Ground For The Liability For Compensation For Non-Contractual Damage

Non-contractual damage is a legal term recognized in civil law. However, civil law has not defined this term so far. Based on its name, compensation for non-contractual damage is a civil liability not being expressed in a contract or agreement between the parties.

Clause 1 Article 584 on the ground for the liability for compensation for non-contractual damage in the Civil Code 2015 describes that: “A person harming the life, health, honour, dignity, reputation, property, or other legal rights or interests of another person, thereby causing loss and damage, must compensate, unless otherwise agreements or provided by other relevant laws.”

With the above legal basis, the ground for the liability for compensation for non-contractual damage could be based on a number of practical factors or in accordance with relevant laws.

1. Based on practical factors:

The practical factors that create the ground for the liability for compensation for non-contractual damage include damages, illegal conduct, and the causal relationship between damage and illegal conduct.

• The actual damage:

Based on the above legal basis, the ground for the liability for compensation for non-contractual damage must include one of the following damages: damage to life, health, honour, dignity, reputation, or other legitimate right and obligation of an entity.

Damage caused by infringing life, health, honour, dignity, reputation, and property is specified in Articles 589, 590, 591, and 592 of the Civil Code 2015.

• Illegal conduct:

Illegal conduct as the ground for the liability for compensation for non-contractual damage is expressed through action or inaction. Specifically, (i) performing acts prohibited by the law, (ii) failure in performing the obligations required by the law, or (iii) performing the powers beyond the limit allowed by the law are considered illegal conduct.

• The causal relationship between damage and illegal conduct:

Accordingly, the damage must be the inevitable result of the illegal conduct and vice versa.

Be of note, in comparison to the Civil Code 2005, the fault factor has been omitted when determining whether or not the ground for the liability for compensation for non-contractual damage. This is of great significance when the authorities settle the claim for damages. Accordingly, the combination of the above three factors without mentioning the fault factor is enough for the ground for the liability for compensation for non-contractual damage. The fault factor is only used as a basis in considering whether the person causing the damage is exempt from liability for compensation for non-contractual damage[1] or determining the value of the damage that needs to be compensated[2].

2. Based on the legal provisions.

An entity that does not have a compensation agreement and does not commit actual damage can still be liable for damages. Some cases of statutory compensation are as follows:

• Compensation for property damage:

Owners and possessors of property must be responsible for compensating for damage in accordance with the law when their property causes damage[3]. Damaged property can be a source of extreme danger, animals, trees, buildings, other structures[4].

• Compensation for damage caused by minors or incapacitated persons[5]:

Parents, guardians, and schools are obliged to compensate minors for damage in accordance with law if the minors cause damage.

The guardian, hospital, or other legal entity directly managing the incapacitated person must compensate for damage caused by the incapacitated person in accordance with the law.

• Other cases

The civil code also stipulates some specific cases where compensation liability arises such as:

• The legal entity compensates for damage caused by its people when performing the tasks assigned by the legal person;
• The State compensates for damage caused by illegal acts of official duty performers;
• Individuals, legal entities to compensate for damage caused by employees, apprentices while performing assigned jobs, etc.

In addition to the cases recommended by the civil law, readers should note that the ground for the liability for compensation for non-contractual damage is regulated by the relevant specialized laws from time to time.

The above is an overview of the ground for the liability for compensation for non-contractual damage. If you have trouble with legal issues regarding the liability for compensation for non-contractual damage, please contact us: Phuoc & Partners is a professional consulting firm established in Vietnam which currently has nearly 100 members working in three offices in Ho Chi Minh City, Hanoi and Danang. Phuoc & Partners. It is rated as one of the leading consulting firms specializing in business law in Vietnam that has leading practice areas in the legal market such as Labour and Employment, Taxation, Merger and acquisition, Litigation. We are confident in providing customers with optimal and effective service.

[1] Article 584.2 of the Civil Code 2015.

[2] Articles 585.2, 585.4, and 587 of the Civil Code 2015.

[3] Article 584.3 of the Civil Code 2015.

[4] Articles 601, 603, 604, and 605 of the Civil Code 2015.

[5] Articles 586.2, 586.3, and 599 of the Civil Code 2015