In the spinning of economic and scientific and technical development, model contracts and general trading conditions were born to meet the needs of a mass production and supply of goods and services. and continuously for a multitude of customers with the feature that the function contains pre-set terms for many different transactions which plays an important role in reducing costs and negotiation time, thereby increasing economic efficiency of entering into a contract. It is for this practical reason that standard contracts and general trading conditions have become an indispensable part of modern life, especially in the digital era with the development of e-commerce today. However, the application of model contracts and general trading conditions also pose challenges to the traditional theory of freedom of contract. When standard contracts and general trading conditions are used, the parties do not really have a chance to negotiate and come to an agreement. The lack of the ability to negotiate and reach an agreement may lead to one party being unaware of the existence or content of the provisions unilaterally made by a party. At the same time, having pre-written terms “imposed” by one party on the other can reduce the other party’s ability to reach a fair agreement. That requires the law to have regulations to control model contracts and general trading conditions.
From a legal perspective, the laws of different countries use many names to identify model contracts such as: Standard contract, batch contract, accession contract,… demonstrate the basic and important characteristics of this type of contract. According to the French-Vietnamese Dictionary of Legal Terminology, a contract by form (Contrat-type) is a form of contract in which all negotiations are excluded. In Vietnamese law, a model contract and general transaction conditions are both considered as an institution in the civil law according to the provisions of Articles 405 and 406 of the Civil Code 2015 and as a specific institution. in the law on consumer protection under the provisions of the Law on Consumer Protection 2010.
In Article 405 of the Civil Code 2015, it is clearly stated that a model contract is a contract consisting of provisions made by one party in a form for the other party to respond within a reasonable time; if the offeree replies with acceptance, it is considered to have accepted the entire content of the contract according to the form provided by the offeror. Model contracts must be made public so that the offeree knows or must know about the contents of the contract. The order and mode of publicizing the contract according to the form shall comply with the provisions of law.
The Law on Protection of Consumer Rights 2010 in Clause 5, Article 3 also stipulates the concept of a model contract as follows: A model contract is a contract prepared by an organization or individual trading goods and/or services negotiating with consumers.
According to the above approach, in addition to the general characteristics of the contract, the model contract can also be identified by some characteristic signs as follows:
First, all the terms of a model contract are made by one party. Normally, the parties will mutually agree on the development and amendment of the terms of the contract, but the entire content of the model contract is prepared by the supplier of goods and services.
Second, the consumer or the party offered to enter into a model contract enters into this type of contract on the principle of take it or leave it. They do not have the right to agree or modify the contents of the contract according to the form, but can only choose to agree to all the contents of the contract and enter into or refuse to enter into that contract.
Third, contract templates are often highly professional and standardized. Due to the long-term and widespread use needs of many customers and partners, when building a model contract, the party giving the contract needs to carefully and meticulously study the content, seek expert advice for the best deal. In addition, in order to be able to register a model contract with a competent state agency, the content of the contract must also be standardized. The form of a model contract is also of special interest to the party offering the contract, because the beautiful and professional form will create trust for customers during the signing process.
Fourth, because they have been standardized in both content and form, model contracts are rarely changed and are used for a long time, leading to their high stability. On the other hand, a model contract is only used when the party offering the contract has made the contract public through registration with a competent state agency or other forms of publicity. In order to change the contents of a registered contract, the party giving the contract must carry out legal procedures in accordance with the law.
Fifth, the basic principles of civil law are relatively applied to model contracts. The establishment, modification, performance or termination of a contract must comply with the basic principle that all individuals and legal entities are equal; the parties are goodwill and honest in entering and performing the contract; be solely responsible for the performance or non-performance of the contract; the establishment, performance and termination of a contract must not infringe upon the national interests, the nation, the public interest, the lawful rights and interests of others; especially the principle of free will, voluntary commitment and agreement. With a model contract, the party offering the contract and the party offered to enter into the contract are not equal because only the party offering the contract can decide the content of the contract. Freedom of will, voluntary commitment and agreement are also limited. Accordingly, the party offered to enter into a contract is not free to express his opinion regarding the change of any terms of the contract before and after the conclusion of the contract, but only free will in deciding whether or not to enter into a contract. enter into or not enter into this contract.
In Vietnam today, model contracts and general transaction conditions are increasingly widely used in civil, business and commercial transactions, finance, banking, insurance, etc. Experience has also pointed out many shortcomings with this type of contract, specifically as follows:
Firstly, the model contracts and general trading conditions still contain provisions that limit the rights and are detrimental to the party offered to enter into the contract. In theory, the party offered to enter into a contract can refuse to enter into a contract with such prepared terms, but in practice, for various reasons, they still have to accept to enter into the contract and certain disadvantage.
Secondly, the access to the content of the model contract and the general transaction conditions of the party who is not allowed to draft the model contract and the general transaction conditions is still limited. Although the law has provided for the party offered to enter into a contract according to the form “reasonable time” to study the content of the contract and the content of the model contract, the general transaction conditions must also be disclosed so that the offeree knows or must know, but in reality, the offeree often does not have a reasonable time to study the contents of the contract. Moreover, the party that drafted the model contract and the general trading conditions did not strictly comply with the form of the model contract and the general trading conditions. Many contracts and general trading conditions are presented in too small font size, making the terms dense and difficult to see, especially for the elderly and people with low vision. This makes customers “impatient” in understanding the contract content and often “signs” because they know that there are many people like them who also accept these pre-written terms.
The explosion and strong development of the Internet has made the use of standard contracts and general trading conditions increasingly complicated. Information asymmetry exposes the party accepting the contract to more risks. One of the best examples of this is online buying and selling of goods. Although the seller provides information about the quality, price, etc., the buyer is not able to verify the quality of the goods purchased at the time of purchase. It is not uncommon for cases when the payment has been made to discover that the quality of the goods is not satisfactory, but it is too late.