Liability of compensation for damage could be divided into two types, including liability of compensation for contractual damage and liability of compensation for non-contractual damage, as follows:
Liability of compensation for damage under a contract
Liability of compensation for damage under a contract could be understood as civil liability arising from breach of one or more contractual obligations.
According to Article 419 of the Civil Code 2015, compensated damages caused by breach of contractual obligations are determined in accordance with clause 2 of this Article, Article 13 and Article 360 thereof. In particular, in case of damage caused by a breach of an obligation, the obligor must compensate for the entire damage, unless otherwise agreed or otherwise provided by law.
In addition, according to the provisions of Article 419.2 of the Civil Code 2015, an obligee may demand compensation for loss and damage in respect of benefits from the contract which the obligee would have enjoyed. The obligee may also require the obligor to pay costs arising from failure to fulfil the contractual obligation without overlapping with the compensation for damage regarding contractual benefits.
With respect to commercial contracts, in compliance with Article 302 of Law on Commerce 2005, the value of compensation includes the value of direct and facto damage that the aggrieved party have to suffer caused by the breaching party and the direct benefit the aggrieved party would have received in case of without any breaches.
Liability of compensation for damage out contract
Article 584.1 of the Civil Code 2015 stipulates as follows: “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 provided by this Code and other relevant laws”. This regulation could be understood that liability of compensation for non-contractual damage arises when meeting the following requirements: (1) the act of causing damage is treated as unlawful act; (2) there is the actual damage happened and (3) there is a causality between such unlawful act and its actual damage happened.
On a case-by-case basis, damage caused by harm to property, health, life, honour, dignity, reputation, legal rights and interest of another person will be determined in different approaches stated in the Civil Code 2015. The relevant parties could agree with each other on the level of compensation, the form of compensation, the method of compensation, unless otherwise provided by law.
Above is an overview of liability of compensation for damage. If you have trouble with finding a law firm providing legal assistance regarding the liability of compensation for damage, please do not hesitate to contact us: Phuoc & Partners is a professional consulting firm established in Vietnam and currently has nearly 100 members working in three offices in Ho Chi Minh City, Hanoi and Danang. Phuoc & Partners is also 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 civil litigation service.