of mails, telephones, telegrams, other forms of 
electronic information of an individual m ay only be conducted in cases provided 
by law.  
4. Contracting parties of a contract may not disclose information about each 
other's private life, personal secrets or family secrets that they know during the 
establishment and performance of the contract, un less otherwise agreed.  
Article 39. Personal rights in marriage and families  
1. Each individual has the right to marry or divorce, the right to equality 
between husband and wife, the right to acknowledge father, mother or child, the 
right to adopt children and be adopted in marriage relation, parent -children 
relation and relations between family’s members.  
All children, of the same parents, regardless of their parents’ marriage status, 
have the same rights and obligations to their parents.  
2. Each individual  exercises his/her personal rights in marriage and families as 
prescribed in this Code, the Law on marriage and families and relevant laws.  
Section 3. PLACE OF RESIDENCE  
Article 40. Place of residence of individuals  
1. The place of residence of an individu al is the place where such person usually 
lives.  
2. In cases where it is impossible to determine an individual's place of residence 
as provided for in Clause 1 of this Article, his/her place of residence shall be the 
place where such person is currently li ving.  
3. If a party, in a particular civil relation, changes his/her place of residence in 
association with his/her exercise of right or fulfillment of obligation, he/she 
must notify the other of the new place of residence.  
Article 41. Place of residence o f minors  16 
 
1. The place of residence of a minor is the place of residence of his/her parents; 
if the parents have separate places of residence, the place of residence of the 
minor shall be the place of residence of the father or mother with whom the 
minor u sually lives.  
2. A minor may have a place of residence separate from the place of residence of 
his/her parents if so agreed by his/her parents or so provided for by law.  
Article 42. Place of residence of wards  
1. The place of residence of a ward is the pl ace of residence of his/her guardian.  
2. A ward may have a place of residence separate from the place of residence of 
his/her guardian if so agreed by the guardian or so provided for by law.  
Article 43. Places of residence of husbands and wives  
1. The pla ce of residence of a husband and wife is the place where the husband 
and the wife usually live together.  
2. A husband and a wife may have separate places of residence if they so agree 
upon.  
Article 44. Places of residence of military personnel  
1. The plac e of residence of a military personnel member currently performing 
his/her military service is the place at which his/her military personnel's unit is 
stationed.  
2. The place of residence of a/an army officer, regular member of military 
personnel, defense worker or official is the place at which his/her unit is 
stationed, except in cases where he/she has a place of residence as specified in 
Clause 1 Article 40 of this Code.  
Article 45. Place of residence of persons performing itinerant occupations  
The place  of residence of a person performing an itinerant occupation on a ship, 
boat or other means for itinerant work is the place of registration of such ship, 
boat or means, unless he/she has a place of residence specified in Clause 1 
Article 40 of this Code.  
Section 4. GUARDIANSHIP  
Article 46. Guardianship  
1. Guardianship means an individual or organization (hereinafter referred 
collectively to as guardian) is required by law or appointed to take care of and 17 
 
protect legitimate rights and interests of a minor or  a legally incapacitated 
person or a person with limited cognition and behavior control (hereinafter 
referred to as a ward).  
2. When a person with limited cognition and behavior control is capable of 
expressing his/her will anytime when he/she requests the  guardianship, his/her 
consent is required.  
3. The guardianship must be registered at a competent authority as prescribed in 
law on civil status affairs.  
Natural guardians must fulfill their obligations regardless of their registration of 
guardianship.  
Article 47. Wards  
1. Wards include:  
a) Minors who have lost their mothers and fathers, or whose parents are 
unidentifiable;  
b) Minors whose parents are both incapacitated persons; parents have limited 
cognition or behavior control; parents have limited capaci ty of exercise; parents 
have their parental rights restricted by a court; and parents do not have the 
means to care for or educate such minor and the parents request the minor to be 
a ward;  
c) Incapacitated persons;  
d) Persons with limited cognition or beh avior control.  
2. A person may only be a ward of one guardian, except where the guardians are 
parents in charge of one child or grandparents in charge of one grandchild.  
Article 48. Guardians  
1. Each natural person or juridical person who meets all require ments prescribed 
in this Code is entitled to be a guardian.  
2. If a person with full legal capacity chooses a guardian for him/her, such 
guardian shall be selected if the person needs the guardianship with the consent 
of the ward. The selection of guardian  must be made in writing and notarized or 
certified.  
3. Each natural or juridical person may be a guardian of multiple persons.  
Article 49. Requirements for natural persons to be guardians  18 
 
Each natural person who meets all of the following requirements may  act as a 
guardian:  
1. Having full legal capacity;  
2. Having good ethics and necessary means to exercise rights and fulfill 
obligations of a guardian;  
3. Not being a person facing a criminal prosecution or a person who has been 
convicted but his/her crimin al record has been not expunged for a deliberate 
crime of violation of life, health, honor, dignity or property of another person;  
4. Not being a person having parental rights to minor child restricted by a court.  
Article 50. Requirements for juridical per sons to be guardians  
Each juridical person who meets all of the following requirements may act as a 
guardian:  
1. Having civil legal personality in conformity with the guardianship;  
2. Having necessary means to exercise rights and fulfill obligations of a 
guardian.  
Article 51. Supervision of guardianship  
1. The relatives of a ward shall have the responsibility to appoint a 
representative to supervise the guardianship in among the relatives or appoint 
another natural or juridical person to act as a guardians hip supervisor.  
The appointment of guardianship supervisor must have the consent of such 
person.  
If the supervision relates to management of property of the ward, the supervisor 
must register it at the People’s Committee of commune where the ward resides.  
Relatives of a ward means his/her spouse, parents and children; if there is no 
such person, relatives of the ward means his/her grandparents and biological 
siblings; if there is also no such person, relatives of the ward means his/her 
biological uncles and  aunts.  
2. If there is no relative of a ward or the relatives fails to appoint a guardianship 
supervisor as prescribed in Clause 1 of this Article, the People’s Committees of 
commune where the guardian resides shall appoint a natural or juridical person 
to supervise the guardianship. If there is a dispute over the appointment of 
guardianship supervisor, it shall be subject to a court's decision.  19 
 
3. Each supervisor being natural person must have full legal capacity, each 
supervisor being juridical person mus t have legal personality in conformity with 
the supervision; the supervisor must have necessary means to conduct the 
supervision.  
4. Each guardianship supervisor has the following rights and obligations:  
a) Monitory and inspect the guardian in the guardian ship;  
b) Examine and offer opinions in writing in terms of establishment and 
performance of civil transactions prescribed in Article 59 of this Code.  
c) Request a regulatory agency in charge of guardianship to change or terminate 
the guardianship or superv ision of guardianship.  
Article 52. Natural guardians of minors  
A natural guardian of a minor prescribed in Points a and b Clause 1 Article 47 of 
this Code shall be determined as follows:  
1. The eldest brother or sister shall be the guardian of the ward; if  the eldest 
brother or sister fails to satisfy all requirements for acting as a guardian, the next 
eldest brother or sister shall be the guardian, unless otherwise agreed that 
another biological brother or sister shall be the guardian;  
2. If there is no gu ardian prescribed in Clause 1 of this Article, the paternal 
grandfather, grandmother or the maternal grandfather, grandmother shall be the 
guardian; or those persons shall agree to appoint a person or some persons to be 
guardian(s);  
3. If there is no guard ian prescribed in Clause 1 and Clause 2 of this Article, a 
biological uncle or aunt of the ward shall be the guardian.  
Article 53. Natural guardians of incapacitated persons  
If there is no guardian prescribed in Clause 2 Article 48 of this Code, the natur al 
guardian of a legally incapacitated person shall be determined as follows:  
1. If a wife is a legally incapacitated person, her husband shall be the guardian; 
if a husband is a legally incapacitated person, her wife shall be the guardian;  
2. If both par ents are incapacitated persons or either of them is a legally 
incapacitated person and the other does not fully meet requirements to be a 
guardian, the eldest child shall be the guardian; if the eldest child does not fully 
meet the requirements to be a gua rdian, the next eldest child shall be the 
guardian;  20 
 
3. If an adult being a legally incapacitated person has no spouse or child or such 
person has spouse or children but they do not fully meet the requirements to be a 
guardian, his/her father and/or mother shall be the guardian.  
Article 54. Appointment of guardians  
1. If a minor or a legally incapacitated person has no guardian as prescribed in 
Article 52 and 53 of this Code, the People’s Committee of commune where such 
person resides must appoint a guardia n for the ward.  
If there is a dispute between guardians prescribed in Article 52 and Article 53 of 
this Code in terms of guardians or appointment of guardians, a court shall 
appoint the guardian.  
The expectation of a minor aged 6 years or older in terms of  his/her guardian 
must be considered.  
2. The appointment of a guardian must have the consent of such person.  
3. The appointment of a guardian must be made in writing, specifying the reason 
for appointing the guardian, the specific rights and obligations of  the guardian 
and the status of the ward's property.  
4. Apart from the cases prescribed in Clause 2 Article 48 of this Code, the 
guardian of a person with limited cognition and behavior control shall be 
appointed among the guardians prescribed in Article 5 3 of this Code by a court. 
If there is no such person, the court shall appoint another natural or juridical 
person to be a guardian.  
Article 55.  Obligations of guardians with regard to wards under fifteen 
years of age  
1. Take care of and educate the ward.  
2. Represent the ward in civil transactions, except where it is provided for by 
law that wards under fifteen years of age can enter in and perform civil 
transactions by themselves.  
3. Manage the property of the ward.  
4. Protect legitimate rights and intere sts of the ward.  
Article 56.  Obligations of guardians with regard to wards from fifteen to 
eighteen years of age  21 
 
1. Represent the ward in civil transactions, except where it is provided for by 
law that wards from fifteen to eighteen years of age can enter  in and perform 
civil transactions by themselves.  
2. Manage the property of the ward, unless otherwise prescribed by law.  
3. Protect legitimate rights and interests of the ward.  
Article 57. Obligations of guardians with regard to incapacitated persons or 
person with limited cognition and behavior control  
1. The guardian of a legally incapacitated person shall have the following 
obligations:  
a) Take care of and ensure the treatment of illness of the ward;  
b) Represent the ward in civil transactions;  
c) Mana ge the property of the ward;  
d) Protect legitimate rights and interests of the ward.  
2. The guardian of a person with limited cognition and behavior control shall 
have obligations specified in the decision of a court according to the obligations 
prescribed  in Clause 1 of this Article.  
Article 58. Rights of guardians  
1. The guardian of a minor or a legally incapacitated person shall have the 
following rights:  
a) Use the property of the ward in order to take care of and pay for the needs of 
the ward;  
b) Recei ve payment of all necessary expenditures on management of the 
property of the ward;  
c) Represent the ward in the establishment and performance of civil transactions 
in order to protect legitimate rights and interests of the ward.  
2. The guardian of a perso n with limited cognition and behavior control shall 
have rights specified in the decision of a court according to the rights prescribed 
in Clause 1 of this Article.  
Article 59. Management of property of wards  
1. The guardian of a minor or a legally incapac itated person must manage the 
property of his/her ward as if it were his/her own property.  22 
 
The sale, exchange, lease, lending, pledge, mortgage, deposit and other 
transactions involving the property of the ward, which has a high value, must 
have the consen t of the guardianship supervisor.  
The guardian must not donate the property of his/her ward to other persons. 
Unless the transaction is undertaken for the interests of the ward and the 
guardianship supervisor consents to the transaction, all civil transact ions 
between the guardian and his/her ward in connection with the latter's property 
shall be void.  
2. The guardian of a person with limited cognition and behavior control shall 
manage the property of the ward specified in the decision of a court according to 
guardianship scope prescribed in Clause 1 of this Article.  
Article 60. Replacement of guardians  
1. A guardian may be replaced in any of the following cases:  
a) The guardian no longer meets all of the requirements specified in Article 49 
or 50 of this Co de; 
b) The guardian being a natural person dies or is declared by court limited 
cognition or behavior control, limited legal capacity, incapacitated, missing or 
the guardian being a juridical person cease to exist;  
c) The guardian seriously violates a gua rdian's obligation;  
d) The guardian proposes his/her replacement and another person agrees to 
assume the guardianship.  
2. In case of replacing a natural guardian, the persons defined in Article 52 and 
Article 53 of this Code shall assume the role of a natu ral guardian; if there is no 
natural guardian, the appointment of a guardian shall comply with the provisions 
of Article 54 of this Code.  
3. The procedures for replacing a guardian shall comply with law on civil status 
affairs.  
Article 61. Transfer of guar dianship  
1. Upon replacement of a guardian, the person who formally conducted the 
guardianship must transfer the guardianship to the new replacement within 
fifteen days as from the date the new guardian is found.  
2. The transfer of guardianship must be ma de in writing, specifying the reason 
for the transfer and the status of the ward's property at the time of transfer. The 23 
 
agency which appointed the guardian and the guardianship supervisor shall 
witness the transfer of the guardianship.  
3. With regard to r eplacement of guardian prescribed in Clause 1 Article 60 of 
this Code, the agency which appointed the guardian shall make a record thereon, 
clearly stating the status of the ward's property and the rights and obligations 
which have arisen in the course of performing the guardianship for transfer to 
the new guardian with the witness of the guardianship supervisor.  
Article 62. Termination of guardianship  
1. A guardianship shall be terminated in any of the following cases:  
a) The ward attains full legal capac ity; 
b) The ward dies;  
c) The ward's father and/or mother have/has fully met the conditions to exercise 
his/her rights or fulfill his/her obligations;  
d) The ward has been adopted.  
2. The procedures for termination of guardianship shall comply with law on civil 
status affairs.  
Article 63. Consequences of the termination of guardianship  
1. When a ward attains full legal capacity, the guardian shall settle the property 
with the ward and transfer all rights and obligations arising from civil 
transactions conc luded by the guardian on behalf of that ward within 15 days 
from the date of termination of guardianship.  
2. If a ward dies, the guardian must settle up the property with the ward's heirs 
or transfer the property to the estate administrator of the ward, or  transfer all 
rights and obligations arising from the civil transactions on behalf of the ward 
within three months as from the date on which the guardianship terminates; if 
the ward's heirs are unidentifiable upon the expiry of such time limit, the 
guardia n shall continue to manage the property of the ward until the property 
has been settled in accordance with the provisions of law on inheritance and 
shall notify such to the People's Committee of the commune where the ward 
resides.  
3. With regard to termina tion of guardianship prescribed in Point c and Point d 
Clause 1 Article 62 of this Code, the guardian shall settle up the property and 
transfer all rights and obligations arising from the civil transactions on behalf of 24 
 
the ward to the ward’s parent within  15 days from the date of termination of 
guardianship.  
4. The settlement of property and transfer of rights and obligations prescribed in 
this Article must be made in writing under supervision of the guardianship 
supervisor.  
Section 5. NOTICE OF SEARCH FOR  PERSONS WHO ARE ABSENT 
FROM THEIR PLACES OF RESIDENCE, DECLARATION OF 
MISSING PERSONS AND DECLARATION OF DEATH  
Article 64.  Request for notice of search for persons who are absent from 
their places of residence and the management of their property  
When a p erson has disappeared for six consecutive months or longer, any person 
with related rights or interests may request a court to issue a notice of search for 
the person absent from his/her place of residence under the provisions of civil 
procedure law and ma y request the court to apply measures for management of 
the property of the absent person in accordance with the provisions of Article 65 
of this Code.  
Article 65. Management of property of person absent from his/her place of 
residence  
1. At the request of  a person with related rights or interests, a court shall hand 
over the property of a person absent from his/her place of residence to one of the 
following persons for management:  
a) With respect to property of which the management has been authorized to 
person by the absent person, such person shall continue to manage the property;  
b) With respect to joint property, the remaining co -owner(s) shall manage the 
property;  
c) The property being currently managed by the spouse’s absent person shall 
continue to b e managed by such spouse; if that spouse dies or that spouse is 
legally incapacitated, has limited cognition or behavior control or has limited 
legal capacity, his/her adult children or parents shall manage the property.  
2. If there is no person defined in  Clause 1 of this Article, a court shall appoint a 
person among the relatives of the absent person to manage his/her property; if 
the absent person does not have any relative, the court shall appoint another 
person to manage the property.  25 
 
Article 66. Oblig ations of persons managing property of person absent from 
his/her place of residence  
1. Keep and preserve the property of the absent persons as if it were his/her own 
property.  
2. Sell immediately any property being crops or other products being in danger 
of decay;  
3. Perform the absent persons' obligations to pay maintenance their dependents 
and/or pay due debts or financial obligations with such persons' property under 
the court's decisions.  
4. Return the property to the absent persons upon their return a nd to notify a 
court thereof; or compensate for any damage caused during the course of 
management of the property due to his/her fault.  
Article 67. Rights of persons managing property of person absent from 
his/her place of residence  
1. Manage the property of the absent persons.  
2. Deduct a portion from the property of the absent person in order to perform 
the obligations of such person to pay maintenance to his/her dependents, due 
debts or financial obligations.  
3. Receive payment of all necessary expenditu res on management of the 
property of the absent person.  
Article 68. Declaration of person missing  
1. When a person has disappeared for two consecutive years or longer and there 
is no reliable information on whether such person is still alive or dead even 
though notification and search measures have been fully applied in accordance 
with the civil procedure law, a court may, at the request of a person with related 
rights or interests, declare such person is missing.  
The two -year time limit shall commence fr om the date the last information on 
such person is obtained; if the date of the last information cannot be determined, 
this time limit shall commence from the first day of the month succeeding the 
month when the last information is received; if the date an d month of the last 
information cannot be determined, this time limit shall commence from the first 
day of the year succeeding the year when the last information is received.  26 
 
2. In cases where the wife or the husband of a person who has been declared 
missi ng files for a divorce, a court shall grant the divorce as prescribed in law on 
marriage and family.  
3. The decision on declaration of a missing person issued by a court must be sent 
to the People’s Committees of commune where the missing person last resid es 
for record as prescribed in law on civil status affairs.  
Article 69. Management of property of persons declared missing  
The person currently managing the property of a person absent from his/her 
place of residence as provided for in Article 65 of this C ode shall continue to 
manage the property of such person when he/she is declared missing by a court 
and such person shall have the rights and obligations specified in Article 66 and 
Article 67 of this Code.  
If a court has granted divorce to the wife or the  husband of the person who has 
been declared missing, the property of the missing person shall be handed over 
to the adult children or to the parents of the missing person for management. If 
there is no such person, the property shall be handed over to a r elative of the 
missing person for management; if there is no relative, the court shall appoint 
another person to manage the property.  
Article 70.  Annulment of decision declaring person missing  
1. When a person who has been declared missing returns or when  there is 
reliable information that such person is still alive, a court shall, at the request of 
such person or a person with related rights or interests, issue a decision on 
annulment of the decision declaring the person missing.  
2. A person who has been declared missing shall, upon his/her return, be 
permitted to receive his/her property back from the person managing the 
property after paying the management expenses.  
3. If the wife or the husband of a person who has been declared missing has 
been granted a divorce, the decision granting the divorce shall retain legal effect 
notwithstanding the return of the person who has been declared missing or the 
reliable information that such person is still alive.  
4. The decision on annulment of a decision declaring a person missing issued by 
a court must be sent to the People’s Committees of commune where the missing 
person resides for record as prescribed in law on civil status affairs.  
Article 71. Declaration of person dead  27 
 
1. A person with related rights or inter ests may request a court to issue a 
decision declaring that a person is dead in any of the following cases:  
a) After three years from the effective date of a court's decision declaring a 
person missing, there is still no reliable information that such pers on is alive;  
b) The person has disappeared during a war and there is still no reliable 
information that such person is alive for five years from the end of the war;  
c) The person met with an accident, catastrophe or a natural disaster and there is 
still no  reliable information that such person is alive for two years from the end 
of such accident, catastrophe or natural disaster, unless otherwise provided for 
by law;  
d) The person has been missing for five consecutive years or longer and there is 
no reliable  information that such person is still alive; this time limit shall be 
calculated in accordance with Clause 1 Article 68 of this Code.  
2. A court shall, according to the cases specified in Clause 1 of this Article, 
determine the date of death of a person d eclared dead.  
3. The decision on declaration of a dead person issued by a court must be sent to 
the People’s Committees of commune where the dead person resides for record 
as prescribed in law on civil status affairs.  
Article 72.  Personal relations and pro perty relations of persons declared 
dead by courts  
1. When a decision of a court declaring that a person is dead becomes legally 
effective, all marriage and family relations and other personal relations of such 
person shall be resolved in the same manner a s if the person were dead.  
2. The property relations of a person who is declared dead by a Court shall be 
resolved in the same manners as if such person were dead; the property of such 
person shall be dealt with in accordance with the law on inheritance.  
Article 73.  Annulment of decision declaring person dead  
1. When a person who has been declared dead returns or when there is reliable 
information that such person is still alive, a court shall, at the request of such 
person or a person with related rights or interests, issue a decision on annulment 
of the decision declaring the person dead.  28 
 
2. The personal relations of the person who has been declared dead shall be 
restored when a court issues a decision on annulment of the decision which 
declared that such  person was dead, except for the following cases:  
a) If the wife or the husband of the person who has been declared dead was 
permitted by the Court for her or his divorce in accordance with the provisions 
of Clause 2 Article 68 of this Code, the decision g ranting the divorce shall 
remain legally effective;  
b) If the wife or the husband of the person who has been declared dead has 
married to another person, such marriage shall remain legally effective.  
3. A person who has been declared dead but is still aliv e shall have the right to 
claim his/her property from the persons who received that his/her inheritance 
and/or the value of the remaining property.  
If the heir of a person whom a court has declared dead is aware that such person 
is still alive, but intenti onally conceals such information for the purpose of 
enjoying the inheritance, he/she must return all of the property received, 
including any benefits and income derived; if any damage has been caused, 
he/she must also pay compensation therefor.  
4. Property  relations between spouses shall be dealt with in accordance with this 
Code and the Law on marriage and families.  
5. The decision on annulment of a decision declaring a person dead issued by a 
court must be sent to the People’s Committees of commune where the dead 
person resides for record as prescribed in law on civil status affairs.  
Chapter IV  
JURIDICAL PERSONS  
Article 74. Juridical persons  
1. An organization shall be recognized as a juridical person if it meets all of the 
following conditions:  
a) It is  legally established as prescribed in this Code and relevant laws;  
b) It has an organizational structure prescribed in Article 83 of this Code;  
c) It has property independent from other natural and juridical persons and bears 
liability by recourse to its p roperty;  
d) It participates independently in legal relations in its own name.  29 
 
2. Every natural or juridical person has the right to establish a juridical person, 
otherwise provided for by law.  
Article 75. Commercial juridical persons  
1. Commercial juridic al person means a juridical person whose primary purpose 
is seeking profits and its profits shall be distributed to its members.  
2. Commercial juridical persons include enterprises and other business entities.  
3. The establishment, operation and terminati on of commercial juridical person 
shall comply with regulations of this Code, Law on enterprises and other 
relevant laws.  
Article 76. Non -commercial juridical persons  
1. Non -commercial juridical person means a juridical person whose primary 
purpose is not  seeking profits and its possible profits may not distributed to its 
members.  
2. Commercial juridical persons include regulatory agencies, people's armed 
units, political organizations, socio -political organizations, political -socio -
professional organizati ons, social organizations, socio -professional 
organizations, social funds, charitable funds, social enterprises and other non -
commercial organizations.  
3. The establishment, operation and termination of non -commercial juridical 
persons shall comply with r egulations of this Code, laws on organizational 
structure of the state and other relevant laws.  
Article 77. Charters of juridical persons  
1. A juridical person must have a charter if it is required by law.  
2. A charter of a juridical person must contain t he following primary contents:  
a) Name of juridical person;  
b) Purpose and scope of its operation;  
c) Head office; branches or representative offices (if any);  
d) Charter capital (if any);  
dd) Legal representative;  
e) Organizational structure, the procedur es for nomination, election, 
appointment, discharge from office and dismissal; duties and powers of the 
positions in the managing body and other bodies;  30 
 
g) Membership requirements, if the judicial person has members;  
h) Rights and obligations of the member s, if the judicial person has members;  
i) Procedures for ratifying decisions of the judicial person; rules for internal 
settlement of disputes;  
k) Procedures for amending and supplementing the charter;  
l) Conditions for consolidation, acquisition, total di vision, partial division or 
dissolution the juridical person.  
Article 78. Names of judicial persons  
1. Each judicial person’s name must be in Vietnamese.  
2. The name of a judicial person must clarify its type of organization and 
distinguish it from other judicial persons in the same field of activities.  
3. Each juridical person must use its own name in civil transactions.  
4. The name of a juridical person shall be recognized and protected by law.  
Article 79. Head offices of judicial persons  
1. The head -office of a juridical person is the place where its executive body is 
located.  
Any change of the judicial person’s head office must be announced.  
2. The contact address of a juridical person shall be the address of its head -
office. The juridical person may select another place as its contact address.  
Article 80. Nationality of judicial persons  
Each juridical person established in accordance with Vietnamese law shall be a 
Vietnamese juridical person.  
Article 81. Property of judicial persons  
Property of a ju ridical person includes contributed capital of its owners, 
founders, members and other kinds of property that the juridical person has 
established its ownership as prescribed in this Code or relevant laws.  
Article 82. Establishment and registration of juri dical persons  
1. A juridical person may be established on the initiative of an individual or 
another juridical person, or under a decision of a regulatory agency.  
2. Registration of juridical person includes registration of establishment, 
modification to r egistration and other registration as prescribed by law.  31 
 
3. The registration of juridical person must be announced.  
Article 83. Organizational structure of juridical persons  
1. Each juridical person must have an executive body. The organization, duties 
and powers of the executive body of a juridical person shall be stipulated in its 
charter or establishment decision.  
2. Each juridical person may have other bodies as decided itself or as prescribed 
by law.  
Article 84. Branches and representative offices of  juridical persons  
1. Each branch and/or representative office is an affiliate other than a juridical 
person.  
2. Each branch shall perform all or part of the functions of the juridical person.  
3. Each representative office shall perform its duties as autho rized by the in 
accordance with within the authorized scope and for the juridical person's 
interests.  
4. The establishment or termination of a branch or a representative office of a 
juridical person must be registered as prescribed by law and announced.  
5. The head of each branch or representative office shall perform his/her duties 
as authorized by the juridical person within the authorized scope and for the 
authorized duration.  
6. A juridical person shall have civil rights and obligations arising from civ il 
transactions established and performed by its representative offices and/or 
branches.  
Article 85. Representatives of juridical persons  
The representative of a juridical person may be a legal representative or an 
authorized representative. The representa tive of a juridical person must comply 
with regulations on representation in Chapter IX of this Part.  
Article 86. Legal personality of juridical persons  
1. The legal personality of a juridical person is its capability to have civil rights 
and civil obligat ions.  
The legal personality of a juridical person shall not be restricted, unless 
otherwise provided for in this Code or relevant laws.  32 
 
2. The legal personality of a juridical person arises from it is established or 
authorized to establish by a competent a uthority; if a juridical person is required 
to register of operation, its legal personality shall arise from the time in which its 
name is included in a register book.  
3. Legal personality of a juridical person terminates from the time of termination 
of su ch juridical person.  
Article 87. Civil liability of juridical persons  
1. Each juridical person must bear civil liability for the civil rights and 
obligations established and performed in the name of the juridical person by its 
representative.  
The juridical  person shall bear the civil liability for obligations assumed by its 
founder or founder’s representative to establish and/or register the juridical 
person, unless otherwise agreed or prescribed by law.  
2. Each juridical person must bear civil liability by  recourse to its property; shall 
not bear civil liability for its members with respect to civil obligations 
established and performed by such members not in the name of the juridical 
person, unless otherwise prescribed by law.  
3. A member of a juridical pe rson shall not bear civil liability of the juridical 
person for the civil obligations established and performed by such juridical 
person, unless otherwise prescribed by law.  
Article 88. Consolidation of juridical persons  
1. Juridical persons may consolidat e into a new juridical person.  
2. After consolidation, the former juridical persons shall cease to exist from the 
time of establishment of the new juridical person; the civil rights and obligations 
of the former juridical persons shall be transferred to th e new juridical person.  
Article 89. Acquisition of juridical persons  
1. A juridical person (hereinafter referred to as acquired juridical person) may be 
merged into another juridical person (hereinafter referred to as acquiring 
juridical person).  
2. After acquisition, the acquired juridical person shall cease to exist; the civil 
rights and obligations of the acquired juridical person shall be transferred to the 
acquiring juridical person.  
Article 90. Total division of juridical persons  33 
 
1. A juridical person  may be totally divided to multiple juridical persons.  
2. After total division, the transferor juridical person shall cease to exist; the 
civil rights and obligations of the transferor juridical person shall be transferred 
to new juridical persons.  
Article  91. Partial division of juridical persons  
1. A juridical person may be partially divided to multiple juridical persons.  
2. After partial division, the transferor juridical person and transferee juridical 
persons shall perform their civil rights and obliga tions in accordance with their 
own operation objectives.  
Article 92. Conversion of forms of juridical persons  
1. The form of a juridical person may be converted into another form.  
2. After conversion of form, the converting juridical person shall cease to exist 
from the time of establishment of the converted juridical person, the civil rights 
and obligations of the converting juridical person shall be transferred to the 
converted juridical person.  
Article 93. Dissolution of juridical persons  
1. A juridical person shall be dissolved in any of the following cases:  
a) In accordance with the provisions of its charter;  
b) Pursuant to a decision of a competent authority;  
c) Upon expiry of its term of operation as provided in its charter or in the 
decision of the c ompetent authority;  
d) Other cases as prescribed by law.  
2. Prior to dissolution, a juridical person must fulfill all of its property 
obligations.  
Article 94. Settlement of property of dissolved juridical persons  
1. The property of a dissolved juridical pe rson shall be settled according to the 
following order:  
a) Dissolution expenses of the juridical person;  
b) Unpaid salaries, severance pay, social insurance, health insurance for 
employees as prescribed by law, other benefits of employees according to 
collective bargaining agreement and signed employment contracts;  34 
 
c) Tax debts and other debts.  
2. After all debts and dissolution costs are paid, the remaining value shall be 
received by the juridical person’s owner, capital contributors, except for the case 
prescribed in Clause 3 of this Article or otherwise prescribed by law.  
3. In case a dissolved social fund or charity fund has paid fully dissolution 
expenses and other debts prescribed in Clause 1 of this Article, the remaining 
property shall be transferred  to another fund with the same purpose.  
If there is no fund with the same purpose that receives the property or the above 
fund is dissolved because of its violation against to prohibition of law or 
contrary to social ethics, its property shall vest in the State.  
Article 95. Bankruptcy of juridical persons  
The bankruptcy of each juridical person shall comply with regulations of law on 
bankruptcy.  
Article 96. Termination of juridical persons  
1. A juridical person shall terminate in any of the following cases : 
a) Consolidation, acquisition, total division, conversion of legal, or dissolution 
prescribed in Articles 88, 89, 90, 92 and 93 of this Code;  
b) Declaration of bankruptcy in accordance with law on bankruptcy.  
2. A legal person shall terminate from the ti me its name is removed from the 
juridical person registry or as from the time stated in a decision of competent 
authority.  
3. When a juridical person terminates, its property shall be resolved in 
accordance with this Code and relevant laws.  
Chapter V  
THE S OCIALIST REPUBLIC OF VIETNAM, CENTRAL AND LOCAL 
REGULATORY AGENCIES IN CIVIL RELATIONS  
Article 97. The Socialist Republic of Vietnam, central and local regulatory 
agencies in civil relations  
When the Socialist Republic of Vietnam or a central or local re gulatory agency 
engages in a civil relation, it shall have the equality with other entities and bear 
civil responsibility as prescribed in Article 99 and 100 of this Code.  
Article 98. Representatives in civil relations  35 
 
The representation of the Socialist Republic of Vietnam or a central or local 
regulatory agency engaging in civil relations shall comply with regulations of 
law in terms of functions, tasks, powers and organizational structure of 
regulatory agencies. The representation by other natural or ju ridical persons may 
only permitted in the cases and procedures prescribed by law.  
Article 99. Liability for civil obligations  
1. The Socialist Republic of Vietnam, central and local regulatory agencies shall 
bear liability for their civil obligations by re course to the property whose 
ownership for which they represent and take centralized management, other than 
the case that the property is transferred to the juridical person prescribed in 
Clause 2 of this Article.  
2. The juridical persons established by th e Socialist Republic of Vietnam, or a 
central or local regulatory agency shall not bear liability for civil obligations of 
the Socialist Republic of Vietnam, or such central or local regulatory agency.  
3. The Socialist Republic of Vietnam, a central or loc al regulatory agency shall 
not bear liability for civil obligations of the juridical persons established 
themselves, including state -owned enterprises, unless the Socialist Republic of 
Vietnam or such central or local regulatory agency has acted as a guara ntee for 
those juridical persons as prescribed by law.  
4. A central or local regulatory agency shall not bear liability for civil 
obligations of the juridical persons of the Socialist Republic of Vietnam, or 
other central or local regulatory agencies, unle ss otherwise prescribed by law.  
Article 100. Liability for civil obligations of the Socialist Republic of 
Vietnam, a central or local regulatory agency in civil relation in which a 
foreign state, natural or juridical person is a party  
1. The Socialist Rep ublic of Vietnam, a central or local regulatory agency shall 
bear liability for its civil obligations arising from the following cases with a 
foreign state, natural or juridical person is a party:  
a) An international agreement to which the Socialist Republ ic of Vietnam is a 
signatory has regulations on waiving immunity;  
b) An agreement on waiving immunity concluded by the parties in such civil 
relation;  
c) The Socialist Republic of Vietnam, the central or local regulatory agency 
waives the immunity.  36 
 
2. The liability for civil obligations of a foreign state, natural or juridical person 
with the Socialist Republic of Vietnam, Vietnamese central or local regulatory 
agencies, natural or juridical persons shall apply Clause 1 of this Article.  
Chapter VI  
HOUSEHOLD S, CO -OPERATIVE GROUPS AND OTHER NON -
JURIDICAL PERSONS IN CIVIL RELATIONS  
Article 101. Entities in civil relations with the participation of households, 
co-operative groups and other non -juridical persons  
1. In case a household, co -operative group or anot her non -juridical person 
engages in a civil relation, the entities establishing or performing civil 
transactions for such household, co -operative group or the other organization 
shall be its member or a representative authorized. The authorization must be 
made in writing, unless otherwise agreed. If there is any change of 
representative, it is required to keep the other party informed about the change.  
If a member of a household, co -operative group or another non -juridical person, 
without authorization from  other members to act as a representative, engages in 
a civil relation, he/she shall be the entity of such civil relation.  
2. The entities of civil relations with the participation of households using land 
shall be determined as prescribed in the Law on la nd. 
Article 102. Common property of members of households, co -operative 
groups and other non -juridical persons  
1. Common property of members of a household and their rights and obligations 
to such property shall be determined as prescribed in Article 212 of this Code.  
2. Common property of members of a co -operative group and their rights and 
obligations to such property shall be determined as prescribed in Article 506 of 
this Code.  
3. Common property of members of another non -juridical person and their rig hts 
and obligations to such property shall be determined as agreed, unless otherwise 
prescribed by law.  
Article 103. Civil liability of members of households, co -operative groups 
and other non -juridical persons  37 
 
1. Civil obligations arising from the engagi ng in civil relations by households, 
co-operative groups, other organizations as non -juridical person shall be fulfilled 
by recourse their common property.  
2. If all members have no property or not enough property to fulfill their 
common obligations, the o bligee may request those members to fulfill the 
obligations as prescribed in Article 288 of this Code.  
3. If the members have no agreement, co -operative contract or not otherwise 
prescribed by law, they must bear the civil liability as prescribed in Claus e 1 and 
Clause 2 of this Article in proportion to each member’s contribution, if it fails to 
determine particular proportions, each member shall have the same proportion.  
Article 104. Consequences of civil transactions established and/or 
performed by unaut horized persons or by representatives beyond scope of 
representation  
1. If an unauthorized member, on behalf of other members of a household, co -
operative group or another non -juridical person, establish or perform a civil 
transaction, or a representative  establish or perform a civil transaction beyond 
his/her scope of representation, the legal consequences of such transaction shall 
apply provisions of Articles 130, 142 and 143 of this Code.  
2. If a civil transaction established and/or performed by an auth orized member 
or by a representative beyond his/her scope of representation cause damage to 
other members of the household, co -operative group or the non -juridical persons 
or a third party, such person must compensate for the infringed person.  
Chapter VII  
PROPERTY  
Article 105. Property  
1. Property comprises objects, money, valuable papers and property rights.  
2. Property includes immovable property and movable property. Immovable 
property and movable property may be existing property or off -plan property.  
Article 106. Registration of property  
1. Ownership and other rights to immovable property shall be registered in 
accordance with this Code and law on registration of property.  
2. Ownership and other rights to movable property shall not be required to be 
registered, unless otherwise prescribed by law.  38 
 
3. The registration of property must be public.  
Article 107. Immovable property and movable property  
1. Immovable property includes:  
a) Land;  
b) Houses and constructions attached to land;  
c) Other property atta ched to land, houses and constructions;  
d) Other property as prescribed by law.  
2. Moveable property is property which is not immovable property.  
Article 108. Existing property and off -plan property  
1. Existing property means a property which is formed a nd to which an entity 
has established his/her ownership rights and other rights before or at the time of 
transaction establishment.  
2. Off -plan property includes:  
a) Non -formed property;  
b) Formed property that the entity has established his/her ownership rights after 
the time of transaction establishment.  
Article 109. Yield and income  
1. Yield means natural products brought by property.  
2. Income means a profit earned from the development of the property.  
Article 110. Primary objects and auxiliary objects  
1. A primary object is an independent object the utility of which can be 
exploited according to its functions.  
2. An auxiliary object is an object which directly supports the exploitation of the 
utility of a primary object and which is part of the primary object but which may 
be separated from it.  
3. Upon performance of an obligation to transfer a primary object, any auxiliary 
objects must also be transferred, unless otherwise agreed.  
Article 111. Divisible objects and indivisible objects  
1. A divisible obj ect is an object which, after being divided, retains its original 
characteristics and usage.  39 
 
2. An indivisible object is an object which, after being divided, is not able to 
retain its original characteristics and usage.  
When an indivisible object needs to  be divided, it must be valued in money for 
the purpose of division.  
Article 112. Consumable objects and non -consumable objects  
1. A consumable object is an object which, after being having been used once, 
loses or is not capable of retaining its original characteristics, appearance and 
usage.  
A consumable object may not be the object of a lease contract or of a lending 
contract.  
2. A non -consumable object is an object which, after being having been used 
many times, substantially retains its original charac teristics, appearance and 
usage.  
Article 113. Fungible objects and distinctive objects  
1. Fungible objects are objects which have the same appearance, characteristics 
and usage and which can be determined by units of measurement.  
Fungible objects of the sa me quality may be interchangeable.  
2. A distinctive object is an object which is distinguishable from other objects by 
its own characteristics regarding markings, appearance, color, material, nature or 
position.  
An obligation to transfer a distinctive obje ct is only able to fulfill by transferring 
that particular distinctive object.  
Article 114. Integrated objects  
An integrated object is an object comprised of components or parts which fit 
together and are connected with each other to make up a complete fro m whereby 
one of the parts or components is missing, or if there is a part or component 
which is not of the right specification or category, it is not able to be used or its 
utility value is decreased.  
An obligation to transfer an integrated object must be  fulfilled by transferring all 
parts or components thereof, unless otherwise agreed.  
Article 115. Property rights  40 
 
Property rights are rights which are able to be valued in money, including 
property rights to subjects of intellectual property rights, right to use land and 
other property rights.  
Chapter VIII  
CIVIL TRANSACTIONS  
Article 116. Civil transactions  
Civil transaction is a contract or a unilateral legal act which gives rise to, 
changes or terminates civil rights and/or obligations.  
Article 117. Condit ions for effective civil transactions  
1. A civil transaction shall be effective when it satisfies all of the following 
conditions:  
a) Participants in the transaction have legal personality and/or legal capacity in 
conformity with such transaction;  
b) Part icipants in the transaction act entirely voluntarily;  
c) The purpose and contents of the transaction are not contrary to the law and/or 
social ethics.  
2. The forms of civil transactions shall be the conditions for its effectiveness in 
cases where it is so provided for by law.  
Article 118. Objectives of civil transactions  
The objectives of a civil transaction are legitimate interests which the parties 
wish to achieve at the time when they enter into such transaction.  
Article 119. Forms of civil transactions  
1. A civil transaction shall be expressed verbally, in writing, or through specific 
acts. 
Civil transactions by way of electronic means in form of data messages 
prescribed in law on electronic transactions shall be deemed to be written civil 
transactions.  
2. In cases where it is provided for by law that a civil transaction must be 
expressed in writing, notarized, authenticated, registered or permitted, such 
provisions must be complied with.  
Article 120. Conditional civil transactions  41 
 
1. In cases where the parties have agreed on the conditions which shall give rise 
to or terminate a civil transaction, such civil transaction shall arise or be 
terminated upon the occurrence of such conditions.  
2. In cases where the conditions which give rise to or terminate a civil 
transaction cannot occur due to the direct or indirect action of deliberate 
impeding of one party, such conditions shall be considered having occurred; if 
the direct or indirect efforts of one of the parties promotes deliberately promote 
the occurren ce of conditions so as to give rise to or terminate the civil 
transaction, such conditions shall be deemed not to have occurred.  
Article 121. Interpretation of civil transactions  
1. In cases where a civil transaction may be understood in different ways, s uch 
transaction must be interpreted in the following order:  
a) In accordance with the real intention of the parties at the time when the 
transaction was entered into;  
b) In a manner consistent with the objective of the transaction;  
c) In accordance with th e customary practice of the place where the transaction 
was entered into.  
2. The interpretation of civil contracts shall comply with the provisions of 
Article 404 of this Code and the interpretation of the contents of testaments shall 
comply with the provi sions of Article 648 of this Code.  
Article 122. Invalid civil transactions  
Civil transactions which fail to satisfy any one of the conditions specified in 
Article 117 of this Code shall be invalid.  
Article 123. Invalidity of civil transactions due to breac h of legal 
prohibitions or contravention of social ethics  
Civil transactions with objectives and contents which breach legal prohibitions 
or which contravene social ethics shall be invalid.  
Legal prohibitions mean provisions of law which do not permit enti ties to 
perform certain acts.  
Social ethics are common standards of conduct as between persons in social life, 
which are recognized and respected by the community.  
Article 124. Invalidity of civil transactions due to falsification  42 
 
1. If the parties falsely  enter into a civil transaction for the purpose of concealing 
another transaction, the false transaction shall be invalid and the concealed 
transaction remains valid, unless it is also invalid under the provisions of this 
Code or relevant laws.  
2. If the p arties enter into a civil transaction falsely for the purpose of evading 
responsibilities to a third person, such transaction shall be invalid.  
Article 125. Invalidity of civil transactions established and performed by 
minors or legally incapacitated perso ns or persons with limited cognition 
and behavior control or persons with limited legal capacity  
1. When a civil transaction is established or performed by a minor, a legally 
incapacitated person, a person with limited cognition and behavior control, or a  
person with limited legal capacity, a court shall, at the request of the 
representative of that person, declare such transaction invalid, if it is provided 
for by law that such transaction must be established and performed by or with 
the consent of the re presentative of that person, except for the cases prescribed 
in Clause 2 of this Article.  
2. A civil transaction of a person prescribed in Clause 1 of this Article shall not 
be invalid in any of the following cases:  
a) The civil transaction of a child less  than 6 years of age or a legally 
incapacitated person established for his/her daily needs;  
b) The civil transaction only either arising rights or exempting from obligations 
for the minor, the legally incapacitated person, the person with limited cognition  
and behavior control, the person with limited legal capacity and their contracting 
parties;  
c) The civil transaction of which validity is recognized by the person established 
such transaction that become an adult or restore his/her legal capacity.  
Article  126. Invalidity of civil transactions due to misunderstanding  
1. If there is a misunderstanding in a civil transaction that make a party or the 
parties fails to meet the objectives of the transaction establishment, the mistaken 
party shall have the right to request a court to declare such transaction invalid, 
except for the case prescribed in Clause 2 of this Article.  
2. A civil transaction having misunderstanding shall not be invalid if the parties 
may meet the objectives of the transaction establishment or the parties may 43 
 
correct the misunderstanding resulting in the achievement of the objectives of 
the transaction establishment.  
Article 127. Invalidity of civil transactions due to deception, threat or 
compulsion  
Any party entering into a civil transactio n as a result of deception, threat or 
compulsion has the right to request a court to declare such transaction invalid.  
Deception in a civil transaction means an intentional act of a party or a third 
person for the purpose of misleading the other party as t o the subject, the nature 
of the entity or contents of the civil transaction which has caused the other party 
to enter into such transaction.  
Threat or compulsion in a civil transaction means an intentional act of a party or 
a third person which compels th e other party to conduct the civil transaction in 
order to avoid danger to the life, health, honor, reputation, dignity and/or 
property or that of its relatives.  
Article 128. Invalidity of civil transactions established by person lacking in 
cognition and b ehavior control  
A person who has legal capacity but has entered into a civil transaction at the 
time of he/she is lacking in cognition and behavior control shall have the right to 
request a court to declare such civil transaction invalid.  
Article 129. Inv alidity of civil transactions due to non -compliance with form  
A civil transaction violating conditions for validity pertaining to form shall be 
invalid, except for any of the following cases:  
1. If the form of a civil transaction, required to be establish ed in writing, does 
not comply with regulations of law, but a party or the parties has/have fulfill at 
least two third of the obligations in the transaction, a court, at his/her/their 
request(s), shall issue a decision on recognition of the validity of suc h 
transaction.  
2. If the form of a civil transaction, required to be established in writing, violates 
against regulations on notarizing or authorization, but a party or the parties 
has/have fulfill at least two third of the obligations in the transaction, a court, at 
his/her/their request(s), shall issue a decision on recognition of the validity of 
such transaction. In this case, the parties need not perform the notarizing or 
authorization.  
Article 130. Partially invalid civil transactions  44 
 
A civil transacti on shall be partially invalid when one part of the transaction is 
invalid but such invalidity does not affect the validity of the remaining parts.  
Article 131. Legal consequences  of invalid civil transactions  
1. An invalid civil transaction shall not give rise to, change or terminate any 
civil rights and obligations of the parties as from the time the transaction is 
entered into.  
2. When a civil transaction is invalid, the parties shall restore everything to its 
original state and shall return to each other  what they have received.  
If the restitution is not able to make in kind, it may paid in money.  
3. A bona fide person in receiving yield and/or income is not required to return 
such yield and/or income.  
4. The party at fault which caused damage must compen sate therefore.  
5. The settlement of consequences of invalid civil transactions regarding 
personal rights shall be prescribed in this Code and relevant laws.  
Article 132. Time limit for requesting court to declare civil transactions 
invalid  
1. The time lim it within which a request may be made to a court to declare a 
civil transaction invalid as specified in Articles 125 thru 129 of this Code shall 
be two years as from the date on which:  
a) The representative of a minor, a legally incapacitated person, a per son with 
limited cognition and behavior control or a person with limited legal capacity 
knows and should know the ward established and/or performed the transaction 
himself/herself.  
b) The mistaken or cheated person in a transaction knows and should know th at 
such transaction is established due to misunderstanding or cheating;  
c) The person that threatened or compelled other persons in a transaction put an 
end to such acts;  
d) The person lacking in cognition and behavior control establishes his/her 
transacti on; 
dd) The civil transaction is established in non -compliance with form.  45 
 
2. After the time limit prescribed in Clause 1 of this Article, if there is still no 
request for declaring civil transaction invalid, such transaction still remains 
valid.  
3. For ci vil transactions specified in Articles 123 and 124 of this Code, the time 
limit for requesting a court to declare such civil transactions invalid shall not be 
restricted.  
Article 133. Protection of the interests of bona fide third parties with regard 
to in valid civil transactions  
1. In cases where a civil transaction is invalid but the transacted property being a 
moveable property is not required to be registered and such property has already 
been transferred to a bona fide third party through another tran saction, the 
transaction with the third party shall remain valid, except for the case specified 
in Article 167 of this Code.  
2. In cases where a civil transaction is invalid but the transacted property is 
registered at a competent authority and such proper ty has already been 
transferred to a bona fide third party through another transaction which is 
established according to that registration, such transaction shall remain valid.  
In cases where the transacted property which is required to be registered has n ot 
registered at a competent authority, the transaction with the third party shall be 
invalid, except for cases the bona fide third party received such property through 
an auction or a transaction with an another party being the owner of such 
property purs uant to a judgment or decision of a competent authority but 
thereafter such person is not the owner of the property as a result of the 
judgment or decision being amended or annulled.  
3. The owner of a property shall have no right to reclaim the property fr om the 
bona fide third party if the transaction with such party remains valid as 
prescribed in Clause 2 of this Article, but the owner may proceed against the 
party at fault to refund appropriate expenses and compensate for his/her damage.  
Chapter IX  
REPRE SENTATION  
Article 134. Representation  
1. Representation means a person (hereinafter referred to as the representative) 
acting in the name and for the benefit of another person (hereinafter referred to 46 
 
as the principal) enters into and performs a civil tran saction within the scope of 
representation.  
2. Each natural or juridical person may enter into and/or perform civil 
transactions through a representative. A natural person may not allow another 
person to represent him/her; if the law provides for that they  must personally 
enter into and perform such transaction.  
3. The representative, if required by law, must have legal personality and/or 
legal capacity in accordance with the transactions that he/she enters into and 
performs.  
Article 135. Basis for establis hment of representation rights  
Representation rights shall be established according to a power of attorney 
between a principal and a representative (hereinafter referred to as authorized 
representation); according to a decision of a competent authority, a charter of a 
juridical person or as prescribed by law (hereinafter referred to as legal 
representation).  
Article 136. Legal representatives of natural persons  
1. The father and/or mother with respect to a minor.  
2. The guardian with respect to a ward. The guardian of a person with limited 
cognition and behavior control is a legal representative if appointed by a court.  
3. The person appointed by a court in case where it is not able to determine the 
representative prescribed in Clause 1 and Clause 2 of this Article.  
4. The person appointed by a court with respect to a person with limited legal 
capacity.  
Article 137. Legal representatives of juridical persons  
1. Legal representatives of juridical persons include:  
a) The person appointed by the juridical perso n according to its charter;  
b) The person competent to represent as prescribed by law;  
c) The person appointed by a court during the proceedings at the court.  
2. Each juridical person may have multiple legal representatives and each 
representative is entit led to represent the juridical person as prescribed in 
Articles 140 and 141 of this Code.  
Article 138. Authorized representatives  47 
 
1. Each natural or juridical person may authorize another natural or juridical 
person to enter into and perform a civil trans action.  
2. Members of a household, co -operative group or a non -juridical person may 
agree to authorize another natural or juridical person to enter into and perform a 
civil transaction related to their common property.  
3. A person aged from fifteen years t o below eighteen years may be an 
authorized representative, except where the law provides for that the civil 
transaction must be entered into and performed by a person who has reached 
eighteen years of age.  
Article 139. Legal consequences of representative  acts 
1. A civil transaction entered into and performed with a third person by a 
representative in accordance with his/her scope of authorization shall give rise to 
rights and obligations of the principal.  
2. The representative is entitled to enter into a nd/or perform necessary acts to 
attain the objectives of the authorization.  
3. In case where a representative still enters into or performs a civil transaction 
although he/she knew or should know the establishment of authorization due to 
misunderstanding, deception, threat or compulsion, such civil transaction shall 
not give rise to rights and obligations of the principal, except for the case that 
the principal knew or should know such misunderstanding, deception, threat or 
compulsion without any objection.  
Article 140. Term of representation  
1. The term of representation shall be determined according to a power of 
attorney, a decision of a competent authority, and a charter of a juridical person 
or as prescribed by law.  
2. If it fails to determine the term of representation prescribed in Clause 1 of this 
Article, the term of representation shall be determined as follows:  
a) If the representation right is determined according to a specific civil 
transaction, the time limit for representation shall be determi ned until the time of 
termination of such civil transaction;  
b) If the representation right is not determined according to a specific civil 
transaction, the term of representation is 1 year, from the time of arising 
representation right.  48 
 
3. The authorized representation shall terminate in any of the following cases:  
a) Upon an agreement;  
b) Upon expiry of the term of authorization;  
c) Upon completion of the authorized tasks;  
d) The principal or the representative unilaterally revokes the authorization;  
dd) The principal or the representative being natural person dies; the principal or 
the representative being juridical person ceases to exist;  
e) The representative does not meet the conditions prescribed in Clause 3 Article 
134 of this Code;  
g) Upon another b asis that causes the failure of the representation.  
4. The legal representation shall terminate in any of the following cases:  
a) The principal being natural person becomes an adult or has his/her legal 
capacity restored;  
b) The principal being person dies ; 
c) The principal being juridical person ceases to exist;  
d) Upon another basis as prescribed in this Code and relevant laws.  
Article 141. Scope of representation  
1. Each representative may only enter into and/or perform civil transactions 
within his/her  scope of representation according to any of the following bases:  
a) The decision of the competent authority;  
b) The charter of the juridical person;  
c) Contents of authorization;  
d) Other regulations as prescribed by law.  
2. If it fails to determine the specific scope authorization prescribed in Clause 1 
of this Article, the legal representative has the right to enter into and perform all 
civil transactions in the interests of the principal, unless otherwise prescribed by 
law. 
3. A natural or juridical pe rson may represent multiple natural or juridical 
persons but he/she/it may not, on behalf of the principal, enter into and perform 
a civil transaction with him/her/it or with a third party that he/she/it also acts as 
a representative therefor, unless other wise prescribed by law.  49 
 
4. The representative must inform the parties of the scope of his/her 
representation.  
Article 142. Consequences of civil transactions entered into and performed 
by unauthorized persons  
1. A civil transaction entered into and perform ed by an unauthorized person 
representative shall not give rise to rights and obligations of the principal, except 
for any of the following cases:  
a) The principal recognizes the transaction;  
b) The principal knows it without any objection within an approp riate time limit;  
c) It is the principal's fault that the other party does not know or is not able to 
know that the person entering into and performing the civil transaction therewith 
was unauthorized.  
2. If a civil transaction entered into and performed b y an unauthorized person 
does not give rise to rights and obligations with respect to the principal, the 
unauthorized person must fulfill the obligations to the person with which he/she 
transacted, unless such person knew or should have known that the 
representative was unauthorized.  
3. A person having transacted with an unauthorized person has the right to 
terminate unilaterally the performance of or to terminate the civil transaction 
entered into and to demand compensation for any damage, except where suc h 
person knew or should have known that the representative was unauthorized or 
the case prescribed in Point a Clause 1 of this Article.  
4. If the unauthorized person and the other party in a civil transaction 
deliberately enter into and perform such transa ction and thereby cause damage 
to the principal, they must jointly compensate for the damage.  
Article 143. Consequences of civil transactions entered into and performed 
by representatives beyond scope of representation  
1. A civil transaction entered into and performed by a representative beyond his 
or her scope of representation shall not give rise to rights and obligations of the 
principal with respect to that part of the transaction which exceeded the scope of 
representation, except for any of the follow ing cases:  
a) The principal gives consent;  
b) The principal knows it without any objection within an appropriate time limit;  50 
 
c) It is the principal's fault that the other party does not know or is not able to 
know that the person entering into and performi ng the civil transaction therewith 
was beyond his/her scope of representation.  
2. If a civil transaction entered into and performed by a representative beyond 
his/her scope of representation does not give rise to rights and obligations of the 
principal wit h respect to that part of the transaction, the representative must 
fulfill the obligations owning to the person with which he/she transacted in 
respect of the part of transaction which is beyond the scope of representation, 
unless such person knew or shoul d have known that the scope of representation 
was exceeded.  
3. A person having transacted with such representative has the right to terminate 
unilaterally the performance of or to terminate the civil transaction with respect 
to that part which is beyond th e scope of representation or with respect to the 
entire transaction and to demand compensation for any damage, except where 
such person knew or should have known that the scope of representation was 
exceeded or the case prescribed in Point a Clause 1 of th is Article.  
4. Where a person and a representative enter into and perform a civil transaction 
deliberately beyond the scope of representation of the representative and thereby 
cause damage to the principal, they shall be jointly liable to compensate for th e 
damage.  
Chapter X  
TIME LIMITS AND PRESCRIPTIVE PERIODS  
Section 1. TIME LIMITS  
Article 144. Time limits  
1. Time limit means a length of time calculated from one point of time to 
another point of time.  
2. A time limit may be calculated by reference to minu tes, hours, days, weeks, 
months or years, or by reference to the happening of an event.  
Article 145. Methods for calculating time limits  
1. The method for calculating a time limit shall be apply in accordance with the 
provisions of this Code, unless otherw ise agreed or otherwise provided by law.  
2. A time limit shall be calculated according to the solar calendar, unless 
otherwise agreed.  51 
 
Article 146. Detailed provisions on time limits and point of time for 
calculating time limits  
1. Where the parties have a greed on a time limit which is one year, half of one 
year, one month, half of one month, one week, one day, one hour or one minute, 
but such length of time is not continuous, the time limit shall be calculated as 
follows:  
a) One year shall be three hundred  and sixty five (365) days;  
b) Half of one year shall be six months;  
c) One month shall be thirty (30) days;  
d) Half of one month shall be fifteen (15) days;  
dd) One week shall be seven days;  
e) One day shall be twenty four (24) hours;  
g) One hour shall be  sixty (60) minutes;  
h) One minute shall be sixty (60) seconds.  
2. Where the parties have agreed on a point of time which is at the beginning of 
a month, the middle of a month or the end of a month, such point of time shall 
be determined as follows:  
a) The  beginning of a month shall be the first day of that month;  
b) The middle of a month shall be the fifteenth day of that month;  
c) The end of a month shall be the last day of that month.  
3. Where the parties have agreed on a point of time which is at the be ginning of 
the year, the middle of a year or the end of a year, such point of time shall be 
determined as follows:  
a) The beginning of a year shall be the first day of January;  
b) The middle of a year shall be the last day of June;  
c) The end of a year sha ll be the last day of December.  
Article 147. Commencement of time limits  
1. Where a time limit is stated by reference to minutes or hours, it shall 
commence from a defined moment of time.  52 
 
2. Where a time limit is stated by reference to days, weeks, months or years, the 
first day of the time limit shall not be taken into account and the time limit shall 
commence from the day following the defined date.  
3. Where a time limit is stated by reference to the happening of an event, the 
date on which the event happ ens shall not be taken into account and the time 
limit shall commence from the day following the date on which the event 
happened.  
Article 148. End of time limits  
1. Where a time limit is stated by reference to days, the time limit shall end at 
the last mo ment of the last day of the time limit.  
2. Where a time limit is stated by reference to weeks, the time limit shall end at 
the last moment of the corresponding day of the last week of the time limit.  
3. Where a time limit is stated by reference to months, the time limit shall end at 
the last moment of the corresponding day of the last month of the time limit. If 
the month in which the time limit ends does not have a corresponding day, the 
time limit shall end on the last day of such month.  
4. Where a time l imit is stated by reference to years, the time limit shall end at 
the last moment of the corresponding day and month of the last year of the time 
limit.  
5. Where the last day of a time limit falls on a weekend or a public holiday, the 
time limit shall end at the last moment of the next working day following such 
day. 
6. The last moment of the last day of a time limit shall be precisely twelve 
o'clock midnight on that day.  
Section 2. PRESCRIPTIVE PERIODS  
Article 149. Prescriptive periods  
1. Prescriptive per iod means a time limit provided by law where, upon its 
expiry, a legal consequence arises as prescribed by law.  
The prescriptive periods shall apply as prescribed in this Code and relevant 
laws.  
2. A court only applies provisions in terms of prescriptive p eriods at the request 
of a party or the parties provided that such request is filed before the first trial 
court of first instance gives a judgment and/or a decision on settlement.  53 
 
The person benefiting from the application of the prescriptive period may r efuse 
to apply such prescriptive period, unless such refusal is aimed at evading his/her 
obligations.  
Article 150. Types of prescriptive periods  
1. A prescriptive period for enjoying civil rights is the time limit where, upon its 
expiry, an entity enjoys c ivil rights.  
2. A prescriptive period for a release from civil obligations is the time limit 
where, upon its expiry, a person with civil obligations is released from the 
fulfillment of those civil obligations.  
3. A prescriptive period for initiating legal action is the time limit within which 
an entity has the right to initiate legal action to request a court to resolve a civil 
case to protect the infringed legal rights or interests of the entity. When such 
time limit expires, the right to initiate such leg al action shall be lost.  
4. A prescriptive period for requesting resolution of a civil case is the time limit 
within which an entity has the right to request a court to resolve a civil case in 
order to protect the legal rights and interests of natural pers ons, juridical 
persons, public interest and/or the interest of the State. When such time limit 
expires, the right to request shall be lost.  
Article 151. Method for calculating prescriptive periods  
A prescriptive period shall be calculated from the first mo ment of time of the 
first day and shall end at the last moment of time of the last day of the period.  
Article 152. Effectiveness of prescriptive periods for enjoyment of civil 
rights and release from civil obligations  
Where the law provides for that a subj ect may enjoy civil rights or be released 
from civil obligations by reference to a prescriptive period, the enjoyment of 
civil rights or the release from civil obligations shall take effect only upon 
expiry of the prescriptive period.  
Article 153. Continui ty of prescriptive periods for enjoyment of civil rights 
and release from civil obligations  
1. The prescriptive period for enjoyment of civil rights or release from civil 
obligations shall continue uninterrupted from its beginning to its expiry. If there 
is an event causing an interruption, the prescriptive period shall recommence 
from the moment when the event causing the interruption ends.  54 
 
2. The prescriptive period for enjoyment of civil rights or release from civil 
obligations shall be suspended upon oc currence of any of the following events:  
a) A competent authority makes a resolution with respect to the civil rights and 
obligations which are the subject of the prescriptive period;  
b) Civil rights or obligations which are the subject of a prescriptive p eriod are 
disputed by a person with related rights or obligations and they are settled by an 
effective judgment or decision issued by a court.  
3. The prescriptive period shall continue uninterrupted where the enjoyment of 
civil rights or the release from c ivil obligations or the right to initiate legal 
action is lawfully transferred to another person.  
Article 154. Commencement of prescriptive periods for initiating legal 
action for civil cases and prescriptive periods for requesting resolution of 
civil case s 
1. The commencement of the prescriptive period for initiating legal action for a 
civil case shall be calculated from the date on which the eligible person knows 
or should know that his/her legal rights or interests are infringed, unless 
otherwise provide d by law.  
2. The commencement of the prescriptive period for requesting resolution of a 
civil case shall be calculated from the date when the right to request arises, 
unless otherwise provided by law.  
Article 155. Non -applicability of prescriptive periods  
A prescriptive period for initiating legal action for a civil case shall not apply in 
any of the following cases:  
1. Request for the protection of personal rights not associated with property;  
2. Request for the protection of ownership rights, unless other wise provided by 
this Code or relevant laws.  
3. Dispute over land use right as prescribed in the Law on land;  
4. Other cases as provided by law.  
Article 156. Time periods excluded from prescriptive periods for initiating 
legal action for civil cases and fr om prescriptive periods for requesting 
resolution of civil cases  55 
 
The time period during which one of the following events occurs shall be 
excluded from prescriptive periods for initiating legal action for civil cases and 
from prescriptive periods for reque sting resolution of civil cases:  
1. An event of force majeure or other objective hindrance which renders the 
person with the right to initiate legal action for a civil case or make the request 
not able to do so within the prescriptive period.  
An event of f orce majeure is an event which occurs in an objective manner 
which is not able to be foreseen and which is not able to be remedied by all 
possible necessary and admissible measures being taken.  
An objective hindrance is a hindrance which in an objective co ntext results in a 
person with civil rights or obligations not knowing that his or her lawful rights 
and interests have been infringed or not being able to exercise his or her rights 
or fulfill his or her civil obligations;  
2. The person with the right to initiate legal action for a civil case or to make the 
request is a minor or a legally incapacitated person, a person with limited 
cognition and behavior control or a person with limited legal capacity, and does 
not yet have a representative.  
3. The represe ntative of a minor or a legally incapacitated person, a person with 
limited cognition and behavior control or a person with limited legal capacity 
has not yet been replaced in any of the following cases:  
a) The representative being natural person dies or t he representative being 
juridical person ceases to exist;  
b) The representative, for good reasons, cannot continue his/her representation.  
Article 157. Re -commencement of prescriptive period for initiating legal 
action for civil cases  
1. The prescriptive period for initiating legal action for a civil case shall re -
commence in any of the following cases:  
a) The obligor has acknowledged part or all of its obligations to the plaintiff;  
b) The obligor has acknowledged or fulfilled part of its obligations to th e 
plaintiff;  
c) The parties have become reconciled.  56 
 
2. The prescriptive period for initiating legal action for a civil case shall re -
commence from the date following the date on which the event provided in 
clause 1 of this Article occurs.  
PART TWO  
OWNERSHI P RIGHTS AND OTHER PROPERTY -RELATED RIGHTS  
Chapter XI  
GENERAL PROVISIONS  
Section 1. Rules for establishing and exercising ownership rights and other 
property -related rights  
Article 158. Ownership rights  
Ownership rights comprise the rights of an owner to  possess, use and dispose of 
the property of the owner in accordance with law.  
Article 159. Other property -related rights  
1. Other property -related rights mean rights of entities directly hold or control 
the property belonging to ownership rights of anoth er entity.  
2. Other property -related rights include:  
a) Right to adjacent immovable property;  
b) Usufruct right;  
c) Surface rights.  
Article 160. Rules for establishing and exercising ownership rights and 
other property -related rights  
1. Ownership rights a nd other property -related rights shall be established and 
exercised if they are prescribed in Code and relevant laws.  
Other property -related rights shall remain valid although the ownership right 
have been transferred, otherwise provided by this Code or re levant laws.  
2. Each owner is entitled to perform all acts on his willpower to the property but 
it is not contrary to the provisions of the law, damage or adversely affects 
national interests, ethnicity, public interests, rights and legitimate interests of  
other people.  
3. Each holder of other property -related rights is entitled to perform all acts 
within the scope prescribed in this Code and relevant laws but it is not contrary 57 
 
to the provisions of the law, damage or adversely affects national interests, 
ethnicity, public interests, rights and legitimate interests of the owner or other 
people.  
Article 161. Time of establishing ownership rights and other property -
related rights  
1. The time of establishing ownership rights and other property -related rights 
shall be determined as prescribed in this Code and relevant laws; if there is no 
relevant regulations of law, the agreement of the parties shall prevail; if there is 
no either relevant regulations of law or agreement of the parties, the time of 
establishing  ownership rights and other property -related rights shall be the time 
when the property is transferred.  
The time when the property is transferred is the time when the obligee or his/her 
legal representative possesses the property.  
2. In case where the prop erty which has been not transferred arise yield or 
income, such yield or income shall belong to the transferor, unless otherwise 
agreed.  
Article 162. Bearing risks of property  
1. Each owner shall bear all risks of the property under his/her ownership, unle ss 
otherwise agreed or unless otherwise prescribed by this Code or relevant laws.  
2. Each holder of other property -related rights shall bear risks of the property 
within his/her right scope, unless otherwise agreed with the owner of the 
property or unless otherwise prescribed by this Code or relevant laws.  
Section 2. PROTECTION OF OWNERSHIP RIGHTS AND OTHER 
PROPERTY -RELATED RIGHTS  
Article 163. Protection of ownership rights and other property -related 
rights  
1. No one may be illegally restricted in or depri ved of his/her ownership rights 
or other property -related rights to his/her property.  
2. In case of extreme necessity for reasons of national defense, security or 
national interests, the State shall affect a compulsory purchase or requisition 
with compensa tion of the property of organizations or individuals in accordance 
with the market prices.  58 
 
Article 164. Measures for protection of ownership rights and other 
property -related rights  
1. Each owner or holder of other property -related rights is entitled to s elf-protect 
and prevent anyone from infringing his/her rights by measures in accordance 
with regulations of law.  
2. Each owner or holder of other property -related rights shall have the right to 
request a court or another competent authority to compel the p erson infringing 
upon their rights to return the property and terminate the acts of illegally 
obstructing the exercise of their ownership rights or other property -related 
rights, and to request compensation for any damage.  
Article 165. Possession with a le gal basis  
1. Possession with a legal basis is the possession of a property in any of the 
following cases:  
a) The owner possesses the property;  
b) A person is authorized by the owner to manage the property;  
c) A person to whom the right to possession has be en transferred through a civil 
transaction in accordance with the provisions of law;  
d) A person who discovers and keeps derelict property, property with 
unidentified owners, property which has been let drop on the ground, left over 
out of inadvertence, bu ried or sunken in accordance with this Code and/or 
relevant laws.  
dd) A person who discovers and keeps stray domestic animals, poultry or raised 
aquatic animals in accordance with this Code and/or relevant laws;  
e) Other cases as prescribed by law.  
2. A po ssession of property which does not comply with the provisions of 
Clause 1 of this Article is a possession without a legal basis.  
Article 166. The right to reclaim property  
1. Owners and/or holders of other property -related rights shall have the right to 
request the persons possessing, using or receiving benefits from the property 
without a legal basis to return such property.  
2. The owner of a property has no right to reclaim such property that is in the 
possession of a holder of other property -related rig hts. 59 
 
Article 167.  The right to reclaim movable property not subject to ownership 
right registration from bona fide possessors  
Owners may reclaim movable property not subject to ownership right 
registration from bona fide possessors in cases where such bona  fide possessors 
have acquired such property through unindemifiable contracts with persons who 
have no right to dispose of the property; in case of indemifiable contracts, the 
owners may reclaim the movable property if such movable property has been 
stolen , lost or other cases of possession against the owners' will.  
Article 168.  The right to reclaim movable property subject to ownership 
right registration or immovable property from bona fide possessors  
Owners may reclaim their movable property subject to ow nership right 
registration and immovable property, except for cases prescribed in Clause 2 
Article 133 of this Code.  
Article 169.  The right to request the prevention of acts of illegally 
obstructing the exercise of ownership rights and other property -relat ed 
rights  
When exercising their ownership rights or other property -related rights, the 
owners or holders shall have the right to request persons committing acts of 
illegally obstructing the exercise of their lawful ownership rights or possession 
rights to  terminate such acts or request a court or another competent authority to 
compel such persons to terminate their violations.  
Article 170.  The right to request compensation for damage  
Owners or holders of other property -related rights are entitled to reques t persons 
infringing upon their ownership rights or other property -related rights to 
compensate for any damage.  
Section 3. RESTRICTIONS ON PROTECTION OF OWNERSHIP 
RIGHTS AND OTHER PROPERTY -RELATED RIGHTS  
Article 171. Rights and obligations of owners and ho lders of other property -
related rights in emergency circumstances  
1. An emergency circumstance is a circumstance where in order to avert a 
danger actually and directly threatening the interests of the State or of a 
collective, or the legitimate rights or i nterests of their own or of other persons, a 
person has no alternative but to take an act which would cause lesser damage 
than the damage to be prevented.  60 
 
2. In an emergency circumstance, the owner and holder of other property -related 
rights to a property must not hinder another person from using his/her own 
property or hinder another person from causing damage to such property in 
order to prevent or abate the greater danger or damage that threatens to happen.  
3. The causing of damage in an emergency circum stance is not the act of 
infringing upon ownership rights or other property -related rights. The owner or 
the holder of other property -related rights shall be compensated for damage in 
accordance with the provisions of Article 595 of this Code.  
Article 172.  Obligations to protection of the environment  
When exercising ownership rights and/or other property -related rights, the 
owner or the holder must comply with the provisions of law on environmental 
protection; if he/she causes environmental pollution, the o wner shall have to 
terminate the acts which cause the pollution, to take measures to remedy the 
consequences and to compensate for damage.  
Article 173.  Obligations to respect and ensure social order and safety  
When exercising ownership rights and/or other property -related rights, the 
owner or the holder must respect and ensure social order and safety and must not 
abuse his/her ownership rights to cause social disorder or unsafety, causing 
damage to the State interests, public interests or legitimate rights and interests of 
other persons.  
Article 174.  Obligation to respect building regulations  
When constructing a project, the owners and holders of other property -related 
rights must comply with the law on construction, ensure safety. It may not build 
beyond th e height and distance specified by the law on construction and 
infringes the legitimate rights and interests of owners of adjoining and 
surrounding immovable properties.  
Article 175. Boundaries between immovable properties  
1. The boundaries between adjoini ng immoveable properties shall be determined 
in accordance with the agreement of the owners or in accordance with a decision 
of the competent authority.  
The boundaries may also be determined in accordance with customary practice 
or according to boundaries which have existed for thirty (30) or more years 
without dispute.  61 
 
The land user may not encroach upon the boundary or change the boundary 
markers, including boundaries being canals, irrigation ditches, trenches, gutters 
or boundaries of rice fields. Each e ntity must respect and maintain the common 
boundaries.  
2. A person having land use rights may use the airspace and the sub -surface 
according to the vertical dimensions of the boundaries around the land as 
prescribed by law and may not interfere with the us e by other persons of the 
adjoining land.  
A land user may only plant trees and performs other activities within the area 
covered by its land use rights and according to the defined boundaries. If the 
roots and branches of trees extend beyond the boundaries , such person must clip 
and prune the parts of the trees beyond the boundaries, except as otherwise 
agreed.  
Article 176. Boundary markers separating immovable property  
1. An owner of adjoining immoveable property may only erect boundary stakes 
and fences a nd build separating walls on the area covered by its land use rights.  
2. Adjoining land users may agree to the erection of boundary stakes and fences, 
the building of separating walls and the planting of trees on the boundary for use 
as boundary markers b etween the immoveable properties, and the boundary 
markers shall be under the multiple ownership of such persons.  
Where a boundary marker is erected on the boundary by only one party with the 
consent of the owner of the adjoining immoveable property, such boundary 
marker shall be multiple ownership property and the construction expenses shall 
be borne by the party having erected the marker, unless otherwise agreed. If the 
owner of the adjoining immoveable property does not give consent and has 
legitimate re ason, the owner having erected the boundary stake or fence or built 
the separating wall must remove it.  
3. With respect to boundary markers which are common house walls, the owner 
of the adjoining immoveable property may not cut out a window or air 
ventila ting hole or drill the wall in order to install building structures, except 
with the consent of the owner of the adjoining property.  
Where houses are separately built, but with adjoining walls, an owner may only 
drill and install building structures up to the space between the adjoining walls.  62 
 
With respect to trees which are common boundary markers, the parties have 
equal obligations to protect the trees, and the fruits from the trees shall be 
distributed equally, unless otherwise agreed.  
Article 177. Safet y guarantee with regard to trees or constructions posing 
risks of causing damage  
1. Where there is a danger that a tree or a construction will collapse onto an 
adjoining immoveable property, the owner must cut down the tree or repair or 
demolish the const ruction at the request of the owners of adjoining immovable 
property or a competent authority. If such person does not cut down the tree or 
demolish the construction, the owner of an adjoining immoveable property may 
request a competent authority to procur e that the tree be cut down or the 
structure be demolished. The expenses for cutting down the tree or demolishing 
the construction shall be borne by the owner of the tree or the structure.  
2. When digging a well or a pond or constructing underground struct ures, the 
owner of the project must do so at the distance away from the boundaries 
provided by the law on construction.  
When constructing a hygiene construction work, a storehouse of hazardous 
materials and other construction works likely to cause environm ental pollution, 
the owner of that property must build it a distance far from the markers and in 
reasonable location, ensure hygiene and safety and do not affect the owners of 
other immovable properties.  
3. If damage is caused to the owners of adjoining or  neighboring properties 
prescribed in Clauses 1 and 2 of this Article, compensation must be made.  
Article 178. Installing doors and windows opening onto adjacent immovable 
property  
1. A house owner may only install entry and exit doors and windows opening 
onto adjacent houses or opposite houses and common walkways in accordance 
with the law on construction.  
2. The underside of awnings above entry and exit doors or the underside of 
awnings of windows opening onto common walkways must be at least two point 
five (2.5) meters above the ground.  
Chapter XII  
POSSESSION  
Article 179. Concept of possession  63 
 
1. Possession means that an entity holds and controls a property directly or 
indirectly as holder of rights to such property.  
2. Possession includes possession of o wners and possession of non -owners.  
The possession of non -owners may not be the basis for establishment of 
ownership, except for the cases prescribed in Articles 228, 229, 230, 231, 232, 
233 and 236 of this Code.  
Article 180. Possession in good faith  
Posse ssion in good faith means the possession that the possessor has bases to 
believe that he/she has the right to the property under his/her possession.  
Article 181. Possession not in good faith  
Possession not in good faith means that the possession that the p ossessor knew 
or should have known that he/she has no right to the property under his/her 
possession.  
Article 182. Continuous possession  
1. Continuous possession of property is possession of property which occurs 
over a period of time without dispute relat ing to such property or with dispute 
but no effective judgment or decision on settlement of such dispute is issued, 
including the case when the property is delivered to another person for 
possession.  
2. The non -continuous possession shall not be treated as  the basis for presuming 
status and rights of possessors prescribed in Article 184 of this Code.  
Article 183. Overt possession  
1. Possession of property shall be deemed to be overt possession when it occurs 
in a transparent manner, without concealment; whe n property currently being 
possessed is used in accordance with its functions and usage and is preserved 
and retained by the possessor as if it were his or her own property.  
2. The overt possession shall not be treated as the basis for presuming status and  
rights of possessors prescribed in Article 184 of this Code.  
Article 184. Presuming status and rights of possessors  
1. Each possessor shall be presumed in good faith. If a person believes that such 
possessor is not in good faith, he/she must prove it.  64 
 
2. If there is a dispute over the rights to a property, the possessor of such 
property shall be presumed to have those rights. The disputing person must 
prove that the possessor have no right.  
3. A person possessing in good faith, continuously and overtly sh all be eligible 
for prescriptive periods for enjoying the rights and enjoy the yield and income 
derived from the property as prescribed in this Code and relevant laws.  
Article 185. Protection of possession  
When the possession is violated by another person,  the possessor is entitled to, 
personally or through a court or a competent authority, compels the violator to 
terminate his/her violation, make restitution, return the property and compensate 
for any damage.  
Chapter XIII  
OWNERSHIP RIGHTS  
Section 1. Conten ts of ownership rights  
Sub-section 1. RIGHT TO POSSESS  
Article 186. Right to possess of owners  
Where an owner possesses its own property, such owner may do all things to 
keep and manage the property in accordance with his or her wishes provided 
that it is  not contrary to law or social morals to do so.  
Article 187. Right to possess of persons managing property under 
authorization of owner  
1. When an owner authorizes another person to manage his or her property, the 
authorized person shall exercise the right  to possess such property within the 
scope, in the manner and for the duration determined by the owner.  
2. A person authorized to manage property is not able to become the owner of 
the property delivered as prescribed in Article 236 of this Code.  
Article 1 88. Right to possess of persons to which property is delivered 
through civil transactions  
1. Where an owner delivers property to another person through a civil 
transaction which does not include the transfer of ownership rights, the person to 
whom the prop erty is delivered must undertake the possession of such property 
in a manner consistent with the purpose and content of the transaction.  65 
 
2. The person to which the property is delivered has the right to use such 
property and is entitled to transfer the rig ht to possess and use the property to 
another person if the owner so agrees.  
3. The person to whom the property is delivered is not able to become the owner 
of that property as prescribed in Article 236 of this Code.  
Sub-section 2. RIGHT TO USE  
Article 18 9. Right to use  
Right to use means the right to exploit the usage of, and to enjoy the yield and 
income derived from, property.  
The right to use may be transferred to another person upon an agreement or as 
prescribed by law.  
Article 190. Right to use of o wners  
The owner has the right to use property in conformity with his/her wishes 
provided that this will not cause damage to or adversely affect the interests of 
the State or the public or the legal rights and interests of other persons.  
Article 191. Right to use of non -owners  
A non -owner shall have the right to use a property as agreed with the owner or 
as prescribed by law.  
Sub-section 3. RIGHT OF DISPOSAL  
Article 192. Right of disposal  
Right of disposal means the right to transfer ownership rights, renoun ce 
ownership rights, right to use, or destruct the property.  
Article 193. Conditions for disposal  
Disposal of property must be performed by a person with legal capacity in 
accordance with law.  
Where the law provides formalities and procedures for disposal of property, 
such formalities and procedures must be complied with.  
Article 194. Right of disposal of owners  
Owners shall have the right to sell, exchange, give, loan, bequeath, renounce or 
ownership rights, right to use, destruct or implement other forms of disposal in 
conformity with the law on property.  66 
 
Article 195. Right of disposal of non -owners  
A non -owner of property shall only have the right to dispose of the property 
pursuant to authorization from the owner or in accordance with provisions of the 
law. 
Article 196. Restrictions on right of disposal  
1. The right of disposal shall only be restricted in cases where the law so 
provides.  
2. Where a property for sale is an historic or cultural relic as prescribed in law 
on cultural heritage, the State shal l have the right of first refusal to purchase.  
Where a natural or juridical person has the right of first refusal to purchase 
certain property in accordance with law, upon the sale of such property, the 
owner must grant such right of first refusal to purch ase to such person.  
Section 2. FORMS OF OWNERSHIP  
Sub-section 1. THE PEOPLE’S OWNERSHIP  
Article 197. Property under the people’s ownership  
Land, water resources, mineral resources, resources in the waters, airspace and 
other natural resources and the asse ts invested and/or managed by the State 
belong to the entire people with the representation and centralized management 
of the State.  
Article 198. Exercise of right of owner with respect to the people -owned 
property  
1. The State of the Socialist Republic of  Vietnam is a representative that 
exercises the rights of the owner with respect to the people -owned property.  
2. The Government shall manage centrally and ensure the appropriate, efficient 
and economic use of the people -owned property.  
Article 199. Posses sion, use and disposal of the people -owned property  
The possession, use and disposal of the people -owned property shall be 
performed within the scope and in accordance with the procedures provided by 
law. 
Article 200. Exercise of the people ownership right s with respect to 
property invested in enterprises  67 
 
1. Where the people -owned property is invested in an enterprise, the State shall 
exercise the rights of the owner with respect to such property in accordance with 
the law on enterprises, management and use  of state capital investing in business 
at enterprises and relevant laws.  
2. Enterprises have the right to manage and use capital, land, natural resources 
and other property invested by the State in accordance with the relevant laws.  
Article 201. Exercise of the people ownership rights with respect to 
property allocated to regulatory agencies and units of armed forces  
1. Where property in the category of the people -owned property is allocated to a 
regulatory agency or unit of the armed forces, the State sha ll exercise the right to 
inspect the management and use of such property.  
2. The regulatory agency or unit of the armed forces shall manage and use the 
property allocated by the State for the correct purpose in accordance with law.  
Article 202. Exercise of  the people ownership rights with respect to 
property allocated to political organizations, socio -political organizations, 
and socio -political professional organizations, social organizations and 
socio -professional organizations  
1. Where property in the c ategory of the people -owned property is allocated to a 
political organization, socio -political organization or socio -political professional 
organization, social organization or socio -professional organization, the State 
shall exercise the right to inspect the management and use of such property.  
2. The political organization, socio -political organization or socio -political 
professional organization, social organization or socio -professional organization 
has the right to manage and use the property allocated  to it by the State for the 
correct purpose, within the scope and in accordance with the methods and 
procedures provided by law, and consistent with the functions and duties of such 
organization as provided in its charter.  
Article 203. Rights of natural an d juridical persons with respect to use of 
property in category of the people -owned property  
Natural and juridical persons may use land and extract aquatic resources, natural 
resources and other properties in the category of the people -owned property for 
the correct purpose and effectively and must fulfill all of their obligations to the 
State in accordance with law.  68 
 
Article 204. Property in category of the people -owned property not having 
been allocated to natural and juridical persons for management  
With respect to property in the category of the people -owned property which has 
not been allocated to a natural and juridical person for management, the 
Government shall organize protection, investigation and survey, and formulation 
of zoning in order to make s uch property available for use.  
Sub-section 2. PRIVATE OWNERSHIP  
Article 205. Private ownership and property under private ownership  
1. Private ownership means the ownership by a natural person or a juridical 
person.  
2. The quantity and value of a property  under lawful private ownership shall not 
be restricted.  
Article 206. Possession, use and disposal of property under private 
ownership  
1. An owner has the right to possess, use and dispose of property under his or 
her ownership for the purpose of satisfyin g the needs of daily life, consumption 
or business activities and other purposes in accordance with law.  
2. The possession, use and disposal of property under private ownership must 
not cause damage to or adversely affect the interests of the State or the public or 
the legal rights and interests of other persons.  
Sub-section 3. MULTIPLE OWNERSHIP  
Article 207. Multiple ownership and types of multiple ownership  
1. Multiple ownership means ownership of property by more than one owner.  
2. Multiple ownership com prises ownership in common and joint ownership.  
Article 208. Establishment of multiple ownership rights  
Multiple ownership rights shall be created as agreed by the owners or in 
accordance with provisions of the law or in accordance with customary practice.  
Article 209. Ownership in common  
1. Ownership in common is multiple ownership whereby each owner's share of 
the ownership rights with respect to the multiple ownership property is 
specified.  69 
 
2. Each of the owners in common has rights and obligations with respect to the 
multiple ownership property corresponding to its share of the ownership rights, 
unless otherwise agreed.  
Article 210. Joint ownership  
1. Joint ownership means multiple ownership whereby each owner's share of the 
ownership rights with respect  to the multiple ownership property is not 
specified.  
Joint ownership includes divisible joint ownership and indivisible joint 
ownership.  
2. Joint owners have equal rights and obligations with respect to the multiple 
ownership property.  
Article 211. Multip le ownership between communities  
1. Multiple ownership between a community is the ownership by a family line, 
hamlet, village, tribal village, mountainous hamlet, ethnic hamlet, religious 
community or other community of property which is formed in accordan ce with 
customary practice, which is jointly contributed to and raised by the members of 
the community or which was given to the whole community, and property which 
is obtained from other lawful sources for the purpose of satisfying the common 
lawful inter ests of the entire community.  
2. Members of a community shall jointly manage, use and dispose of multiple 
ownership property in the interests of the community as agreed or in accordance 
with customary practice, but not inconsistent with the law or social m orals.  
3. Multiple ownership property by a community is indivisible joint property.  
Article 212. Multiple ownership between family members  
1. Property of family members living together includes property that they 
contributed or made together and other prop erties whose ownership rights are 
established in accordance with this Code and relevant laws.  
2. The possession, use and disposal of multiple ownership property by family 
members shall be conducted as mutually agreed. With respect to disposal of an 
immovab le property, a movable property required registration, or a property 
being the primary income of the family, the agreement between all family 
members being adults with full legal capacity is required, unless otherwise 
prescribed by law.  70 
 
If there is no agre ement, the regulations on ownership in common prescribed in 
this Code and relevant laws shall apply, except for the case prescribed in Article 
213 of this Code.  
Article 213. Multiple ownership between husbands and wives  
1. Multiple ownership between a husb and and wife is divisible joint ownership.  
2. A husband and wife jointly create and develop their marital property through 
their efforts and have equal rights to possess, use and dispose of such property.  
3. A husband and wife shall discuss, agree on or au thorize each other in relation 
to the possession, use and disposal of the marital property.  
4. The marital property may be divided as agreed or pursuant to a decision of a 
court.  
5. If a husband and wife select the regulations on property under agreement a s 
prescribed in law on marriage and families, the marital property shall apply 
those regulations.  
Article 214. Multiple ownership in apartment buildings  
1. The areas, equipment and furnishings which are for common use in an 
apartment building prescribed in  the Law on Housing are under multiple 
ownership of all owners of the apartments in the apartment building and are 
indivisible, unless otherwise provided by law or unless all of the owners reach 
some other agreement.  
2. The owners of the apartments in an a partment building have equal rights and 
obligations with respect to the management and use of common areas and 
equipment prescribed in Clause 1 of this Article, unless otherwise agreed or 
prescribed by law.  
3. Where an apartment building is destroyed, the rights of the owners of the 
apartment building shall be exercised in accordance with law.  
Article 215. Mixed multiple ownership  
1. Mixed multiple ownership means ownership of property in respect of which 
owners from different economic sectors contribute ca pital for the purpose of 
conducting production and business for profit -making purposes.  
2. Property which is formed from sources being capital contribution by owners, 
lawful profits derived from production and business activities or other lawful 
sources in  accordance with law is mixed multiple ownership property.  71 
 
3. The possession, use and disposal of property under mixed multiple ownership 
must comply with the provisions of Article 209 of this Code and other relevant 
laws relating to capital contribution; to the organization and operation of 
production and business activities; to the administration and management of 
property; and to the liability for property and distribution of profits.  
Article 216. Management of multiple ownership property  
The owners of m ultiple ownership property shall manage jointly such property 
in accordance with the principle of unanimity, unless otherwise agreed or 
otherwise provided by law.  
Article 217. Use of multiple ownership property  
1. Each owner in common has the right to expl oit, and to enjoy the yield and 
income derived from, the multiple ownership property in proportion to its share 
of the ownership rights, unless otherwise agreed or otherwise provided by law.  
2. Joint owners have equal rights to exploit and to enjoy the yie ld and income 
derived from, the multiple ownership property, unless otherwise agreed.  
Article 218. Disposal of multiple ownership property  
1. Each owner in common has the right to dispose of its share of the ownership 
rights.  
2. Disposal of joint property shall be implemented as agreed by the owners of 
the property or as provided by law.  
3. Where an owner of multiple ownership property sells its share of the 
ownership rights, the other owners of the property have the right of first refusal 
to purchase such share.  
Such owner may sell such share to other persons if no other owner purchases 
within three months in the case of immoveable property, or within one month in 
the case of moveable property, from the date on which the other owners received 
notice of the sale and the conditions of the sale. The notice must be made 
writing and conditions for sale applying to other owners in common shall be 
similar to those applying to non -owners in common.  
In the case where there is a sale of a share of the multiple ownersh ip rights in 
breach of this regulation on priority purchase right, within the time limit of three 
months from the date of discovery of the breach, any one of the multiple owners 
has the right to request a court to transfer to it the rights and obligations of the 72 
 
purchaser; and the party at fault which caused damage shall be liable to 
compensate for damage.  
4. Where one of the owners of immovable property renounces its share of the 
ownership rights or where such person dies without leaving an heir, its share  of 
the ownership rights shall belong to the State, except in the case of multiple 
ownership between communities where the share of ownership rights shall 
belong to the remaining members.  
5. Where one of the owners of movable property renounces its share o f the 
ownership rights or where such person dies without leaving an heir, its share of 
the ownership rights shall belong to the remaining members.  
6. Where all owners renounce their ownership rights with respect to multiple 
ownership property, the ownershi p rights shall be established as prescribed in 
Article 228 of this Code.  
Article 219. Division of multiple ownership property  
1. Where multiple ownership property is divisible, each owner has the right to 
request the property to be divided. If the property  must be maintained within a 
certain period of time as agreed by all owners or as prescribed by law, each 
owner only has the right to request the property to be divided upon expiry of that 
period. Where the property is not able to be divided in kind, it sh all be valued in 
terms of money for the purposes of division, unless otherwise agreed.  
2. Where a person requests one of the owners of multiple ownership property to 
fulfill a payment obligation and such owner does not have private property or 
sufficient p rivate property to make the payment, the requesting person has the 
right to request that the multiple ownership property be divided in order to 
receive monetary payment and such person shall be entitled to participate in the 
division of the property, unles s otherwise provided by law.  
If the shares of ownership rights are not able to be divided in kind or if such a 
division is opposed by the remaining owners, the requesting person has the right 
to request the owner with the obligation to sell to sell its sha re of ownership 
rights in order to fulfill the payment obligation.  
Article 220. Termination of multiple ownership  
Multiple ownership shall terminate in any of the following circumstances:  
1. The multiple ownership property has been divided;  73 
 
2. One of the o wners of the multiple ownership property is entitled to enjoy the 
property in its entirety;  
3. The multiple ownership property no longer exists;  
4. Other cases as provided by law.  
Section 3. CREATION AND TERMINATION OF OWNERSHIP RIGHTS  
Sub-section 1. CREAT ION OF OWNERSHIP RIGHTS  
Article 221. Basis for establishing ownership rights  
Ownership rights are created with respect to property in any of the following 
cases:  
1. Through labour, lawful production and business activities, or creation of 
subjects of intel lectual property rights;  
2. Transfer of ownership rights as agreed or pursuant to a decision of a 
competent authority;  
3. Receipt of yield and/or income;  
4. Formation of new objects through merging, mixing or processing;  
5. Inheritance of property;  
6. Acqu isition in accordance with law on objects of which owner is unidentified, 
buried or sunken objects; lost or mislaid objects, stray poultry or livestock or 
aquaculture stock.  
7. Possession and gain from property prescribed in Article 236 of this Code;  
8. Other cases as provided by law.  
Article 222. Establishment of ownership rights with respect to property 
earned from labour and lawful business and production activities  or 
creation of subjects of intellectual property rights  
Workers and persons conducting l awful business and production activities have 
ownership rights with respect to property earned from labour and the lawful 
business and production activities from the time when such property is earned.  
Person conducting creation activities has ownership rig hts to the property gained 
from those activities as prescribed in the Intellectual Property Law.  
Article 223. Establishment of ownership rights under agreements  74 
 
A person to which property has been transferred through a contract of sale and 
purchase or by a  gift, exchange or loan or another contract of transfer of 
ownership rights has the right to own such property as provided by law.  
Article 224. Establishment of ownership rights with respect to yield and 
income  
An owner or a user of property has ownership rights with respect to the yield 
and income derived from such property as agreed or in accordance with law 
from the time when such yield and income are derived.  
Article 225. Establishment of ownership rights in case of merger  
1. Where property of more tha n one owner is merged to form an indivisible 
object and it is not possible to determine whether the property which is merged 
is a primary object or an auxiliary object, the newly formed object shall be the 
multiple ownership property of such owners. If the  property which is merged 
consists of a primary object and an auxiliary object, the newly formed object 
shall belong to the owner of the primary object from the time when the new 
object is formed. The owner of the new property must pay the value of the 
auxiliary object to its owner, unless otherwise agreed.  
2. Where a person merges the moveable property of another person with his/her 
own moveable property, even though he/she knew or should have known that 
such property was not his/her own and he/she did not  have the consent of the 
owner of the property which was merged, the owner of the property which is 
merged shall have one of the following rights:  
a) Request the person having merged the property to deliver the new property to 
it and to pay the value of th e property;  
b) Request the person having merged the property to pay the value of the 
merged property and to compensate for any damage if the owner of the property 
which is merged does not wish to take the new property.  
c) Other rights as provided by law.  
3. Where a person merges the moveable property of another person with his/her 
own immoveable property, even though he/she knew or should have known that 
such property was not his/her own and he/she did not have the consent of the 
owner of the property which  was merged, the owner of the property which is 
merged shall have one of the following rights:  75 
 
a) Request the person having merged the property to pay the value of the merged 
property and to compensate for any damage;  
b) Other rights as provided by law.  
4. Where a person merges the immoveable property of another person with 
his/her own moveable property, the owner of the immovable property has the 
right to request such person to demolish the illegally merged property and 
compensate for any damage, or retain  the property and pay the value of the 
merged property to such person, unless otherwise agreed.  
Article 226. Establishment of ownership rights in case of mixing  
1. Where the property of more than one owner is mixed to form a new 
indivisible object, the new  object shall be the multiple ownership property of 
such owners from the moment of mixing.  
2. Where a person has mixed the property of another person with its own 
property, even though it knew or should have known that such property is not its 
own and it d oes not have the consent of the owner of the property which has 
been mixed, the owner of the property which has been mixed may:  
a) Request the person having mixed the property to deliver the new property to it 
and pay such person the value of the property of such person;  
b) If the owner of the property which has been mixed does not wish to take the 
new property, request the person having mixed the property to pay the value of 
the property of the owner and to compensate for any damage.  
Article 227. Establish ment of ownership rights in case of processing  
1. An owner of raw materials which are processed to form a new object is also 
the owner of the newly formed object.  
2. A person using raw materials under the ownership of another person for 
processing who acts  in good faith shall become the owner of the new property, 
but must pay the value of the raw materials to the owner and compensate it for 
any damage.  
3. Where a person processes raw materials not in good faith, the owner of the 
raw materials has the right to request that the new object be delivered to it. 
Where the raw materials are owned by more than one person, such persons shall 
become the owners of the newly formed object in proportion to the value of the 
raw materials owned by each person. The owners o f the raw materials processed 76 
 
not in good faith may request the person carrying out the processing to 
compensate for any damage.  
Article 228. Ownership rights are established with respect to abandoned 
objects and objects the owner of which is not able to b e identified  
1. An abandoned object is an object in respect of which the owner has 
renounced its ownership rights.  
A person finding an abandoned object which is moveable property shall have the 
right to own such property, unless otherwise prescribed by law . If the found 
object is immoveable property, it shall belong to the State.  
2. A person finding an object the owner of which is not able to be identified 
must inform or deliver the object to the people's committee or police station of 
the nearest commune i n order that a public announcement may be made 
notifying the owner to reclaim the object.  
The delivery of the object must be recorded, specifying the surnames, given 
names and addresses of the finder and the receiver and the condition, quantity 
and volume of the property delivered.  
The people's committee or police station of commune which received the object 
must notify the finder of the results of their inquiries in order to determine the 
owner.  
Where the object, the owner of which is not able to be identi fied, is moveable 
property, if the owner of the object is still not able to be identified after one year 
from the date of the public announcement, such property shall be under the 
ownership of the finder in accordance with law.  
Where the object is immovea ble property, if the owner is still not able to be 
identified after five years from the date of the public announcement, such 
property shall belong to the State. The finder shall be entitled to enjoy a 
monetary reward in accordance with law.  
Article 229. E stablishment of ownership rights with respect to buried or 
sunken objects which are found  
1. A person finding an object which is buried or sunken must notify and return 
to the owner; if the owner is not able to be identified, he/she must inform or 
deliver the object to the people's committee or police station of the nearest 
commune or a competent authority in accordance with regulations of law.  77 
 
2. Ownership rights with respect to a buried or sunken object which is found, but 
which has no owner or the owner  of which is not able to be identified, shall be 
determined, after deducting search and maintenance expenses, as follows:  
a) A found object which is an historic or cultural relic shall belong to the State 
as prescribed in Law on cultural heritage and the f inder shall be entitled to enjoy 
a monetary reward in accordance with law.  
b) A found object which is not an historic or cultural relic as prescribed in Law 
on cultural heritage, and which has a value equivalent up to ten -month base 
salary provided for by the State, shall belong to the finder; if the value of the 
found object is more than the equivalent of ten -month base salary provided for 
by the State, the finder shall be entitled to the value of ten -month base salary 
plus fifty (50) per cent of the remai ning value of the object in excess of the ten -
month base salary provided for by the State, with the remaining value belonging 
to the State.  
Article 230. Establishment of ownership rights with respect to objects 
which other persons have lost or mislaid  
1. A person finding an object which another person has lost or mislaid and being 
aware of the address of the person having lost or mislaid the object must inform 
or return the object to such person. If the finder is not aware of the address of the 
person havin g lost or mislaid the object, it must inform or deliver the object to 
the people's committee or police station of the nearest commune in order that a 
public announcement may be made notifying the owner to reclaim the object.  
The people's committee or polic e station of commune which received the object 
must notify the finder of the results of their inquiries in order to determine the 
owner.  
2. If, after one year from the date of the public announcement of the object 
having being found, the owner of the objec t is still not able to be identified or 
the owner does not claim the object, the ownership rights with respect to such 
property shall be determined as follows:  
a) If the value of lost or mislaid object is up to ten -month base salary provided 
for by the St ate, it shall belong to the finder as prescribed in this Code and 
relevant laws; if the value of the found object is more than the equivalent of ten -
month base salary provided for by the State, the finder shall be entitled to the 
value of ten -month base sa lary, deducted from preservation expenses, and plus 
fifty (50) per cent of the remaining value of the object in excess of the ten -78 
 
month base salary provided for by the State, with the remaining value belonging 
to the State.  
b) A lost or mislaid object whic h is an historic or cultural relic as prescribed in 
the Law on cultural heritage shall belong to the State. The finder shall be 
entitled to enjoy a monetary reward in accordance with law.  
Article 231. Establishment of ownership rights with respect to stray  
domestic livestock  
1. A person capturing a stray domestic livestock must take care of it and notify 
the people's committee of the commune in which such person resides in order 
that a public announcement may be made notifying the owner to reclaim the 
stray  domestic livestock. After 6 months or after 1 year, with regard to domestic 
livestock allowed to roam according to customary practice, from the date of the 
public announcement, the ownership rights with respect to domestic livestock 
and any offspring born  thereof shall belong to the capturer.  
2. If the owner reclaims the stray domestic livestock, he/she must pay care 
remuneration and other expenses for the capturer. During the period of feeding 
and taking care of the stray domestic livestock, the capturer shall be entitled to 
half of or 50% of value any offspring born. Such person must compensate for 
any damage if it intentionally causes the death of the stray domestic livestock.  
Article 232. Establishment of ownership rights with respect to stray 
domestic poultry  
1. Where the domestic poultry of a person is lost and captured by another 
person, the person having captured the stray domestic poultry must make a 
public announcement notifying the owner to reclaim such poultry. If no one 
reclaims the stray domest ic poultry after one month from the date of the public 
announcement, it shall be under the ownership of the person having captured it.  
2. An owner reclaiming the stray poultry must remunerate the person having 
captured it for feeding and taking care of the  stray domestic poultry and any 
other expenses incurred. During the period of feeding and taking care of the 
stray domestic poultry, the person having captured it shall enjoy the benefits 
from the stray domestic poultry. Such person must compensate for any  damage 
if it intentionally causes the death of the stray domestic poultry.  
Article 233. Establishment of ownership rights with respect to aquaculture 
stock  79 
 
Where the aquaculture stock of a person moves naturally into the field, pond or 
lake of another per son, the stock shall be under the ownership of the person 
having such field, pond or lake. Where the aquaculture stock has special marks 
which make it possible to determine that it is not under the ownership of the 
person having such field, pond or lake, s uch person must make a public 
announcement notifying the owner to reclaim the stock. If no one reclaims the 
stock after one month from the date of the public announcement, it shall be 
under the ownership of the person having such field, pond or lake.  
Artic le 234. Establishment of ownership rights due to inheritance  
An heir shall have ownership rights with respect to inherited property in 
accordance with Part Four of this Code.  
Article 235. Establishment of ownership rights in accordance with 
judgment or dec ision of court or in accordance with decision of another 
competent authority  
Ownership rights may also be created on the basis of an effective judgment or 
decision of a court or an effective decision of another competent authority.  
Article 236. Establishm ent of ownership rights resulting from prescriptive 
periods with respect to possession or deriving benefits from property 
unlawfully  
A person unlawfully but in good faith possessing, or deriving benefits from, 
property continuously and in an overt manner for ten (10) years with respect to 
moveable property, and for thirty (30) years with respect to immoveable 
property, shall become the owner of such property from the moment of 
commencement of possession, unless otherwise prescribed by this Code and 
relevan t laws.  
Sub-section 2. TERMINATION OF OWNERSHIP RIGHTS  
Article 237. Bases for terminating ownership rights  
Ownership rights terminate in any of the following cases:  
1. The owners transfers his or her ownership rights to another person;  
2. The owner renounc es his or her ownership rights;  
3. The property is consumed or destroyed;  
4. The property is realized in order to fulfill the obligations of the owner;  
5. The property is requisitioned;  80 
 
6. The property is confiscated;  
7. Other persons have established owne rship rights with respect to property in 
accordance with this Code;  
8. Other bases as provided by law.  
Article 238. Transfer of ownership rights by owner  
Where an owner transfers its ownership rights to another person through a 
contract for sale and purcha se, by exchange, gift or loan, or through inheritance, 
the ownership rights of the owner with respect to the property shall terminate 
from the time when the ownership rights of the transferee arise.  
Article 239. Renunciation of ownership rights  
An owner ma y terminate ownership rights with respect to its property by 
publicly declaring, or by performing certain acts evidencing, its renunciation of 
the right to possess, use and dispose of such property.  
With respect to property the renunciation of which may ha rm social order or 
security or cause environmental pollution, the renunciation of ownership rights 
must comply with the law.  
Article 240. Property in respect of which other persons have established 
ownership rights  
When a person has, in accordance with Art icle 228 through 233 of this Code, 
lawfully established ownership rights with respect to an object the owner of 
which is not able to be identified; a buried or sunken objects; a lost or mislaid 
object or stray domestic livestock, poultry or aquaculture sto ck, the ownership 
rights of the person formerly having the property shall terminate.  
When the ownership rights of a possessor or a person benefiting from property 
have been created in accordance with Article 236 of this Code, the ownership 
rights of the pe rson who formally had the property shall terminate.  
Article 241. Realization of property in order to fulfill obligations of owner  
1. Ownership rights with respect to property shall terminate when such property 
is realized in order to fulfill the obligation s of the owner pursuant to a decision 
of a court or another competent authority, unless otherwise provided by law.  
2. Property which the law provides is not able to be seized may not be realized 
in order to fulfill the obligations of the owner.  81 
 
3. The owne rship rights with respect to property realized in order to fulfill the 
obligations of the owner shall terminate at the time when the ownership rights of 
the recipient of such property arise.  
4. The realization of land use rights shall be carried out in acc ordance with the 
law on land.  
Article 242. Destroyed property  
When property is destroyed, the ownership rights with respect to such property 
shall terminate.  
Article 243. Property which is compulsorily acquired  
Where property is compulsorily acquired as pr escribed by law, the ownership 
rights of the owner shall terminate from the time when the decision of the 
competent authority becomes legally effective.  
Article 244. Confiscated property  
Where property of an owner is confiscated and paid into the State Bud get due to 
the owner committing a crime or an administrative offence, the ownership rights 
of the owner with respect to such property shall terminate from the time when 
the judgment or decision of the court or the decision of the competent authority 
become s legally effective.  
Chapter XIV  
OTHER PROPERTY -RELATED RIGHTS  
Section 1. Right to adjoining immovable property  
Article 245. Right to adjoining immovable property  
Right to adjoining immovable property means a right to be exercised on an 
immovable proper ty (hereinafter referred to as obliged immovable property) to 
serve the exploitation of another immovable property under ownership of 
another person (hereinafter referred to as entitled immovable property).  
Article 246. Bases for establishment of right to adjoining immovable 
property  
The right to adjoining immovable property shall be established according to 
natural terrain, as prescribed by law, according to agreement or will.  
Article 247. Effect of right to adjoining immovable property  82 
 
The right to adjo ining immovable property shall take effect to every natural and 
juridical person and it is transferred concurrently with the transferred immovable 
property, unless otherwise prescribed by law.  
Article 248. Rules for exercising right to adjoining immovable property  
The right to adjoining immovable property shall be exercised as agreed by the 
parties. If the parties fail to agree, the rules below must be followed:  
1. Ensure the appropriate exploitation of the entitled immovable property in 
conformity with th e use purposes of both entitled and obliged immovable 
property;  
2. Do not abuse the right to the obliged immovable property;  
3. Do not obstruct or hassle the exercising of right to the entitled immovable 
property.  
Article 249. Change of exercising right to  adjoining immovable property  
In case the change of use or exploitation of the obliged immovable property 
leading the change of exercising of right to the entitled immovable property, the 
owner of the former immovable property must notify the owner of the  latter 
immovable property within an appropriate period. The owner of the obliged 
immovable property must enable the owner of the entitled immovable property 
to adapt to such change.  
Article 250. Obligation of owners relating to draining of rainwater  
An o wner of house or construction works must install water drain pipes in order 
that the rainwater from its roof does not run onto any adjoining immoveable 
properties.  
Article 251. Obligation of owners relating to draining of waste water  
An owner of house or c onstruction work must install underground drains or 
water drainage channels to discharge waste water to the prescribed location in 
order that the waste water does not run and spill onto any adjoining immoveable 
properties or onto public streets or public p laces.  
Article 252. Rights relating to supply and drainage of water through 
adjoining immoveable property  
Where, due to the natural location of immoveable property, the supply and 
drainage of water must pass through another immoveable property, the owner o f 
the immoveable property through which the water flows must provide an 83 
 
appropriate channel for the supply and drainage of water and may not hinder or 
prevent the flow of water.  
The person using the water supply and drainage channel must minimize to the 
lowest possible extent any damage to the owner of the immoveable property 
through which the water flows when installing the water channel. If damage is 
caused, compensation must be made. Where water flows naturally from a higher 
position to a lower position  and causes damage to the owner of the property 
through which the water flows, the person using the water supply and drainage 
channel shall not be liable to compensate for any damage.  
Article 253. Rights relating to irrigation and water drainage in cultiv ation  
A person having the right to use land for cultivation has the right to request 
neighboring land users to provide a reasonable and convenient water channel for 
irrigation and drainage. A person having been so requested has the obligation to 
grant such  request. If the person using such water channel causes damage to 
neighboring land users, compensation must be made.  
Article 254. Right of passage  
1. An owner of immoveable property which is surrounded by immoveable 
properties of other owners such that th ere is no exit has the right to request one 
of the owners of adjoining immoveable properties to provide it with a passage to 
a public road on their land.  
The passage shall be opened in the adjoining immoveable property which is 
deemed to be the most conve nient and reasonable, taking into consideration the 
special characteristics of the location, the interests of the immoveable property 
which does not have an exit, and what will cause the least damage to the 
immoveable property through which the passage is created.  
The owner of the immovable property eligible for the passage must compensate 
for the obliged immovable property, unless otherwise agreed.  
2. The location and the length, width and height of the passage shall be agreed 
by the owners in order to ens ure convenient passage and minimize 
inconvenience to the parties. If there are any disputes regarding the passage, the 
parties may request the authorized State body to resolve.  
3. Where immoveable property is divided into more than one portion for 
differen t owners or users, upon division, necessary passages must be provided, 84 
 
without compensation, to persons in the interior as provided in Clause 2 of this 
Article.  
Article 255. Right to install electricity transmission cables and 
communication cables through other immoveable properties  
An owner of immoveable property has the right to install electricity transmission 
cables and communication cables in a reasonable manner through the 
immoveable property of other owners, but must ensure the safety and 
convenience  of such owners. If damage is caused, compensation must be made.  
Article 256. Termination of easements over adjoining immoveable property  
An easement over adjoining immoveable property shall terminate in the 
following circumstances:  
1. The entitled immovab le property and the obliged immovable property belong 
to ownership rights of a person;  
2. The use and exploitation of the immovable property do not arise the needs of 
enjoying rights;  
3. Upon agreement of contracting parties;  
4. Other bases as provided by  law. 
Section 2. USUFRUCT RIGHT  
Article 257. Usufruct right  
Usufruct right means the right to use a property, under ownership of another 
entity, and enjoy its yield or income in a specific period of time.  
Article 258. Bases for establishment of usufruct ri ght 
The usufruct right shall be established as prescribed by law, according to 
agreement or will.  
Article 259. Effect of usufruct right  
The usufruct right shall be established from the time of transfer of the property, 
unless otherwise agreed or otherwise prescribed by law.  
The established usufruct right shall take effect to every natural and juridical 
person, unless otherwise prescribed by law.  
Article 260. Time limit of usufruct right  85 
 
1. The time limit of usufruct right shall be agreed by the parties or p rescribed by 
law provided that its maximum length is the full life of the first usufructary 
being natural person or the period of time for which the first usufructary being 
juridical person exists as long as it does not exceed 30 years.  
2. The usufructary has the right to lease the usufruct right within a specific 
period of time prescribed in Clause 1 of this Article.  
Article 261. Rights of usufructary  
1. On his/her own or permit another person exploit, use and enjoy yield and/or 
income from the object of t he usufruct right.  
2. Request the owner of the property perform obligation to repair the property as 
prescribed in Clause 4 Article 263 of this Code; if the usufructary performs the 
obligation on behalf of the owner of property is entitled to request the o wner to 
refund the expenses.  
3. Lease the usufruct right to the property.  
Article 262. Obligations of usufructary  
1. Receive property under current conditions and register it if required by law.  
2. Exploit the property for appropriate purposes.  
3. Preserve  property as if it is his/her own property.  
4. Maintain and repair property periodically to ensure the normal use; restore the 
status of the property and remedy the bad consequences of property due to 
his/her poor performance of obligations in line with te chnical requirements or by 
custom of property preservation.  
5. Return the property to the owner of the expiration of usufruct time limit.  
Article 263. Rights and obligations of property owner  
1. Dispose property without any change of the usufruct right whi ch has been 
established.  
2. Request a court to deprive usufruct right from a usufructary who seriously 
breaches his/her obligations.  
3. Do not obstruct or hassle or otherwise violate the legitimate rights and 
interests of the usufructary.  
4. Perform obliga tion to repair property to ensure that there is no significant 
decline leading the property cannot be used or lost all its utility and value.  86 
 
Article 264. Right to enjoy yield and income  
1. Each usufructary has ownership right to the yield and income deriv ed from 
the property being the object of the usufruct right during its effective period of 
time.  
2. If the usufruct right cease to exist before the harvest time of yields and 
income, the usufructary shall, upon the harvest time, be entitled to enjoy the 
value of yield and income received corresponding the time that person is entitled 
to such usufruct right.  
Article 265. Termination of usufruct right  
The usufruct right shall terminate in any of the following cases:  
1. The time limit of usufruct right has e xpired;  
2. As agreed by the parties;  
3. The usufructary becomes the owner of the property being the subject of the 
usufruct right;  
4. The usufructary waives or fails to exercise the usufruct right during a time 
limit prescribed by law;  
5. The property bein g subject of the usufruct right no longer exists;  
6. Pursuant to a decision of a court;  
7. Pursuant to other provisions of law.  
Article 266. Returning property upon termination of usufruct right  
The property being subject of usufruct right must be returne d to the owner upon 
the termination of usufruct right, unless otherwise agreed or otherwise 
prescribed by law.  
Section 3. SURFACE RIGHTS  
Article 267. Surface rights  
Surface rights mean an entity's rights to the ground, water surface, space thereon 
and eart h bowel of the land whose land use rights belong to another entity.  
Article 268. Bases for establishment of surface rights  
Surface rights shall be established by law, according to agreement or will.  
Article 269. Effect of surface rights  87 
 
Surface rights shal l take effect from the point of time when the holder of land 
use rights transfer ground, water surface, space thereon and earth bowel of the 
land to the holder of surface rights, unless otherwise agreed or otherwise 
prescribed by law.  
Surface rights shall take effect to every natural and juridical person, unless 
otherwise prescribed by relevant laws.  
Article 270. Time limit of surface rights  
1. The time limit of surface rights shall be established by law, according to 
agreement or will provided that it does  not exceed the time limit of land use 
rights.  
2. If the agreement or will does not mention the time limit of surface rights, each 
party is entitled to terminate any time provided that it provides a written 
notification to the other party within 6 months.  
Article 271. Contents of surface rights  
1. Each holder of surface rights has the right to exploit and use ground, water 
surface, space thereon, the water and the earth bowel of the land whose land use 
rights belong to another entity for construction, plan ting or cultivation provided 
that it is not contrary to the provisions of this Code, the law on land, 
construction, planning, resources, minerals and other provisions of relevant 
laws.  
2. The holder of surface rights has the ownership rights to every prope rty 
derived as prescribed in Clause 1 of this Article.  
3. If part of the whole of surface rights is transferred, the transferee shall inherit 
the surface rights according to conditions and within the scope in proportion to 
the part or the whole transferred  surface rights.  
Article 272. Termination of surface rights  
The surface rights shall terminate in any of the following cases:  
1. The time limit of surface rights has expired;  
2. The holder of surface rights and the holder of land use rights shall be the 
same; 
3. The holder of surface rights waives his/her rights;  
4. Surface rights of land use rights are appropriated as prescribed in law on land;  88 
 
5. As agreed by the parties or as prescribed by law.  
Article 273. Realization of property upon termination of sur face rights  
1. Upon the termination of surface rights, its holder must return ground, water 
surface, space thereon and earth bowel of the land to the holder of land use 
rights, unless otherwise agreed or otherwise prescribed by law.  
2. The holder of surfac e rights must realize the property under ownership upon 
its termination, unless otherwise agreed.  
If the holder of surface rights must realize the property under ownership upon its 
termination, the ownership of such property shall be transferred to the hol der of 
land use rights from the termination time, unless the latter holder refuse such 
property.  
If the holder of land use rights refuses the property while the property is required 
to be realized, the holder of surface rights must pay the property realiza tion 
expenses.  
PART THREE  
OBLIGATIONS AND CONTRACTS  
Chapter XV.  
GENERAL PROVISIONS  
Section 1. Bases for giving rise to and subject matter of obligations  
Article 274. Obligations  
Obligations means acts whereby one or more entities (hereinafter referred to as 
obligors) must transfer objects, transfer rights, pay money or provide valuable 
papers, perform other acts or refrain from performing certain acts in the interests 
of one or more other subjects (hereinafter referred to as obligees).  
Article 275. Bases f or giving rise to obligations  
Obligations arise from the following bases:  
1. Contracts;  
2. Unilateral legal acts;  
3. Unauthorized performance of acts;  
4. Unlawful possession or use of or receipt of benefits from property;  
5. Causing damage through unlawful  acts; 89 
 
6. Other bases as provided by law.  
Article 276. Subject matter of obligations  
1. The subject matter of an obligation may be property or acts which must be 
performed or acts which must not be performed.  
2. The subject matter of an obligation must be defined precisely.  
Section 2. Performance of obligations  
Article 277. Places for performing obligations  
1. The place for performing an obligation shall be agreed by the parties.  
2. Where the parties do not have an agreement, the place for performance of th e 
obligation shall be:  
a) The location of the immoveable property, if the subject matter of the 
obligation is immoveable property;  
b) The place of residence or head office of the obligee, if the subject matter of 
the obligation is not immoveable property.  
Where the obligee changes its place of residence or head office, it must notify 
the obligor of the change and must bear any increase in expenses resulting from 
the change in residence or head office, unless otherwise agreed.  
Article 278. Time limits for pe rforming obligations  
1. The time limit for performing an obligation shall be as agreed by the parties 
or as provided by law.  
2. The obligor must perform the obligation strictly in accordance with the 
relevant time limit, unless otherwise prescribed by this  Code or relevant laws.  
If the obligor performs the obligation prior to the time limit and the obligee 
accepts such performance, the obligation shall be deemed to have been fulfilled 
on time.  
3. Where the parties do not have an agreement and the time limi t for the 
performance of a civil obligation is not identifiable prescribed in Clause 1 of this 
Article, a party may fulfill the obligation or demand the fulfillment of the 
obligation as the case may be at any time, but must give reasonable prior notice 
to the other party.  
Article 279. Performance of obligations to deliver objects  90 
 
1. A person having the obligation to deliver an object must take care of and 
preserve the object until the time of delivery.  
2. Where an object to be delivered is a distinctive obj ect, the obligor must 
deliver that particular object in the same condition as agreed. If the object is a 
fungible object, it must be delivered in accordance with the quality and quantity 
agreed. If there is no agreement as to the quality, the object delive red must be of 
average quality. If the object is an integrated object, the whole integrated object 
must be delivered.  
3. An obligor must bear all expenses related to the delivery of an object, unless 
otherwise agreed.  
Article 280. Performance of obligation s to pay money  91 
 
1. An obligation to pay money shall be performed in full, strictly on time, at the 
place and by the method as agreed.  
2. The obligation to pay money shall include the payment of interest on 
principal, unless otherwise agreed.  
Article 281. Pe rformance of obligations to perform acts or not to perform 
acts 
1. Obligation to perform an act means an obligation whereby the obligor must 
perform that particular act.  
2. Obligation not to perform an act means an obligation whereby the obligor 
must not p erform that particular act.  
Article 282. Performance of obligations in stages  
An obligation may be performed in stages if so agreed or so provided by law or 
pursuant to a decision of a competent authority.  
The late performance of one stage of an obligation  shall be deemed to be late 
performance of the obligation.  
Article 283. Performance of obligations through third parties  
With the consent of the obligee, an obligor may authorize a third person to 
perform an obligation on behalf of the obligor provided tha t the obligor shall be 
liable to the obligee if the third person fails to perform or performs incorrectly 
the obligation.  
Article 284. Conditional performance of obligations  
1. Where the parties have agreed on conditions for the performance of a civil 
obligation or where the law provides certain conditions for the performance of 
an obligation, the obligor must perform the obligation when such conditions are 
satisfied.  
2. If the conditions do not occur or occur resulting from the influence of a party, 
Clause  2 Article 120 of this Code shall apply.  
Article 285. Performance of obligations having optional subject matters  
1. Obligation having an optional subject matter means an obligation the subject 
matter of which is one of several different items of property o r acts from which 
the obligor may select at its discretion, except where it is agreed or provided by 
law that the right to select is reserved to the obligee.  92 
 
2. The obligor must notify the obligee of the property or act selected in order to 
perform the obl igation. In the case where the obligee has fixed a time limit for 
performance of the obligation with a selected subject matter, the obligor must 
fulfill the obligation on time.  
3. Where there remains only one property or one act to select, the obligor must  
deliver that particular property or perform that particular act.  
Article 286. Performance of substitutable civil obligations  
Substitutable obligation means an obligation whereby if the obligor fails to 
perform the original obligation, it may perform a dif ferent obligation as agreed 
by the obligee as a substitute for the original obligation.  
Article 287. Performance of severable obligations  
Where more than one person jointly performs an obligation and each person has 
a clearly defined share of the obligatio n which is severable from that of the other 
person, each person must perform only its own share of the obligation.  
Article 288. Performance of joint obligations  
1. Joint obligation means an obligation which must be performed by more than 
one person and whi ch the obligee may request any one of the obligors to 
perform in its entirety.  
2. When one person has performed an obligation in its entirety, such person may 
require the other joint obligors to make payment for their respective shares of 
the joint obligat ion to such person.  
3. Where an obligee designates one person from amongst the joint obligors to 
perform an entire obligation and later releases that person, the other obligors 
shall also be released from performing the obligation.  
4. Where an obligee rele ases one of the joint obligors from its share of the joint 
obligation, the other obligors must, nevertheless, perform jointly their respective 
shares of the obligation.  
Article 289. Performance of obligations for joint obligees  
1. Civil obligation for join t obligees means an obligation whereby each joint 
obligee may require the obligor to perform the obligation in its entirety.  
2. An obligor may perform its obligation with respect to any one of the joint 
obligees.  93 
 
3. Where one of the joint obligees releases  the obligor from performing the share 
of the obligation owed to such joint obligee, the obligor must, nevertheless, 
perform the remaining shares of the obligation owed to the other joint obligees.  
Article 290. Performance of divisible obligations  
1. Divis ible obligation means an obligation the subject matter of which is a 
divisible object or an act which is able to be divided into portions for the 
purpose of performance.  
2. An obligor may perform the obligation in stages, unless otherwise agreed.  
Article 2 91. Performance of indivisible obligations  
1. Indivisible obligation means an obligation the subject matter of which is an 
indivisible object or an act which must be performed in its entirety at the one 
time.  
2. Where several persons must perform an indiv isible obligation, they must 
perform the obligation in its entirety at the same time.  
Section 3. SECURITY FOR PERFORMANCE OF OBLIGATIONS  
Sub-section 1. GENERAL PROVISIONS  
Article 292. Types of security for performance of obligations  
Types of security for the performance of obligations comprise the following:  
1. Pledge of property;  
2. Mortgage of property;  
3. Deposit;  
4. Security collateral;  
5. Escrow deposit;  
6. Title retention;  
7. Guarantee;  
8. Fidelity guarantees;  
9. Lien on property.  
Article 293. Scope of security for performance of obligations  
1. An obligation may be fully or partly secured, as agreed or as provided by law. 
If there is no agreement on or if the law does not provide, the scope of the 94 
 
security, the obligation, including the obligation to pay interest and to 
compensate for any damage, shall be deemed to be fully secured.  
2. Secured obligations may comprise current obligations, future obligations and 
conditional obligations.  
3. With respect to a future obligation which is going to arise with in a guaranteed 
time limit, it shall be the secured obligation, unless otherwise agreed.  
Article 294. Security for performance of future obligations  
1. With respect to a future obligation, the parties may agree on the scope of the 
secured obligation and th e deadline by which the secured obligation must be 
performed, unless otherwise prescribed by law.  
2. When the future obligation arises, the parties are not required to re -establish 
the security for such obligation.  
Article 295. Collateral  
1. Collateral m ust be under the ownership rights of the securing party, except for 
the cases of lien on property or title retention.  
2. Collateral may be described generally but must be identified.  
3. Collateral may be existing property or off -plan property.  
4. The value  of collateral may be greater, equal or smaller than the value of the 
secured obligation.  
Article 296. Single item of property used as security for performance of 
several obligations  
1. A single item of property may be used as security for performance of s everal 
obligations if, at the time of establishment of the security transaction, the value 
of such property is greater than the total aggregate value of the secured 
obligations, unless otherwise agreed or otherwise provided by law.  
2. Where a single item o f property is used as security for performance of several 
obligations, the securing party must notify the later secured party that the 
security property is being used as security for performance of other obligations. 
The provision of security on each occas ion must be made in writing.  
3. Where the security property must be realized in order to satisfy one obligation 
which has fallen due, the other obligations which have not yet fallen due shall 
also be deemed due and all secured parties shall be entitled to take part in the 
realization. The secured party which provided notice of realization of the 95 
 
property shall be responsible for realizing the property, unless otherwise agreed 
by the secured parties.  
If the parties wish to continue to fulfill the obligations  which have not yet fallen 
due, they may agree that the securing party will use other property as security 
for performance of the obligation which has fallen due.  
Article 297. Effectiveness against third parties  
1. Security shall take effect against a thir d party from the time of registration of 
such security or the secured party keeps or possess the collateral.  
2. When the security takes effect against a third party, the secured party is 
entitled to reclaim the collateral and the payment prescribed in Arti cle 308 of 
this Code and relevant laws.  
Article 298. Registration of security  
1. Security shall be registered as agreed by the parties or provided by law.  
The registration shall be the condition for a secured transaction become valid 
only the case as pres cribed by law.  
2. A registered security shall take effect against third party from the time of 
registration.  
3. The registration of security shall comply within regulations of law on 
registration of security.  
Article 299. Cases of realization of collateral  
1. An obligator fails to perform or perform not as agreed an obligation when it 
falls due.  
2. An obligator must perform the secured obligation before time limit due to 
his/her violation against the obligation as agreed or prescribed by law.  
3. Other cases  as agreed by the parties or prescribed by law.  
Article 300. Notification of realization of collateral  
1. Before a collateral is realized, a secured party must notify the securing party 
and other secured parties of the realization of the collateral within a reasonable 
time limit.  
If the collateral at risk of being damaged resulting in diminished value or lose 
the entire value, a secured party may realize it immediately and notify the 
securing party and other secured parties of the realization of such asset.  96 
 
2. If the secured party does not notify the realization of collateral as prescribed 
in Clause 1 of this Article that cause damage to the securing party and/or other 
secured parties, compensation must be made.  
Article 301. Giving collateral for realization   
The holder of collateral is obliged to give it to the secured party for realization 
in any of the cases prescribed in Article 299 of this Code.  
If the holder of collateral fails to give the asset, the secured party is entitled to 
request a court for set tlement, unless otherwise prescribed by relevant laws.  
Article 302. Right to reclaim collateral  
The securing party may reclaim the collateral if, before the realization of the 
collateral, it completely performs its obligations and pay all expenses incurred  
for the late performance of obligations, unless otherwise prescribed by law.  
Article 303. Methods of realizing collateral  
1. The securing party and the secured party may agree any of the following 
methods of realizing collateral:  
a) Put collateral up for  an auction;  
b) The secured party sells collateral itself;  
c) The secured party accepts the collateral as substitutions for the performance 
of obligations of the securing party;  
d) Other methods.  
2. If there is no agreement on methods of realizing collater al as prescribed in 
Clause 1 of this Article, the collateral shall be put up for auction, unless 
otherwise prescribed by law.  
Article 304. Selling collateral  
1. The collateral shall be put up for auction as prescribed by law on property 
auction.  
2. The co llateral sold by the secured party must comply with the regulations on 
property sale in this Code and the regulations below:  
a) The payment amount derived from the realization of collateral shall comply 
with Article 307 of this Code;  97 
 
b) The owner of collat eral and the person competent to realize the collateral, 
upon the completion of the sale, shall comply with procedures for transfer of 
ownership rights to the buyer.  
Article 305. Acceptance of the collateral as substitution for the performance 
of obligatio ns of the securing party  
1. The secured party may accept the collateral as substitution for the 
performance of obligations of the securing party if agreed by the parties.  
2. If there is no agreement prescribed in Clause 1 of this Article, the secured 
party  may only accept the collateral as substitution for the performance of 
obligations of the securing party with the written consent of the securing party.  
3. Where the value of the collateral is greater than the value of the secured 
obligation, the secured p arty must pay the difference amount to the securing 
party; where the value of the collateral is less than the value of the secured 
obligations then the unpaid obligations become unsecured obligations.  
4. The securing party is obliged to follow the procedur es for transfer of 
ownership rights to the secured party as prescribed by law.  
Article 306. Valuation of collateral  
1. The securing party and the secured party may agree on collateral prices or 
have the collateral valuated by an asset valuation organizatio n upon the 
realization of the collateral.  
If there is no agreement mentioned above, the collateral shall be valuated by an 
asset valuation organization.  
2. The valuation of the collateral must be objective and in conformity with 
market price.  
3. The asset valuation organization must compensate for any damage to the 
securing party and/or the secured party during the process of valuation due to its 
legal violations.  
Article 307. Payment of the sum of money obtained from the realization of 
collateral  
1. The su m of money obtained from the realization of the collateral after 
deducting from the cost of preservation, capture and realization of the collateral 
shall be paid in order of priority specified in Article 308 of this Code.  98 
 
2. Where the sum of money obtained  from the realization of the collateral, after 
deducting from the cost of preservation, seizure and realization of the collateral 
is greater than the value of secured obligations, the difference amount must be 
paid to the securing party.  
3. Where the sum o f money obtained from the realization of the collateral, after 
deducting from the cost of preservation, seizure and realization of the collateral 
is less than the value of secured obligations, part of the unpaid obligations are 
defined as unsecured obligat ions, unless the parties otherwise agree additional 
collateral. The secured party may request the obligor to perform the unpaid 
secured obligations.  
Article 308. Order of priority for payment between joint secured parties  
1. When an asset is used to secure  the performance of many obligations, 
payment priority order between the joint secured parties shall be determined as 
follows:  
a) If all types of security take effect against a third party, the order of priority for 
payment shall be determined according to  the order of effect against the third 
party;  
b) If there are some types of security take effect against a third party while some 
types of security do not take effect against the third party, the payment of 
obligations with security taking effect against t he third party shall be given 
priority;  
c) If all types of security do not take effect against a third party, the order of 
priority for payment shall be determined according to the order of establishment 
of types of security.  
2. The order of priority for p ayment prescribed in Clause 1 of this Article may 
be changed as agreed by the parties. The subrogating party of the right to 
priority of payment shall only be given priority within the secured extent of the 
subrogated party.  
Sub-section 2. PLEDGE OF PROPER TY 
Article 309. Pledge of property  
Pledge of property means the delivery by one party (hereinafter referred to as 
the pledgor) of property under its ownership to another party (hereinafter 
referred to as the pledgee) as security for the performance of an o bligation.  
Article 310. Effectiveness of pledge of property  99 
 
1. Agreement on pledge of property shall take effect from the time of 
concluding, unless otherwise agreed or prescribed by law.  
2. Pledge of property shall take effect against third party from the  time at which 
the pledgee keeps the pledged property.  
If an immovable property is the subject of pledge as prescribed in law, the 
pledge on immovable property shall take effect against third party from the time 
of registration.  
Article 311. Obligations of  pledgors  
1. Deliver the pledged property to the pledgee as agreed.  
2. Notify the pledgee of any third person rights with respect to the pledged 
property. In the case of failure to provide such notice, the obligee shall have the 
right to cancel the contrac t of pledge of property and demand compensation for 
damage or the right to maintain the contract and agree on the rights of the third 
person with respect to the pledged property.  
3. Pay the pledgee reasonable expenses for taking care of and preserving the 
pledged property, unless otherwise agreed.  
Article 312. Rights of pledgors  
1. Require the pledgee to suspend use of the pledged property in cases provided 
in Clause 3 of Article 314 of this Code if the pledged property is in danger of 
losing its value or d epreciating in value as a result of such use.  
2. Require the pledgee to hold the pledged property to return the pledged 
property and related documents after the obligation secured by the pledge has 
been fulfilled.  
3. Require the pledgee to compensate for a ny damage caused to the pledged 
property.  
4. Sell, substitute, exchange, or give the pledged property to other property if so 
agreed by the pledgee or prescribed by law.  
Article 313. Obligations of pledgees  
1. Take care of and preserve the pledged property ; if the pledgee loses or 
damages the pledged property, the pledgee must compensate the pledgor for the 
damage.  
2. Do not sell, exchange, give or use the pledged property as security for the 
performance of another obligation.  100 
 
3. Do not lease, lend, exploit  the yield or income derived from, the pledged 
property, unless otherwise agreed.  
4. Return the pledged property and related documents upon fulfillment of the 
secured obligation or where the pledge is substituted with another security.  
Article 314. Rights of pledgees  
1. Require a person unlawfully possessing or using the pledged property to 
return the property.  
2. Demand the realization of the pledged property in accordance with the 
methods as agreed or as provided by law.  
3. Lease, lend, exploit, and to en joy the yield and income derived from, the 
pledged property if so agreed.  
4. Receive reimbursement of reasonable expenses incurred in taking care of the 
pledged property upon returning the pledged property to the pledgor.  
Article 315. Termination of pledge s on property  
A pledge of property shall terminate in any of the following cases:  
1. The obligation secured by the pledge has terminated;  
2. The pledge has been cancelled or substituted with another security;  
3. The pledged property has been realized;  
4. As agreed by the parties.  
Article 316. Return of pledged property  
Where a pledge of property is terminated in accordance with Clause 1 or Clause 
2 of Article 315 of this Code or as agreed by parties, the pledged property and 
documents evidencing the ownersh ip rights with respect to the property shall be 
returned to the pledgor. Any yield and income derived from the pledged 
property shall also be returned to the pledgor, unless otherwise agreed.  
Sub-section 3. MORTGAGES ON PROPERTY  
Article 317. Mortgage of pr operty  
1. Mortgage of property means the use by one party (hereinafter referred to as 
the mortgagor) of property under the ownership of the obligor as security for the 
performance of an obligation to the other party (hereinafter referred to as the 
mortgage e) without transferring such property to the mortgagee.  101 
 
2. The mortgaged property shall be held by the mortgagor. The parties may 
agree to deliver the mortgaged property to a third person to hold.  
Article 318. Mortgaged property  
1. Where entire immoveable property or moveable property having auxiliary 
objects is mortgaged, such auxiliary objects shall also form part of the 
mortgaged property, unless otherwise agreed.  
2. Where a portion of immoveable property or moveable property having 
auxiliary objects is mortgaged, such auxiliary objects shall also form part of the 
mortgaged property, unless otherwise agreed by the parties.  
3. With respect to mortgage on land use rights that property on land is owned by 
the mortgagor, such property shall also part of the m ortgaged property, unless 
otherwise agreed.  
4. Where mortgaged property is insured, the mortgagee must notify the insurer 
that the insured property is being mortgaged. The insurer shall pay the insured 
sum directly to the mortgagee upon occurrence of an in sured event.  
If the mortgagee failed to notify the insurer that the insured property was 
mortgaged, the insurer shall pay the insured sum in accordance with the 
insurance contract and the mortgagor shall be obliged to make payment to the 
mortgagee.  
Articl e 319. Effectiveness of mortgage of property  
1. Agreement on mortgage of property shall take effect from the time of 
concluding, unless otherwise agreed or prescribed by law.  
2. The mortgage of property shall take effect against third party from the time o f 
registration.  
Article 320. Obligations of mortgagor  
1. Transfer documents related to the mortgaged property, unless otherwise 
agreed or prescribed by law.  
2. Take care of and preserve the mortgaged property.  
3. If the mortgaged property is in danger of l osing its value or depreciating in 
value due to its exploitation, to take necessary remedial measures, including 
ceasing the exploitation of the mortgaged property.  102 
 
4. When the mortgaged property is damaged, the mortgagor is obligated to, 
within a reasonab le period, repair or substitute another property with equivalent 
value, unless otherwise agreed.  
5. Provide information about the actual condition of the mortgaged property to 
for the mortgagee.  
6. Deliver the mortgaged property to the mortgagee for realiz ation in one of the 
cases prescribed in Article 299 of this Code.  
7. Notify the mortgagee of any third person rights with respect to the mortgaged 
property (if any). In the case of failure to provide such notice, the mortgagee 
shall have the right to cance l the contract of mortgage of property and demand 
compensation for damage or the right to maintain the contract and agree on the 
rights of the third person with respect to the mortgaged property.  
8. Do not sell, exchange or give the mortgaged property, exc ept in the cases 
provided in Clauses 4 and 5 of Article 321 of this Code.  
Article 321. Rights of mortgagor  
1. Exploit, and to enjoy the yield and income derived from, the property, except 
where the yield and income also form part of the mortgaged property as agreed.  
2. Invest in order to increase the value of the mortgaged property.  
3. Recover the mortgaged property and related documents held by a third person 
when the obligation secured by the mortgage is terminated or is substituted by 
other security.  
4. Sell or replace mortgaged property being goods rotating during the production 
and business process. In the case of a sale of mortgaged property being goods 
rotating during the production and business process, the right to require the 
purchaser to pay money , the proceeds received or the assets formed from the 
proceeds received shall form the mortgaged property in substitution for the 
property which was sold.  
When a warehouse is mortgaged, the mortgagor may substitute goods in the 
warehouse but must ensure th e value of the goods in the warehouse remains the 
value agreed.  
5. Sell, exchange or give mortgaged property not being goods rotating during the 
production and business process with the consent of the mortgagee or as 
prescribed by law.  103 
 
6. Lease or lend the  mortgaged property provided that notice must be provided 
to the lessee and the borrower that the property is being mortgaged and that the 
mortgagee must also be notified that such notice has been provided.  
Article 322. Obligations of mortgagees  
1. Where t he parties agree that the mortgagee will hold the documents relating to 
the mortgaged property, to return to the mortgagor such documents upon 
termination of the mortgage.  
2. Follow procedures for realization of mortgaged property in accordance with 
regula tions of law.  
Article 323. Rights of mortgagees  
1. Examine and inspect directly the mortgaged property provided that such 
examination and inspection does not hinder or cause difficulty to the use and 
exploitation of the mortgaged property.  
2. Require the m ortgagor to provide information on the current status of the 
mortgaged property.  
3. Require the mortgagor to apply necessary measures to preserve the property 
and the value of the property if there is a danger that use and exploitation of the 
mortgaged pro perty will cause loss of value or depreciation in value of the 
property.  
4. Conduct the registration of mortgage as prescribed by law.  
5. Require the mortgagor or a third person holding the mortgaged property to 
deliver it to the mortgagee for realization if, upon expiry of the term for 
fulfillment of the obligation, the obligor has failed to perform or performed 
incorrectly the obligation.  
6. Hold documents related to mortgaged property as agreed by parties, unless 
otherwise prescribed by law  
7. Follow pr ocedures for realization of mortgaged property as prescribed in 
Article 299 of this Code.  
Article 324. Rights and obligations of third parties holding mortgaged 
property  
1. A third person holding mortgaged property has the following rights:  
a) Exploit the property if so agreed;  104 
 
b) Receive remuneration and be reimbursed for expenses incurred in taking care 
of and preserving the mortgaged property, unless otherwise agreed.  
2. A third person holding mortgaged property has the following obligations:  
a) Take car e of and preserve the mortgaged property, and to compensate for any 
damage if the third person loses the mortgaged property or causes the mortgaged 
property to lose its value or depreciate in value;  
b) Cease the exploitation of the property if it is in dan ger of losing its value or 
depreciating in value;  
c) Return the mortgaged property to the mortgagee or mortgagor as agreed or 
prescribed by law.  
Article 325. Mortgage on land use rights without mortgage of property on 
land  
1. With respect to mortgage on la nd use rights without mortgage property on 
that land but the land user is also the owner of the property on land; such 
property shall also part of the realized property, unless otherwise agreed.  
2. With respect to mortgage on land use rights that the land user is not also the 
owner of the property on land, such owner may keep using such land within 
his/her rights and obligations during the realization of the land use rights. The 
rights and obligations of the mortgagor in relation with the owner of the 
prope rty on land shall be transferred to the transferee of the land use rights, 
unless otherwise agreed.  
Article 326. Mortgage of property on land without mortgage on land use 
rights  
1. With respect to mortgage of property on land without mortgage on land use 
rights but the owner of the property on land is also the land user, such land use 
rights shall also part of the realized property, unless otherwise agreed.  
2. With respect to mortgage of property on land without mortgage on land use 
rights that the owner of  the property on land is not also the land user, the 
transferee of property on land may keep using such property within the 
transferred rights and obligations from the owner of the property on land during 
the realization of the land use rights, unless othe rwise agreed.  
Article 327. Termination of property mortgages  
A mortgage of property shall terminate in any of the following cases:  105 
 
1. The obligation which is secured by the mortgage has terminated;  
2. The mortgage of the property has been cancelled or subs tituted with another 
security;  
3. The mortgaged property has been realized;  
4. As agreed by the parties.  
Sub-section 4. DEPOSIT, SECURITY COLLATERAL, ESCROW 
DEPOSIT  
Article 328. Deposit  
1. Deposit is an act whereby one party (hereinafter referred to as the  depositor) 
transfers to another party (hereinafter referred to as the depositary) a sum of 
money or precious metals, gemstones or other valuable things (hereinafter 
referred to as the deposited property) for a period of time as security for the 
entering i nto or performance of a contract.  
2. Upon a contract being entered into or performed, any deposited property shall 
be returned to the depositor, or deducted from the amount of an obligation to 
pay money. If the depositor refuses to enter into or perform th e contract, the 
deposited property shall belong to the depositary. If the depositary refuses to 
enter into or perform the contract, it must return the deposited property and pay 
an amount equivalent to the value of the deposited property to the depositor, 
unless otherwise agreed.  
Article 329. Security collateral  
1. Security collateral is an act whereby a lessee of a movable property transfers a 
sum of money or precious metals, gems or other valuable things (hereinafter 
referred to as security collateral pr operty) to the lessor for a specified time limit 
to secure the return of the leased property.  
2. In cases where the leased property is returned, the lessee shall be entitled to 
reclaim the security collateral property after pay the rental; if the lessee do es not 
return the leased property, the lessor shall be entitled to reclaim the leased 
property; if the leased property is no longer available for the return, the security 
collateral property shall belong to the lessor.  
Article 330. Escrow deposit  106 
 
1. Escrow  deposit is an act whereby an obligor deposits a sum of money, 
precious metals, gems or valuable papers into an escrow account at a credit 
institution to secure the performance of an obligation.  
2. In cases where the obligor has failed to perform or has i mproperly performed 
an obligation, the obligee shall be entitled to receive payment and compensation 
for damage caused by the obligor from the bank where the escrow deposit is 
affected, after deducting the bank service charges.  
3. The procedures for making  deposits and making payments shall be as 
provided by the law.  
Sub-section 5. TITLE RETENTION  
Article 331. Title retention  
1. In a sale contract, the ownership of property of the seller may remain until the 
buyer pays the purchase price in full.  
2. Title r etention must be made in a separate document or included in the sale 
contract.  
3. The title retention shall take effect against third party from the time of 
registration.  
Article 332. Right to reclaim property  
If the buyer fails to fulfill the payment obli gation for the seller as agreed, the 
seller is entitled to reclaim the property. The seller shall refund the paid amount 
by the buyer deducted from the depreciated value due to use. Where the buyer 
lost or damaged property, the seller has the right to clai m damages.  
Article 333. Rights and obligations of the buyer  
1. Using the property and enjoying the yield and income derived therefrom 
within the effective term of title retention.  
2. Facing the risks of the property within the effective term of the title retention, 
unless otherwise agreed.  
Article 334. Termination of title retention  
The title retention shall terminate in any of the following cases:  
1. Payment obligation fulfilled completely by the buyer;  
2. The seller receives the property under title rete ntion back;  
3. As agreed by the parties.  107 
 
Sub-section 6. GUARANTEES  
Article 335. Guarantees  
1. Guarantee means an undertaking made by a third person (hereinafter referred 
to as the guarantor) to an obligee (hereinafter referred to as the creditor) to 
perfor m an obligation on behalf of an obligor (hereinafter referred to as the 
principal debtor) if the obligation falls due and the principal fails to perform or 
performs incorrectly the obligation.  
2. The parties may agree that the guarantor shall only be obli ged to perform the 
obligation if the principal debtor is incapable of performing it.  
Article 336. Scope of guarantees  
1. A guarantor may guarantee an obligation in whole or in part on behalf of a 
principal debtor.  
2. A guaranteed obligation includes inter est on the principal, penalties and 
compensation for any damage and interest on late payment, unless otherwise 
agreed.  
3. The parties may agree on using security as property to secure the performance 
of guaranteed obligation.  
4. If the obligation to guaran tee is an obligation arising in the future, the scope 
of guarantee is exclusive of any obligations arising after the guarantor being 
natural person dies or the guarantor being juridical person ceases to exist.  
Article 337. Remuneration  
The guarantor shall be entitled to receive remuneration if so agreed by the 
guarantor with the principal debtor.  
Article 338. Joint guarantors  
When more than one person guarantee an obligation, those persons must 
perform jointly the guarantee, except where it is agreed or pro vided by law that 
the guarantee comprises separate portions. The obligee may require any of the 
joint guarantors to perform the obligation in its entirety.  
Where one of the joint guarantors has performed the entire obligation on behalf 
of the principal deb tor, the guarantor may require the other guarantors to 
perform their respective portions of the obligation with respect to that guarantor.  
Article 339. Relationship between guarantors and creditors  108 
 
1. If the principal fails to perform or performs incorrect ly the obligation, the 
creditor is entitled to request the guarantor to fulfill the guaranteed obligation , 
unless contracting parties has agreed that the guarantor only be required to 
perform the obligation on behalf of the principal debtor in case of the  failure to 
perform obligation by the principal debtor.  
2. A creditor may not require a guarantor to perform an obligation on behalf of 
the principal debtor until the obligation falls due.  
3. Where a guarantor is able to offset an obligation with a princi pal debtor, a 
guarantor does not have to perform the guaranteed obligation.  
Article 340. Rights to require of guarantors  
Each guarantor may require the principal debtor to indemnify the guarantor to 
the extent of the guarantee, unless otherwise agreed.  
Article 341. Discharge from guaranteed obligations  
1. Where the guarantor must perform the guaranteed obligation but the creditor 
discharges the guarantor from an obligation, the principal debtor is discharged 
from performance of the obligation with respect t o the creditor, except where it 
is agreed or provided by law.  
2. Where one person from amongst the joint guarantors is discharged from the 
performance of its portion of the guaranteed obligation, the other joint 
guarantors must, nevertheless, perform their  portion of the guaranteed 
obligation.  
3. Where one person from amongst the joint creditors discharge the guarantor 
from the performance of its portion of the guaranteed obligation, the guarantor 
must, nevertheless, perform their portion of the guaranteed obligation with 
respect to remaining joint creditors.  
Article 342. Civil liability of guarantor  
1. If the principal debtor fails to perform or perform incorrectly the obligation, 
the guarantor is obligated to perform such obligation.  
2. If the guarantor p erforms incorrectly the guaranteed obligation, the creditor is 
entitled to request the guarantor to pay the value of the breached obligation and 
compensate for any damage.  
Article 343. Termination of guarantees  
A guarantee shall terminate in any of the fo llowing cases:  109 
 
1. The obligation secured by the guarantee terminates;  
2. The guarantee is cancelled or is substituted by another security;  
3. The guarantor has satisfied the guaranteed obligation;  
4. As agreed by the parties.  
Sub-section 7. FIDELITY GUARAN TEES  
Article 344. Fidelity guarantees provided by socio -political organizations  
A socio -political organization at the grassroots level may provide a fidelity 
guarantee in order that poor individuals and households are able to borrow sums 
from banks or othe r credit institutions for purposes of production, business or 
provision of services in accordance with the regulations of law.  
Article 345. Formalities and contents of fidelity guarantees  
A loan guaranteed by a fidelity guarantee must be made in writing wi th 
certification of a socio -political organization in terms of conditions and 
circumstances of the borrower.  
The agreement on fidelity guarantee must specify the loan amount, the purpose 
of loan, the term of loan, the interest rate, and the rights, obligat ions and 
responsibilities of the borrower, the lending bank or credit institution and the 
guarantor organization.  
Sub-section 8. LIEN ON PROPERTY  
Article 346. Lien on property  
Lien on property means that the obligee (hereinafter referred to as the lienor) 
who is legally possessing the property being an object of a bilateral contract is 
entitled to retain the property when the obligor fails to perform the obligations 
or has performed the obligations not strictly as agreed upon.  
Article 347. Establishment of lien on property  
1. Lien on property shall arise from the due time for performance of obligation 
that the obligor failed to perform or perform incorrectly the obligation.  
2. Lien on property shall take effect against third party from the time of 
possession  of the possessor.  
Article 348. Rights of lienors  
1. Request the obligor to fulfill completely the obligations arising from a 
bilateral contract.  110 
 
2. Require the obligor to pay expenses necessary for taking care of and keeping 
such property.  
3. Exploit the property to obtain yield and income therefrom with the consent of 
the obligor.  
The value of benefits from the exploitation of the property shall be offset against 
the value of the obligation of the obligor.  
Article 349. Obligations of lienors  
1. Take care and preserve the property  
2. Do not change the status of the property.  
3. Do not transfer or use the property without the consent of the obligor.  
4. Return the property upon the complete performance of the obligation.  
5. Compensate for lost or damaged pro perty.  
Article 350. Termination of lien on property  
A lien on property shall terminate in any of the following cases:  
1. The lienor actually no longer retains the property;  
2. Contracting parties shall agree on another security instead of retain on 
proper ty; 
3. upon the complete performance of the obligation;  
4. The property ceases to exist;  
5. As agreed by the parties.  
Section 4. CIVIL LIABILITY  
Article 351. Civil liability arising from breach of civil obligations  
1. An obligor which fails to perform or performs incorrectly an obligation has 
civil liability to the obligee.  
Breach of obligations means that the obligor fails to perform the obligations on 
time, perform the obligations incompletely or incorrectly.  
2. Where an obligor is not able to perform a civil obligation due to an event of 
force majeure, it shall not have civil liability, unless otherwise agreed or 
otherwise provided by law.  
3. An obligor shall not have civil liability if it is able to prove that failure to 
perform an obligation is due ent irely to the fault of the obligee.  111 
 
Article 352. Responsibility for continuing performing obligations  
When an obligor perform its obligations improperly, the obligee is entitled to 
request the obligor to continue perform such obligations.  
Article 353. Late performance of civil obligations  
1. Late performance of a civil obligation is the failure to have performed the 
civil obligation in whole or in part as at the expiry of the time limit for the 
performance of such obligation.  
2. The party being late in perfo rmance of a civil obligation must notify 
immediately the obligee about the failure to have performed the civil obligation 
in a timely manner.  
Article 354. Postponement of performance of civil obligations  
1. When it is not possible to perform a civil obliga tion on time, the obligor must 
inform immediately the obligee and may suggest postponement of performance 
of the civil obligation.  
In the case of failure to notify the obligee, the obligor must compensate for any 
damage arising, unless otherwise agreed or unless it was impossible to provide 
notification due to objective reasons.  
2. The obligor may postpone the performance of the obligation only if the 
obligee consents. The performance of the civil obligation in this case of 
postponement shall be deemed to b e performance in a timely manner.  
Article 355. Late acceptance of performance of civil obligations  
1. The late acceptance of the performance of a civil obligation is where the time 
limit for the fulfillment of the civil obligation has expired and the oblig or has 
already fulfilled the civil obligation as agreed but the obligee does not accept the 
performance of such obligation.  
2. When the subject matter of late acceptance of performance of a civil 
obligation is property, the obligor may hand over the proper ty to a bailee must 
or take the necessary measures to take care of the property and is entitled to 
demand reimbursement of reasonable expenses. If the property is kept by a 
bailee, the obligor must notify the obligee.  
3. The obligor has the right to sell p roperty which is in danger of being damaged 
or of deteriorating, and shall pay the proceeds of sale of such property to the 112 
 
obligee after deducting necessary expenses for the preservation and sale of the 
property.  
Article 356. Civil liability for failure t o perform obligations to deliver 
objects  
1. Where an obligor fails to deliver a distinctive object, the obligee has the right 
to require the obligor to deliver that particular object. If the object no longer 
exists or is damaged, the obligor must pay the v alue of the object.  
2. Where an obligor fails to deliver a fungible object, the obligee has the right to 
require the obligor to deliver another fungible object. If there is no fungible 
object, the obligor must pay the value of the object.  
3. Where an oblig or fails to perform an obligation as provided in clauses 1 and 2 
of this article and causes damage to the obligee, the obligor must compensate for 
any damage.  
Article 357. Liability for late performance of the obligation to pay  
1. Where the obligor makes l ate payment, then it must pay interest on the unpaid 
amount corresponding to the late period.  
2. Interest arising from late payments shall be determined by agreement of the 
parties, but may not exceed the interest rate specified in paragraph 1 of Article 
468 of this Code; if there no agreement mentioned above, the Clause 2 of Article 
468 of this Code shall apply.  
Article 358. Civil liability for failure to perform obligations to perform acts 
or not to perform acts  
1. Where an obligor fails to perform an act  which it must perform, the obligee 
has the right to request the obligor to perform the act, or the obligee may 
perform the act or assign the performance of the act to another person and to 
require the obligor pay reasonable expenses incurred and compensat e for any 
damage.  
2. Where a person has an obligation not to perform an act but, nevertheless, 
performs such act, the obligee has the right to require the obligor to cease 
performing the act, make restitution and compensate for any damage.  
Article 359. Lia bility for late acceptance of performance of civil obligations  
An obligee which is late in accepting the performance of a civil obligation, and 
thereby causes damage to the obligor, must compensate the obligor for any 113 
 
damage and shall accept all risks aris ing from the time when acceptance fell due, 
unless otherwise agreed or otherwise provided by law.  
Article 360. Liability for compensation due to breach of obligations  
With respect to damage caused by breach of an obligation, the obligor must 
compensate for  the whole damage, unless otherwise agreed or prescribed by 
law. 
Article 361. Damage caused by breach of obligations  
1. Damage caused by breach of obligations comprises physical damage and 
spiritual damage.  
2. The physical damage means those actual physica l losses, comprising loss of 
property, reasonable expenses to prevent, mitigate or restore damage, and the 
actual loss or reduction of income.  
3. Spiritual damage means losses related to life, health, honor, dignity or 
reputation and other personal benefit s of an entity.  
Article 362. The obligation to prevent or limit damage  
The obligee must adopt the necessary and reasonable measures to prevent or 
limit its damage.  
Article 363. Compensation for damages in case of the aggrieved party at 
fault  
Where the brea ch of the obligations and damage incurred due to part of the fault 
of the aggrieved party, the violating party only be required to pay damages 
corresponding to its degree of fault.  
Article 364. Fault in civil liability  
Fault in civil liability includes int entional fault and unintentional fault.  
Intentional fault means that a person is fully aware that its act will cause damage 
to another person but, nevertheless, performs the act and, irrespective of whether 
or not it so wishes, allows the damage to occur.  
Unintentional means that a person does not foresee that its act is capable of 
causing damage, even though it knows or should know that the damage will 
occur, or where it does foresee that such act is capable of causing damage but 
believes that the damage w ill not occur or will be able to be prevented.  114 
 
Section 5. TRANSFER OF RIGHT TO DEMAND AND TRANSFER OF 
CIVIL OBLIGATIONS  
Article 365. Transfer of right to demand  
1. A party having the right to demand the performance of a civil obligation may 
transfer such right to demand to a subrogatee of the obligee as agreed, except in 
the following cases:  
a) The right is the right to demand support or the right to demand compensation 
for any damage resulting from harm to life, health, honor, dignity or reputation;  
b) Th e obligee and the obligor agree that the right to demand may not be 
transferred;  
2. Where a person having a right to demand transfers such right to a subrogatee, 
the subrogatee of the obligee shall become the person having the right to 
demand. The transfer  of right to demand does not require the consent of the 
obligor.  
A person transferring a right must notify the obligor in writing of the transfer of 
the right to demand, unless otherwise agreed. If the person transferring the right 
fails to notify the obli gor thereby the obligor incurs expenses, the person 
transferring the right must pay for those expenses.  
Article 366. Obligation to provide information and documents  
1. A person transferring a right to demand must provide the necessary 
information and the relevant documents to the subrogatee of the obligee.  
2. A person transferring a right to demand and breaching the provisions in 
Clause 1 of this Article, thereby causing damage, must compensate for such 
damage.  
Article 367. No liability after transfer of r ight to demand  
A person transferring a right to demand shall not be liable for the capability of 
the obligor to perform the obligation, unless otherwise agreed.  
Article 368. Transfer of right to demand performance of secured civil 
obligations  
Where a right  to demand the performance of a secured civil obligation is 
transferred, the transfer of the right to demand shall include the security.  
Article 369. Right to refuse of obligors  115 
 
1. Where the obligor is not notified of the transfer of the right to demand or  
where the subrogatee of the obligee does not prove the authenticity of the 
transfer of the right to demand, the obligor has the right to refuse to perform the 
obligation with respect to the subrogatee of the obligee.  
2. Where the obligor is not notified o f the transfer of the right to demand and has 
already fulfilled the obligation with respect to the person having transferred the 
right to demand, the subrogatee of the obligee may not demand the obligor to 
perform the obligation with respect to that subrog atee. 
Article 370. Transfer of civil obligations  
1. An obligor may transfer a civil obligation to a subrogatee of the obligor with 
the consent of the obligee, except where the obligation is personal to the obligor 
or where the law provides that the obligat ion may not be transferred.  
2. Upon a transfer of the obligation, the subrogatee of the obligor shall become 
the obligor.  
Article 371. Transfer of secured civil obligations  
Where a secured civil obligation is transferred, the security shall terminate, 
unless otherwise agreed.  
Section 6. TERMINATION OF CIVIL OBLIGATIONS  
Section 372. Termination of civil obligations  
A civil obligation shall terminate in any of the following cases:  
1. The obligation is fulfilled;  
2. The parties so agree;  
3. The obligee waives performance of the obligation;  
4. The obligation is substituted by another civil obligation;  
5. The obligation is offset;  
6. The obligee and the obligor merge;  
7. The prescriptive period for a release from the civil obligation has expired;  
8. The obligor b eing a natural person dies, or the obligor being a juridical person 
ceases to exist, and the obligation must be performed by that particular natural 
person or juridical person;  116 
 
9. The obligee being a natural person dies and the right to demand does not for m 
part of the bequeathed estate, or the obligee being a juridical person ceases to 
exist and the right to demand is not able to be transferred to another juridical 
person;  
10. A distinctive object which is the subject matter of the civil obligation no 
longer exists and is substituted by another civil obligation.  
11. Other cases as provided by law.  
Article 373. Fulfillment of civil obligations  
The civil obligation shall be deemed to be have been fulfilled when the obligor 
has performed the obligation in its entirety, or has performed a portion of the 
obligation and the obligee waives any further performance.  
Article 374. Fulfillment of civil obligations where obligees are late in 
accepting subject matter of obligations  
When an obligee is late in accepting the  subject matter of an obligation which is 
an object, the obligation to deliver an object shall be fulfilled at the moment 
when the object is deposited for bailment as prescribed in Clause 2 Article 355 
of this Code.  
Article 375. Termination of civil obliga tions by agreement  
Parties may agree to terminate a civil obligation at any time but must not cause 
damage to the interests of the State or the public or the legal rights or interests of 
other persons.  
Article 376. Termination of civil obligations due to w aiver  
1. A civil obligation shall terminate when the obligee waives the obligation of 
the obligor, unless otherwise provided by law.  
2. When a secured civil obligation is waived, the security arrangement shall also 
terminate.  
Article 377. Termination of ci vil obligations by substitution  
1. Where parties agree to substitute an original civil obligation with another civil 
obligation, the original civil obligation shall terminate.  
2. A civil obligation shall also terminate if the obligee has accepted another 
property or the performance of another act as a substitute for the property or act 
previously agreed.  117 
 
3. Where a civil obligation is an obligation to support others or to compensate 
for any damage due to harm to life, health, honor, dignity or reputation, o r 
another personal obligation which is not able to be transferred to other persons, 
such obligation may not be substituted with another obligation.  
Article 378. Termination of civil obligations where obligations are offset  
1. Where parties have reciprocal obligations with respect to fungible objects, 
when both obligations fall due, the parties shall not be required to perform their 
obligations to each other, and the obligations shall be deemed to have 
terminated, unless otherwise provided by law.  
2. Where t he values of properties or acts are not equivalent, the parties shall 
settle with each other the difference in value.  
3. Objects having monetary value may be used to offset an obligation to pay 
money.  
Article 379. Cases where civil obligations may not be o ffset 
A civil obligation may not be offset in the following cases:  
1. The civil obligation is in dispute;  
2. The obligation is to compensate for harm to life, health, dignity, honor or 
reputation;  
3. The obligation is to support others;  
4. Other obligation s as provided by law.  
Article 380. Termination of civil obligations upon merger of obligor and 
obligee  
A civil obligation of an obligor shall terminate when the obligor becomes the 
obligee with respect to that particular obligation.  
Article 381. Terminatio n of civil obligations due to expiry of duration of 
waiver of civil obligation  
Upon expiry of the duration of waiver of a civil obligation, the obligation shall 
terminate.  
Article 382. Termination of civil obligations when obligor being natural 
person dies  or when obligor being juridical person ceases to exist  118 
 
Where parties have agreed or the law provides that an obligation must be 
performed by a particular obligor, when such natural person dies or such 
juridical person ceases to exist, the obligation shall  terminate.  
Article 383. Termination of civil obligations when distinctive objects no 
longer exist  
An obligation to deliver a distinctive object shall terminate when such 
distinctive object no longer exists.  
Parties may agree on the substitution of such ob ject with another object or on 
compensation for any damage.  
Article 384. Termination of civil obligations in cases of bankruptcy  
In cases of bankruptcy, civil obligations shall terminate in accordance with the 
Law on bankruptcy.  
Section 7. CONTRACTS  
Sub-section 1. ENTERING INTO CIVIL CONTRACTS  
Article 385. Definition of civil contract  
Civil contract means an agreement between parties in relation to the 
establishment, modification or termination of civil rights and obligations.  
Article 386. Offers to enter i nto civil contracts  
1. Offer to enter into a contract means a clear expression by the offeror of its 
intention to enter into a contract and to be bound by such offer made to another 
specific party or the public (hereinafter referred to as the offeree).  
2. Where an offer to enter into a contract has specified the time for reply and the 
offeror enters into a contract with a third person during the time limit for reply 
by the offeree, if the offeror fails to enter into the contract with the offeree and 
the off eree suffers damage, the offeror must compensate the offeree for such 
damage.  
Article 387. Information in entering into contracts  
1. Each party must notify the other party of any piece of information affecting 
the acceptance of offer to enter into the con tract by the latter party.  
2. When a party receives any secret information from the other party during the 
process of entering into the contract, it must protect that information and may 
not use it for its own purposes or other illegal purposes.  119 
 
3. Any par ty violating Clause 1 or Clause 2 of this Article thereby causes 
damage must compensate for it.  
Article 388. Time limit within which offer to enter into contract remains 
effective  
1. The time limit within which an offer to enter into a contract remains eff ective 
shall be determined as follows:  
a) Where an offeror has specified such time limit;  
b) Where an offeror has not specified the time limit, the offer to enter into the 
contract is effective as from the time the offeree receives the offer.  
2. The follow ing cases shall be deemed to be receipt of an offer to enter into a 
contract:  
a) The offer is delivered to the place of residence if the offeree is a natural 
person, or the offer is delivered to the head office if the offeree is a juridical 
person;  
b) The offer is placed into the official information system of the offeree;  
c) When the offeree knows about the offer to enter into a contract by way of 
other means.  
Article 389. Modification or withdrawal of offers to enter into contracts  
1. An offeror may modif y or withdraw an offer to enter into a contract in the 
following cases:  
a) If the offeree receives notice of modification or withdrawal of the offer prior 
to or at the same time as receipt of the offer;  
b) The offeror clearly specified the circumstances in  which the offer could be 
modified or withdrawn and such circumstances have in fact arisen.  
2. When the offeror modifies the contents of the offer, that offer shall be deemed 
to be a new offer.  
Article 390. Rescission of offers to enter into contracts  
If the offeror exercises the right to rescind the offer to enter into a contract on 
the ground that such right was specified in the offer, the offeror must notify the 
offeree and such notice shall only be effective if the offeree receives the notice 
prior to t he offeree providing its acceptance of the offer to enter into the 
contract.  120 
 
Article 391. Termination of offers to enter into contracts  
An offer to enter into a civil contract shall terminate in the following cases:  
1. The offeree replies that the offer is  accepted.  
2. The offeree replies that the offer is not accepted;  
3. The time limit for acceptance has expired;  
4. When notice of modification or withdrawal of the offer becomes effective;  
5. When notice of rescission of the offer becomes effective;  
6. As agreed by the offeror and the offeree within the time limit within which 
the offer to enter into a contract remains effective.  
Article 392. Amendment of offer proposed by offeree  
When an offeree accepts the offer to enter into a contract but specifies 
cond itions or amendments to the offer, the offeree shall be deemed to have made 
a new offer.  
Article 393. Acceptance of offers to enter into contracts  
1. Acceptance of an offer to enter into a contract means a reply by the offeree to 
the offeror accepting the entire contents of the offer.  
2. The silence of the offeree shall not mean an acceptance of the offer to enter 
into the contract, unless it is agreed upon or habit established by the parties.  
Article 394. Time limits for acceptance of offers to enter into  civil contracts  
1. Where an offeror has specified a time limit for reply, a reply accepting shall 
only be effective if it is made within that time limit. If the offeror receives an 
acceptance after the time limit has expired, such acceptance shall be deem ed to 
be a new offer from the party which is late in replying.  
When the offeror does not specify the time limit for reply, the reply accepting 
shall only be effective if it is made within reasonable period.  
2. If a notice of acceptance of an offer to enter  into a contract arrives late for 
objective reasons which the offeror knows or should know, such notice shall still 
be effective, unless the offeror immediately replies that it does not agree with 
such acceptance by the offeree.  
3. Where the parties commun icate directly, including conversations by 
telephone or other means of communication, the offeree must reply immediately 121 
 
as to whether or not it will accept, except where there is an agreement on the 
time limit for reply.  
Article 395. Cases where offeror d ies or lacks of legal capacity or has 
limited cognition and behavior control  
Where the offeror dies or lacks of legal capacity or has limited cognition and 
behavior control after the offeree has replied accepting the offer, the offer to 
enter into a contra ct shall still be valid, unless the contents of contract is 
associated with the personal identity of the offeror.  
Article 396. Cases where offeree dies or lacks of legal capacity or has 
limited cognition and behavior control  
Where the offeree dies or lacks  of legal capacity or has limited cognition and 
behavior control after the offeree has replied accepting the offer, the offer to 
enter into a contract shall still be valid, unless the contents of contract is 
associated with the personal identity of the off eror. 
Article 397. Withdrawal of notice of acceptance to enter into contract  
The offeree may withdraw notice of acceptance to enter into a contract if such 
notice arrives prior to or at the same time as the offeror receives the reply 
accepting the offer to  enter into a contract.  
Article 398. Contents of contracts  
1. The contracting parties may agree on the contents of a contract.  
2. A contract may have the following contents:  
a) Subject matter of the contract;  
b) Quantity and quality;  
c) Price and method of  payment;  
d) Time limit, place and method of performing the contract;  
dd) Rights and obligations of the parties;  
e) Liability for breach of contract;  
g) Methods of settlement of disputes.  
Article 399. Places for entering into contracts  122 
 
The place where a co ntract is entered into shall be as agreed by the parties; if 
there is no agreement, such place shall be the residence of the individual, or the 
head office of the legal entity, having made the offer to enter into the contract.  
Article 400. Time when contra cts are entered into  
1. A contract is entered into at the time when the offeror receives the reply 
accepting to enter into the contract.  
2. If the parties have agreed that silence shall constitute an acceptance within a 
time limit, the contract shall also be deemed to be entered into when such time 
limit has expired.  
3. The time when an oral contract is entered into is the time when the parties 
have reached agreement on the contents of the contract.  
4. The time when a written contract is entered into shall be the time when the 
last party signs the contract or by other forms of written acceptance.  
If a contract is entered into orally and then it is made in writing, the time when 
the contract is entered into shall be determined as prescribed in Clause 3 of thi s 
Article.  
Article 401. Effectiveness of contracts  
1. A contract legally entered into shall take effect from the time when it is 
entered into, unless otherwise agreed or otherwise provided by law.  
2. From the effective date of the contract, contracting par ties must mutually 
exercise rights and perform obligations as agreed. A contract may be amended 
or terminated as agreed by the parties or prescribed by law.  
Article 402. Principal types of contracts  
Contracts comprise the following principal types:  
1. A bi lateral contract is a contract whereby each party has an obligation to the 
other;  
2. A unilateral contract is a contract whereby only one party has an obligation;  
3. A principal contract is a contract the effectiveness of which does not depend 
on another c ontract;  
4. An ancillary contract is a contract the effectiveness of which depends on a 
principal contract;  123 
 
5. A contract for the benefit of a third person is a contract whereby contracting 
parties must perform obligations for the benefit of a third person  and the third 
person enjoys benefits from such performance;  
6. A conditional contract is a contract the performance of which depends on the 
occurrence, modification or termination of a specified event.  
Article 403. Appendices to contracts  
1. Appendices pr oviding details on certain terms and conditions of a contract 
may be attached to the contract. The appendices shall have the same 
effectiveness as the contract. The contents of the appendices shall not contradict 
the contents of the contract.  
2. If the ter ms and conditions of the appendices contradict the terms and 
conditions of the contract, such terms and conditions of the appendices shall be 
ineffective, unless otherwise agreed. If the parties agree that the terms and 
conditions of the appendices contrad ict the terms and conditions of the contract, 
the terms and conditions of the contract which are contradicted shall be deemed 
to have been amended.  
Article 404. Interpretation of contracts  
1. Where a contract contains terms and conditions which are unclear , the 
interpretation of such terms and conditions shall be based not only on the 
wording of the contract but also on the mutual intentions of the parties during 
the process prior to and after the time of establishment and performance of the 
contract.  
2. Wh ere a term of a contract may be interpreted in different ways, it shall be 
interpreted in the way which, when effective, will best benefit the parties.  
3. Where the wording of a contract may be interpreted in different ways, such 
wording shall be interpret ed in the way most appropriate to the nature of the 
contract.  
4. Where a contract contains a term or wording which is difficult to understand, 
such term or wording shall be interpreted in accordance with the customary 
practice of the place where the contra ct was entered into.  
5. Where there is a conflict between the mutual intentions of the parties and the 
wording used in the contract, the mutual intentions of the parties shall be used in 
order to interpret the contract.  124 
 
6. Where the party in a powerful pos ition inserts into the contract contents which 
are disadvantageous to the party in a weak position, the contract shall be 
interpreted in a manner favoring the party in a weak position.  
Article 405. Standard form contracts  
1. Standard form contract means a contract containing terms and conditions 
which are prepared by a party based on a standard form requiring the other party 
to reply within a reasonable period of time. If the offeree accepts, it shall be 
deemed to have accepted the entire contract provided by the offeror.  
The standard form contract must be public in order for the parties to know or 
should know the contents of the contract.  
Procedures for announcement of standard form contract shall comply with 
regulations of law.  
2. Where a standard form con tract contains terms and conditions which are 
unclear, such terms and conditions shall be interpreted in a manner favoring the 
offeree.  
3. Where a standard form contract contains provisions exempting the party 
providing such standard form contract from lia bility, or increasing the liability 
of or waiving legitimate interests of the other party, such provisions shall be 
ineffective, unless otherwise agreed.  
Article 406. General trading conditions in concluding contracts  
1. General trading conditions are sta ble terms announced by a party to apply to 
the offeree; if the offeree accepts the contract is then deemed to accept these 
terms.  
2. General trading conditions shall be effective only with the parties as long as 
these conditions have been publicly in order  for the parties to know or should 
know them.  
The procedures for announcement of general trading conditions shall comply 
with regulations of law.  
3. The general trading conditions must ensure equality between the parties. If the 
general trading conditions contain provisions on discharge of liability from the 
party giving the general trading conditions, increase of responsibility or removal 
of the legitimate interests of the other party, these provisions do not take effect, 
unless otherwise agreed.  125 
 
Article 4 07. Invalid civil contracts  
1. The provisions on invalid civil transactions in Articles 123 to 138 inclusive of 
this Code shall also govern invalid contracts.  
2. Invalidity of a principal contract shall terminate an ancillary contract, unless 
the parties a gree that the ancillary contract replaces the principal contract. This 
provision shall not apply with respect to security for the performance of civil 
obligations.  
3. Invalidity of an ancillary contract shall not terminate the principal contract, 
unless th e parties agree that the ancillary contract is an inseparable part of the 
principal contract.  
Article 408. Invalidity of civil contracts due to impossibility of performing 
subject matter  
1. If, immediately as from the time a contract is signed, it is impos sible to 
perform the subject matter of the contract for objective reasons, the contract 
shall be invalid.  
2. If, when entering into a contract, one party knew or should have known that it 
was impossible to perform the subject matter of the contract for obj ective 
reasons but failed to notify the other party which entered into the contract, the 
former party must compensate the latter party for damage, unless the latter party 
knew or should have known that it was impossible to perform the subject matter 
of the  contract.  
3. The provision in Clause 1 and Clause 2 of this Article shall also apply to a 
contract containing one or more parts with subject matter which is impossible to 
perform, but the remaining parts of the contract shall remain valid.  
Sub-section 2. PERFORMANCE OF CONTRACTS  
Article 409. Performance of unilateral contracts  
With respect to a unilateral contract, the obligor must perform the obligation 
strictly as agreed. The obligor may only perform the obligation prior to or after 
the time limit with t he consent of the obligee.  
Article 410. Performance of bilateral contracts  
1. With respect to a bilateral contract, where the parties have agreed on a time 
limit for the performance of an obligation, each party must perform its 
obligation when the obligati on falls due. One party may not postpone 126 
 
performance by reason of the other party not having performed the obligations 
owed to the former party, except in the cases provided in Articles 411 and 413 
of this Code.  
2. Where the parties have no agreement on wh ich party will perform its 
obligation first, the parties must perform their obligations concurrently; where 
obligations are not able to be performed concurrently, the obligation the 
performance of which will take longer shall be performed first.  
Article 41 1. Right to postpone performance of civil obligations in bilateral 
contracts  
1. The party which is required to perform its obligation first has the right to 
postpone the performance of such obligation, if the property of the other party 
has substantially d ecreased in value such that its obligation is not able to be 
performed as undertaken, until the other party is able to perform its obligation or 
has a guarantor.  
2. The party which is required to perform its obligation last has the right to 
postpone the pe rformance of such obligation when it falls due if the party which 
was required to perform its obligation first failed to do so when such obligation 
fell due.  
Article 412. Lien on property in bilateral contracts  
If the obligor fails to perform his/her oblig ations, the obligee shall establish the 
right to lien on property of the obligor as prescribed in Article 346 to Article 350 
of this Code.  
Article 413. Obligations not able to be performed due to fault of obligee  
With respect to a bilateral contract, when one party is not able to perform its 
obligations due to the fault of the other party, the former party has the right to 
demand the latter party to continue to perform its obligation with respect to the 
former party or has the right to cancel the contract a nd demand compensation 
for damage.  
Article 414. Failure to perform obligations not due to fault of parties  
With respect to a bilateral contract, when one party is not able to perform its 
obligations but there is no fault of any party, the party not being a ble to perform 
does not have the right to demand the other party to perform its obligation with 
respect to the former party. When one party has performed part of its 127 
 
obligations, such party has the right to demand the other party to perform its 
correspondi ng obligation with respect to the former party.  
Article 415. Performance of contracts for benefit of third parties  
Where a contract is performed for the benefit of a third person, the third person 
has the right to demand personally the obligor to perform t he obligations with 
respect to such third person. If there is a dispute between the parties over the 
performance of the contract, the third person does not have the right to demand 
performance until the dispute is resolved.  
An obligee also has the right to  demand the obligor perform a contract for the 
benefit of a third person.  
Article 416. Right to waive of third persons  
1. Where a third person waives its right to benefits prior to the performance of 
an obligation by an obligor, the obligor shall not be re quired to perform the 
obligation but must notify the obligee, the contract shall be deemed to be 
cancelled, and each party shall return anything it has received from the other 
party.  
2. If a third person waives its [right to] benefits after the obligor ha s performed 
the obligation, the obligation shall be deemed to have been fulfilled and the 
obligee must perform its undertakings with respect to the obligor. In this case, 
benefits derived from the contract shall be enjoyed by a party that should have 
been the beneficiary if the contract is performed for the interests of a third party, 
unless otherwise agreed.  
Article 417. No amendment or cancellation of contracts for benefit of third 
persons  
Where a third person has agreed to receive a benefit, the parties  to the contract 
may not amend or cancel the contract, even where the contract is yet to be 
performed, except with the consent of the third person.  
Article 418. Agreements on fines against violations  
1. Agreements on fines for violations are reached by the  parties to a contract 
which requires the violating party to pay a fine to the aggrieved party.  
2. The fine levels shall be agreed among the parties, unless otherwise prescribed 
by relevant laws.  128 
 
3. The parties may reach an agreement that the violating pa rty has to pay only a 
fine for violations and is not liable to any compensation for damage, or has to 
pay both a fine for violations and a compensation for damage.  
In case the parties have an agreement on fines against violation which does not 
specify that  the violating party has to pay both a find for violations and a 
compensation for damage, then the violating party has to pay only the fine for 
violations.  
Article 419. The damage to be compensated for breach of contract  
1. The damage to be compensated for  breach of contractual obligations is 
determined in accordance with Clause 2 of this Article, Article 13 and Article 
360 of this Code.  
2. The obligee may demand compensation for damage to its supposed benefits 
that will be enjoyed by the contract offer. The obligee also may request the 
obligor to pay the costs incurred due to its non -fulfillment of contractual 
obligations which do not overlap with the compensation for damages for 
contractual benefits.  
3. At the request of the obligee, a court may compel t he obligor to pay spiritual 
damages to the obligee. The damages shall be decided by the court according to 
contents of case.  
Article 420. Performance of contract upon the basic change of 
circumstances  
1. The change of circumstances shall be deemed basic w hen it meets all 
following conditions:  
a) The circumstances change due to objective reasons occurred after the 
conclusion of the contract;  
b) At the time of concluding the contract, the parties could not foresee a change 
in circumstances;  
c) The circumstan ces change such greatly that if the parties know in advance, 
the contract has not been concluded or are concluded, but with completely 
different content;  
d) The continuation of the contract without the change in the contract would 
cause serious damage to o ne party;  129 
 
dd) The party having interests adversely affected has adopted all the necessary 
measures in its ability, in accordance with the nature of the contract, cannot 
prevent or minimize the extent of effect.  
2. In the case of basic circumstances change,  the affected party may request the 
other party to the re -negotiate the contract in a reasonable period of time.  
3. If the parties cannot reach an agreement on amending the contract within a 
reasonable period of time, any of the parties may request a court  to: 
a) Terminate the contract at a specific time;  
b) Amend the contract to balance the lawful rights and interests of the parties 
due to basic change of circumstances.  
The court may only decide to amend the contract in the event that the 
termination of th e contract would cause greater damage than the cost to perform 
the contract if it is modified.  
4. In the process of negotiating amendments and termination of the contract and 
the court handling the case, the parties must continue to perform its obligations  
under the contract, unless otherwise agreed.  
Sub-section 3. AMENDMENT AND TERMINATION OF CONTRACTS  
Article 421. Amendment to contracts  
1. Parties may agree to amend a contract.  
2. Each contract may be amended as prescribed in Article 420 of this Code.  
3. Each amended contract must also comply which the formalities of the initial 
contract.  
Article 422. Termination of contracts  
A civil contract shall terminate in any of the following cases:  
1. The contract has been completed;  
2. The parties so agree;  
3. Wher e a contract is only able to be performed by a particular natural person or 
juridical person having entered into the contract, and that particular natural 
person dies or that juridical person ceases to exist.  
4. The contract is cancelled or unilaterally te rminated;  130 
 
5. The contract is not able to be performed because the subject matter of the 
contract no longer exists;  
6. The contract terminates as prescribed in Article 420 of this Code;  
7. Others circumstances as provided by law.  
Article 423. Cancellation o f contracts  
1. A party has the right to cancel a contract and shall not be liable to compensate 
for damage in any of the following cases:  
a) A violation of contract by the other party gives rise to cancellation as agreed 
by the parties;  
b) The other party seriously violates the obligations in the contract;  
c) Others circumstances as provided by law.  
2. Serious violation means the failure to fulfill obligations properly by a party 
leading the failure to achieve the purposes of entering into contract by the o ther 
party.  
3. A party cancelling a contract must notify the other party immediately of the 
cancellation [and] must compensate if the failure to notify causes damage.  
Article 424. Cancellation of the contract due to late performance of 
obligations  
1. Where  the obligor fails to perform the obligations that the obligee requests in 
a reasonable period of time but the obligor still fails to perform, the obligee may 
cancel the contract.  
2. If, due to the nature of the contract or by the will of the parties, the contract 
will not achieve the objective if it is not performed within a certain time limit, 
but the obligor fails to perform that contract upon the expiry date of such time 
limit, the obligee has the right to cancel the contract without adherence to Clause  
1 of this Article.  
Article 425. Cancellation of the contract due to inability to perform  
Where the obligor cannot perform part or all of its obligations to make the 
purpose of the obligee may not be reached, the obligee party can cancel the 
contract and c laim damages.  
Article 426. Cancellation of the contract in the case of lost or damaged 
property  131 
 
Where a party losses or causes damage to property being the subject of a 
contract that cannot be refunded or compensated by other property or cannot be 
repaire d or replaced with the same type of property, the other party may cancel 
contract.  
The violating party shall compensate in cash equal to the value of lost or 
damaged property, unless otherwise agreed or stipulated in Clause 2, Clause 3, 
Article 351 and Art icle 363 of this Code.  
Article 427. Consequences of cancellation of contracts  
1. When a contract is canceled, the contract is void from the time of signing; the 
parties do not have to fulfill the obligations agreed upon, except for agreement 
on fines again st violations, compensation and settlement of disputes.  
2. The parties must return to each other what they have received after deducting 
from the reasonable costs of contract performance and cost of preservation and 
development of property.  
The refund is m ade in kind. In case it cannot be returned in kind, it is worth the 
money to repay.  
Where the parties are jointly obliged to refund, the refund must be made at the 
same time, unless otherwise agreed or otherwise provided by law.  
3. The aggrieved party shal l be compensated due to breach of obligations of the 
other party.  
4. The settlement of the consequences of the cancellation of the contract relating 
to personal rights shall comply with this Code and other relevant law provisions.  
5. In case of canceling t he contract without grounds specified in Articles 423, 
424, 425 and 426 of this Code, the cancellation of the contract is determined as 
the violating party to perform its obligations and responsibilities to comply with 
its obligations under the provisions of this Code, other relevant laws.  
Article 428. Unilateral termination of performance of contracts  
1. A party has the right to terminate unilaterally the performance of a contract 
without any compensation for damage when a party violates its obligations 
seriously if so agreed by the parties or so provided by law.  
2. A party terminating unilaterally the performance of a contract must notify the 
other party immediately of its termination of the contract and must compensate 
if the failure to notify causes dama ge. 132 
 
3. Where the performance of a contract is terminated unilaterally, it shall 
terminate from the time when the other party is notified of the termination. In 
such case, the parties are not required to continue to perform their obligations, 
except for agr eement on fines for violations, compensation for damage and 
settlement of disputes. A party which has already performed its obligation may 
demand the other party to make payment for the performed obligation.  
4. The aggrieved party shall receive a compensat ion for damage caused by the 
improper performance of obligation by the violating party.  
5. If a contract is terminated unilaterally without any basis prescribed in Clause 
1 of this Article, the party terminating unilaterally the performance of the 
contract  shall be deemed to be the violating party and must perform civil 
liability as prescribed in this Code and relevant laws.  
Article 429. Prescriptive period for initiating legal action with respect to 
contracts  
The prescriptive period for initiating legal ac tion to request a court to resolve a 
dispute relating to a contract is three years from the date on which the party 
entitled to request knows or should know that their lawful rights and interests 
are infringed.  
Chapter XVI  
COMMON CONTRACTS  
Section 1. SALE CONTRACTS OF PROPERTY  
Article 430. Sale contract of property  
Sale contract means an agreement between parties whereby a seller is obligated 
to transfer the ownership rights of property to the purchaser and the purchaser is 
obligated to make a payment to th e seller.  
Sale contracts of houses or sale contracts of houses for other purposes shall 
comply with this Code, the Law on Housing and relevant laws.  
Article 431. Subject matter of sale contracts  
1. Each property prescribed in this Code may be the subject matter of a sale 
contract. If a property is banned or restricted from transfer as prescribed by 
laws, it shall become a subject matter of a sale contract if it complies with the 
regulations of such laws.  133 
 
2. The property is under ownership of the seller an d the seller has the right to 
sell it.  
Article 432. Quality of objects for sale  
1. The quality of an object for sale and purchase shall be as agreed by the 
parties.  
2. Where the quality of an object has been proclaimed or is provided by a 
competent author ity, the quality of the object agreed by the parties shall not be 
lower than the quality proclaimed standard or the stipulations of the competent 
authority.  
3. Where parties have not agreed on or agree unclearly on the quality of the 
object for sale, its q uality shall conform to requirements pertaining to quality of 
the object proclaimed or prescribed by a competent authority or by industry 
standards.  
If there is no quality standard, regulations of a competent authority and industry 
standard in terms of an object for sale, its quality shall be determined according 
to normal standards or separate standards in conformity with the purposes of 
entering into contract and as prescribed in the Law on consumers’ right 
protection.  
Article 433. Price and method of pay ment  
1. Price shall be as agreed by the parties or as determined by a third person at the 
request of the parties. With respect to property in a transaction for which a 
competent authority has provided price and method of payment, the parties shall 
reach an  agreement in accordance with such regulations.  
2. Where parties reach no agreement or reach an agreement with unclear terms 
about price and method of payment, the price shall be determined according to 
the market price and the method of payment shall be d etermined according to 
the customary practice at the time and place of entering into the contract.  
Article 434. Time limits for performance of sale contracts  
1. The time limit for performance of a sale contract shall be as agreed by the 
parties. The selle r must deliver the property to the purchaser at the agreed time. 
The seller may only deliver the property prior to the time limit with the consent 
of the purchaser.  
2. Where the parties have not agreed on a time limit for delivery of the property, 
the purc haser has the right to demand, at any time, the seller to deliver the 134 
 
property and the seller also has the right to demand, at any time, the purchaser to 
accept the property, but the parties must give an advanced reasonable notice to 
each other.  
3. The pur chaser shall make the payment according to the agreed time. Where 
the parties have no agreement or have an unclear agreement on the time limit for 
payment, the purchaser must pay immediately upon receipt of the property or 
documents proving the ownership o f the property.  
Article 435. Place for delivery of property  
The place for delivery of the property shall be as agreed by the parties. If there is 
no agreement, Clause 2 of Article 277 of this Code shall apply.  
Article 436. Method for delivery of property  
1. Property shall be delivered by the method as agreed by the parties. If there is 
no agreement on the method for delivery of the property, the property shall be 
delivered at one time directly to the purchaser.  
2. If the parties agreed that the seller shall  deliver property to the purchaser 
many times, but the seller violates obligation of delivery in a certain time, the 
purchaser may cancel the part of contract related to such violation and claim 
compensation.  
Article 437. Liability in respect of delivery o f objects in incorrect quantities  
1. Where a seller delivers objects in a quantity which is more than that agreed, 
the purchaser has the right to accept or not to accept the excess. If it accepts the 
excess, payment shall be made in accordance with the agr eement on the excess.  
2. Where a seller delivers objects in a quantity which is less than that agreed, the 
purchaser has one of the following rights:  
a) Accept the amount delivered and set a time limit for the seller to deliver the 
amount outstanding;  
b) Accept the amount delivered and demand compensation for damage;  
c) Cancel the contract and demand compensation for damage if the violation 
prevents the purchaser from achieving the purposes of enter into the contract.  
Article 438. Liability in respect of de livery of incomplete integrated objects  
1. Where an integrated object is delivered incomplete, thereby rendering the 
object unusable, the purchaser has one of the following rights:  135 
 
a) Accept the object and demand the seller to deliver the remaining parts, 
demand compensation for damage, and postpone payment in respect of the parts 
received until the missing parts are delivered;  
b) Cancel the contract and demand compensation for damage.  
2. Where a purchaser has paid for, but not yet accepted, the delivery of  an 
incomplete integrated object, the purchaser shall be paid interest on the amount 
pre-paid as agreed by the parties provided it does not exceed the interest rate 
prescribed in Clause 1 Article 468 of this Code. If the parties do not agree the 
interest r ate, Clause 2 Article 468 of this Code shall apply and the purchaser 
may demand the seller to compensate for damage due to the delivery of the 
incomplete integrated object from the time when the contract is required to be 
performed to the time when the com plete integrated object is delivered.  
Article 439. Liability in respect of delivery of objects of incorrect type  
Where an object delivered is of an incorrect type, the purchaser has one of the 
following rights:  
1. Accept the object and pay the agreed price ; 
2. Demand delivery of an object of the correct type and compensation for 
damage;  
3. c) Cancel the contract and demand compensation for damage if the delivery of 
incorrect type prevents the purchaser from achieving the purposes of enter into 
the contract.  
With regard to an object including many types, if the seller fails to deliver it in 
conformity with the agreement, the purchaser may cancel the part of contract 
related to such object and claim compensation.  
Article 440. Obligation to make payment  
1. A pu rchaser must pay the full price at the agreed place and time.  
2. If the parties only agree on time limit for delivery of object, the time limit for 
payment shall be determined equivalent to the time limit for delivery of object. 
If the parties do not agre e on time limit for delivery of object and payment, the 
purchaser must make payment upon the receipt of the object.  
3. If the purchaser fails to make payment, he/she/it must pay interest on the late 
payment as prescribed in Article 357 of this Code.  
Artic le 441. Transfer of risks  136 
 
1. The seller shall bear all risks of the property until the property is delivered to 
the purchaser, the purchaser shall bear all risks of the property from the time of 
acceptance of the property, unless otherwise agreed or prescr ibed by law.  
2. Where the law requires that ownership rights with respect to property which is 
the subject matter of a contract for sale and purchase must be registered, the 
seller bear all risks until the completion of the registration procedures and the 
purchaser bear all risks from the completion of the registration procedures, 
unless otherwise agreed.  
Article 442. Transport costs and costs related to transfer of ownership 
rights  
1. Transport costs and costs related to transfer of ownership rights shall be 
agreed by the parties, unless otherwise prescribed by law.  
2. Where the parties do not reach an agreement or reach an unclear agreement on 
transport costs and costs related to transfer of ownership rights, those costs shall 
be determined according to th e costs proclaimed or prescribed by a competent 
authority or industry standards.  
3. If there is no basis prescribed in Clause 1 and Clause 2 of this Article, the 
transport costs and costs related to transfer of ownership rights shall be 
determined accordin g to normal standards or separate standards in conformity 
with the purposes of entering into contract.  
4. Where the parties have not agreed on and the law does not provide transport 
costs and costs related to transfer of ownership rights, the seller shall be liable 
for the costs of transportation to the place of delivery of the property and the 
costs related to the transfer of the ownership rights.  
Article 443. Obligation to provide information and instructions for use  
A seller has the obligation to provide  a purchaser with necessary information on 
the property for sale and instructions on the use of the property. If the seller fails 
to perform this obligation, the purchaser has the right to require the seller to 
perform such obligation within a reasonable t ime limit and, if the seller still fails 
to perform such obligation that prevents the purchaser from achieving the 
purposes of entering into the contract, the purchaser has the right to cancel the 
contract and demand compensation for damage.  
Article 444. A ssurances as to ownership rights of purchasers with respect to 
purchased property  137 
 
1. A seller has the obligation to assure that the ownership rights with respect to 
the property sold to a purchaser are not disputed by a third person.  
2. Where ownership rig hts with respect to property are disputed by a third 
person, the seller must support the purchaser in protecting the interests of the 
purchaser. If a third person has the ownership rights with respect to all or part of 
the property for sale and purchase, t he purchaser has the right to cancel the 
contract and require the seller to compensate for damage.  
3. Where a purchaser knows or should know that property for sale and purchase 
is under the ownership of a third person but, nevertheless, purchases the 
prope rty, the purchaser must return the property to the owner and does not have 
the right to demand compensation for damage.  
Article 445. Assurances as to quality of objects for sale  
1. A seller must assure the utility value or the characteristics of the objec t for 
sale and purchase. If, after having purchased an object, a purchaser discovers 
defects which cause the object to lose its value or diminish its utility value, the 
purchaser must notify the seller immediately of such defects and has the right to 
requi re the seller to repair or replace the defective object with another object, to 
reduce its price and to compensate for damage, unless otherwise agreed.  
2. A seller must assure that an object for sale corresponds to descriptions on any 
package, to any trade mark or to any sample selected by the purchaser.  
3. A seller shall not be liable for any defect of an object in the following cases:  
a) Where the purchaser knew or should have known of the defect at the time of 
purchase;  
b) Where the object was sold at an auction or a second -hand shop;  
c) Where the purchaser was at fault for causing the defect.  
Article 446. Warranty obligation  
If agreed by parties or provided by law, a seller has the obligation to provide a 
warranty for the object for sale and purchase for a certain period, hereinafter 
referred to as the warranty period.  
The warranty period shall be calculated from the time when the purchaser has 
the obligation to accept the object.  
Article 447. Right to claim on warranty  138 
 
If a purchaser discovers a defect in  a purchased object during the warranty 
period, it has the right to require the seller to repair the object free of charge, or 
reduce its price or replace it with another object, or it has the right to return the 
object in exchange for a refund.  
Article 44 8. Repairs of objects during warranty periods  
1. A seller must repair a defective object and assure that it satisfies the quality 
standards or characteristics as undertaken.  
2. A seller shall pay the costs for repairing a defective object and for 
transport ing it from the place of residence or head office of the purchaser to the 
place of repair and vice versa.  
3. A purchaser has the right to require the seller to complete the repairs within a 
time limit agreed by the parties or within a reasonable time. If t he seller is not 
able to make or complete the repairs within such time, the purchaser has the 
right to demand a price reduction or replacement of the defective object with 
another object, or it has the right to return the object in exchange for a refund.  
Article 449. Compensation for damage during warranty periods  
1. In addition to demanding the performance of warranty obligations, a 
purchaser has the right to require the seller to compensate for damage caused 
during the warranty period due to technical def ects of the object.  
2. A seller shall not be liable to compensate for damage if it is able to prove that 
the damage was caused due to the fault of the purchaser. The seller shall be 
entitled to a reduction in the amount of compensation for the damage where  the 
purchaser has failed to take all necessary measures available to it to mitigate the 
damage.  
Article 450. Sale of property rights  
1. Where property rights are sold, a seller must deliver the relevant documents 
and complete the procedures for transferri ng the ownership rights to the 
purchaser and the purchaser must pay the seller.  
2. Where property rights are the right to demand payment of a debt and the seller 
has guaranteed the ability to pay of the debtor, the seller must be jointly liable 
for payment  if the debt falls due and the debtor fails to pay.  
3. The time when ownership rights with respect to property rights are transferred 
is the time when a purchaser receives documents evidencing the ownership 139 
 
rights with respect to the property rights, or th e time when the transfer of the 
ownership rights is registered if so provided by law.  
Article 451. Auctions  
Property may be sold at an auction as required by the owner or as provided by 
law. A sale by auction of multiple ownership property must have the co nsent of 
all owners, unless otherwise agreed or otherwise provided by law.  
The auction must be conducted in conformity of principles of objective, public 
and transparent, assurance of lawful rights and interests of the participants and 
in accordance with l aw on auction.  
Article 452. Purchases after trial use  
1. Parties may agree on the trial use of purchased property by the purchaser for a 
period, hereinafter referred to as the trial use period. During the trial use period, 
the purchaser may inform the sell er whether or not the purchaser wishes to make 
the purchase. If the purchaser fails to inform the seller prior to the expiry of the 
trial use period, the purchaser shall be deemed to have accepted the purchase on 
the terms agreed prior to the property bein g received for trial use.  
If the parties do not reach an agreement and reach an unclear agreement on the 
trial use period, such period shall be determined according to the customary 
practice of the transactions with the same subject matter.  
2. During the t rial use period, property shall remain under the ownership of the 
seller. The seller shall bear all risks of the property, unless otherwise agreed. 
During the trial use period, the seller may not sell, give, lease, exchange, 
mortgage or pledge the property  until the purchaser informs the seller whether or 
not it wishes to make the purchase.  
3. Where a prospective purchaser informs the seller that it does not wish to make 
the purchase, the prospective purchaser must return the property to the seller and 
must  compensate the seller if the prospective purchaser loses or damages the 
trial property. The prospective purchaser shall not be liable for normal wear and 
tear caused by the trial use and shall not have to return any yield derived from 
the trial use.  
Artic le 453. Purchases by deferred payment or payment in instalments  
1. Parties may agree that the purchaser may purchase by deferred payment or 
payment in instalments of the purchase price within a time limit after delivery of 140 
 
the purchased property. The selle r has title retention of the property sold until 
the purchaser has paid the purchase price in full, unless otherwise agreed.  
2. Contracts for purchase by deferred payment or payment in instalments shall 
be made in writing. The purchaser may use the propert y purchased by deferred 
payment or payment in instalments and bear all risks during the period of use, 
unless otherwise agreed.  
Article 454. Buy -back of property sold  
1. A seller and purchaser of property may agree that the seller has the right to 
buy-back  the property within a period of time following the sale (hereinafter 
referred to as the buy -back period).  
The buy -back period for property shall be as agreed by the parties but shall not 
exceed one year in respect of moveable property, and five years in r espect of 
immoveable property, from the time of delivery of the property, unless 
otherwise prescribed by law. During this period, the seller may buy back the 
property at any time provided that reasonable prior notice is given to the 
purchaser. The buy -back  price shall be the market price at the time when and 
place where the buy -back occurs, unless otherwise agreed.  
2. During the buy -back period, a purchaser may not sell, exchange, give, lease, 
mortgage or pledge the property, and shall bear all risks with r espect to the 
property, unless otherwise agreed.  
Section 2. CONTRACTS FOR EXCHANGE OF PROPERTY  
Article 455. Contracts for exchange of property  
1. Contract for the exchange of property means an agreement between parties 
whereby they deliver property, and tr ansfer the ownership rights thereto, to each 
other.  
2. A contract for the exchange of property must be made in writing, and must be 
notarized, certified or registered if so provided by law.  
3. Where one party exchanges with another party property which it does not own 
or property in respect of which it has no authorization from the owner, the other 
party may cancel the contract and demand compensation for damage.  
4. Each party shall be deemed to be the seller of the property delivered to the 
other party and  the purchaser of the property delivered to it. The provisions on 
contracts for sale and purchase in articles 430 to 439 inclusive and articles 449 141 
 
to 454 inclusive of this Code shall also apply to contracts for the exchange of 
property.  
Article 456. Settl ement of differences in value  
Where exchanged property differs in value, the parties must settle that difference 
between themselves, unless otherwise agreed or otherwise provided by law.  
Section 3. CONTRACTS FOR GIFTS OF PROPERTY  
Article 457. Contracts for  gifts of property  
Contract for a gift of property means an agreement between parties whereby the 
giver delivers its property and transfers its ownership rights to the recipient 
without requiring compensation and the recipient agrees to accept the gift.  
Article 458. Gifts of moveable property  
1. A contract for a gift of moveable property shall take effect when the recipient 
accepts the property, unless otherwise agreed.  
2. Where the law requires the ownership rights with respect to such moveable 
property to  be registered, the contract shall take effect from the time of 
registration.  
Article 459. Gifts of immoveable property  
1. A gift of immoveable property must be recorded in writing and notarized or 
certified, and must be registered if the law on immoveable  property requires 
registration of ownership.  
2. A contract for a gift of immoveable property shall take effect from the time of 
registration. In the case of immoveable property for which no registration of 
ownership rights is required, the gift contract s hall take effect from the time 
when the property is delivered.  
Article 460. Liability in respect of intentional gift of property not under 
one's ownership  
Where a giver intentionally gives property which is not under its ownership and 
the recipient does no t know or is not able to know, such giver must reimburse 
the recipient for expenses incurred by the recipient in increasing the value of the 
property at such time as it is reclaimed by the owner.  
Article 461. Disclosure of defects in gifts  142 
 
A giver has the obligation to notify the recipient of any defects in a gift. If the 
giver knows about defects in a gift but fails to provide notice thereof, the giver 
must be liable to compensate for damage caused to the recipient; but if the giver 
does not know about def ects in a gift, the giver shall not be liable to compensate 
for damage.  
Article 462. Conditional gifts of property  
1. A giver may require a recipient to perform one or several civil obligations 
prior to or after the giving of a gift. The conditions for giv ing a gift must not 
contravene the law or social morals.  
2. Where a recipient performs an obligation required to be performed as a 
condition to the giving of a gift and the giver fails to deliver the gift, the giver 
must pay for the obligation already perf ormed by the recipient.  
3. Where a recipient fails to perform an obligation required to be performed after 
the giving of a gift, the giver may reclaim the gift and demand compensation for 
damage.  
Section 4. CONTRACTS FOR LOAN OF PROPERTY  
Section 463. Contr acts for loan of property  
Contract for the loan of property means an agreement between parties whereby a 
lender delivers property to a borrower. When the loan falls due, the borrower 
must repay the lender property of the same type in accordance with the co rrect 
quantity and quality, and must pay interest if so agreed or so provided by law.  
Article 464. Ownership rights with respect to property lent  
A borrower shall become the owner of borrowed property from the time of 
delivery of the property.  
Article 465.  Obligations of lenders  
1. Deliver the property to the borrower in full, strictly in accordance with the 
quality and quantity, and at the time and place, agreed.  
2. Compensate the borrower for any damage where the lender knows that the 
property is not of t he agreed quality but fails to notify the borrower, unless the 
borrower accepts the property with knowledge that the property is not of the 
agreed quality.  
3. Do not demand the borrower to return the property prior to the due date, 
except in the cases prov ided in article 470 of this Code or relevant laws.  143 
 
Article 466. Obligations of borrowers to repay loans  
1. Where the property lent is a sum of money, the borrower must repay the 
lender the loan in full when due. If the property is an object, the borrower m ust 
deliver to the lender an object of the same type, quantity and quality, unless 
otherwise agreed.  
2. Where a borrower is not able to deliver an object, it may, with the consent of 
the lender, repay the value of the borrowed object, in cash, as at the ti me and 
place of delivery.  
3. The place for repayment of a loan shall be the place of residence or head 
office of the lender, unless otherwise agreed.  
4. If a borrower fails to repay all or any instalment of an interest -free loan, in 
whole or in part, when payment falls due, the borrower must, if the parties so 
agree, pay interest on the overdue amount from the due date until the date on 
which payment is made, at the basic interest rate prescribed in Clause 2 Article 
468 of this Code, unless otherwise agreed  or otherwise prescribed by law.  
5. If a borrower fails to repay, in whole or in part, a loan with interest, the 
borrower must pay:  
a) Interest on the principal as agreed in proportion to the overdue loan term and 
interest at the rate prescribed in Clause 2 Article 468 in case of late payment;  
b) Overdue interest on the principal equals one hundred and fifty (150) per cent 
of the interest rate in proportion to the late payment period, unless otherwise 
agreed.  
Article 467. Use of borrowed property  
Parties m ay agree that borrowed property may only be used for the agreed 
purpose of the loan. The lender may check the use of the property and may 
demand its early return if, despite warning, the borrower continues to use the 
property contrary to the agreed purpose . 
Article 478. Interest rates  
1. The rate of interest for a loan shall be as agreed by the parties.  
The rate of interest for a loan agreed by the parties may not exceed 20% per 
year, unless otherwise prescribed by law. According to actual conditions and at  
the proposal of the Government, the Standing Committee of National Assembly 144 
 
shall adjust the above interest and send report to the National Assembly at the 
latest session.  
If the agreed interest exceeds the maximum interest prescribed in this Clause, 
the agreed interest shall become invalid.  
2. Where 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 50% of the max imum interest prescribed in 
Clause 1 of this Article at the repayment time.  
Article 469. Performance of contracts for loans without fixed term  
1. With respect to a contract for an interest -free loan without a fixed term, the 
lender may reclaim the property , and the borrower may repay the debt, at any 
time provided that each party gives reasonable prior notice to the other party, 
unless otherwise agreed.  
2. With respect to a contract for a loan with interest without a fixed term, the 
lender may reclaim the p roperty at any time, subject to giving reasonable prior 
notice to the borrower, and shall be paid interest until the time when the 
property is returned. The borrower may also return the property at any time, 
subject to giving reasonable prior notice to the  lender, in which case the 
borrower shall pay interest only up to the date on which repayment is made.  
Article 470. Performance of contracts for fixed term loans  
1. With respect to a contract for a fixed term interest -free loan, the borrower 
may return the  property at any time, subject to giving reasonable prior notice to 
the lender. The lender may reclaim the property prior to the due date, subject to 
the consent of the borrower.  
2. With respect to a contract for a fixed term loan with interest, the borrow er 
may return the property prior to the due date, but must pay interest for the entire 
term, unless otherwise agreed or otherwise prescribed by law.  
Article 471. "H ọ, hụi, bi êu, phư ờng"  
1. "H ọ, hụi, bi êu, phư ờng" (hereinafter referred to as "ho") means a form of 
transaction regarding property in accordance with customary practice on the 
basis of an agreement reached by a group of people who assemble to gether and 
jointly determine the number of people, the term, the amount of money or other 
property, the form of contribution and payment of "ho", and the rights and 
obligations of the members of the group.  145 
 
2. "Ho" is aimed at mutual assistance of citizens and shall be implemented in 
accordance with law.  
3. If "ho" is organized with interest, it shall comply with this Code.  
4. It shall be strictly prohibited to organize "ho" in the form of lending at high 
interest rates.  
Section 5. CONTRACTS FOR LEASE OF PRO PERTY  
Sub-section 1. GENERAL PROVISIONS ON CONTRACTS FOR LEASE 
OF PROPERTY  
Article 472. Contracts for lease of property  
Contract for lease of property means an agreement between parties whereby a 
lessor delivers property to a lessee for use during a fixed term and the lessee is 
required to pay rent.  
Lease contracts of houses or lease contracts of houses for other purposes shall 
comply with this Code, the Law on Housing and relevant laws.  
Article 473. Rent  
1. Rent for a lease of property shall be as agreed b y the parties or determined by 
a third party at the request of the parties, unless otherwise prescribed by law.  
2. Where parties reach no agreement or reach an agreement with unclear terms 
about the rent, it shall be determined according to the market pric e at the time 
and place of entering into the contract.  
Article 474. Lease term  
1. The term of a lease shall be as agreed by the parties. If there is no agreement, 
the term of the lease shall be determined according to the purpose of the lease.  
2. Where par ties have not agreed on the term of a lease or where the term of a 
lease is not able to be determined according to the purpose of the lease, the lease 
shall terminate when the lessee has achieved the purpose of the lease.  
Article 475. Sub -leases  
A lessee m ay sub -lease leased property with the consent of the lessor.  
Article 476. Delivery of leased property  
1. A lessor must deliver property to the lessee strictly in accordance with the 
agreed quantity, quality, type and condition and at the agreed place and t ime, 
and must provide information necessary for use of the property.  146 
 
2. Where a lessor is late in delivering property, the lessee may extend the time 
for the delivery of the property or may cancel the contract and demand 
compensation for damage. If the lea sed property is not of the quality agreed, the 
lessee has the right to require the lessor to repair the property or reduce the rent, 
or to cancel the contract and demand compensation for damage.  
Article 477. Obligation to assure utility value of leased pro perty  
1. A lessor must assure that leased property is in the condition agreed and is 
suitable for the purpose of the lease contract for the entire term of the lease. The 
lessor must repair any damage to or defect in the leased property, with the 
exception of minor damage which the lessee must repair in accordance with 
customary practice.  
2. Where the utility value of leased property decreases otherwise than due to the 
fault of the lessor, the lessee has the right to demand the lessor:  
a) Repair the property ; 
b) Reduce the rent;  
c) Replace the property or, if the leased property is beyond repair and the 
purpose of the lease is not able to be achieved as a result or if the property has 
defects which the lessee did not know of, the lessee may terminate unilater ally 
the performance of the contract and demand compensation for damage.  
3. Where a lessee demands repair but the lessor fails to repair in time or at all, 
provided that the lessee informs the lessor, the lessee has the right to repair 
personally the lease d property and has the right to require the lessor to reimburse 
the costs of repair.  
Article 478. Obligation to assure right of lessees to use property  
1. A lessor must assure the right of a lessee to uninterfered use of the property.  
2. In the event of a dispute as to the ownership rights with respect to leased 
property, which interferes with use of that property by the lessee, the lessee has 
the right to terminate unilaterally the performance of the contract and demand 
compensation for damage.  
Article 479 . Obligation to take care of leased property  
1. A lessee shall take care of leased property as if it were its own and shall carry 
out minor repairs and maintenance. If the lessee causes any loss of or damage to 
the property, it must compensate the lessor.  147 
 
The lessee shall not be liable for normal wear and tear due to the use of the 
leased property.  
2. A lessee may, with the consent of the lessor, carry out repairs and 
improvements to leased property which increase its value and may require 
reimbursement fro m the lessor for reasonable costs incurred.  
Article 480. Obligation to use leased property strictly in accordance with 
utility and purpose  
1. A lessee must use leased property strictly in accordance with its utility and the 
agreed purpose.  
2. Where a lesse e fails to use leased property strictly in accordance with its 
utility and purpose, the lessor has the right to terminate unilaterally the 
performance of the contract and to demand compensation for damage.  
Article 481. Payment of rent  
1. A lessee must pay rent in full and on time as agreed. If there is no agreement 
on the time for payment of rent, the time shall be determined in accordance with 
the customary practice at the place of payment. If it is not possible to determine 
the time of payment in accordan ce with such customary practice, the lessee must 
make payment when the lessee returns the leased property.  
2. Where the parties have agreed on payment of rent in instalments, if the lessee 
fails to make payment for three consecutive instalments, the lessor  has the right 
to terminate unilaterally the performance of the lease contract, unless otherwise 
agreed or otherwise provided by law.  
Article 482. Return of leased property  
1. A lessee must return leased property in the same condition in which it was 
recei ved, normal wear and tear excepted, or in the condition agreed. If the value 
of the leased property has decreased in comparison with its condition at the time 
it was received, the lessor has the right to demand compensation for any 
damage, normal wear and tear excepted.  
2. Where leased property is moveable property, the place for returning the leased 
property shall be the place of residence or head office of the lessor, unless 
otherwise agreed.  
3. Where leased property is livestock, the lessee must return b oth the leased 
livestock and any offspring born during the term of the lease, unless otherwise 148 
 
agreed. The lessor must reimburse the lessee for expenses incurred in caring for 
the offspring.  
4. Where a lessee is late in returning leased property, the lesso r has the right to 
require the lessee to return the leased property and to pay rent for the period of 
delay and the lessee must compensate for damage. The lessee must pay a penalty 
for the late return of the leased property if so agreed.  
5. The lessee must  bear the risk in relation to the leased property during the 
period of delay.  
Sub-section 2. CONTRACTS FOR "THUE KHOAN" OF PROPERTY  
Article 483. Contracts for "thue khoan" of property  
Contract for "thue khoan" of property means an agreement between parties  
whereby a "thue khoan" lessor delivers the property to a "thue khoan" lessee for 
the exploitation of its utility and for the enjoyment of the yield and income 
derived from such property and the lessee has the obligation to pay rent.  
Article 484. Subject m atter of contracts for "thue khoan" of property  
The subject matter of a contract for "thue khoan" may be land, forest, and water 
surfaces which have not been exploited, livestock, production and business 
facilities, and other means of production together w ith the equipment required to 
exploit the utility of such property and to enjoy the benefits and income derived 
therefrom, unless otherwise provided by law.  
Article 485. Terms of "thue khoan"  
The term of a "thue khoan" shall be agreed by parties. If the pa rties do not reach 
an agreement and reach an unclear agreement on the term of “thue khoan”, such 
period shall be determined according to the production or business cycle 
appropriate to the nature of the subject matter of the "thue khoan".  
Article 486. Rent  in respect of "thue khoan"  
Rent in respect of a "thue khoan" shall be as agreed by the parties. If a "thue 
khoan" is awarded by tender, the rent in respect of such "thue khoan" shall be 
determined in the bidding process.  
Article 487. Delivery of "thue kho an" property  
Upon delivery of "thue khoan" property, parties must record their assessment of 
the condition and value of the property.  149 
 
If the parties are not able to determine the value, a third person shall be invited 
to determine the value. Such determina tion shall be made in writing.  
Article 488. Payment of "thue khoan" rent and method of payment  
1. "Thue khoan" rent may be paid in kind or money, or by performance of acts.  
2. A "thue khoan" lessee must pay "thue khoan" rent in full even where the 
lessee d oes not exploit the utility of the "thue khoan" property.  
3. When entering into a contract for "thue khoan", parties may agree on 
conditions for a reduction in rent. If at least one third of the benefits or income is 
lost due to an event of force majeure, a "thue khoan" lessee may demand a 
reduction of or exemption from rent, unless otherwise agreed.  
4. Where a "thue khoan" lessee must pay in kind according to the season or 
cycle in the exploitation of the utility of the "thue khoan" property, payment 
must be made at the end of such season or cycle, unless otherwise agreed.  
5. Where a "thue khoan" lessee is required to perform an act, the "thue khoan" 
lessee must perform that particular act.  
6. Repayment term of “thue khoan” shall be agreed by the parties. I f the parties 
have no agreement, the lessee has to pay on the last day of each month; in case 
the “thue khoan” follows the business cycle, the payment must be made at the 
end of the business cycle at the latest.  
Article 489. Exploitation of "thue khoan" pr operty  
A "thue khoan" lessee must exploit "thue khoan" property strictly in accordance 
with the agreed purpose and must inform the "thue khoan" lessor periodically of 
its condition and its exploitation. If the "thue khoan" lessor demands or requires 
inform ation at any other time, the "thue khoan" lessee must provide such 
information promptly. If the "thue khoan" lessee does not exploit the "thue 
khoan" property strictly in accordance with the agreed purpose, the "thue khoan" 
lessor has the right to terminat e unilaterally the performance of the contract and 
demand compensation for damage.  
Article 490. Taking care, maintenance and disposal of "thue khoan" 
property  
1. During the period of exploitation of the "thue khoan" property, the "thue 
khoan" lessee must t ake care of and preserve the "thue khoan" property and any 
related equipment at its own expense, unless otherwise agreed. If the "thue 
khoan" lessee loses or damages the "thue khoan" property or causes any loss or 150 
 
reduction in its value, the "thue khoan" l essee must compensate for damage. The 
"thue khoan" lessee shall not be liable for normal wear and tear due to the use of 
the "thue khoan" property.  
2. A "thue khoan" lessee may replace or improve "thue khoan" property if the 
parties so agree, but must pres erve its value.  
A "thue khoan" lessor must reimburse a "thue khoan" lessee for the reasonable 
expenses incurred in replacing or improving the "thue khoan" property as 
agreed.  
3. A "thue khoan" lessee may not sub -lease "thue khoan" property without the 
consent of the "thue khoan" lessor.  
Article 491. Enjoyment of benefits and liability for damage with respect to 
"thue khoan" livestock  
During the term of a "thue khoan" of livestock, the "thue khoan" lessee shall be 
entitled to enjoy half of the number of offs pring born and shall be liable for half 
of any damage of the "thue khoan" livestock caused by an event of force 
majeure, unless otherwise agreed.  
Article 492. Unilateral termination of performance of contracts for "thue 
khoan"  
1. Where a party terminates u nilaterally the performance of a "thue khoan" 
contract, that party must give reasonable prior notice to the other party. If the 
"thue khoan" is based on a season or cycle of exploitation, the period of prior 
notice must conform to such season or cycle.  
2. Where a "thue khoan" lessee breaches an obligation and the exploitation of 
the "thue khoan" property is the sole means of livelihood of the lessee and 
continuation of the "thue khoan" would not seriously affect the interests of the 
"thue khoan" lessor, the  "thue khoan" lessor may not terminate unilaterally the 
performance of the contract. In such case, the "thue khoan" lessee must 
undertake to the "thue khoan" lessor not to commit further breaches of the 
contract.  
Article 493. Return of "thue khoan" propert y 
Upon termination of a "thue khoan" contract, the "thue khoan" lessee must 
return the "thue khoan" property in a condition which takes into account the 
agreed depreciation. If the "thue khoan" lessee has caused any reduction in the 151 
 
value of the "thue khoa n" property, the "thue khoan" lessee must compensate for 
damage.  
Section 6. CONTRACTS FOR BORROWING PROPERTY  
Article 494. Contracts for borrowing property  
Contract for borrowing property means an agreement between parties whereby a 
lender delivers property  to a borrower for use free of charge for a period of time 
and the borrower returns the property at the end of the period of time or when 
the purpose of the borrowing has been achieved.  
Article 495. Subject matter of contracts for borrowing property  
Any no n-consumable object may be the subject matter of a contract for 
borrowing property.  
Article 496. Obligation of borrowers of property  
1. Take care of and preserve the borrowed property and not to change the 
condition thereof at the volition of the borrower.  The borrower must repair any 
normal damage to the property.  
2. Do not on -lend the property to any other person without the consent of the 
lender.  
3. Return the borrowed property on the due date. If there is no agreement on the 
time for returning the prope rty, the borrower must return the property 
immediately after the purpose of the borrowing has been achieved.  
4. Compensate for damage where the borrower causes damage to or loss of the 
borrowed property.  
5. The borrower must bear the risk in relation to th e borrowed property during 
the period of late return.  
Article 497. Rights of borrowers of property  
1. Use the borrowed property strictly in accordance with its utility and agreed 
purpose.  
2. Require the lender to reimburse reasonable expenses incurred in c arrying out 
repairs or improvements to the borrowed property which increase its value if so 
agreed.  
3. Do not bear liability for normal wear and tear of the borrowed property.  
Article 498. Obligations of lenders of property  152 
 
1. Provide necessary information  on the use of the property and its defects, if 
any. 
2. Reimburse the borrower for expenses incurred in carrying out repairs or 
improvements to the borrowed property which increase its value if so agreed.  
3. Where the lender knows but fails to notify the b orrower of a defect in the 
property which results in damage to the borrower, to compensate the borrower 
for such damage, except where the borrower knows or should know of such 
defect.  
Article 499. Rights of lenders of property  
1. Reclaim the property immed iately after the borrower has achieved its purpose 
where there is no agreement on the borrowing period. If the lender suddenly and 
urgently needs to use the borrowed property, the lender may reclaim it upon 
giving reasonable prior notice to the borrower, e ven if the borrower has not yet 
achieved its purpose.  
2. Reclaim the property where the borrower fails to use it strictly in accordance 
with the agreed purpose, utility, or method or where the borrower on -lends the 
property without the consent of the lende r. 
3. Demand compensation for damage to the property caused by the borrower.  
Section 7. CONTRACTS OF LAND USE RIGHTS  
Article 500. Contract of land use rights  
The contract of land use rights means the agreement between the parties that the 
land user conve rt, transfer, lease, sublease, donate, mortgage and contribute land 
use rights as capital or exercise other rights to the other party as prescribed in 
the Law on land; and the other party shall exercise rights and perform 
obligations according to the contr act to the land user.  
Article 501. Contents of contract of land use rights  
1. General provisions on contracts and the content of common contracts related 
in this Code shall also apply to contracts on land use rights, unless otherwise 
provided by law.  
2. Contents of the contract of land use rights are not contrary to the provisions of 
the purpose of use, the duration of land use, zoning, land use planning and the 
rights and obligations stipulated by law on land and other provisions of relevant 
laws.  153 
 
Article  502. Forms and procedures for performing contract of land use 
rights  
1. Contracts relating to land use rights must be made in writing in the form 
consistent with the provisions of this Code, the law on land and other provisions 
of relevant laws.  
2. The pe rformance of the contract for the land use rights must follow the 
procedures prescribed by the law of the land and other provisions of relevant 
laws.  
Article 503. Effect of the transfer of land use rights  
The transfer of land use rights shall be effect fro m the date of registration under 
the provisions of the law on land.  
Section 8. COOPERATION CONTRACT  
Article 504. Cooperation contract  
1. A cooperation contract means an agreement between natural and/or juridical 
persons regarding the property contribution,  effort to perform certain jobs, the 
same benefit and mutual responsibility.  
2. Each cooperation contract must be made in writing.  
Article 505. Contents of cooperation contract  
Each cooperation contract shall contain the major contents below:  
1. Purpose an d duration of cooperation;  
2. Full name and place of residence of natural person; name and headquarters of 
juridical person;  
3. Contributed property (if any);  
4. Contributed labor (if any);  
5. Method of distributing the yield and/or income;  
6. Rights and o bligations of cooperative members;  
7. Rights and obligations of representatives (if any);  
8. Conditions for participation and withdrawal from the cooperation contract (if 
any);  
9. Conditions for termination of cooperation.  
Article 506. Common property of t he cooperative members  154 
 
1. Property contributed and created by the members and other property as 
prescribed by law shall be considered as common property part of the 
cooperative members.  
Where there is agreement on the contribution that members fail to cont ribute 
money on schedule, they must pay interest on the unpaid portion of the money 
under the provisions of Article 357 of this Code and must pay damages.  
2. The disposition of the property is land use rights, housing, factories, other 
production materials  must have a written agreement of all the members; the 
disposal of other property shall be decided by the representatives of the 
members, unless otherwise agreed.  
3. The common property may not be divided before the termination of the 
cooperation contract,  unless otherwise agreed by all members.  
The division of common property shall not change or terminate the rights and 
obligations established before the division time.  
Article 507. Rights and obligations of cooperative members  
1. Enjoy the yield and income  gained from cooperation activities.  
2. Participate in decisions involving issues of performance of cooperation 
contract and co -operation monitoring.  
3. Compensate for damages to other cooperative members caused by their faults.  
4. Perform other rights and  obligations under the contract.  
Article 508. Establishing and performing civil transactions  
1. Where the cooperative members appoint representatives, they shall establish 
and perform civil transactions.  
2. Where the cooperative members do not appoint any representative, they shall 
jointly establish and perform civil transactions, unless otherwise agreed.  
3. Civil transactions that are be established and performed by entities specified 
in Clauses 1 and 2 of this Article shall give rise to rights and obligat ions of all 
cooperative members.  
Article 509. Civil liability of cooperative members  
The cooperative members are responsible for general civil liability by their 
common property; if the common property is insufficient to fulfill the 
obligation, the members  shall be held responsible by their own property 155 
 
corresponding to its contribution, unless otherwise specified by the cooperation 
contract or otherwise prescribed by law.  
Article 510. Withdrawal from the cooperation contract  
1. A member has the right to wi thdraw from the cooperation contract in any of 
the following cases:  
a) Satisfy the conditions specified in the cooperation contract;  
b) There is a good reason and the consent of more than half the total cooperative 
members.  
2. The member withdrawing from t he cooperation contract has the right to 
reclaim contributed property, divided part of the property in the common 
property and must pay all obligations under the agreement. Where the division 
of property in kind affects the cooperation activities, the prop erty are worth the 
money to divide.  
The withdrawal of a member from the cooperation contract does not terminate 
his/her rights and obligations that are established or performed before the 
withdrawal time.  
3. The withdrawal of a member from the contract in a case other than Clause 1 
of this Article shall be defined as the breach of contract and should execute the 
civil liability as prescribed in this Code and other relevant laws.  
Article 511. Joining cooperation contract  
Unless the cooperation contract other wise specifies, a natural or juridical person 
shall become a new member of the contract with the consent of more than half 
the total cooperative members.  
Article 512. Termination of cooperation contract  
1. A cooperation contract shall terminate in any of t he following cases:  
a) As agreed by cooperative members;  
b) The time limit mentioned in the cooperation contract has expired;  
c) The purpose of cooperation has been achieved;  
d) Pursuant to a decision of a competent authority;  
dd) Other cases prescribed in  this Code or other relevant laws.  
2. Upon the termination of the cooperation contract, the debts arising from the 
contract must be paid; if the common property is insufficient to repay it to 156 
 
private assets of cooperative members to pay under the provision s of Article 509 
of this Code.  
Where the debt was repaid and the common property still exists, it shall be 
divided by the cooperative members in proportion to the contribution of each 
person, unless otherwise agreed.  
Section 9. CONTRACTS FOR SERVICES  
Artic le 513. Contracts for services  
Contract for services means an agreement between parties whereby a service 
provider performs an act for a client which pays a fee for that act.  
Article 514. Subject matter of contracts for services  
The subject matter of a con tract for services must be an act which is capable of 
being performed, which is not prohibited by law and which does not contravene 
social morals.  
Article 515. Obligations of clients  
1. Supply the service provider with the information, documentation and fa cilities 
necessary for the performance of the act if so agreed or required for the 
performance of the act.  
2. Pay a fee to the service provider as agreed.  
Article 516. Rights of clients  
1. Require the service provider to perform the act strictly in accorda nce with the 
agreement on quality, quantity, time, location and other matters.  
2. Where a service provider commits a serious breach of its obligations, the 
client may terminate unilaterally performance of the contract and demand 
compensation for damage.  
Article 517. Obligation of service providers  
1. Perform the act strictly in accordance with the agreement on quality, quantity, 
time, location and other matters.  
2. Do not assign the act to another person for performance on its behalf without 
the consent of the client.  
3. Take care of, and to return to the client after completion of the act, the 
documents and facilities provided to it.  157 
 
4. Notify the client promptly of any inadequacy in the information or documents 
and any failure of the facilities to satisfy the quality required for the completion 
of the act.  
5. Keep confidential any information of which it has had knowledge during the 
period of providing the service as agreed or as provided by law.  
6. Compensate the client for damage where the service provide r causes any loss 
of or damage to the documents or facilities supplied or discloses confidential 
information.  
Article 518. Rights of service providers  
1. Require the client to provide information, documents and facilities.  
2. Amend the terms of service in the interests of the client without necessarily 
asking for the opinion of the client where waiting for such opinion would cause 
damage to the client provided that the service provider promptly informs the 
client thereof.  
3. Require the client to pay the fe e. 
Article 519. Payment of fees  
1. A client must pay the agreed fee for services.  
2. If, upon entering a contract, there is no agreement on the service fee rate or on 
the method for fixing the fee for services and there are no other instructions on 
fees, t he service fee rate shall be fixed on the basis of market fees for services of 
the same type at the time when and place where the contract was entered into.  
3. A client must pay the fee for services at the place where the service is 
provided and at the tim e of its completion, unless otherwise agreed.  
4. Where the services provided fail to meet the terms of the agreement or the act 
is not completed in time, the client has the right to reduce the fee for services 
and demand compensation for damage.  
Article 52 0. Unilateral termination of performance of contracts for services  
1. Where the continued provision of services does not benefit the client, the 
client has the right to terminate unilaterally the performance of the contract but 
must provide reasonable prio r notice to the service provider, in which case the 
client must pay a fee according to the portion of services already provided and 
[must] compensate for damage.  158 
 
2. Where the client fails to perform its obligations or performs its obligations not 
as agreed , the service provider has the right to terminate unilaterally the 
performance of the contract and demand compensation for damage.  
Article 521. Continuation of contracts for services  
If, after the expiry of the agreed period for the provision of services, the act has 
not been completed and the service provider continues its performance and the 
client is aware of this but does not object, the performance of the contract for 
services shall automatically be deemed to continue in accordance with the 
agreed term s until the act is completed.  
Section 10. TRANSPORT CONTRACTS  
Sub-section 1. Transport contracts  
Article 522. Contracts for transport of passengers  
Contract for transport of passengers means an agreement between parties 
whereby a carrier transports passeng ers and luggage to an agreed destination and 
the passengers must pay transport fares.  
Article 523. Formalities for contracts for transport of passengers  
1. A contract for transport of passengers may be made in writing or orally.  
2. A ticket is evidence of the entry into a contract for transport of passengers by 
the parties.  
Article 524. Obligations of carriers  
1. Carry the passengers safely from the place of departure to the agreed 
destination on time, in a civilized and courteous manner, by the means agree d 
and on the agreed route; to ensure that there are sufficient seats for the 
passengers and that the transport capacity of the carrier is not exceeded.  
2. Purchase civil liability insurance for the passengers, as provided by law.  
3. Ensure that the departu re time is adhered to as notified or agreed.  
4. Carry and return the luggage to the passenger or person entitled to receive the 
luggage in accordance with the agreed destination, time and route.  
5. Refund the transport fare to any passenger as agreed or as  prescribed by law.  
Article 525. Rights of carriers  
1. Require the passengers to pay in full the passenger transport fares and fares 
for the transport of personal luggage in excess of the prescribed limit.  159 
 
2. Refuse to carry a passenger in the following ca ses: 
a) Where the passenger fails to follow the regulations of the carrier, where the 
acts of the passenger disturb public order, obstruct the work of the carrier, or 
pose a threat to life, health or property of other persons, or where a passenger 
commits other acts which make it impossible to ensure safety during the 
journey. In this case, the passenger shall not receive a refund of the passenger 
transport fare, and must pay a fine if so provided by the transport regulations;  
b) Where the health of the pas senger is such that it is obvious to the carrier that 
the transport [of such person] will endanger the passenger or other persons 
during the journey;  
c) In order to prevent the spread of contagious diseases.  
Article 526. Obligations of passengers  
1. Pay in  full the passenger transport fare and fares for the transport of luggage 
in excess of the prescribed limit, and to take care of his or her hand -luggage.  
2. Present at the place of departure at the agreed time.  
3. Respect and comply strictly with the regul ations of the carrier and all other 
regulations ensuring traffic safety.  
Article 527. Rights of passengers  
1. Request to be transported by the agreed means of transport, in the class 
commensurate with the value of the ticket and in accordance with the agre ed 
route.  
2. Be exempt from transport fares for check -in luggage and hand -luggage within 
the limits as agreed or as provided by law.  
3. Demand reimbursement of expenses incurred or compensation for any 
damage if the carrier is at fault in failing to transp ort according to the agreed 
time schedule and destination.  
4. Receive a refund of all or part of the transport fare in the cases provided for in 
Points b and c Clauses 2 of Article 525 of this Code and in other cases as agreed 
or as provided by law.  
5. Rec eive the luggage at the agreed destination in accordance with the agreed 
time and route.  
6. Request temporary interruption of the journey for the duration and in 
accordance with the procedures provided by law.  160 
 
Article 528. Liability to compensate for damag e 
1. In case of loss of life of or damage to the health or luggage of a passenger, the 
carrier must compensate for any damage in accordance with law.  
2. Unless otherwise provided by law, a carrier shall not be liable to compensate 
for loss of life of or da mage to the health and luggage of a passenger in the case 
where such loss or damage is entirely due to the fault of the passenger, unless 
otherwise prescribed by law.  
3. A passenger which breaches the agreed terms for transport or the transport 
regulations , thereby causing damage to the carrier or a third person, must 
compensate.  
Article 529. Unilateral termination of contracts for transport of passengers  
1. A carrier has the right to terminate unilaterally the performance of a contract 
in the cases provide d in Clause 2 of Article 525 of this Code.  
2. A passenger has the right to terminate unilaterally the performance of a 
contract where the carrier breaches the obligations provided in Clauses 1, 3 and 
4 of article 524 of this Code.  
Sub-section 2. CONTRACTS FOR TRANSPORT OF PROPERTY  
Article 530. Contracts for transport of property  
Contract for transport of property means an agreement between parties whereby 
a carrier has the obligation to transport property to an agreed destination and to 
deliver it to the au thorized recipient, and the customer has the obligation to pay 
the freight charges.  
Article 531. Formalities for contracts for transport of property  
1. A contract for transport of property may be entered into orally or in writing or 
a specific act.  
2. A bi ll of lading or equivalent source document of transport shall be evidence 
of the entering into of a contract by the parties.  
Article 532. Delivery of property to carriers  
1. A customer has the obligation to deliver property to a carrier at the agreed 
time and place and pack the property in accordance with the agreed 
specifications. The customer must bear the costs f loading the property onto and 
unloading the property from the means of transport, unless otherwise agreed.  161 
 
2. Where a customer is late in deliv ering property to the agreed place, the 
customer must reimburse the carrier for the costs associated with the delay and 
pay the freight charges for transporting the property to the place agreed in the 
contract, or must pay a penalty for breach of the contr act.  
If the carrier is late in accepting the property at the agreed at the agreed place, it 
shall be liable for the costs incurred due to such late acceptance.  
Article 533. Freight charges  
1. The rate of freight charges shall be as agreed by the parties. If the law 
regulates freight charges, charges shall apply as regulated.  
2. A customer must pay freight charges in full after the property is loaded onto 
the means of transport, unless otherwise agreed.  
Article 534. Obligations of carriers  
1. Transport the property in its entirety and safely to the agreed destination at the 
agreed time.  
2. Deliver the property to the person entitled to receive it.  
3. Bear all costs related to the transport of the property, unless otherwise agreed.  
4. Purchase civil liability  insurance as required by law.  
5. Compensate the customer for damage where the loss of or damage to the 
property is caused by the fault of the carrier, unless otherwise agreed or 
otherwise provided by law.  
Article 535. Rights of carriers  
1. Check the authe nticity of the property and the bill of lading or equivalent 
source document of transport.  
2. Refuse to transport property which is different from that agreed in the 
contract.  
3. Demand the full and timely payment of the freight charges by the customer.  
4. Refuse to transport property if the carrier knows or should know that the 
transacting of such property is prohibited or the property is of a dangerous or 
toxic nature.  
Article 536. Obligations of customers  
1. Pay in full the freight charges to the carrier , at the time and by the method of 
payment as agreed.  162 
 
2. Provide necessary information about the transported property to ensure its 
safety.  
3. Take care of the property during transport if so agreed. Where the customer 
takes care of the property and it is lost or damaged, the customer shall not be 
entitled to compensation.  
Article 537. Rights of customers  
1. Demand the carrier to transport the property to the agreed destination at the 
agreed time.  
2. Receive directly the property which has been transported,  or appoint a third 
person to receive it.  
Article 538. Delivery of property to recipients  
1. A recipient of property may be the customer or a third person appointed by 
the customer to receive the property.  
2. A carrier must deliver the property to a recipi ent in full, at the time and place 
and by the method as agreed.  
3. Where property has been delivered to the point of delivery on time but there is 
no recipient of the property, the carrier may deposit such property at a place of 
bailment and must notify im mediately the customer or the recipient of the 
property. The customer or recipient of the property must bear the reasonable 
expenses incurred in relation to the bailment of the property.  
The obligation to deliver property shall be completed upon bailment o f the 
property in compliance with the agreed terms and when the customer or the 
recipient of the property has been notified about the bailment.  
Article 539. Obligation of recipients of property  
1. Produce to the carrier the bill of lading or other equivale nt source document 
of transport, and to receive the property at the agreed time and place.  
2. Bear the costs for loading and unloading the transported property, unless 
otherwise agreed or otherwise provided by law.  
3. Reimburse the carrier for reasonable c osts incurred due to late acceptance of 
the property.  
4. Notify the customer of the acceptance of the property and provide other 
necessary information required by the customer if the recipient is a third party 
appointed by the customer.  163 
 
Article 540. Rights  of recipients of property  
1. Verify the quantity and quality of the delivered property.  
2. Accept the delivered property.  
3. Require the carrier to reimburse reasonable costs incurred due to any delay by 
the carrier in delivering the property.  
4. Require the carrier compensate for loss of or damage to the property.  
Article 541. Liability to compensate for damage  
1. Where a carrier is responsible for the loss of or damage to property, the 
carrier must compensate the customer for damage, except in the case p rovided in 
Clause 3 of Article 536 of this Code.  
2. A customer must compensate a carrier and any third parties for damage 
caused by the transport of dangerous or toxic property which is not safely 
packaged or the safety of which is not otherwise ensured.  
3. A carrier shall not be liable to compensate for damage in the event of force 
majeure causing loss or deterioration of or damage to the property during 
transport, unless otherwise agreed or otherwise provided by law.  
Section 11. PROCESSING CONTRACTS  
Artic le 542. Processing contracts  
Processing contract means an agreement between parties whereby a processor 
carries out work to create products at the request of a supplier, and the supplier 
receives the products and pays fees.  
Article 543. Subject matter of p rocessing contracts  
The subject matter of a processing contract shall be items which are specified by 
samples, the standard of which is agreed by the parties or provided by law.  
Article 544. Obligation of suppliers  
1. Supply raw materials to the processor strictly in accordance with the agreed 
quantity, quality, time and place, unless otherwise agreed by the parties; and to 
provide necessary documents relating to the processing.  
2. Provide the processor with instructions as to how to perform the contract.  
3. Pay agreed fees.  
Article 545. Rights of suppliers  164 
 
1. Accept the processed products in accordance with the agreed quantity, 
quality, manner, time and place.  
2. Terminate unilaterally performance of the contract and demand compensation 
for damage if the pr ocessor commits a serious breach of the contract.  
3. Where the products are not of the agreed quality and the supplier accepts the 
products but requests repairs, but the processor is not able to perform the repairs 
within the agreed time, the supplier has the right to cancel the contract and 
demand compensation for damage.  
Article 546. Obligations of processors  
1. Take care of the raw materials supplied by the supplier.  
2. Notify the supplier to replace any raw materials supplied which are not of the 
agreed  quality; to refuse to perform the processing if the use of the raw materials 
may create products which pose a danger to society.  
3. Deliver the products to the supplier strictly in accordance with the agreed 
quantity, quality, method, time and place.  
4. Keep confidential all information relating to the processing and the products.  
5. Bear liability for the quality of the products, unless the lack of quality is due 
to the raw materials supplied by the supplier or due to the unreasonable 
instructions of the  supplier.  
6. Return any leftover raw materials to the supplier after completing 
performance of the contract.  
Article 547. Rights of processors  
1. Require the supplier to deliver the raw materials strictly in accordance with 
the agreed quality, quantity, t ime and place.  
2. Refuse to comply with unreasonable instructions of the supplier where the 
processor is of the view that [compliance with] such instructions could decrease 
the quality of the products provided that the processor immediately informs the 
supplier.  
3. Require the supplier to make payment of the fees in full, at the time and by 
the method as agreed.  
Article 548. Liability for risk  165 
 
Unless otherwise agreed, the owner of the raw materials shall bear all risks with 
respect to such materials and the  products processed therefrom until the products 
are delivered to the supplier.  
If the supplier is late in accepting the products, it shall bear all risks during the 
period of delayed acceptance, including where the products are processed from 
the raw mate rials of the processor, unless otherwise agreed.  
If the processor delays delivery of the products and the delay damages the 
processed property, the processor must compensate for damage suffered by the 
supplier.  
Article 549. Delivery and acceptance of proce ssed products  
A processor must deliver, and the supplier must accept, products at the agreed 
time and place.  
Article 550. Late delivery and acceptance of processed products  
1. Where the processor is late in delivering processed products, the supplier may 
extend the time of delivery. If, upon expiry of such extension, the processor still 
has not delivered the products, the supplier has the right to terminate unilaterally 
the performance of the contract and demand compensation for damage.  
2. Where the supplie r is late in accepting the products, the processor may 
deposit the products at a place of bailment and must notify the supplier 
immediately. The obligation to deliver the products shall be fulfilled when the 
agreed terms are satisfied and the supplier has been notified. The supplier must 
bear all costs incurred for bailment.  
Article 551. Unilateral termination of performance of processing contracts  
1. Unless otherwise agreed or otherwise provided by law, each party has the 
right to terminate unilaterally th e performance of a processing contract if 
continued performance would not benefit that party but must give reasonable 
prior notice to the other party.  
2. If the supplier terminates unilaterally the performance of the contract, the 
supplier must pay fees f or the work already performed, unless otherwise agreed. 
If the processor terminates unilaterally the performance of the contract, it shall 
not be paid fees, unless otherwise agreed.  
3. A party which unilaterally terminates the performance of a contract and  
thereby causes damage to the other party must compensate.  166 
 
Article 552. Payment of fees  
1. Unless otherwise agreed, the supplier must pay fees in full at the time of 
accepting the products.  
2. If there is no agreement on the rate of fees, the applicable ra te shall be the 
average rate charged for the production of products of the same type at the place 
of processing at the time of payment.  
3. If the products fail to meet the agreed quality due to the raw materials 
supplied or the unreasonable instructions pr ovided by the supplier, the supplier 
does not have the right to reduce the fees.  
Article 553. Dealing with leftover raw materials  
Unless otherwise agreed, the processor must return leftover raw materials to the 
supplier upon termination of the processing c ontract.  
Section 12. CONTRACTS FOR BAILMENT OF PROPERTY  
Article 554. Contracts for bailment of property  
Contract for bailment of property means an agreement between parties whereby 
a bailee accepts the property of a bailor for safekeeping, for return to th e bailor 
upon expiry of the duration of the contract, and the bailor must pay a fee to the 
bailee, except where the bailment is free of charge.  
Article 555. Obligation of bailors of property  
1. Inform the bailee of the condition of the property and the app ropriate 
safekeeping measures upon delivery of the property; if the bailor fails to inform 
the bailee, and the property is destroyed or damaged as a result of inappropriate 
safekeeping, the bailor must be liable itself for such destruction of or damage to 
the bailed property and must compensate for other damage caused.  
2. Pay the bailment fees in full, at the time and by the method as agreed.  
Article 556. Rights of bailors of property  
1. Reclaim the property at any time subject to giving reasonable prior no tice to 
the bailee if the bailment contract does not specify a period of time.  
2. Demand compensation for loss of or damage to the bailed property caused by 
the bailee, except in the case of an event of force majeure.  
Article 557. Obligation of bailees of property  167 
 
1. Take care of the property as agreed and return it to the bailor in the same 
condition in which the bailee received it.  
2. Change the method for safekeeping of the property only where such change is 
necessary for better safekeeping of such prope rty and provided that the bailor is 
notified immediately of the change.  
3. Notify promptly the bailor in writing and request the bailor to advise, within a 
certain period of time, a solution where, due to its nature, the bailed property is 
in danger of bei ng damaged or destroyed. If the bailor fails to reply within such 
period of time, the bailee has the right to take all necessary measures to take care 
of the property and to require the bailee to reimburse the costs incurred.  
4. Compensate for damage where  the bailee causes any loss of or damage to the 
bailed property, except in the case of an event of force majeure.  
Article 558. Rights of bailees of property  
1. Require the bailor to pay the agreed bailment fees.  
2. Require the bailor to pay the reasonable costs of taking care of the property 
where the bailment is free of charge.  
3. Request, at any time, the bailor to take back the property subject to giving 
reasonable prior notice to the bailor where the bailment is for an indefinite 
period of time.  
4. Sell  the property in the interests of the bailor where the bailed property is in 
danger of being damaged or destroyed, inform the bailor thereof and pay the 
proceeds of the sale to the bailor after deduction of reasonable expenses incurred 
for the sale of the property.  
Article 559. Return of bailed property  
1. A bailee must return the same property that was received, including any 
benefits derived therefrom, unless otherwise agreed.  
The bailed property shall be returned to the bailor at the place where it was 
delivered. If the bailor wishes to have the property returned at another place, the 
bailor must bear the transport costs to such place, unless otherwise agreed.  
2. A bailee must return property at the agreed time and only has the right to 
request the bailor  take back the property prior to such time for a legitimate 
reason.  
Article 560. Late taking back of bailed property  168 
 
If a bailee is late in returning the property, the bailee may not require the bailor 
to pay bailment fees and costs for taking care of the property incurred from the 
agreed time for return of the property to the time it is actually returned and bears 
the risk with respect to the property during such period.  
Where a bailor is late in taking back property, the bailor must pay all costs for 
taking care of the property and the bailment fees to the bailee during the period 
for which the bailor is late.  
Article 561. Payment of fees  
1. A bailor must pay bailment fees in full when taking back the bailed property, 
unless otherwise agreed.  
2. Where the parties have no agreement on the rate of bailment fees, the 
applicable rate shall be the average rate of bailment fees at the time when and 
place where the bailment fee is paid.  
3. Notwithstanding that the bailor takes back the property prior to the agreed  
time, the bailor must pay the bailment fees in full and must pay the necessary 
costs which the bailee incurs due to the return of the property by the bailee prior 
to the agreed time, unless otherwise agreed.  
4. Where a bailee requests a bailor to take bac k the property prior to the agreed 
time, the bailee shall not be entitled to be paid bailment fees and must 
compensate for any damage to the bailor, unless otherwise agreed.  
Section 13. AUTHORIZATION CONTRACTS  
Article 562. Authorization contracts  
Authoriza tion contract means an agreement between parties whereby an attorney 
has the obligation to perform an act in the name of a principal. The principal 
shall only be required to pay remuneration if so agreed or so provided by law.  
Article 563. Duration of auth orization  
The duration of the authorization shall be as agreed by the parties or as provided 
by law. If there is no agreement and the duration is not provided by law, the 
authorization contract shall be effective for one year from the date on which the 
authorization is made.  
Article 564. Sub -authorization  
1. An attorney may only sub -authorize its authorization to a third person in any 
of the following cases:  169 
 
a) With the consent of the principal;  
b) Due to force majeure events that if the sub -authorization does not apply, the 
purposes of entering into a civil transaction for the interests of the principal is 
unachievable.  
2. A sub -authorization shall not exceed the scope of the original authorization.  
3. The formalities of the sub -authorization contract must  conform to the 
formalities of the original authorization contract.  
Article 565. Obligation of attorneys  
1. Perform the act in accordance with the authorization and inform the principal 
of such performance.  
2. Notify any third parties involved in the perfo rmance of the authorized act of 
the duration and scope of the authorization and of any amendments of or 
additions to such scope.  
3. Take care of and preserve documents and facilities provided for the 
performance of the authorized act.  
4. Keep all informati on confidential which the attorney comes to know during 
the performance of the authorized act.  
5. Return to the principal any property received and benefits derived during the 
performance of the authorized act as agreed or as provided by law.  
6. Compensate  for damage caused by a breach of any of the obligations provided 
in this Article.  
Article 566. Rights of attorneys  
1. Require the principal to provide the information, documentation and facilities 
necessary for performance of the authorized act.  
2. Receiv e remuneration and be reimbursed for reasonable expenses incurred in 
the performance of the authorized act.  
Article 567. Obligation of principals  
1. Provide the information, documentation and facilities necessary for the 
attorney to perform the authorized act. 
2. Be liable for undertakings given by the attorney within the scope of the 
authorization.  170 
 
3. Reimburse the attorney for reasonable expenses incurred by the attorney in 
the performance of the authorized act and pay any agreed remuneration to the 
attorney. 
Article 568. Rights of principals  
1. Require the attorney to report fully on the performance of the authorized act.  
2. Require the attorney to return any property and benefits derived from the 
performance of the authorized act, unless otherwise agreed . 
3. Compensate for damage caused by a breach of any of the obligations provided 
in Article 565 of this Code.  
Article 569. Unilateral termination of performance of authorization 
contracts  
1. Where an authorization involves payment of remuneration, the prin cipal has 
the right, at any time, to terminate unilaterally the performance of the contract 
but must remunerate the attorney in proportion to the acts performed and 
compensate for damage. If the authorization does not involve payment of 
remuneration, the p rincipal has the right, at any time, to terminate the 
performance of the contract, subject to giving reasonable prior notice to the 
attorney.  
A principal must notify any third person in writing of the termination of the 
performance of the contract by the p rincipal. If the principal fails to do so, any 
contract with any such third person shall remain in effect, unless such third 
person knows or should know of the termination of the performance of the 
contract.  
2. Where an authorization does not involve payme nt of remuneration, the 
attorney has the right, at any time, to terminate unilaterally the performance of 
the contract, subject to giving reasonable prior notice to the principal. If the 
authorization involves payment of remuneration, the attorney has the right, at 
any time, to terminate unilaterally the performance of the contract and must 
compensate for any damage caused to the principal.  
Chapter XVII  
PROMISES OF REWARDS AND PRIZE COMPETITIONS  
Article 570. Promises of rewards  171 
 
1. A person having made a pub lic promise of a reward must pay that reward to a 
person having performed the act requested by the promissor.  
2. An act for which a reward is promised must be specific and capable of being 
performed and must not be prohibited by law nor contravene social m orals.  
Article 571. Withdrawal of promises of rewards  
A promissor may withdraw its promise of a reward at any time prior to the 
commencement of the performance of the act. A withdrawal of a promise of 
reward must be made in the same manner and by the same media in which the 
promise of reward was announced.  
Article 572. Payment of rewards  
1. Where a person performs an act for which a reward is promised, that person 
shall be given the reward upon completion of the act.  
2. Where several persons perform an act for which a reward is promised, 
concurrently but independently, the person having first completed the act shall 
be given the reward.  
3. Where more than one person complete, at the same time, an act for which a 
reward is promised, the reward shall be distri buted in equal shares amongst such 
persons.  
4. Where more than one person co -operate with each other to perform, at the 
request of the promissor, an act for which a reward is promised, each person 
shall receive a share of the reward in proportion to its co ntribution.  
Article 573. Prize competitions  
1. Organization of a cultural, artistic, sports, scientific, technical or other 
competition shall not violate prohibitions of law and contravene social morals.  
2. A person organizing the competition must announce  publicly the terms of 
participation, the scale of marks, the prizes and the value of each prize.  
Any alteration of the terms of participation must be announced in the manner in 
which the competition was announced, within a reasonable period of time prior 
to the competition being conducted.  
3. A winner of a prize has the right to demand the organizer of a competition 
give a prize of the value announced.  
Chapter XVIII  172 
 
PERFORMANCE OF ACTS WITHOUT AUTHORIZATION  
Article 574. Performance of acts without authoriz ation  
Performance of acts without authorization means the voluntary performance of 
acts by a person being under no obligation to perform the act, solely for the 
benefit of a beneficiary, without the knowledge of the beneficiary, or with its 
knowledge but w ithout the beneficiary raising any objection.  
Article 575. Obligation to perform acts without authorization  
1. A person performing an act without authorization has the obligation to do so 
in accordance with its capabilities and conditions.  
2. A person perf orming an act without authorization must do so as if such person 
were performing such act for its own benefit. If such person knows or is able to 
guess the wishes of the beneficiary, such person must perform the act in 
accordance with such wishes.  
3. A per son performing an act without authorization must, if requested, notify 
the beneficiary of the progress and results of the performance, unless the 
beneficiary already knows such information or the person performing the act 
without authorization does not kno w the place of residence of the beneficiary.  
4. If a beneficiary being natural person dies or a beneficiary being juridical 
person ceases to exist, the person performing an act without authorization must 
continue to perform the act until the heir or repres entative of the beneficiary 
takes over the act.  
5. Where a person performing an act without authorization has legitimate 
reasons for not being able to continue performance, such person must notify the 
beneficiary, or the representative or close relatives o f the beneficiary, or may ask 
another person to perform the act on its behalf.  
Article 576. Obligation of beneficiary to pay for acts performed without 
authorization  
1. A beneficiary of an act performed without authorization must accept the 
results of the act when it is handed over to the beneficiary by the person having 
performed the act and [must] reimburse that person for reasonable expenses 
incurred in performing such act, even where the performance has failed to 
achieve the results desired by the benef iciary.  173 
 
2. If a person has performed an act properly for the benefit of a beneficiary, the 
beneficiary must remunerate the person having performed the act, unless the 
person having performed the act refuses to accept the remuneration.  
Article 577. Obligati on to compensate for damage  
1. If a person performing an act without authorization intentionally causes 
damage to the beneficiary while performing the act, such person must 
compensate for such damage.  
2. If a person performing an act without authorization unintentionally causes 
damage to the beneficiary while performing the act, the compensation by such 
person may be reduced on the basis of the circumstances in which the act was 
performed.  
Article 578. Termination of performance of acts without authorizatio n 
The performance of acts without authorization shall terminate in the following 
cases:  
1. The beneficiary so requests;  
2. The beneficiary, or its heir or representative, takes over the acts;  
3. The person performing the acts without authorization becomes not able to 
continue performance in accordance with Clause 5 Article 575 of this Code;  
4. The person performing the acts without authorization dies with regard to 
natural person or juridical person ceases to exist with regard to juridical person.  
Chapter X IX 
OBLIGATIONS TO RETURN PROPERTY DUE TO UNLAWFUL 
POSSESSION OR USE OF PROPERTY OR DERIVING OF BENEFITS 
FROM PROPERTY  
Article 579. Obligation to return property  
1. A person possessing or using property of another unlawfully must return the 
property to its owners and holders of other property -related rights. If the lawful 
owners and holders of other property -related rights of such property are not able 
to be found, the property must be delivered to a competent authority, except in 
the case provided in articl e 236 of this Code.  
2. A person deriving benefits from property unlawfully, thereby causing damage 
to another person, must give such benefits to such other person, except in the 
case provided in Article 236 of this Code.  174 
 
Article 580. Property to be returne d 
1. A person possessing or using property unlawfully must return the whole of 
such property.  
2. Where the property to be returned is a distinctive object, that particular object 
must be returned and, if such distinctive object is lost or damaged, monetary  
compensation must be paid, unless otherwise agreed.  
3. If the property to be returned is a fungible object which has been lost or 
damaged, an object of the same type must be returned or monetary 
compensation must be paid, unless otherwise agreed.  
4. A per son deriving benefits from property unlawfully must return, either in 
kind or in money, the benefits derived from the property to any person having 
suffered loss of such benefits.  
Article 581. Obligation to return yield and income  
1. A person possessing o r using property, or a person deriving benefits from 
property, unlawfully and not in good faith, must return yield and income derived 
from the property during the time of unlawful possession or use of, or deriving 
benefits from, the property.  
2. A person p ossessing or using property, or a person deriving benefits from 
property, unlawfully but in good faith, must return any yield and income derived 
from the property from the time when it knew or should have known that the 
possession or use of, or deriving be nefits from, the property was unlawful, 
except in the case provided in Article 236 of this Code.  
Article 582. Right to require third person to return property  
Where a person unlawfully possessing or using property transfers the property to 
a third person, the third person must return the property if so demanded by the 
owner and holders of other property -related rights, unless this Code contains 
some other provision. If money or compensation has been paid for such 
property, the third person has the right to demand the party having transferred 
the property to the third person to compensate for damage.  
Article 583. Obligation to pay  
Upon taking back property, an owner or holders of other property -related rights 
or an aggrieved person must reimburse the person h aving taken possession of or 
used the property, or having derived benefits from the property, unlawfully but 175 
 
in good faith, for the necessary expenses such person has incurred for taking 
care of the property and increasing its value.  
Chapter XX  
LIABILITY F OR COMPENSATION FOR NON -CONTRACTUAL 
DAMAGES  
Section 1. GENERAL PROVISIONS  
Article 584. Grounds giving rise to liability to compensate for damage  
1. A person intentionally or unintentionally harming the life, health, honor, 
dignity, reputation, property, or  other legal rights or interests of a person, must 
compensate for such damage, unless otherwise prescribed in this Code or 
relevant laws.  
2. The person who causes damage shall be discharged from liability for 
compensation in case where the damage incurs d ue to force majeure events or at 
entire fault of the aggrieved person, unless otherwise agreed or otherwise 
prescribed by law.  
3. If a property causes damage, its owner or possessor must compensate for the 
damage, except for the damage prescribed in Claus e 2 of this Article.  
Article 585. Principles of compensation for damage  
1. Actual damage must be compensated in full and promptly. Unless otherwise 
provided by law, parties may agree on the amount of compensation; on the form 
of compensation, which may be  money, in kind or the performance of an act; 
lump sum payment or payment in instalments; and on the method of 
compensation.  
2. The compensation payable by a person having caused damage may be 
reduced if such damage was caused unintentionally and is very l arge in 
comparison to the financial positions of such person.  
3. If the amount of compensation determined becomes unrealistic, the aggrieved 
person, or the person having caused damage, has the right to request a court or 
another competent authority to chan ge the amount of compensation.  
4. If the aggrieved party is partly his/her fault for causing the damage, that part 
of damage shall not be compensated.  176 
 
5. The party having rights and interests infringed shall not be compensated if 
such damage incurs due to his/her failure to adopt necessary measures to prevent 
the damage.  
Article 586. Capacity of individuals for liability to compensate for damage  
1. A person of eighteen years of age or older who causes damage shall be 
personally liable to compensate.  
2. Wher e a minor under fifteen years of age causes damage, his or her parents, if 
any, must compensate for the total damage. If the parents have insufficient 
property to compensate and the minor who has caused the damage has property 
of his or her own, such prope rty shall be used to satisfy the outstanding amount 
of compensation, except in the cases provided in Article 599 of this Code.  
Where a person who is between fifteen and eighteen years of age causes 
damage, such person must compensate by recourse to his or her own property. If 
such person has insufficient property to compensate, the parents of such person 
must satisfy the outstanding amount by recourse to their own property.  
3. Where a minor, legally incapacitated person, person with limited cognition 
and be havior control, causes damage but there is a guardian, such guardian shall 
use the property of the ward to compensate. If the ward has no or insufficient 
property to compensate, the guardian must do so by recourse to the property of 
the guardian. If the gu ardian is able to prove that he or she was not at fault with 
respect to guardianship, the guardian shall not be required to use its property to 
compensate.  
Article 587. Compensation for damage caused jointly by several persons  
Where several persons jointly  cause damage, they must jointly compensate any 
aggrieved person. Liability for compensation of each person having jointly 
caused the damage shall be determined in proportion to the degree of fault of 
each person. If the degree of fault is not able to be d etermined, the persons 
causing damage must compensate in equal shares.  
Article 588. Prescriptive period for initiating legal action claiming 
compensation for damage  
The prescriptive period for initiating legal action claiming compensation for 
damage shall be 03 years from the date on which the legal rights or interests of 
an individual, legal entity or other subject were infringed.  
Section 2. ASSESSMENT OF DAMAGE  177 
 
Article 589. Damage caused by infringement of property  
In the event of an infringement of prope rty, the compensable damage shall 
comprise:  
1. Property which was lost, destroyed or damaged;  
2. Interests associated with the use and exploitation of the property was lost or 
declined;  
3. Reasonable costs for the prevention, mitigation and remedy of the d amage;  
4. Other damage as prescribed by law.  
Article 590. Damage caused by harm to health  
1. Damage caused by harm to health shall comprise:  
a) Reasonable costs for treating, nursing and rehabilitating health, and functional 
losses and impairment of the ag grieved person;  
b) Loss of or reduction in the actual income of the aggrieved person. If the 
actual income of the aggrieved person is irregular and is not able to be 
determined, the average income level for the type of work performed by the 
aggrieved perso n shall be applied;  
c) Reasonable costs and actual income losses of the carers of the aggrieved 
person during the period of treatment. If the aggrieved person loses his or her 
ability to work and requires a permanent carer, the damage shall also include 
reasonable costs for taking care of the aggrieved person.  
d) Other damage as prescribed by law.  
2. A person causing harm to the health of another person must pay the items 
provided in Clause 1 of this Article together with an amount of money as 
compensation for mental suffering of the aggrieved person. The amount of 
compensation for mental suffering shall be as agreed by the parties; if the parties 
are not able to agree, the maximum sum shall not exceed fifty -month base salary 
prescribed by the State.  
Article  591. Damage caused by harm to life  
1. Damage caused by harm to life shall comprise:  
a) Damage caused by harm to life prescribed in Article 590 of this Code;  
b) Reasonable funeral costs;  
c) Support for the dependants of the aggrieved person;  178 
 
d) Other damag e as prescribed by law.  
2. A person causing death to another person must pay compensation for damage 
as provided in Clause 1 of this Article together with an amount of money as 
compensation for mental suffering of the closest relatives in the first line of  
succession to the deceased. If there are no such relatives, this sum shall be paid 
to the persons who were directly reared by the deceased or to the persons who 
directly reared the deceased. The amount of compensation for mental suffering 
shall be as agre ed by the parties; if the parties are not able to agree, the 
maximum sum shall not exceed one -hundred -month base salary prescribed in by 
the State.  
Article 592. Damage caused by harm to honor, dignity or reputation  
1. Damage caused by harm to the honor, di gnity or reputation shall comprise:  
a) Reasonable costs for mitigating and remedying the damage;  
b) Loss of or reduction in actual income;  
c) Other damage as prescribed by law.  
2. A person causing harm to the honor, dignity or reputation of another person 
must pay compensation for damage as provided in Clause 1 of this Article 
together with another amount of money as compensation for mental suffering of 
the aggrieved person. The amount of compensation for mental suffering shall be 
as agreed by the parties; if the parties are not able to agree, the maximum sum 
shall not exceed ten -month base salary prescribed by the State.  
Article 593. Period of entitlement to compensation for damage caused by 
harm to health or resulting from loss of life  
1. Where an aggrieve d person loses totally the ability to work, the aggrieved 
person shall receive compensation until the time of his or her death, unless 
otherwise agreed.  
2. Where the aggrieved person dies, his or her dependants shall be entitled to 
receive support for the following durations:  
a) A child of the deceased, whether living or conceived prior to his or her death, 
shall be entitled to compensation until the age of eighteen years, except a child 
between fifteen and eighteen years of age who is employed and earns su fficient 
income to look after himself or herself;  179 
 
b) An adult who is not able to work shall be entitled to receive support until his 
or her death.  
3. With regard to the conceived child of the deceased, the compensation shall be 
paid from the time he/she is  born and alive.  
Section 3. COMPENSATION FOR DAMAGE IN A NUMBER OF 
SPECIFIC CASES  
Article 594. Compensation for damage by persons exceeding limits of 
reasonable self -defense  
A person causing damage while acting in reasonable self -defense shall not be 
liable to compensate any aggrieved person.  
A person causing damage while not acting in reasonable self -defense must 
compensate any aggrieved person.  
Article 595. Compensation for damage by persons exceeding requirements 
of emergency situation  
1. A person causin g damage as a result of exceeding the requirements of an 
emergency situation must compensate any aggrieved person for that part of the 
damage which resulted from exceeding the requirements of an emergency 
situation.  
2. A person creating an emergency situat ion which leads to damage being 
caused must compensate any aggrieved person.  
Article 596. Compensation for damage caused by persons using stimulants  
1. A person who, due to the consumption of alcohol or the use of other 
stimulants, becomes incapable of bei ng aware of or controlling his or her acts, 
thereby causing damage to another person, must compensate such person.  
2. A person who intentionally causes another person to take alcohol or 
stimulants, thereby causing such person to become incapable of being a ware of 
or controlling his or her acts, must compensate any person aggrieved thereby.  
Article 597. Compensation for damage caused by persons belonging to 
juridical persons  
A juridical person must compensate for any damage caused by any person 
belonging to the juridical person during the performance of duties assigned by it 
to such person. If a juridical person has compensated for any damage, it has the 180 
 
right to demand the person at fault for causing the damage to reimburse it an 
amount of money in accordanc e with law.  
Article 598. Compensation for damage caused by law enforcers  
The State must compensate for damage caused by law enforcers as prescribed in 
the Law on compensation liability of the State.  
Article 599. Compensation for damage caused by persons u nder fifteen 
years of age or persons having lost capacity for civil acts and under direct 
supervision of school, hospital or other organization  
1. Where a person under fifteen years of age causes damage during school 
hours, the school must compensate for t he damage.  
2. If a legally incapacitated person causes damage to another person while under 
the direct supervision of a hospital or another juridical person, such hospital or 
the juridical person must compensate for the damage.  
3. If, in the cases provided  in Clauses 1 and 2 of this Article, the school, hospital 
or another juridical person proves that it was not at fault with respect to 
supervision, the parents or guardian of the person under fifteen years of age or 
of the legally incapacitated person must compensate.  
Article 600. Compensation for damage caused workers and trainees  
A natural person or juridical person must compensate for any damage caused by 
any worker or trainee belonging to it during the performance by the employee or 
trainee of his or her  assigned duties. The natural person or juridical person has 
the right to demand such worker or trainee reimburse it an amount of money in 
accordance with law.  
Article 601. Compensation for damage caused by sources of extreme danger  
1. Sources of extreme d anger comprise motorized means of transport, power 
transmission systems, operating industrial plants, weapons, explosives, 
inflammable substances, toxic substances, radioactive substances, dangerous 
animals and other sources of extreme danger as provided b y law.  
An owner of a source of extreme danger must comply strictly with the 
regulations on taking care of, preserving, transporting and using sources of 
extreme danger in accordance with law.  
2. An owner of a source of extreme danger must compensate for da mage caused 
by such source. If the owner has transferred possession or use of the source of 181 
 
extreme danger to another person, such other person must compensate [for the 
damage], unless otherwise agreed.  
3. An owner, or person to which an owner has transfer red the possession or use, 
of a source of extreme danger must compensate for damage caused by such 
source, even where such owner or person is not at fault, except in either of the 
following cases:  
a) The aggrieved person is entirely at fault for intentiona lly causing the damage;  
b) The damage occurred due to an event of force majeure or in an emergency 
situation, unless otherwise provided by law.  
4. Where a source of extreme danger is taken into possession or used 
unlawfully, the person possessing or using [it] unlawfully must compensate for 
damage.  
Where an owner, or a person to which an owner has transferred possession or 
use, of a source of extreme danger is at fault by allowing the unlawful 
possession or use of the source of extreme danger, the owner, or  the person to 
which the owner has transferred possession or use, of the source of extreme 
danger as the case may be must compensate jointly for the damage.  
Article 602. Compensation for damage caused by environmental pollution  
Any entity polluting the env ironment, thereby causing damage, must 
compensate in accordance with the law, including when the entity polluting the 
environment was not at fault.  
Article 603. Compensation for damage caused by livestock  
1. An owner of livestock must compensate for damage  caused to another person 
by such livestock. The possessor or user of livestock must compensate during 
the period of possession or using, unless otherwise agreed.  
2. Where a third person is entirely at fault in causing livestock to cause damage 
to another person, the third person must compensate for the damage. If both the 
third person and the owner are at fault, both of them must compensate jointly for 
the damage.  
3. Where livestock which is possessed or used unlawfully causes damage, the 
unlawful possesso r or user must compensate for the damage. When the owner, 
possessor or user of livestock is at fault leading the livestock is possessed or 
used unlawfully thereby causes damage, they must jointly compensate for 
damage.  182 
 
4. Where livestock which is allowed t o roam according to customary practice 
causes damage, its owner must compensate according to customary practice 
provided that such compensation does not contravene the law or social morals.  
Article 604. Compensation for damage caused by trees  
An owner, a p ossessor or a person in charge of trees must compensate for 
damage caused by the trees.  
Article 605. Compensation for damage caused by houses and other 
construction works or buildings  
An owner or a possessor of a house or another construction work, or a pe rson to 
which the owner has assigned the management or use thereof, must compensate 
for damage if such house or construction causes damage to another person.  
If the executor of the house or construction work is partly fault that such house 
or construction work causes damage, he/she must jointly compensate for such 
damage.  
Article 606. Compensation for damage caused by infringement of corpses  
1. Each natural person or juridical causing damage to a corpse must compensate.  
2. Damage caused by infringement of a  corpse shall include reasonable costs for 
mitigating and remedying the damage.  
3. A person causing damage to a corpse must pay an amount of money as 
provided in Clause 2 of this Article together with another amount of money as 
compensation for mental suff ering of the closest relatives in the first line of 
succession to the deceased. If there are no such relatives, this sum shall be paid 
to the persons who directly reared the deceased. The amount of compensation 
for mental suffering shall be as agreed by th e parties; if the parties are not able 
to agree, the maximum sum shall not exceed thirty -month base salary prescribed 
by the State.  
Article 607. Compensation for damage caused by infringement of graves  
1. Each natural person or juridical person causing dam age to the grave of 
another must compensate.  
2. Damage caused by infringement of a grave shall include reasonable costs for 
mitigating and remedying the damage.  
3. A person causing damage to a grave must pay an amount of money as 
provided in Clause 2 of t his Article together with another amount of money as 183 
 
compensation for mental suffering of the closest relatives in the first line of 
succession to the deceased. If there are no such relatives, this sum shall be paid 
to the persons who directly reared the d eceased. The amount of compensation 
for mental suffering shall be as agreed by the parties; if the parties are not able 
to agree, the maximum sum for each damaged grave shall not exceed ten -month 
base salary prescribed by the State.  
Article 608. Compensati on for damage caused by infringement of consumer 
interests  
A natural person or juridical person carrying out production or business and 
failing to ensure the quality of goods, thereby causing damage to consumers, 
must compensate for such damage.  
PART FOUR  
INHERITANCE  
Chapter XXI  
GENERAL PROVISIONS  
Article 609. Rights of inheritance  
A natural person may make a will to dispose of his or her estate, may leave his 
or her property to an heir in accordance with law, or may inherit an estate left to 
him or her un der a will or in accordance with law.  
An heir not being natural person has the right to inherit estate under a will.  
Article 610. Equality of individuals with respect to rights of inheritance  
All natural persons are equal with respect to rights to bequeath  their property to 
others and to inherit estates under wills or in accordance with law.  
Article 611. Time and place of commencing inheritance  
1. The time of commencement of an inheritance shall be the time when the 
deceased dies. Where a court declares tha t a person is dead, the time of 
commencement of the inheritance shall be the date provided in Clause 2 of 
Article 81 of this Code.  
2. The place of commencement of the inheritance shall be the last place of 
residence of the owner of the estate. If the last place of residence is not able to 
be determined, the place of commencement of the inheritance shall be the place 
at which all or most of the estate is located.  184 
 
Article 612. Estates  
An estate comprises property which the deceased owned and property which th e 
deceased jointly owned with other persons.  
Article 613. Heirs  
If an heir is an individual, such person must be alive at the time of 
commencement of the inheritance or, if such person is born and alive after the 
commencement of inheritance, must have been  conceived prior to the time when 
the deceased dies. Where an heir under a will is a body or organization, it must 
be in existence at the time of commencement of the inheritance.  
Article 614. Time when rights and obligations of heirs arise  
From the time of  commencement of an inheritance, the heirs have the property 
rights and obligations left by the deceased.  
Article 615. Performance of property obligations left by deceased  
1. A person entitled to an inheritance has the responsibility to perform the 
propert y obligations within the scope of the estate left by the deceased, unless 
otherwise agreed.  
2. Where an estate has not yet been divided, the property obligations left by the 
deceased shall be performed by the administrator of the estate as agreed by the 
heirs. 
3. Where an estate has already been divided, each heir shall perform those 
property obligations left by the deceased corresponding to, but not exceeding, 
that part of the estate that the heir has inherited, unless otherwise agreed.  
4. Where the heir i nheriting an estate under a will is not a natural person, it must 
perform the property obligations left by the deceased in like manner as a natural 
person.  
Article 616. Administrators of estates  
1. Administrator of an estate means the person who is appoint ed in the will or by 
agreement of the heirs.  
2. Where a will fails to appoint, and the heirs have not yet appointed, an 
administrator, any person currently possessing, using or managing property 
within the estate at the time of the commencement of the inhe ritance shall 
continue its administration until the heirs have appointed an administrator.  185 
 
3. Where an heir has not yet been determined and there is not yet an 
administrator of the estate as prescribed in Clauses 1 and 2 of this Article, the 
estate shall b e administered by a competent authority.  
Article 617. Obligations of administrators of estates  
1. An administrator of an estate as provided in Clauses 1 and 3 of article 616 of 
this Code has the following obligations:  
a) Make a list of the property within the estate and collect any property 
belonging to the estate of the deceased which is possessed by others, unless 
otherwise provided by law;  
b) Take care of the estate and do not sell, exchange, give, pledge, mortgage or 
otherwise dispose of property within  the estate without the written consent of the 
heirs;  
c) Notify the heirs of the estate;  
d) Compensate for any damage if the administrator breaches any of its 
obligations, thereby causing damage;  
dd) Deliver back the estate at the request of the heirs.  
2. A person possessing, using or managing property within an estate as provided 
in Clause 2 of Article 638 of this Code has the following obligations:  
a) Take care of the estate and do not sell, exchange, give, pledge, mortgage or 
otherwise dispose of propert y within the estate;  
b) Notify the heirs of the estate;  
c) Compensate for any damage if the administrator breaches any of its 
obligations, thereby causing damage;  
d) Deliver back the estate as agreed with the deceased in a contract or at the 
request of the  heirs.  
Article 618. Rights of administrators of estates  
1. An administrator of an estate as provided in clauses 1 and 3 of article 616 of 
this Code has the following rights:  
a) Represent the heirs in dealings with any third parties in relation to the esta te 
of inheritance;  
b) Receive remuneration as agreed with the heirs;  
c) Receive payment of costs of estate preservation.  186 
 
2. A person possessing, using or managing property within an estate as provided 
in Clause 2 of Article 616 of this Code has the followi ng rights:  
a) Continue to use the estate as agreed with the deceased in a contract or with 
the consent of the heirs;  
b) Receive remuneration as agreed with the heirs;  
c) Receive payment of costs of estate preservation.  
3. If the estate administrator fails to reach an agreement on the remuneration 
with the heirs, he/she shall be entitled to receive an appropriate remuneration.  
Article 619. Inheritance by persons entitled to inherit each other's estate 
but dead at same time  
Where persons who are entitled to i nherit each other's estate die at the same time 
or are deemed to have died at the same time because it is impossible to 
determine who of them died first (hereinafter referred to as simultaneous death), 
they do not have the right to inherit each other's est ate and the estate of each of 
the deceased shall be inherited by their respective heirs, except in the case of 
inheritance pursuant to Article 652 of this Code.  
Article 620. Disclaimer of inheritance  
1. An heir may disclaim an inheritance, unless such disc laimer is for the purpose 
of avoiding the performance of its property obligations to other persons.  
2. A disclaimer of an inheritance must be made in writing. A person disclaiming 
must notify the other heirs and the person authorized to distribute the esta te. 
3. The disclaimer of an estate must be expressed before the time of inherit 
distribution.  
Article 621. Persons not entitled to inherit  
1. The following persons are not entitled to inherit:  
a) Persons convicted of having intentionally caused the death o f or harmed the 
health of the deceased, of having seriously mistreated or tortured the deceased, 
or of having harmed the honor or dignity of the deceased;  
b) Persons having seriously breached their duty to support the deceased;  
c) Persons convicted of havi ng intentionally caused the death of another heir in 
order to obtain all or part of the entitlement of such other heir to the estate;  187 
 
d) Persons deceiving, coercing or obstructing the deceased with respect to the 
making of the will, or forging, altering or  destroying the will in order to obtain 
all or part of the estate contrary to the wishes of the deceased.  
2. Persons provided in Clause 1 of this Article may, nevertheless, inherit the 
estate if the deceased was aware of such acts but, nevertheless, allowe d them to 
inherit the estate under the will.  
Article 622. Estates which no one inherits  
Where there is no heir under a will and at law, or where there is an heir but such 
heir is not entitled to inherit the estate or disclaims the inheritance of the estate , 
the residual estate for which there is no heir shall, after fulfillment of property 
obligations, belong to the State.  
Article 623. Prescriptive periods with respect to inheritance  
1. The prescriptive period with respect to a claim of an heir for distribu tion of an 
estate shall be thirty years regarding immovable property or ten years regarding 
movable property from the time of commencement of the inheritance. Upon the 
expiry date of the aforesaid period, the estate shall belong to the estate 
administrator . In case where there is no estate administrator, the estate shall be 
dealt with as follows:  
a) It shall belong to the person possessing it as prescribed in Article 236 of this 
Code;  
b) It shall belong the State if there is no possessor prescribed in Poin t a of this 
Clause.  
2. The prescriptive period with respect to a claim of an heir for a declaration of 
right of inheritance of the requester or to disallow the claim to inheritance of 
another shall be ten years from the time of commencement of the inherita nce. 
3. The prescriptive period with respect to a claim for an heir to fulfill property 
obligations of the deceased shall be three years from the time of commencement 
of the inheritance.  
Chapter XXII  
INHERITANCE UNDER WILLS  
Article 624. Wills  
Will means an  expression of the wishes of a natural person, made in order to 
bequeath his or her property to others after his or her death.  188 
 
Article 625. Testators  
1. An adult satisfying conditions prescribed in Point a Clause 2 Article 630 of 
this Code may make a will to dispose his/her property.  
2. A person who is between fifteen and eighteen years of age may make a will 
with the consent of his or her parents or guardian.  
Article 626. Rights of testators  
A testator has the following rights:  
1. Appoint heirs or to depri ve an heir of the right to inherit the estate;  
2. Determine those parts of the estate which each heir is entitled to;  
3. Reserve part of the estate as a gift or for worship purposes;  
4. Designate heirs to perform obligations;  
5. Appoint a custodian of the will, an administrator of the estate, and a 
distributor of the estate.  
Article 627. Formalities for wills  
A will must be made in writing. If it is not able to be made in writing, it may be 
made orally.  
Article 628. Written wills  
Written wills comprise:  
1. Unwitnessed written wills;  
2. Witnessed written wills;  
3. Written wills which are notarized;  
4. Written wills which are certified.  
Article 629. Oral wills  
1. Where a person is likely to die due to illness or any other reason and it is not 
possible for him  or her to make a written will, such person may make an oral 
will. 
2. If the testator is alive and is of sound mind three months after he or she has 
made an oral will, such will shall automatically become invalid.  
Article 630. Lawful wills  
1. A will must s atisfy the following requirements in order to be lawful:  189 
 
a) The testator was of sound mind when he or she made the will; and he or she 
was not deceived, threatened or coerced into making the will;  
b) The contents of the will are not contrary to law or soci al morals and the will 
complies with legal formalities.  
2. A will made by a person between fifteen and eighteen years of age must be 
made in writing and with the consent of the parents or guardian of such person.  
3. A will made by a person who is incapacit ated or illiterate must be made in 
writing by a witness and must be notarized or certified.  
4. A written will which is not notarized or certified shall be deemed lawful only 
if it satisfies the requirements provided in Clause 1 of this Article.  
5. An oral will shall be deemed lawful only if the testator orally expressed his or 
her last wishes before at least two witnesses who immediately thereafter 
recorded those wishes in writing and signed or fingerprinted the document. Such 
will must be notarized or cert ified within five working days of the date on which 
the testator orally expressed his or her last wishes.  
Article 631. Contents of written wills  
1. A will must specify clearly the following:  
a) The date on which the will is made;  
b) The full name and place  of residence of the testator;  
c) The full names of the persons and the bodies or organizations entitled to 
inherit the estate;  
d) The estate to be bequeathed and its location.  
2. Apart from the contents prescribed in Clause 1 of this Article, the will may  
have other contents.  
3. A will may not be written using abbreviations or other symbols. If a will 
consists of several pages, each page must be numbered and bear the signature or 
fingerprint of the testator.  
Where a will has erasure or correction, the test ator or the testament witness must 
sign beside erasing and corrected place.  
Article 632. Witnesses to making of will  
Any person may act as a witness to the making of a will, except the following 
persons:  190 
 
1. Persons who are heirs of the testator under the will or at law;  
2. Persons with property rights or obligations which relate to the will;  
3. Minors, legally incapacitated persons, persons with limited cognition and 
behavior control.  
Article 633. Unwitnessed written wills  
A testator must write a will by h is or her own hand and must sign it.  
The drawing up of a written will without witnesses must comply with article 631 
of this Code.  
Article 634. Witnessed written wills  
Where a testator is not able to write a will by his or her own hand, the testator 
may re quest another person to write the will, but there must be at least two 
witnesses. The testator must sign or fingerprint the will in the presence of the 
witnesses; the witnesses shall acknowledge the signature or fingerprint of the 
testator and sign the wil l. 
The will must be made in compliance with articles 631 and 632 of this Code.  
Article 635. Wills which are notarized or certified  
A testator may request that the will be notarized or certified.  
Article 636. Procedures for preparation of wills at notary of fice or people's 
committee of commune  
The preparation of a will at a notary office or the people's committee of the 
commune must comply with the following procedures:  
1. The testator shall declare the contents of his or her will to a notary public 
officer or a member of the people's committee of the commune who has the 
authority to certify it. The notary public officer or the person having the 
authority to certify must record the wishes stated by the testator. The testator 
shall sign or fingerprint the will  after acknowledging that it has been recorded 
accurately and that it expresses faithfully the intentions of the testator. 
Thereafter, the notary public officer or the member of the people's committee of 
the commune shall sign the will;  
2. Where the testat or is not able to read or hear the will or not able to sign or 
fingerprint it, there must be a witness who must acknowledge the will by signing 
it before a notary public officer or a member of the people's committee of the 
commune who has the authority to certify it. The notary public officer shall 191 
 
notarize the will, or the member of the people's committee of the commune who 
has the authority to certify the will shall certify it, in the presence of the testator 
and the witnesses.  
Article 637. Persons not pe rmitted to notarize or certify wills  
A notary public officer or a member of the people's committee of the commune 
who has authority shall not be permitted to notarize or certify a will if such 
person is:  
1. An heir of the testator under the will or at law;  
2. A person whose father, mother, wife, husband or child is an heir under the 
will or at law;  
3. A person having property rights or obligations relating to the will.  
Article 638. Written wills valid as though notarized or certified  
1. A written will made by a serving soldier who is not able to request a 
notarization or certification of his or her will provided that such will is certified 
by the head of his or her unit having the rank of a company commander or 
higher.  
2. A written will made by a person trav elling on a seagoing vessel or aircraft 
provided that the will is certified by the captain of the vessel or aircraft.  
3. A written will made by a person undergoing medical treatment in a hospital or 
other medical establishment or sanatorium provided that t he will is certified by 
the person in charge of such hospital or establishment or sanatorium.  
4. A written will made by a person conducting surveys, explorations or research 
in mountainous areas, forests or offshore islands provided that the will is 
certif ied by the person in charge of the unit.  
5. A written will made by a Vietnamese citizen residing abroad provided that the 
will is certified by a Vietnamese consular or diplomatic representative mission 
in that country.  
6. A written will made by a person he ld in temporary detention, serving a prison 
sentence or administrative penalty, or at an educational or medical facility 
provided that the will is certified by the person in charge of such facility.  
Article 639. Wills prepared by notary public officers at places of residence 
of testators  192 
 
1. A testator may request a notary public officer to visit his or her place of 
residence in order to prepare a will.  
2. Such will shall be prepared in accordance with the procedures for the 
preparation of wills at a State n otary public provided in article 636 of this Code.  
Article 640. Amendment of, addition to, replacement or revocation of wills  
1. A testator may amend, add to, replace or revoke his or her will at any time.  
2. If a testator adds to his or her will, the orig inal will and the codicil shall have 
equal validity. If a part of the original will and the codicil conflict with each 
other, the codicil shall prevail.  
3. Where a testator replaces a will with a new will, the previous will shall be 
deemed to have been rev oked.  
Article 641. Custody of wills  
1. A testator may request a notary office or another person to keep custody of 
the will of the testator.  
2. Where a will is kept in custody by a notary office, it must be taken care of and 
looked after in accordance with  the law on notaries.  
3. An individual keeping custody of a will has the following obligations:  
a) Keep the contents of the will confidential;  
b) Take care of and look after the will. If the will is lost or damaged, the person 
must notify immediately the t estator;  
c) Upon the death of the testator, to deliver the will to his or her heirs or to the 
person authorized to announce the will. The delivery of the will must be 
recorded in writing and signed by the person delivering the will, and by the 
person recei ving it, in the presence of two witnesses.  
Article 642. Loss and damage of wills  
1. If, from the commencement of the inheritance, the will is lost or damaged to 
the extent that it is incapable of indicating clearly the wishes of the testator and 
there is n o evidence of the true wishes of the testator, it shall be deemed that no 
will exists and inheritance at law shall apply.  
2. Where the will is found prior to distribution of the estate, the estate shall be 
distributed according to the will.  193 
 
3. Within the p rescriptive periods for requesting estate distribution, if a will is 
found after the distribution of the estate, the estate shall be distributed according 
to the will at the request of the heir under will.  
Article 643. Legal effectiveness of wills  
1. A wi ll shall become legally effective from the time of commencement of the 
inheritance.  
2. All or part of a will shall be legally ineffective in any of the following cases:  
a) An heir under the will dies prior to or at the same time as the testator dying;  
b) A  body or organization named as an heir no longer exists at the time of 
commencement of the inheritance.  
Where there are several heirs under a will and one of them dies prior to or at the 
same time as the death of the testator or one of the bodies or organi zations 
named as an heir under the will no longer exists at the time of commencement of 
the inheritance, only that part of the will which relates to the individual, body or 
organization no longer existing shall be legally ineffective.  
3. A will shall not b e legally effective if the estate left to the heirs no longer 
exists at the time of commencement of the inheritance. If only part of the estate 
left to the heirs remains, only that part of the will which relates to such part of 
the estate shall be legally effective.  
4. Where a will contains provisions which are unlawful but such provisions do 
not affect the effectiveness of the remainder of the will, only such provisions 
shall be legally ineffective.  
5. Where a person leaves behind more than one will with r espect to certain 
property, only the most recent of such wills shall be legally effective.  
Article 644. Heirs notwithstanding contents of wills  
1. Where a testator does not grant any of the following persons an inheritance, or 
grants any such person an inh eritance which is less than two -thirds of the share 
that person would have received if the estate had been distributed according to 
law, such person shall be entitled to a share of the estate equivalent to two -thirds 
of the share that he or she would have received if the estate had been distributed 
in accordance with law:  
a) Children who are minors, father, mother, wife or husband of the testator;  
b) Children who are adults but who are incapable of working.  194 
 
2. Clause 1 of this Article shall not apply to per sons who have disclaimed their 
inheritance as prescribed in Article 620 or person who are not entitled to inherit 
as prescribed in Clause 1 Article 621 of this Code.  
Article 645. Estates used for worship purposes  
1. Where a testator designates part of his or her estate for worship purposes, 
such part of the estate shall not be distributed among the heirs and shall be 
delivered to the person appointed in the will to manage for worship purposes. If 
such appointee fails to implement strictly the will or the ag reement of the heirs, 
the heirs have the right to appoint another person to manage for worship 
purposes.  
Where the testator fails to appoint a person to manage that part of his or her 
estate which is designated for worship purposes, the heirs shall appoint  a person 
to manage such part of the estate.  
Where all heirs under a will have died, that part of the estate which is designated 
for worship purposes shall belong to the person managing that part of the estate 
for worship purposes provided that he or she i s an heir at law.  
2. Where the entire estate of the deceased is insufficient to satisfy all property 
obligations of the deceased, no part of the estate may be designated for worship 
purposes.  
Article 646. Testamentary gifts  
1. A testator may designate part  of his or her estate as a testamentary gift to 
another person. The testamentary gift must be expressly stated in the will.  
2. The grantee of the testamentary gift must be alive at the time of 
commencement of the inheritance or he/she must bear and alive a fter the time of 
commencement of the inheritance he/she must be conceived before the death of 
the estate leaver. If the grantee of the testamentary gift is not a natural person, it 
must exist at the time of commencement of the inheritance.  
3. The grantee o f a gift shall not be required to fulfill property obligations with 
respect to that part of the estate granted as a gift, unless the whole estate is 
insufficient to satisfy all property obligations of the grantor, in which case the 
part of the estate grant ed as a gift shall also be applied towards satisfying the 
remainder of the obligations of the grantor.  
Article 647. Announcement of wills  195 
 
1. Where a written will is kept by a notary office, the notary officer shall be the 
person announcing the will.  
2. Whe re a testator has appointed a person to announce the will, such person 
shall announce the will. If the testator fails to appoint a person or has appointed 
a person but the appointee refuses to announce the will, the heirs shall agree on 
the appointment of a person to announce the will.  
3. After the time of commencement of an inheritance, the person announcing the 
will must send copies of the will to all persons with an interest in the contents of 
the will.  
4. A recipient of a copy of a will has the right to  verify the copy against the 
original.  
5. Where a will has been prepared in a foreign language, it must be translated 
into Vietnamese and notarized.  
Article 648. Interpretation of contents of wills  
Where the contents of a will are unclear and may be interp reted in different 
ways, the person announcing the will and the heirs must interpret jointly the 
contents of the will based on the true wishes of the deceased, taking into 
consideration the relationship of the deceased with the heirs under the will. If 
such persons fail to agree on the interpretation of the contents of the will, they 
have the right to request a court for settlement.  
Where part of the contents of a will is not able to be interpreted but the 
remainder of the will is not affected, only that pa rt which is not able to be 
interpreted shall not be legally effective.  
Chapter XXIII  
INHERITANCE AT LAW  
Article 649. Inheritance at law  
Inheritance at law means inheritance in accordance with the order of priority of 
inheritance and the conditions and proc edures of inheritance provided by law.  
Article 650. Cases of inheritance at law  
1. Inheritance at law shall apply in the following cases:  
a) There is no will;  
b) The will is unlawful;  196 
 
c) All heirs under the will died prior to or at the same time as the tes tator dying, 
or the bodies or organizations which are entitled to inherit under the will no 
longer exist at the time of commencement of the inheritance;  
d) The persons appointed as heirs under the will do not have the right to inherit 
or disclaimed the rig ht to inherit.  
2. Inheritance at law shall also apply to the following parts of an estate:  
a) Parts of an estate in respect of which no disposition has been made in the will;  
b) Parts of an estate related to an ineffective part of the will;  
c) Parts of an estate related to heirs under the will not having the right to inherit, 
having disclaimed the right to inherit, or having died prior to or at the same time 
as the testator dying; and parts of an estate related to bodies or organizations 
entitled to inherit  under the will but no longer existing at the time of 
commencement of the inheritance.  
Article 651. Heirs at law  
1. Heirs at law are categorized in the following order of priority:  
a) The first level of heirs comprises: spouses, biological parents, adoptiv e 
parents, offspring and adopted children of the deceased;  
b) The second level of heirs comprises: grandparents and siblings of the 
deceased; and biological grandchildren of the deceased;  
c) The third level of heirs comprises: biological great -grandparents  of the 
deceased, biological uncles and aunts of the deceased and biological nephews 
and nieces of the deceased.  
2. Heirs at the same level shall be entitled to equal shares of the estate.  
3. Heirs at a lower level shall be entitled to inherit where there are no heirs at a 
higher level because such heirs have died, or because they are not entitled to 
inherit, have been deprived of the right to inherit or have disclaimed the right to 
inherit.  
Article 652. Succeeding heirs  
Where a child of a testator died pri or to or at the same time as the testator, the 
grandchildren of the testator shall inherit that part of the estate which their father 
or mother would have been entitled to inherit had such father or mother still 
been alive. If the grandchildren also died p rior to or at the same time as the 
testator, the great -grandchildren of the testator shall inherit that part of the estate 197 
 
which their father or mother would have been entitled to inherit had such father 
or mother still been alive.  
Article 653. Inheritance  relations between adopted children and their 
adoptive parents and biological parents  
An adopted child and his or her adoptive parents may inherit each other's estates 
and may also inherit in accordance with articles 651 and 652 of this Code.  
Article 654. Inheritance relations between stepchildren and their 
stepparents  
If a stepchild and his or her stepparents care for and support each other as 
though they were biologically related, they may inherit each other's estates and 
may also inherit in accordance wi th articles 652 and 653 of this Code.  
Article 655. Inheritance where wives and husbands have divided multiple 
ownership property, have applied for divorce or have remarried  
1. Where a wife and husband have divided their multiple ownership property 
while th ey are still married and one of them subsequently dies, the surviving 
spouse shall still be entitled to inherit the estate of the deceased.  
2. Where a wife and husband have applied for but not yet obtained a legally 
effective divorce pursuant to a judgment  or decision of a court, or they have 
obtained such a divorce but the judgment or decision of the court is not yet 
effective, and one of them dies, the surviving spouse shall, nevertheless, be 
entitled to inherit the estate of the deceased.  
3. A person who  is the wife or husband of the deceased at the time when his or 
her spouse dies shall be entitled to inherit the estate of the deceased even if that 
person subsequently remarries.  
Chapter XXIV  
SETTLEMENT AND DISTRIBUTION OF ESTATES  
Article 656. Meeting of heirs  
1. After being notified of the commencement of an inheritance, or after a will 
has been announced, the heirs may meet to agree on the following matters:  
a) If the testator has failed to appoint an administrator of the estate or a 
distributor of the e state, or has not determined the powers and obligations of 
such persons, the appointment of such persons and the determination of their 
powers and obligations, as the case may be;  198 
 
b) Method of distributing the estate.  
2. All agreements by the heirs must be  made in writing.  
Article 657. Distributors of estates  
1. A distributor of an estate may also be the administrator of the estate appointed 
in the will or by agreement of the heirs.  
2. A distributor of an estate must distribute it strictly in accordance wit h the will 
or the agreement of the heirs at law.  
3. A distributor of the estate may receive remuneration if so allowed by the 
testator in the will or if so agreed by the heirs.  
Article 658. Order of priority of payment  
Property obligations and expenses rel ated to an inheritance shall be paid in the 
following order of priority:  
1. Reasonable funeral expenses in accordance with customary practice;  
2. Outstanding support payments;  
3. Expenditures on preservation of estate;  
4. Allowances for dependants of the deceased;  
5. Wages;  
6. Monetary compensation for any damage;  
7. Taxes and other liabilities owed to the State;  
8. Other liabilities owed to other natural persons or juridical persons;  
9. Fines;  
10. Other expenses.  
Article 659. Distribution of estates in ac cordance with wills  
1. An estate shall be distributed in accordance with the wishes of the testator. If 
the will fails to specify the share of each heir, the estate shall be divided equally 
between the persons named in the will, unless otherwise agreed.  
2. Where a will provides for the distribution in kind of an estate, each of the 
heirs shall be entitled to receive his or her share in kind, plus the benefits and 
income derived therefrom, or must bear the depreciation in value of such share 
in kind up to th e time when the estate is distributed. If the property which is the 199 
 
subject of a share in kind has been destroyed due to the fault of another person, 
the heir has the right to demand compensation for damage.  
3. Where a will provides for the distribution of  an estate according to certain 
proportions of the total value of the estate, such proportions shall be calculated 
on the basis of the value of the estate at the time of distribution.  
Article 660. Distribution of estates in accordance with law  
1. If, at th e time of distribution, an heir has been conceived but not yet born, a 
part of the estate equal to the share of another heir at the same level of heirs 
shall be set aside for the unborn heir. If the heir is born alive, he or she shall 
inherit such part of the estate. If the heir does not survive his or her birth, the 
other heirs at the same level of heirs shall be entitled to his or her share.  
2. The heirs have the right to demand the estate to be distributed in kind. If the 
estate is not able to be equally  distributed in kind, the heirs may agree that the 
property shall be valued and may agree on which heirs shall be entitled to 
receive which particular items of property. Failing such agreement, the assets in 
kind shall be sold for distribution.  
Article 661 . Limited distribution of estates  
Where it was the wish of a testator, or where the heirs agree, that an estate is to 
be distributed only after a certain period of time, it shall be distributed only after 
such period of time has expired.  
If there is a requ est to distribute an estate but such distribution will seriously and 
adversely affect the life of the remaining wife or husband and family, such 
spouse has the right to request a court to fix the share of the estate to which 
other heirs are entitled but no t to allow distribution of the estate during a certain 
period of time. Such period shall not exceed three years from the date of 
commencement of inheritance. When such period fixed by the court has expired 
or such remaining spouse has remarried, the other heirs have the right to request 
the court to permit distribution of the estate.  
Article 662. Distribution of estates where new heir or where right of heir to 
inherit has been disallowed  
1. Where a new heir appears after an estate has been distributed, the estate shall 
not be re -distributed in kind but the heirs which have received [a share of] the 
estate must pay the new heir a sum equivalent to the share of the estate of such 
[new heir] at the time of distribution of the estate in proportion to the 200 
 
[respec tive] share of the estate already received [by each heir], unless otherwise 
agreed.  
2. Where the right of an heir to inherit is disallowed after an estate has been 
distributed, such heir must return the inheritance or pay to the other heirs a sum 
equivalen t to the value of the inheritance received at the time of distribution of 
the estate, unless otherwise agreed.  
PART FIVE  
CIVIL RELATIONS INVOLVING FOREIGN ELEMENTS  
Chapter XXV  
GENERAL PROVISIONS  
Article 663. Scope  
1. This Part provides for applied law to c ivil relations involving foreign 
elements.  
If any regulation of law providing for applied law to civil relations involving 
foreign elements complies with Article 664 through Article 671 of this Code, it 
shall prevail; if it does not comply with those Artic les, Part Five of this Code 
shall prevail.  
2. Civil relation involving a foreign element means any of the following civil 
relations:  
a) There is at least one of the participating parties is a foreign natural person or 
juridical person;  
b) The participatin g parties are Vietnamese natural persons or juridical persons 
but the basis for the establishment, modification or termination of such relation 
arose in a foreign country;  
c) The participating parties are Vietnamese natural persons or juridical persons 
but the subject matter of such civil relation is located in a foreign country.  
Article 664. Determination of law applying to civil relations involving 
foreign elements  
1. The international agreements to which the Socialist Republic of Vietnam is a 
signatory o r Vietnamese law shall apply to civil relations involving foreign 
elements.  201 
 
2. In case the international agreements to which the Socialist Republic of 
Vietnam is a signatory or a Vietnamese law stipulates that contracting parties 
have the right to select a pplied law, the law applied to civil relations involving 
foreign elements shall be determined according to the selection of the 
contracting parties.  
3. If it fails to determine the applied law as prescribed in Clause 1 and Clause 2 
of this Article, the app lied law is the law of the country that closely associates 
with the civil relations involving foreign elements.  
Article 665. Application of international treaty in terms of civil relations 
involving foreign elements  
1. In case an international treaty to wh ich the Socialist Republic of Vietnam is a 
signatory contains regulations on rights and obligations of contracting 
participants in the civil relations involving foreign elements, such international 
treaty shall prevail.  
2. In case an international treaty t o which the Socialist Republic of Vietnam is a 
signatory contains provisions different from those in this Code and other laws in 
terms of applied law on civil relations involving foreign elements, such 
international treaty shall prevail.  
Article 666. Appli cation of international customary practices  
Contracting parties may select international customary practices in the case 
prescribed in Clause 2 Article 664 of this Code. If the application of such 
international customary practices is contrary to the basic principles of the laws 
of the Socialist Republic of Vietnam, Vietnamese laws shall prevail.  
Article 667. Application of foreign laws  
Where foreign law applies to a civil relation with different interpretations, the 
application must follow the interpretatio n of the competent authority in that 
country.  
Article 668. Scope of the law to be referred to  
1. The law to be referred to include regulations on determination of applied law 
and regulations on rights and obligations of participants in civil relations, ot her 
than the case prescribed in Clause 4 of this Article.  
2. Where the Vietnamese law is referred to, regulations of Vietnamese law on 
rights and obligations of participants of a civil relation shall apply.  202 
 
3. Where law of a third country is referred to, r egulations of that law on rights 
and obligations of participants of a civil relation shall apply.  
4. With respect to regulations on Clause 2 Article 664 of this Code, the law 
selected by the contracting parties shall include rights and obligations of 
participants of the civil relation, and not include regulations on applied law.  
Article 669. Application of law of countries having multiple legal systems  
If the law of a country having multiple legal systems is referred to, the applied 
law shall be determined according to the rules prescribed by such country's law.  
Article 670. Non -application of foreign laws  
1. The foreign law, notwithstanding being referred to, shall not apply in any of 
the following cases:  
a) The consequences of its application are not incon sistent with the fundamental 
principles of the law of the Socialist Republic of Vietnam;  
b) The contents of foreign law are not identifiable regardless of the adoption of 
necessary measures prescribed by procedural law.  
2. In case the foreign law is not ap plied as prescribed in Clause 1 of this Article, 
Vietnamese law shall apply.  
Article 671. Prescriptive periods  
Prescriptive periods for civil relations involving foreign elements shall be 
determined according to the law applying to such civil relations.  
Chapter XXVI  
THE LAW APPLIED TO NATURAL PERSONS AND JURIDICAL 
PERSONS  
Article 672. Bases for choice of law applicable to stateless persons and to 
foreigners with multiple foreign nationalities  
1. Where the law referred to is the law of a country of which a foreigner is a 
citizen but he/she is a stateless person, the applied law shall be the law of the 
country of residence of such person at the time when the civil relations 
involving foreign elements were established. If that person has multiple 
residences or  his residence is unidentifiable at the time of establishing the civil 
relation involving foreign elements, the applied law shall be the law of the 
country with which such person closely associates.  203 
 
2. Where the law referred to is the law of a country of which a foreigner is a 
citizen but he/she has multiple foreign nationalities, the applied law shall be the 
law of which he/she holds nationality and where he/she resided at the time when 
the civil relations involving foreign elements were established. If t hat person has 
multiple residences or his residence is unidentifiable or his/her residence is 
different from the country of which he/she holds nationality at the time when the 
civil relations involving foreign elements were established, the applied law sha ll 
be the law of the country with which such person closely associates.  
Where the law referred to is the law of a country of which a foreigner is a citizen 
but he/she has multiple foreign nationalities, including Vietnamese nationality, 
the applied law sh all be Vietnamese law.  
Article 673. Legal personality of natural persons  
1. Legal personality of a natural person shall be determined according to the law 
of the country of which he/she holds nationality.  
2. A foreigner in Vietnam shall have legal personal ity in the same manner as a 
Vietnamese citizen, unless otherwise provided by the law of Vietnam.  
Article 674. Legal capacity of natural persons  
1. Legal capacity of a natural person shall be determined according to the law of 
the country of which he/she ho lds nationality, other than the case prescribed in 
Clause 2 of this Article.  
2. Where a foreigner establishes or performs civil transactions in Vietnam, 
his/her legal capacity shall be determined in accordance with the law of 
Vietnam.  
3. The determination of a legally incapacitated person, a person with limited 
cognition or behavior control or a person with limited legal capacity in Vietnam 
shall be in accordance with the law of Vietnam.  
Article 675. Determination of persons disappeared or died  
1. A determi nation that a person has disappeared or died must comply with the 
law of the country of which such person held nationality at the point of time 
prior to the last information about such disappearance or death, except for the 
case prescribed in Clause 2 of t his Article.  
2. The determination of a disappeared or dead person in Vietnam shall be in 
accordance with the law of Vietnam.  204 
 
Article 676. Juridical persons  
1. The nationality of a juridical person shall be determined according to the law 
of the country in which such juridical person was established.  
2. Legal personality, name, legal representatives, organization, restructuring, 
dissolution of a juridical person; relations between a juridical person and its 
members; responsibilities of a juridical person and  its members pertaining to its 
obligations shall be determined in accordance with the law of the country of 
which such juridical person holds nationality, other than the case prescribed in 
Clause 3 of this Article.  
3. Where a foreign juridical person estab lishes or performs civil transactions in 
Vietnam, its legal personality shall be determined in accordance with the law of 
Vietnam.  
Chapter XXVII  
THE LAW APPLIED TO PROPERTY RELATIONS AND PERSONAL 
RELATIONS  
Article 677. Classification of property  
The classi fication between moveable and immoveable property shall be made in 
accordance with the laws of the country in which such property is located.  
Article 678. Ownership rights and other property -related rights  
1. The establishment, exercise, operation and ter mination of ownership rights 
and other property -related rights shall be determined in accordance with the 
laws of the country in which the property is located, except in the cases provided 
in Clause 2 of this Article.  
2. Ownership rights with respect to mo veable property in transit shall be 
determined in accordance with the law of the country of destination, unless 
otherwise agreed.  
Article 679. Intellectual property rights  
The intellectual property rights shall be determined in accordance with the laws 
of the country in which the subjects of the intellectual property rights are 
required to be protected.  
Article 680. Inheritance  
1. Inheritance must comply with the law of the country of which the person who 
bequeathed the assets held nationality prior to his  or her death.  205 
 
2. The right to inherit immoveable property must comply with the law of the 
country where such immoveable property is located.  
Article 681. Wills  
1. The capacity to create a will, and to alter or rescind a will, must comply with 
the law of t he country of which the testator is a citizen.  
2. The form of a will must comply with the law of the country in the place where 
the will is created. The form of a will shall be also recognized in Vietnam if it 
complies with the laws of any of the following  countries:  
a) The country in which the testator resides at the time when the will is created 
or the testator dies;  
b) The country of which the testator holds nationality at the time when the will 
is created or the testator dies;  
c) The country where the i nheritance being immovable property is located.  
Article 682. Guardianship  
The guardianship shall be determined in accordance with the law of the country 
where the ward resides.  
Article 683. Contracts  
1. Contracting parties in a contract may agree to select  the applied law for the 
contract, other than regulations of Clauses 4, 5 and 6 of this Article. In case the 
contracting parties have no agreement on the applied law, the law of the country 
with which such contract closely associates shall apply.  
2. The la ws of any of the following countries shall be treated as the law of the 
country with which such contract closely associates:  
a) The law of the country where the seller being natural person resides or the 
place of establishment if the seller being a legal e ntity in terms of sale contracts;  
b) The law of the country where the provider being natural person resides or the 
place of establishment if the provider being a legal entity in terms of service 
contracts;  
c) The law of the country where the licensee/assig nee being natural person 
resides or the place of establishment if the licensee/assignee being a legal entity 
in terms of license agreement or assignment agreement of intellectual property 
rights;  206 
 
d) The law of the country where employees frequently perform  their jobs in 
terms of labor contracts. If an employee frequently performs his/her job in 
multiple countries or the country in which the employee frequently does his/her 
job is unidentifiable, the law of the country with which his/her labor contract 
close ly associates shall be the law of the country where the employer being 
natural person resides or the place of establishment if the employer being a legal 
entity.  
dd) The law of the country where consumers resides in terms of consume 
contract.  
3. If there i s evident that the law of a country other than the country prescribed 
in Clause 2 of this Article associates with the contract more closely than the 
latter, the law of the former country shall prevail.  
4. If the object of a contract is an immovable proper ty, the law applied to 
transfer of its ownership rights and/or other property -related rights, lease of 
immovable property or using the immovable property as the guarantee for 
performance of obligations shall be the law of the country where the immovable 
property is located.  
5. If the applied law selected by contracting parties in a labor contract or a 
consume contract affects adversely minimum interests of employees or 
consumers as prescribed in the law of Vietnam, the law of Vietnam shall prevail.  
6. Contr acting parties in a contract may agree to change the applied law 
provided that such change does not affect adversely lawful rights and interests of 
a third party before changing, unless agreed by the third party.  
7. Form of a contract shall be determined in accordance with the law applied to 
such type of contract. In case where the form of a contract does not comply with 
the form of the law applied to such contract but it comply with the form of the 
law of the country where the contract is offered or the l aw of Vietnam, such 
form of contract shall be recognized in Vietnam.  
Article 684. Unilateral acts  
The law applied to unilateral acts of a person shall be determined in accordance 
with the law of the country of residence with regard to natural person or the  law 
of the country of establishment with regard to juridical person.  
Article 685. Obligation to refund property possessed, used or derived 
unlawfully  207 
 
The obligation to refund property possessed, used or derived unlawfully shall be 
determined according to the law of the country where the property is possessed, 
used or derived unlawfully.  
Article 686. Performance of acts without authorization  
Contracting parties may agree to select the law applied to the performance of 
acts without authorization. If the cont racting parties fail to agree to select the 
applied law, the law of the country where the acts without authorization are 
performed shall prevail.  
Article 687. Compensation for non -contractual damage  
1. Contracting parties may agree to select the law applie d to the compensation 
for non -contractual damage, except for the case prescribed in Clause 2 of this 
Article. If the contracting parties fail to agree to select the applied law, the law 
of the country where the consequences of such acts arise shall prevail . 
2. Where the party causing damage and the aggrieved party being natural 
persons have residence or being juridical person place of establishment in the 
same country, the law of such country shall prevail.  
PART SIX  
IMPLEMENTATION  
Article 688. Transitional  regulations  
1. With respect to civil transactions established before the effective date of this 
Code, the law shall be implemented as follows:  
a) The parties of non -performed civil transactions whose contents and forms are 
different from this Code shall  keep complying with regulations of the Civil Code 
No. 33/2005/QH11 and legislative documents on guidelines for the Civil Code 
No. 33/2005/QH11, unless the parties agree to amend the contents or forms of 
the transactions in accordance with this Code.  
a) Th e parties of being -performed civil transactions whose contents and forms 
are different from this Code shall keep complying with regulations of the Civil 
Code No. 33/2005/QH11 and legislative documents on guidelines for the Civil 
Code No. 33/2005/QH11;  
b) The parties of non -performed or being -performed civil transactions whose 
contents and forms are conformable to this Code shall comply with regulations 
of this Code;  208 
 
c) The parties of civil transactions that are completely performed before the 
effective date  of this Code but arise dispute shall keep complying with 
regulations of the Civil Code No. 33/2005/QH11 and legislative documents on 
guidelines for the Civil Code No. 33/2005/QH11;  
d) Prescriptive periods shall comply with this Code.  
2. This Code shall not apply to a case settled by a court in accordance with law 
on civil before the effective date of such Code for the purpose of appeal under 
cassation procedures.  
Article 689. Effect  
This Code comes into force from January 1, 2017.  
The Civil Code No. 33/2005/QH11 shall be annulled from the effective date of 
this Code.  
This Code is passed by the 13th National Assembly of Socialist Republic of 
Vietnam during the 10th session on November 24, 2015.  
  
  PRESIDENT OF NATIONAL 
ASSEMBLY  
 
 
 
 
Nguyen Sinh Hung