Civil transactions are the most common grounds for arising, changing or terminating civil rights and obligations; it is the most important legal means in civil exchanges, in the movement of assets and in the provision of services to meet the increasing needs of all members of society. However, not all civil transactions are legal and legally enforceable. The following article refers to invalid civil transactions:
Article 116 of the Civil Code 2015 stipulates: “Civil transaction is a contract or unilateral legal act that gives rise to, changes or terminates civil rights and obligations”. A civil transaction is invalid when one of the conditions specified in Article 117 of the 2015 Civil Code is not met, specifically:
- First, participants have legal personalities, legal capacity in accordance with established civil transactions;
- Second, participants in civil transactions are completely voluntary;
- Third, the purpose and content of the civil transaction do not violate the prohibition of the law and social ethics;
- Fourth, the form of a civil transaction is the effective condition of a civil transaction in case it is provided for by law;
- Fifth, other cases prescribed by this Code.
Cases of invalidated transactions can be classified into two main groups:
- Absolutely invalid civil transactions (also known as naturally invalid) and
- Relatively invalid civil transactions (also known as declared invalidity).
The above classification is based on a number of characteristics showing the nature of two concepts of absolute invalidity and relative invalidity of civil transactions:
| Contents | Absolutely invalid civil transactions | Relatively invalid civil transactions |
| Order | Default is considered invalid | It becomes invalid only when there is a petition from a person with related rights and interests and is declared invalid by the court |
| Time limit for requesting declaration of invalid transaction | The time limit for requesting the court to declare the transaction invalid is not limited | The statute of limitations for initiating a lawsuit requesting the court to declare a civil transaction invalid is two years from the date the civil transaction is established (Article 132 of the Civil Code 2015). |
| Court decision | regardless of the court’s decision | The court’s decision is the basis for making the transaction invalid |
| Purpose | for the purpose of protecting public interests (the interests of the State, of society in general) | for the purpose of protecting the interests of the subjects participating in the transaction. |
Absolutely invalid civil transactions:
- Invalidity of civil transactions due to breach of legal prohibitions or contravention of social ethics;
- Invalidity of civil transactions due to falsification;
- Invalidity of civil transactions due to non-compliance with form
Relatively invalid civil transactions:
- Invalidity of civil transactions established and performed by minors or legally incapacitated persons or persons with limited cognition and behavior control or persons with limited legal capacity;
- Invalidity of civil transactions due to misunderstanding;
- Invalidity of civil transactions due to deception, threat or compulsion;
- Invalidity of civil transactions established by person lacking in cognition and behavior control
Above is our consultancy about this issue. If you need more detailed advice and answers as well as how to access this service, please contact directly the Deputy Director of Sales: Lawyer Nhat Nam via hotline: 0912.35.65.75, 0912.35.53.53 or call the free legal consultation hotline 1900.6575 or send a service request via email: lienheluathongbang@gmail.com
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