Last week we discussed the application of the Commercial Law. This week, I want to dig further into the Commercial Law and discuss the question of place of delivery of goods.
To begin, goods are delivered according to the contract between the seller and the buyer. If there is no specific clause in the contract governing delivery, then delivery is conducted according to the law. This is stated in the Commercial Law when it says that “A seller must deliver goods to the place as agreed.”
If there is no agreement,, then the clauses of the Commercial Law take over.
If the goods are attached to land, then they are to be delivered at the location of the land. “Where the contract contains a clause on transportation of the goods, the seller must deliver the goods to the initial carrier.”
I’m going to jump a bit here. Transportation is not discussed much in the Commercial Law, though it is understood that treaties to which Vietnam is a party, and which affect the matters concerned in the Commercial Law, then the treaty applies. That is important to know because there are some treaties that affect the shipping of goods across international borders.
One of those treaties is the UN Convention on Contracts for the International Sale of Goods, or CISG. There are many clauses in CISG that discuss the obligations of delivery and acceptance. I won’t go into them now, but be aware that they do exist and that they are important, especially if the parties to the contract selected CISG as a governing law.
There is another set of terms that is also important to understand, and these are the INCOTERMS. While not a treaty, the INCOTERMS are a recognized standardization of a bunch of different shipping terms. They cover time and place of delivery, method of transportation, who pays for the transportation, the insurance, who obtains the insurance, and a few other important aspects of international delivery. Again, I won’t go into further detail on them here, but know they exist and that they are important to understand if you are dealing with international shipping into or out of Vietnam.
Returning to the Commercial Law, it is important to understand that the parties knowledge is vital to the determination of location of delivery. If there is no clause in the contract on transportation, and the parties knew where the goods were stored, loaded, manufactured or produced, then the seller must deliver the goods at that location.
Otherwise, if there is a business location of the seller, or if not, then a residence that is known to the parties at the time of entering into the contract for the purchase and sale of goods, then that business location or residence is the place of delivery.
There are other elements of delivery, some of which I will go into at a later date, but for now, this is the main gist of the Commercial Law when it comes to Place of Delivery.