Circular No. 10TM/PC guides the implementation of the agency system for buying and selling goods.

CIRCULAR
Guidelines for implementing the agency system for buying and selling goods

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Pursuant to Decree No. 95/CP dated December 4, 1993 of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Trade;

Pursuant to Decree No. 25/CP dated April 25, 1996 of the Government promulgating the Agency System for Buying and Selling Goods;

The Minister of Trade hereby provides guidelines for implementing certain provisions of the agency system for buying and selling goods as follows:

Article 1: These regulations shall apply to the agency activities for buying and selling goods of:

a) Vietnamese legal entities: enterprises established under Vietnamese law, including foreign-invested enterprises established under the Law on Foreign Investment in Vietnam.

b) Individuals: individuals who have registered for business.

Article 2: The agent acts on their own behalf to sell (or buy) goods for the principal and the agent bears direct responsibility under the law for the agency activities and towards customers regarding sold and purchased goods.

Article 3 Clause 4:

a) Object of agency: tangible movable goods permitted to circulate according to the law.

b) Agency for buying and selling immovable property is not within the scope of regulation of this system.

Article 3 Clause 9: The exclusive agency territory is the geographical area agreed upon by both parties such as district, county, province, city, etc., or nationwide.

Article 3 Clause 10:

a) Relationship between General Agent and Agent: the general agent represents the rights and obligations of the affiliated agents. Affiliated agents operate under the management of the general agent but deal with customers in their own name and bear direct responsibility to customers.

b) The use of the general agent form must be agreed upon by both parties in the agency contract.

c) The relationship between the general agent and the affiliated agent is defined through the contract.

Article 6: In cases where the principal and the agent have agreed to establish an agency relationship and the agent has not yet registered to trade in the goods intended to be represented, the agent must supplement the registration for trading in those goods and can only act as an agent after the supplementary registration has been completed.

Article 16: Agency Contract.

a) Delivery time: clearly specified at a particular point in time, date, or hour, or within a specific period.

b) Delivery method: direct delivery between the principal and the agent or indirect delivery through a carrier.

c) Costs in agency activities include loading, transportation, storage costs, etc.

d) Penalty for breach of contract and compensation for damages:

- A penalty for breach of contract is the obligation of the party violating the contract to pay a fixed amount if the contract specifies this. The amount of the penalty is agreed upon by the parties in the contract.

- Compensation for damages is the value of losses suffered and lost benefits (i.e., the benefit that would have been obtained) that one party must bear due to the breach of contract by the other party.

- If the parties have no other agreement, they may choose only one of the two sanctions mentioned above, either demanding a penalty or compensation for damages for the same breach.

e) Warranty regime: clearly defines the responsibilities of the principal and the agent for product warranty.

g) Technical support may include training in commercial techniques and purchasing and selling techniques, etc.

h) Technical facilities for purchasing or selling goods may belong to the principal or the agent.

The parties need to agree specifically on the maintenance, repair of technical facilities, depreciation rate, costs, etc.

i) Advertising and marketing organization: clearly defines the advertising and marketing costs and the party responsible for these activities.

Article 8: The principal must register agency points and stores when registering for business and simultaneously bear the responsibility to report the number and activities of the agents to the competent state agencies for trade management.