LLM Nguyen Trung Nam - EPLegal

Increasingly, businesspeople has got accustomed to international brands such as Alibaba, E-Bay, Amazon or local ones like Chodientu.vn, Thegioididong.com, Sieuthinhanh.com, etc.

In the context of Vietnamese enterprises expressing an optimistic prospective of online export, it is essential that the legal issues be foreseen and solutions be found to enhance the likeliness to succeed.

Who are involving in online transactions?

In a broad sense, e-commerce includes all commercial activities employing electronic data interchange (including symbols, sounds and pictures) in the form of offer, negotiation or trade of services. In addition to the well-known types of e-commerce between enterprises (B2B) and between enterprises and individuals (B2C), there are many other remarkable types between enterprises and public entities (B2G) and vice versa (G2B), or even between customers, etc.

According to the mentioned definition and practical online export activities of Vietnam nowadays, it is contended that the penetration of local firms into this field has been limited to E-marketing only. In other words, building business relationships online would then be followed by traditional written contracts execution and implementation. Therefore, domestic firms has not encountered the core obstacles and risks arising from international e-commerce.

E-commerce – Resonance of legal issues of international trade

There have been many efforts in codification of existing laws and regulations in terms of electronic commerce. However, the striking differences between countries’ laws still create many legal issues diminishing e-commerce development.

Firstly, it is the requirement for the “written form” of contracts in some countries regarding international transactions, while electronic data may not be reckoned as written document.

Moreover, a manual signature is normally required. Although Vietnam’s e-commerce law and many other nations permit electronic means, the regulations regarding the recognition of the e-signature are different from countries to countries. The requirement for “originality”, “tangibility” and “integrity” of the document also present a harsh challenge in comparison with traditional commerce.

Secondly, when business parties conduct contracts online, the time and place of formation of such contracts are very difficult to determine. Therefore, when and where to confirm the passing of property and transfer of risk for loss or damage, together with applicable law is also a problem.

Thirdly, the incorporation of General Terms and Conditions (GTCs) in the contracts, which has long been a controversial issue, is now intensified by e-contracts. Most of the companies participating in e-commerce often include GTCs in a website frame or a hyper-link where customers can only click “I accept” to continue without amending. This sparks a disagreement over customers having no opportunity to negotiate, bargain or amend these GTCs.

Last but not least, the implementation of trademark, copyright and patent protection in an electronic environment also constitutes serious challenges for the development of electronic commerce as there are many issues relating to domain dispute, confidential information protection, online payment, applicable law, etc.

Some suggestions to avoid legal risks in online export

To minimize the legal risks when performing online export, private sectors should notice some following recommendations:

Limiting legal surprises and legal conflict: It is necessary to study Vietnamese laws and regulations as well as international conventions relating to e-commerce. Furthermore, local firms should optimise their freedom of contract rights to the fullest in the process of contract formation to ensure they have adequate and detailed terms and conditions, especially applicable law and dispute resolution methods.

Handling data input errors: Data input error is a common mistake occurred during the process of input data on websites, which have the function of order online. To prevent such mistake, companies should set up a monitoring system which checking the quotation on websites frequently. In case of encountering mistakes, companies are to warn and announce to all customers so as to terminate the mistaken contracts (according to Decree 57/2006 – E-commerce)

Allocating risks: Together with analysing the above legal issues of e-commerce, the writer advocates that enterprises define their own acceptable risk level, from which online export is only be performed in terms of small to medium scale of value (i.e. below USD. 10,000). Moreover, important documents should be kept under the written form or backed up for later use.

Conclusion

E-commerce in general and online export in particular is an effective tool in doing business in terms of affordable and wide spread marketing capability, saving transaction costs, etc. It has constantly brought lots of benefits to Vietnamese private sector, especially the SMEs which have limited marketing financing capacity. However, it contains various complicated legal issues which could diminish the way to success of many business entities. Therefore, local enterprises should be aware and proactive to tackle with such issues so as to make consistent move upward in the context of global integration.