According to the provisions of Article 116 of the 2015 Civil Code, “civil transaction is a contract or unilateral legal act that gives rise to, changes or terminates civil rights and obligations”. From the provisions of this law, it can be determined that the result of the establishment of a civil transaction is to give rise to, change or terminate the civil rights and obligations of the subject in civil legal relations. In addition, in order for a civil transaction to have legal effect, when establishing a transaction, it must comply with the conditions specifically prescribed by Article 117 of the 2015 Civil Code about the conditions for effective civil transactions as follows:

“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) Participants in the transaction act entirely voluntarily;

c) The purpose and contents of the transaction are not contrary to the law and/or social ethics.

The forms of civil transactions shall be the conditions for its effectiveness in cases where it is so provided for by law”.

Thus, a civil transaction takes effect when all conditions are met such as: the participants in the civil transaction have the capacity for civil acts, and the purpose and content of the civil transaction must not be contrary to the law provisions or social ethics; participants in civil transactions are completely voluntary; transaction form in accordance with the provisions of law:

First, about the condition of participants

• Participants in civil transactions have civil legal personality and legal capacity:

(i) Regarding civil legal personality

According to the provisions of Article 16 of the Civil Code on Legal personality of natural persons

1. The legal personality of natural persons is her/his capacity to have civil rights and civil obligations.
2. All individuals have the same civil legal personality
3. The legal personality of natural persons commences at birth and terminates at death

Thus, according to the above provisions, the  civil legal personality of an individual comes from the moment of birth, the individual already has civil rights and obligations, is the ability, the premise and necessary condition for the citizen to have rights and obligations. Civil legal capacity is an indispensable component of the individual as the subject of civil legal relations. The civil legal capacity of an individual is not limited by any reason (age, social status, gender, religion, ethnicity…). Every individual has the same ability to enjoy the same rights and to bear the same obligations.

The state does not allow citizens to limit their own legal capacity and that of other individuals. Legal capacity of an individual is a personal attribute of the subject and cannot be transferred to another subject. Article 18 of the Civil Code stipulates: “The legal capacity of an individual is not restricted, unless otherwise provided for by this Code or other relevant laws”. Thus, the legal capacity of an individual can only be limited according to the provisions of law.

(ii) Regarding the legal capacity

Article 19 of the Civil Code also stipulates the legal capacity of individuals as follows: “An individual’s legal capacity is the ability of an individual to establish and exercise his/her rights and perform civil obligations by his/her own actions”.

Legal capacity is understood as the ability of a subject as prescribed by law, by his acts and according to his will to establish and perform civil rights and obligations. A subject’s legal capacity includes the ability by his/her acts to establish and exercise civil rights and perform specific civil obligations; the ability to be personally liable for one’s own conduct, both lawful and illegal.

As for the individual’s legal capacity, since birth, the individual has had civil rights and obligations. But the ability to exercise civil rights and obligations on his own does not arise at the same time that the individual acquires those civil rights and obligations. In order to perform his/her own civil rights and obligations, an individual must be able to perceive and master the acts that he/she establishes in civil legal relations. This will ensure the rights of the individual who is the subject of civil legal relations and also ensure the legitimate rights and interests of other subjects.

The provisions of the Civil Code provide a way to make legal speculations about an individual’s ability to perceive and control behavior on the basis of age, in addition, in some cases based on another factor. Therefore, the difference in cognitive ability of each individual, the civil act capacity of individuals is divided into different levels among different individuals as follows:

• • Adult’s legal capacity;
  • Minors’ legal capacity;
  • Legal capacity of the person who has lost his/her legal capacity;
  • Legal capacity of the person who has difficulties in perception and behavior control.

• Participants in civil transactions are completely voluntary

The nature of civil transactions is the unity between the will and the expression of the will, so “voluntary” includes the constituent elements of free will and expression of will. Without free will and the expression of will there can be no voluntariness, if one of these two factors is absent or inconsistent, there can be no voluntariness. The voluntariness of a party (unilateral legal act) or the voluntariness of the parties in a civil relationship (contract) is one of the principles specified in Article 3 of the Civil Code 2015: Freedom, pledge, agreement. Violation of the Participants’ voluntariness is a violation of the law. Therefore, civil transactions without voluntariness do not give rise to legal consequences.

The Civil Code stipulates a number of cases in which civil transactions established without consent will be invalidated. Those are the cases of invalidation due to falsification; by mistake; due to being deceived, threatened or coerced; due to being established at a time without being aware of and controlling their behavior.

Secondly, on the condition that the purpose and content of civil transactions must not contravene the law

For a civil transaction to have legal effect, the purpose and content of the transaction must not violate the prohibition of the law and not violate social ethics. Prohibited laws are regulations that do not allow subjects to perform certain acts. Social ethics are common standards of behavior between people in social life, which are recognized and respected by the community. Only properties that are allowed to be traded, and that are allowed to be performed that do not violate the prohibition of the law and are not contrary to social ethics are the objects of civil transactions. Transactions established to evade the law or contrary to social morality are civil transactions with illegal purposes and contents and do not give rise to the legal effect of such civil transactions.

Thirdly, on conditions of the form of transaction is in accordance with the provisions of law

In the content of transaction forms, the provisions of the Civil Code 2015 No. 91/2015/QH13 have specific requirements on the form of transactions with the provisions of law, in Article 119 as follows:

1.  Civil transactions are expressed verbally, in writing or by specific acts.

Civil transactions through electronic means in the form of data messages in accordance with the law on electronic transactions are considered written transactions.

2. Where the law stipulates that civil transactions must be expressed in writing, notarized, authenticated or registered, such provisions must be complied with.”

Thus, we can see that civil transactions are also regulated in their own forms so that such transactions are legalized in form as follows: Transactions can be done through forms such as speech, writing copy or can also be done by specific acts and actions. Currently, a number of methods through the electronic network have also been recognized as one of the forms of performing civil transactions.

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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