In civil litigation practice in Vietnam, the issue of invalid civil transaction disputes is not uncommon. Many people think that "void contract" and "cancellation contract" are the same, but in fact, the nature, consequences and resolution have many important differences. In this article, I would like to summarize the new regulations and practical experience to help youIdentify invalid civil transactionsandChoose the appropriate solution
According toArticle 122 of the 2015 Civil Code
“A void civil transaction is a transaction that does not create, change or terminate the civil rights and obligations of the parties from the time the transaction is established.”
This means that when a transaction is declared void, it is considered voidnever existedlegally (unless the law provides otherwise). The rights and obligations that the other party takes as a basis from that transaction will not be recognized.
In contrast, “termination of contract” only applies to transactions that are in effect before, and the termination may arise before that transaction is completely completed. With a void transaction, there is no such “before – after” aspect.
The basis for declaring a transaction invalid starts from determining that the transaction violates the "validity conditions" specified in Clause 1 of this Article.Article 117 of the 2015 Civil Code
For a civil transaction to be recognized as valid (and conversely, if any condition is missing, it will be invalid), the following conditions must be met (Article 117 of the 2015 Civil Code):
Subject: The person establishing the transaction must have appropriate legal capacity and behavioral capacity.
Free will, does not violate the principle of freedom of transaction, not to be deceived, coerced, confused, threatened, not in a state of not being able to control one's behavior.
Purpose and content: Transactions must not violate legal prohibitions and must not be contrary to social ethics. (Article 123 of the Civil Code)
Form: If the law stipulates that the transaction must be made in writing, notarized, authenticated, registered... then the transaction must comply with that form (If so prescribed by law).
If the transaction does not meet at least one of the above conditions — unless the law provides an exception — it may be declared void according to the provisions of Article 122.
Below are common cases in which civil transactions can be declared invalid:
Violating legal prohibitions or violating social ethics (Article 123 of the Civil Code).
Fake transactions to hide other transactions or avoid obligations (Article 124 of the Civil Code).
Violations of established subject: minors, people who have lost civil act capacity, people with limited capacity without a legal representative.
Being mistaken, deceived, coerced, or threatened while establishing a transaction (Articles 127, 128 of the Civil Code).
Failure to comply with the mandatory form under the law (Article 129 of the Civil Code). For example, buying and selling apartments or land if the law requires notarization or authentication but the transaction does not comply.
Partial invalidation: if the content of part of a transaction violates but the remaining part is still valid, the court can declare the violating part invalid while keeping the valid part valid (Article 130 of the Civil Code).
When a civil transaction is discovered to be invalid, the injured party or whose rights are affected need to know how to protect their rights so that the court or competent authority can intervene effectively.
The party participating in the transaction (damaged) has the right to sue and request the court to declare the transaction invalid.
A third person (not participating in the transaction) whose interests are violated due to that transaction can also request invalidation in some cases. For example, a transaction that violates a prohibition affects a third person. (Regulated in Clause 2, Article 132 and Article 123)
A transaction cannot be automatically declared invalid through a written document sent to the other party — there must be a valid court judgment or decision.
Determining the statute of limitations is very important - if the statute of limitations has passed, the transaction, even if it is wrong, will still be considered valid.
According toArticle 132 of the 2015 Civil Code, the statute of limitations for requesting the court to declare invalid transactions that violate formality, are mistaken, deceived, coerced... is02 years, since the person with the right knows or should know that his or her right is being violated.
However, there are two cases where the statute of limitationsunrestricted
Transaction is invalid due to fraud (Article 124).
The transaction has a purpose or content that violates legal prohibitions or is contrary to social ethics (Article 123) — in this case, the requesting party can sue at any time.
If after 2 years from the date of signing there is no request for invalidation in cases of formal violations, the transaction can be assumed to be valid.
Below are common steps in resolving invalid transaction disputes:
Prepare evidence
Contract (if any), transaction documents
Documents proving violations (e.g., laws requiring notarization without doing so)
Delivery record, proof of fulfillment of obligations
Emails, messages, text exchanges between parties
Choose the time and court with jurisdiction
District and provincial courts depending on place of residence or place of transaction
Check the statute of limitations for filing a lawsuit
File a lawsuit or request annulment
The application must clearly state the request to declare the transaction invalid and the request to restore the original status
Claim damages if the other party is at fault
Trial, mediation, judgment
During the proceedings, the court may conduct mediation
If the court accepts the request, it will issue a judgment declaring the transaction invalid and stipulating refund and compensation
Enforcement of judgment
Coercion if the defendant returns property and pays delay
When the court declares a transaction invalid, the main consequences include:
No rights or obligations arise: The transaction has no impact on rights and obligations since its establishment.
Restore the original condition, return to each other what has been received: The party receiving the returned property, if unable to pay in kind, shall pay in equivalent cash.
Compensation for damages (if at fault): The party causing the error or violation must compensate for damage to the other party or the affected person.
In case the third person is sincere: If the transaction has transferred property to a bona fide third person (when the transaction is void), that property can be protected (the third person retains rights) unless otherwise provided by law. (Article 133 of the Civil Code)
Partially effective: If only part of the transaction content violates, the violating part can be invalidated while the remaining part remains valid if it can be separated. (Article 130)
Determine the type of violation first: Is it a violation of form, content, subject matter, or sham transaction? This determines the statute of limitations and how to handle it.
Take action soon: For formal violations, if you do not file a lawsuit within 2 years, you may lose your right to claim.
Avoid arbitrarily declaring invalidity: A transaction can only be declared invalid when there is an effective court judgment or decision — you should not issue a notice of invalidity yourself and then force the partner to unilaterally enforce it.
Pay attention to evidence: Transaction documents, minutes, emails, messages... are very important to prove violations or transaction purposes.
Consider the third person case: If the property has been transferred to a third person in good faith, this person's rights also need to be considered and protected.
Flexibility in filing lawsuits: In the same case, it is possible to combine a request for annulment, a request for compensation for damages, and a request for property return in one petition to reduce costs and processing time.
Disputes over invalid civil transactions are one of the complex types of disputes, because it involves determining the legality of the transaction from the beginning, determining errors, determining the statute of limitations, handling consequences and relationships with third parties. Accurately recognizing the signs of invalidity and choosing the appropriate course of action will determine whether you can revoke your rights or not.
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