“Consumer” is defined to mean “a person purchasing or using goods and services with the aim of consumption for daily needs of individuals, families or organizations”. The term “person” here could mean either an individual or an organization. Therefore an organization under Vietnamese law may also be treated as a consumer. The only distinction is that a consumer uses the goods for consumption purpose. However, for a business entity which purchases various inputs during its operation in order to provide goods or services to its clients, the inputs could be treated either as “consumption purpose” or as “business purpose”.
Generally, if a contract between two business entities are regarded as a consumer contract then the following types of provisions will be deemed invalid:
- provisions which excluded statutory liability of trader;
- provision which restrict or exclude the right of consumers to lodge a complaint or to institute legal proceedings;
- provisions which allow the trader to unilaterally change contractual conditions previously agreed with the consumer; or contract which fail to specifically set out the rules and regulations on sale of goods or supply of services applicable to consumers when they purchase and/or use such goods or services;
- provisions which allow the trader to unilaterally determine that a consumer has failed to discharge of goods or supply of services;
- provisions which allow the trader to fix or change the price at the time of delivery of goods or supply of services;
- provisions which allow the trader to give its own interpretation of a contract containing ambiguous contractual clauses;
- provisions which is mandatory for the consumer to discharge its obligations before the trader has fully discharged its own obligations; and
- provisions which allows the trader to assign rights and obligations to a third party without the consent of the customer.
Various provisions prohibited in a consumer contract are common in a business contract. Therefore, it is important that a contract between two business entities to determine whether such contract is a business contract or a consumer contract.