IBL Report
IBL Report
FACULTY OF LAW
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VIETNAMESE LAW
Group: 9
Class: PLU410E(JIB-HK2-2324)K60.1
Introduction ....................................................................................................................... 1
References ......................................................................................................................... 22
Introduction
Quasi-contracts are a unique category of legal obligations that resemble contracts but
lack some key elements. Unlike traditional contracts, which arise from an agreement
between parties, quasi-contracts are imposed by law to prevent unjust enrichment.
These obligations are crucial in ensuring fairness within legal systems. They prevent
one party from benefiting unfairly at the other's expense, even in the absence of a formal
agreement. Imagine a situation where you accidentally pay your friend twice for lunch.
There's no written contract, but the law recognizes your right to recover the extra payment
through the concept of quasi-contract.
This report aims to analyze the concept of quasi-contracts in common law legal systems
and explore the possibility of applying a similar mechanism within the Vietnamese legal
framework.
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Chapter I. Understanding Quasi-Contracts
Quasi-contracts, also known as contracts implied in law, are not traditional contracts but
rather legal obligations imposed by the court to prevent unjust enrichment when no
enforceable agreement exists between parties. According to Investopedia, a quasi-contract
is “a legal agreement created by the courts between two parties who did not have a previous
obligation to each other but are required to fulfill the terms of the agreement for the sake
of fairness and justice.” This concept is based on the principle of restitution, which aims to
prevent one party from unfairly benefiting at the expense of another.
The doctrine of unjust enrichment is a fundamental principle within the realm of quasi-
contracts. In George E. Palmer’s influential work, “The Law of Restitution,” the author
asserts that the purpose of restitutionary remedies, which include quasi-contracts, is to
prevent one party from unjustly benefiting at the expense of another. Palmer succinctly
states, “Unjust enrichment is a term that conveys the legal conclusion that a person
possesses money or assets that, in equity and good conscience, they should not have.”
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To further emphasize the significance of restitution and the prevention of unjust
enrichment in the absence of a contract, one can look to the landmark case “Fibrosa Spolka
Akcyjna v. Fairbairn Lawson Combe Barbour Ltd.” Here, the House of Lords underlined
the importance of restitution by ruling that when a party receives a benefit without fulfilling
a corresponding obligation due to the failure of a contractual condition, restitution may be
necessary to avoid unjust enrichment.
This case illustrates the courts’ recognition of the need to rectify situations where one
party gains an advantage or benefit without fulfilling their part of the agreement. By
allowing restitution in such cases, the legal system ensures that individuals are not able to
unfairly profit from the failure to meet contractual obligations.
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unfairly benefits at the expense of another. By consulting authoritative texts like the
Restatement (Third) of Restitution and Unjust Enrichment, as well as considering the
insights of legal scholars and landmark court decisions, we gain a deeper understanding of
quasi-contracts. This understanding emphasizes their vital role in promoting justice and
fairness in legal transactions where traditional contract law does not apply.
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Chapter II. Elements of Quasi-Contracts
Unjust enrichment, defined as the enrichment of party at the expense of another without
legal justification, represents a significant issue within the legal system. In response to this
injustice, quasi-contracts have emerged as a crucial tool to address and prevent such
instances of unfair benefit. These contracts serve as a means to impose obligations on the
party that has been unjustly enriched, effectively curbing the unjust enrichment. Professor
P.S. Atiyah, in his article “Quasi-Contracts: A Comparative Analysis,” highlights the
importance of quasi-contracts in preventing individuals from gaining unfair advantages
from the contributions or losses of others. This principle aligns seamlessly with the
fundamental concepts of equity and fairness that underpin the legal system.
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principle of unjust enrichment rather than the parties’ intent. This unique characteristic
allows the courts to intervene and impose obligations to prevent one party from unfairly
benefiting at the expense of another, even in the absence of an explicit agreement.
Quasi-contracts fill a significant gap in the legal system by addressing situations where
the absence of an express agreement would lead to an unjust outcome. These contracts
serve as a means to rectify imbalances and prevent one party from unjustly enriching
themselves at the expense of another. By emphasizing the principle of preventing unjust
enrichment, quasi-contracts demonstrate their necessity in situations where no explicit
agreement exists. Unjust enrichment occurs when one party benefits unfairly at the expense
of another, and it is essential to address this imbalance regardless of the presence of a
formal agreement. Quasi-contracts offer a legal means to hold parties accountable for their
actions and maintain fairness in contractual relationships.
The absence of an express agreement does not diminish the efficacy of quasi-contracts
in preventing unjust enrichment. Rather, it highlights their adaptability and importance in
addressing situations where a formal agreement is lacking. Quasi-contracts provide a
mechanism for the courts to intervene, impose obligations, and rectify unjust enrichment
in the absence of an explicit agreement. This ensures that parties are held accountable and
that fairness is upheld, even in scenarios where a traditional contract is absent.
Legal remedies play a crucial role in rectifying instances of unjust enrichment within
the framework of quasi-contracts. One such remedy commonly employed is restitution,
which requires the party who has been unjustly enriched to either return the received benefit
or compensate the aggrieved party for its value.
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fairness in legal relationships. Quasi-contracts, by providing remedies like restitution, offer
a mechanism for courts to correct instances of unjust enrichment stemming from the
absence of an express agreement. This accountability ensures that fairness is maintained in
contractual relationships, as parties are held responsible for their actions and compelled to
rectify any unjust enrichment that has occurred. For instance, the landmark case of Lumley
v. Wagner (1852) demonstrates the power of restitutionary remedies in quasi-contracts. In
this case, the plaintiff, an opera singer, had entered into a verbal agreement with the
defendant, a theater owner, to perform exclusively at his theater. However, the defendant
breached this agreement by hiring another singer. The court, recognizing the unjust
enrichment of the defendant at the expense of the plaintiff, awarded restitution by ordering
the defendant to compensate the plaintiff for the loss of earnings resulting from the breach.
This ruling showcases the court’s ability to remedy the absence of a formal agreement
through restitution, ensuring that the unjustly enriched party does not retain an undeserved
benefit.
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Chapter III. Principles of Quasi-Contracts in Common Law
Quasi-contracts promote justice by preventing one party from being unjustly enriched
at the expense of another. This ensures fairness even when a formal contract is absent. For
example, someone pays for repairs on your car believing it's theirs (mistaken identity).
Here, you've been unjustly enriched by receiving the service. A quasi-contract claim could
require you to reimburse the repair costs. In the case of Lipkin v. Lester (1982), Lester
mistakenly paid Lipkin £7,500 for a property deposit. Lipkin knew the money was paid in
error but refused to return it. A quasi-contract claim forced Lipkin to return the money due
to unjust enrichment.
3.1.2. Equity
Courts aim to achieve a fair outcome based on the specific circumstances, even if it
deviates from strict legal rules. For example, a contractor partially finishes a construction
project but is wrongly terminated by the owner. While they don't have a complete contract,
a quasi-contract could award the contractor compensation for the work they've done based
on principles of fairness (quantum meruit). In Spruce Manufacturing Ltd. (1971) - Bribes,
a subcontractor, partially completed work for Spruce Manufacturing. Spruce wrongly
terminated the contract. While there was no complete contract, a quasi-contract claim
awarded Bribes compensation for the work done based on a quantum meruit calculation
(reasonable value of services rendered).
The concept of good conscience prevents someone from taking advantage of another's
mistake or situation for personal gain. Quasi-contracts enforce this notion by requiring the
return of benefits unjustly received. For example, a company accidentally receives a double
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payment from a customer. Keeping the extra payment would violate good conscience. A
quasi-contract claim could require the company to return the duplicate payment. In Kelly
v. RBC Dominion Securities Inc. (1993) - RBC Dominion Securities accidentally
deposited excess funds into Kelly's account. Keeping the extra funds would violate good
conscience. A quasi-contract claim required Kelly to return the duplicate deposit.
In the realm of common law contracts, the principle of privity of contract dictates that
only parties directly involved in a contract can enforce its terms or be held liable for its
breach. This means a third party, someone not named in the agreement, generally has no
rights or obligations under that contract.
However, the concept of privity of contract doesn't apply to quasi-contracts. The focus
of quasi-contracts is on preventing unjust enrichment, and who benefits or is at a loss takes
precedence over whether someone was formally part of an initial agreement.
A true contract arises from an agreement between parties. A quasi-contract, on the other
hand, is not based on an actual agreement, but rather on the principle of preventing unjust
enrichment.
Quasi-contracts are a legal remedy created by courts to ensure fairness. They step in
when someone receives a benefit at the expense of another, even without a formal
agreement.
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3.2.3. Focus on Unjust Enrichment
Third-party beneficiaries (someone not party to the original agreement) can potentially
benefit from a quasi-contract claim. This can occur if:
For example, a parent hires a tutor for their child (third-party beneficiary). If the parent
refuses to pay the tutor, the tutor might have a quasi-contract claim against the parent for
the services rendered to the child.
In the case of New Zealand Shipping Co. Ltd. v. A.M. Satterthwaite & Co. Ltd. (1972),
a shipping company paid port charges on behalf of a freight forwarder. The freight
forwarder, in turn, had a contract with the importer (third-party beneficiary) that stated the
importer would be responsible for these charges. A quasi-contract claim allowed the
shipping company to recover the port charges from the importer, even though they weren't
directly party to the contract between the importer and the freight forwarder.
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Chapter IV. An overview of Vietnamese Contract Law
Contract law serves as a critical cornerstone of Vietnam's legal system, regulating the
intricate web of legal relationships between parties and forming the foundation for
everyday activities within the country's social and economic fabric. As Vietnam's
integration into the global marketplace accelerates, the need to continuously refine its
contract law becomes paramount. This report delves into the historical development, key
sources, and prominent features of Vietnamese contract law, highlighting its crucial role in
fostering a dynamic and interconnected economy.
A paradigm shift occurred in 1986 with the introduction of the Doi Moi (Renovation)
policy. This policy marked a significant departure from the past, aiming to open up the
Vietnamese economy, embrace market-oriented reforms, and integrate Vietnam into the
global economic landscape. The Doi Moi era ushered in an era of greater economic
freedom, fostering innovation and participation in international trade. Inevitably, contract
law underwent substantial changes to accommodate this new economic reality. Specific
examples include the introduction of written requirements for land purchase agreements
and the allowance for installment payments in contracts, such as those involving the
purchase of a bicycle.
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4.2. Sources of Vietnamese Contract Law
Vietnamese contract law draws its foundation from a confluence of sources. The Civil
Code stands as the primary legal document governing contracts within the country. It
meticulously outlines the essential elements of valid contracts, the rights and obligations
of contracting parties, available remedies for breach of contract, and robust enforcement
mechanisms.
Beyond the Civil Code, French legal thought exerts a significant influence on
Vietnamese contract law. This influence has its roots in Vietnam's colonial past. During
the French colonial period, Vietnam fell under French rule. This period witnessed a
transformation of the Vietnamese legal system, with the French introducing a centralized
government modeled after their own political system. The French also implemented a
series of new laws and regulations, profoundly impacting Vietnamese politics and legal
norms.
• Consent: Both parties must freely and voluntarily agree to the terms of the contract.
• Capacity: The parties involved must possess the legal capacity to enter into a
binding contract, such as being of sound mind and above the legal age.
• Object: The contract must have a lawful and achievable subject matter.
• Form: Certain contracts may require specific formalities, such as written form, to
be considered legally valid.
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These conditions closely mirror French legal principles concerning contract validity.
The very formulation of these conditions reflects the French legal tradition's emphasis on
clarity, mutual consent, and enforceability. While Vietnam has undeniably carved its own
legal path since its colonial era, French legal concepts remain deeply embedded within the
fabric of its legal system. Notably, Vietnam has struck a balance between preserving these
traditional norms and adapting them to meet the demands of the modern legal landscape.
• Consent: Both parties must freely and voluntarily agree to the terms of the contract.
• Capacity: The parties involved must possess the legal capacity to enter into a
binding contract.
• Object: The contract must have a lawful and achievable subject matter.
• Form: Certain contracts may necessitate specific formalities, such as written form,
for validity.
The subject matter of contracts in Vietnam encompasses a wide range, including sale
and purchase agreements, leases, service contracts, and employment contracts. Clear
definition of the subject matter is crucial to avoid potential disputes arising later.
Vietnamese contract law serves as the foundation for structuring interactions between
individuals, businesses, and organizations. Contracts facilitate economic transactions,
employment relationships, and various social arrangements. Core principles governing
these legal relationships include:
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• Contractual Freedom: Parties enjoy a degree of autonomy to negotiate and agree
upon the terms and conditions of their contracts. This freedom allows for flexibility
and caters to the specific needs of each contracting party.
• Equality: Vietnamese contract law upholds the principle of equality before the law.
This principle ensures that all parties involved in a contract, regardless of their size,
origin, or economic power, are treated equally under the law.
• Good Faith and Loyalty: The law mandates that parties act with honesty, fairness,
and transparency throughout their contractual dealings. This fosters trust and
cooperation between contracting parties.
• Self-Responsibility: Each party involved in a contract bears the responsibility to
fulfill their contractual obligations. If a party fails to meet their obligations, the other
party may have legal recourse to seek compensation or enforce the terms of the
contract.
Vietnamese contract law is a dynamic and evolving legal framework that continuously
adapts to the ever-changing economic landscape and Vietnam's growing integration into
the global marketplace. As Vietnam progresses on this path, a deeper understanding of
Vietnamese contract law becomes increasingly important not only for domestic businesses
but also for foreign investors and international trading partners. To gain a more
comprehensive understanding of how Vietnamese contract law is applied in practice,
researchers and practitioners are encouraged to explore case law, established legal
precedents, and practical examples that shed light on the nuances of its application.
Through ongoing development and a focus on clarity and enforceability, Vietnamese
contract law will continue to serve as a cornerstone for fostering a vibrant and
interconnected Vietnamese economy.
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Chapter V. Application of Quasi-Contracts in Vietnam
The Vietnamese legal system presents an interesting case where a civil law foundation
coexists with influences from common law principles in business matters. This creates a
situation where the concept of quasi-contracts, though not explicitly codified, plays a
significant role in ensuring fairness within commercial transactions.
While there has not been a specific law solely dedicated to quasi-contracts, the concept
is established through various provisions within the 2015 Civil Code of Vietnam. These
provisions focus on the principles of fairness and unjust enrichment. Most notable of which
include:
• Article 453: Unjustified Enrichment: This article states that an individual who
obtains a benefit without legal basis at the expense of another must return that
benefit. This principle forms the foundation for quasi-contracts, ensuring parties are
not unjustly enriched.
• Article 454: Management of Another's Property: This article deals with situations
where someone manages another's property without a formal agreement. It outlines
obligations for the manager to act in good faith and preserve the property, reflecting
principles applied in quasi-contractual scenarios.
● Article 485: Payment of Something Not Owed: This article addresses instances
where someone mistakenly pays another party something they don't owe. It allows
the mistaken payer to reclaim the payment, similar to remedies available in
situations involving quasi-contracts.
As an illustration of how quasi-contracts could be effective in cases where Article 453
applies, suppose a customer accidentally overpaid their electricity bill by an amount of 2
million VND due to a bank error. The electricity company received the excess payment
without any valid reason. Based on Article 453 and the concept of quasi-contracts, the
company was obligated to return the extra 2 million VND to the customer.
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While the Civil Code provides the framework, Vietnamese courts play a crucial role in
further developing the application of quasi-contracts. Through their rulings and
interpretations of the Code's provisions, courts can establish a body of case law that
clarifies the application of quasi-contractual principles in specific situations. This ongoing
process helps to ensure a predictable and fair legal environment for business activities in
Vietnam.
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Chapter VI. Challenges and Considerations
Cultural factors exert a profound influence on legal frameworks and attitudes toward
contractual obligations in Vietnam, particularly due to its deep-rooted Confucian heritage.
This tradition emphasizes interpersonal relationships, trust, and moral obligations within a
hierarchical societal structure. Traditional Vietnamese legal principles are accordingly
built around these cultural norms.
Additionally, the hierarchical nature of Vietnamese society, where respect for authority
and elders is valued, can further impact the reception of quasi-contractual principles.
Individuals may be reluctant to assert legal claims based on quasi-contractual obligations
out of fear of disrupting social harmony or damaging relationships. Navigating these
cultural nuances requires a nuanced understanding of Vietnamese societal values and a
willingness to adapt legal principles to local contexts. While quasi-contracts offer a
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mechanism to address unjust enrichment and promote fairness, their acceptance in Vietnam
may necessitate a shift in mindset and a broader recognition of legal principles beyond
explicit contractual arrangements.
6.2. Enforcement
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6.3. Public Policy
Quasi-contracts, by their nature, aim to promote fairness and prevent unjust enrichment.
However, their imposition of obligations ex post facto may conflict with broader policy
objectives that prioritize contractual certainty, stability, and predictability in commercial
transactions. Balancing the interests of corrective justice against individual autonomy and
freedom of contract poses a fundamental challenge when assessing the compatibility of
quasi-contracts with Vietnamese public policy objectives.
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Conclusion
In conclusion, this report has explored the concept of quasi-contracts in common law
legal systems and analyzed its potential applicability within the Vietnamese legal
framework. While the Vietnamese Civil Code prioritizes codified law and doesn't explicitly
recognize quasi-contracts, it does address situations aligned with this concept through
principles like preventing unjust enrichment (Article 451). This offers a foundation for
addressing scenarios where a formal contract is absent.
Further research into quasi-contracts within the Vietnamese context could be highly
beneficial. Key areas of exploration include the potential for interpreting existing Civil
Code provisions (like those on unjustified benefits) to encompass quasi-contractual
situations. Additionally, it would be valuable to assess the potential advantages and
disadvantages of implementing a more explicit framework for quasi-contracts in Vietnam.
Determining if such a framework would enhance clarity and predictability in resolving
disputes, or conversely, create uncertainty or undermine existing contractual law, is crucial.
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