Decree No. 25/CP Issuing the Agency for Buying and Selling Goods Regulation

DECREE OF THE GOVERNMENT

Issuing the Agency Sales and Purchase Commodities Regulation

 _________________

THE GOVERNMENT

Pursuant to the Law on the Organization of the Government dated September 30, 1992;

At the proposal of the Minister of Trade,

DECREE:

Article 1. The Regulation on agency sales and purchase of goods is promulgated together with this Decree.

Article 2. This Decree takes effect from the date of signature. All previous regulations contrary to this Decree are abolished.

Article 3. The Minister of Trade shall be responsible for guiding the implementation of this Decree.

Article 4. Ministers, Heads of ministerial-level agencies, Heads of agencies under the Government, Chairpersons of People's Committees of provinces and centrally governed cities shall be responsible for implementing this Decree./.

 AGENCY SALES AND PURCHASE COMMODITIES REGULATION

(Issued together with Decree No. 25/CP, dated April 25, 1996)

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PART I

GENERAL PROVISIONS

Article 1. This regulation applies to agency sales and purchase activities of Vietnamese legal entities and individuals within Vietnam.

Article 2. Agency sales and purchase of goods is a method of buying and selling goods where the party performing the agency (hereinafter referred to as the agent) undertakes to sell (or buy) goods for the principal party (hereinafter referred to as the entrusting party) to earn remuneration.

Article 3. In this regulation, the following terms are understood as follows:

1. Entrusting Party: Is the party delivering goods (in sales agency) or delivering money to purchase goods (in purchase agency) with specific provisions and requirements regarding price, specifications, quality...

2. Agent: Is the party receiving goods (in sales agency) or receiving money to purchase goods (in purchase agency), undertaking the purchase and sale of goods according to specific provisions and requirements regarding price, specifications, quality... of the entrusting party.

3. Remuneration: Is the amount of money that the agent earns for selling or purchasing goods for the entrusting party mainly in two forms: commission or price difference; the specific level is agreed upon by both parties in the agency contract.

4. Object of Agency: Are tangible goods.

5. Purchase Agency: Is an agency form where the entrusting party provides money to the agent to purchase goods according to the requirements and regulations of the entrusting party and earns a remuneration based on the agreement of both parties.

6. Sales Agency: Is an agency form where the entrusting party delivers goods (with brand, specifications, and quality already determined) to the agent to carry out the sale of goods entrusted by the entrusting party and earns remuneration based on the agreement of both parties.

7. Commission Agency: Is an agency form where the agent carries out the purchase and sale of goods at prices set by the entrusting party to earn a remuneration in the form of commission paid by the entrusting party. The commission rate is calculated as a percentage of the actual purchase and sale prices of the goods, agreed upon by both parties.

8. Buyout Agency (in sales agency) or Buy Agency (in purchase agency): Is an agency form where the agent undertakes to purchase or sell a certain quantity of goods entirely at a minimum price (in sales agency) or maximum price (in purchase agency) set by the entrusting party. The remuneration earned by the agent is the price difference between the actual purchase and sale prices and the prices set by the entrusting party.

9. Exclusive Agency: Is an agency form where, within a specific area, the entrusting party only assigns one agent to purchase or sell one or several of its goods.

10. General Agency for Purchasing and Selling Goods: Is an agency form where the agent uses a network of agents to purchase and sell goods for the entrusting party.

The general agent is the direct partner of the entrusting party and represents the rights and obligations of the network of agents within the system. Agents under the general agent operate and fulfill their rights and obligations directly towards the general agent, while also fulfilling their rights and obligations towards the entrusting party through the general agent.

Article 4. The entrusting party is the owner of the goods and money transferred to the agent for purchasing and selling; it exercises its rights and fulfills its obligations over these goods and money throughout the duration of the agency contract.

Article 5. Both the entrusting party and the agent must be legal entities or individuals registered for business.

Article 6. Goods subject to purchase and sales agency must be those that both the entrusting party and the agent are permitted to trade. Agency activities must comply with regulations concerning conditional goods trading in the domestic market.

Article 7. Settlements between the entrusting party and the agent regarding agency goods and remuneration are conducted in installments corresponding to the time when the agent completes a certain volume of purchased or sold goods, or according to a specific settlement format agreed upon by both parties in the agency contract.

Article 8. The entrusting party and the agent may agree on the pledge and deposit of the agent to the entrusting party if deemed necessary.

Article 9. The relationship between the entrusting party and the agent is reflected through the agency contract.

The agency contract becomes effective immediately upon signing, or after a specified period as agreed by the entrusting party and the agent.

 PART II

RIGHTS AND OBLIGATIONS OF THE PARTIES

Article 10. The entrusting party has the following rights:

1. To select, decide on the agent, agency form, and sign the agency contract, according to specific business needs and capabilities.

2. To set purchase and sale prices of goods (depending on the agency form and object).

3. To receive a deposit or collateral from the agent if agreed upon in the agency contract.

4. To request the agent to pay money (in sales agency) or deliver goods (in purchase agency) according to the contract.

5. To inspect and supervise the performance of the contract by the agent.

6. To enjoy legitimate rights and benefits derived from agency activities within the framework of the law.

Article 11. The entrusting party must fulfill the following obligations:

1. To guide and provide necessary information about agency sales and purchase activities, creating conditions for the agent to perform the agency contract.

2. To fulfill all commitments in the contract regarding the delivery and receipt of agency goods with the agent.

3. To be responsible for the specifications and quality of delivered goods (in sales agency) and received goods (in purchase agency) as stipulated in the agency contract.

4. To pay remuneration to the agent according to the commitment in the contract.

5. To return the deposit or collateral to the agent if agreed upon in the contract upon termination of the contract.

6. To jointly bear responsibility before the law if the agent violates the law, provided that the violation is caused by the entrusting party or both parties intentionally violate the law.

7. Be subject to inspection and supervision by state agencies with competent authority and fulfill all obligations towards the State as prescribed by law.

Article 12. The agent has the following rights:

1. To select and enter into agency contracts with one or more principals according to business needs and capabilities and according to the form of agency.

2. To request the principal to deliver money and goods in accordance with the contract and to reclaim from the principal any deposit or collateral when the contract ends (if applicable).

3. To request the principal to provide guidance, information, and other conditions relevant to the performance of the agency contract.

4. To enjoy remuneration and other lawful benefits arising from the agency activities within the framework of the law.

Article 13. The agent must perform the following obligations:

1. Purchase or sell goods in accordance with the requirements specified by the principal.

2. Fulfill accurately the commitments in the agency contract regarding receipt and delivery of money and goods to the principal.

3. Provide a deposit or collateral for the principal as agreed in the agency contract (if applicable).

4. Pay the proceeds from sales (in selling agency) or deliver goods (in buying agency) to the principal in accordance with the contract.

5. At their place of business (headquarters, store), clearly display the name, trademark, symbol (if any) of the principal, the name of the goods being bought or sold under agency, and post prices as prescribed.

6. Store goods, be responsible for quantity, specifications, quality of goods after receiving (for selling agency) or before delivering (for buying agency) as recorded in the agency contract.

7. Be subject to inspection and supervision by the principal, implement reporting systems on agency operations to the principal.

8. Bear responsibility before the principal and the law if they act contrary to the agency contract or the law.

9. Be subject to inspection and supervision by state agencies with competent authority and fulfill all obligations towards the State as prescribed by law.

Article 14. In addition to the provisions on rights and obligations stipulated in Articles 10, 11, 12, and 13 of Chapter II, the principal and the agent may agree and commit to additional rights and obligations, but not contrary to current laws.

 CHAPTER III

AGENCY CONTRACT

Article 15. The agency contract must be established in writing.

Article 16. The agency contract includes the following main contents:

1. Names and legal addresses of the parties entering into the agency contract (principal and agent).

2. Goods:

Goods Name

Specifications, quality

Quantity, volume

.......

3. Delivery period, method, and location.

Delivery period to the principal (in buying agency).

Delivery period to the agency recipient (in selling agency).

Method of delivery and receipt of goods.

Delivery location (warehouse, premises of the delivering and receiving agents).

4. Price:

Maximum and minimum selling price (in selling agency).

Maximum and minimum purchasing price (in buying agency).

5. Commission rate and expenses.

6. Payment method and payment time:

Payment for sales in selling agency contract.

Payment for purchases in buying agency contract.

Payment for commission (remuneration) and other expenses.

Payment of deposit, return of collateral.

7. Reward, penalty, and compensation system.

8. Duration of validity of the contract:

Effective duration of the contract.

Termination date of the contract.

Additionally, the two parties may specify other contents and clauses such as warranty, technical support, facilities for the agent to organize advertising and marketing..., but not contrary to the law.

Article 17. Any amendments or supplements to the agency contract shall only have legal effect if both parties accept and establish them in writing.

Article 18. One party to the agency contract may only transfer rights and obligations under the agency contract to a third party with the consent of the other party.

Article 19. The parties are obligated to fulfill their commitments in the contract accurately and fully. The party violating the contract shall bear material responsibility for failing to perform or performing the contract incorrectly. If there are no other provisions in the agency contract, penalties for breach of contract and compensation for damages shall be applied according to current laws.

Article 20. The agency contract terminates in the following cases:

1. Termination of the agency contract:

The parties to the agency contract liquidate the contract when it has been fulfilled or its effective term has expired (and there is no agreement to extend that term).

2. By mutual agreement of the parties:

The agency contract may terminate before the expiration of its effective term if there is a written agreement between the two contracting parties.

3. Invalidity of the agency contract:

The agency contract is invalid according to the current legal principles regarding the invalidity of economic contracts.

4. Unilateral suspension of the contract.

One party has the right to unilaterally suspend the performance of the agency contract when its performance does not benefit them. In this case, the party suspending unilaterally must compensate for the damage caused to the other party due to the suspension of contract performance.

One party has the right to unilaterally suspend the performance of the contract when the other party breaches the contract to the extent that it must be suspended as agreed by the parties, the breaching party must compensate for the damage.

 PART IV

INSPECTION AND VIOLATION HANDLING

Article 21. State agencies with management authority over commerce have the right to inspect and supervise the parties in agency activities (regarding legal procedures, business licenses, product quality, etc.) to promptly detect and handle violations of the law.

Article 22. Each party in agency activities must be responsible to the other party and the law for all activities and commitments made in the contract.

Article 23. Parties in the buying and selling agency contract who violate these provisions affecting market conditions, causing damage to the interests of the State, organizations, and citizens will be administratively punished or criminally prosecuted depending on the degree of damage.

CHAPTER V

IMPLEMENTING PROVISIONS

Article 24. These regulations come into effect from June 1, 1996, and replace previous regulations on buying and selling agency.

Article 25. The Minister of Commerce is responsible for guiding, organizing, and supervising the implementation of these regulations.

Article 26. The ministries, heads of agencies at the ministerial level, heads of government agencies, chairpersons of provincial people's committees under the central government, and organizations and individuals participating in agency activities are responsible for implementing this Regulation./.