According to an overview of key points to consider when drafting contracts with consumers, standard contracts, and general transaction conditions as stipulated by the Consumer Protection Law (CPL) of 2023 and its detailed regulations, the content below analyzes specific requirements regarding clarity, comprehensibility, content compliance, and instances of prohibited clauses under the consumer protection law when drafting standard contracts and general transaction conditions in transactions between businesses and consumers.
1. Clarity and Comprehensibility of the Content of Consumer Contracts, Standard Contracts, and General Transaction Conditions
The clarity and comprehensibility of the content of consumer contracts, standard contracts (SC), and general transaction conditions (GTC) are mandatory requirements stipulated in Clause 5, Article 6 of Decree No. 55/2024/ND-CP dated May 16, 2024, detailing certain provisions of the 2023 CPL (Decree No. 55/2024/ND-CP). The nature of SCs and GTCs in consumer transactions is (i) unilateral drafting, and (ii) imposition—meaning consumers must accept the entire content of SCs and GTCs provided by the business if they agree to the transaction. Therefore, clarity, transparency, and comprehensibility for consumers are mandatory criteria to ensure that consumers fully understand the content of SCs and GTCs before deciding to participate in the transaction.
To meet the requirements of clarity and comprehensibility, it is necessary to avoid using overly technical terms, vague, qualitative, or overly broad content that consumers might not understand, potentially affecting their rights once they accept SCs and GTCs containing such unclear clauses. The following examples illustrate clauses that do not meet the clarity and comprehensibility requirements under the regulations:
Example 1: Using phrases like “other arising costs,” “reasonable arising costs,” or “other documents as required by the Seller.”
In the above example, when the contract subject is clearly defined, quantified by specific parameters regarding quantity, quality, supply limits, etc., the seller can fully determine or foresee all costs to fulfill their obligations under the contract. Vague regulations like these grant businesses the power to expand the consumer’s obligations.
Example 2: Using technical terms that are difficult to understand; abbreviations or foreign language terms without clear explanations; content requiring consumers to comply with the business's “guidelines/regulations/policies” without specifying or referencing those guidelines.
In this case, if businesses still want to stipulate these terms, they need to clarify them by adding explanations for technical terms, abbreviations, or foreign language terms to ensure consumers can read and understand the entire content of the contract/GTC; adding specific content or referencing sources (containing) these documents so that consumers can actively access and research them, for example, “the company's regulations are listed/publicly available at the transaction counter/website of the company at the address….”
Example 3: “Health check fees: based on actual arising costs. Customers only bear these fees in certain special cases.”
In this example, the customer's responsibility is not clearly defined, and specific circumstances under which the customer must bear health check fees are not identified. This clause needs to be redrafted and revised to clarify specific cases where the customer is responsible for paying this fee.
2. Compliance with Prohibited Clauses in Consumer Contracts, Standard Contracts, and General Transaction Conditions
Compared to the 2010 CPL, the 2023 CPL revises the provisions of invalid clauses to “prohibited clauses” (Article 25 of the 2023 CPL) and stipulates that the act of “stipulating prohibited clauses in consumer contracts, standard contracts, general transaction conditions” is one of the prohibited acts in consumer protection (Article 10 of the 2023 CPL). This amendment makes Article 25 of the 2023 CPL a basis for identifying civil transactions void due to violations of legal prohibitions under Article 123 of the 2015 Civil Code.
Additionally, the 2023 CPL supplements and improves the prohibited clauses (compared to Article 16 of the 2010 CPL) to ensure more practical application, specifically: Article 25 of the 2023 CPL has (i) revised some cases stipulated in Clause 1, Article 16 of the 2010 CPL and (ii) added new cases to increase flexibility, ensuring suitability with the specific circumstances and business sectors of each market type. Specifically, Article 25 of the 2023 CPL stipulates:
“In consumer contracts, standard contracts, general transaction conditions, businesses are prohibited from stipulating the following clauses:
1. Limiting or excluding the responsibilities prescribed by law of the business to the consumer, except where relevant laws allow for such limitation or exclusion;
2. Limiting or excluding the consumer’s right to complain or sue;
3. Allowing the business to unilaterally change the agreed terms of the contract with the consumer;
4. Allowing the business to unilaterally change the general transaction conditions without granting the consumer the right to terminate the contract;
5. Allowing the business to unilaterally determine that the consumer has not fulfilled one or more obligations;
6. Allowing the business to set or change the price at the time of delivering products, goods, or services, except as otherwise stipulated by law;
7. Allowing the business to change the price during the provision of continuous services without granting the consumer the right to terminate the contract;
8. Allowing the business to interpret the contract or general transaction conditions in cases where contract or condition clauses are understood differently;
9. Excluding the business's responsibility when selling products, goods, or providing services through third parties;
10. Compelling the consumer to comply with obligations when the business fails to fulfill its own obligations;
11. Allowing the business to transfer obligations to third parties without the consumer’s consent, except as otherwise stipulated by law;
12. Stipulating penalties unfavorable to the consumer for contract breaches or terminations;
13. Allowing the business to extend the agreed contract with the consumer without prior notice or without a mechanism for the consumer to choose to extend or terminate the contract;
14. Stipulating that the consumer must agree to the business collecting, storing, or using their information as a condition for entering into a contract or general transaction condition, except as otherwise stipulated by law;
15. Stipulating terms contrary to the principle of good faith as prescribed by civil law, leading to an imbalance of rights and obligations to the detriment of the consumer.”
This content also falls under the scope of review as per Article 11 of Decree No. 55/2024/ND-CP. Specifically, Clause 2, Article 11 of Decree No. 55/2024/ND-CP stipulates the authority to review SCs and GTCs regarding “prohibited clauses as per Article 25 of the Consumer Protection Law.”
To avoid drafting or entering into SCs and GTCs containing prohibited clauses, businesses and consumers need to thoroughly study the specific cases stipulated in Article 25 of the CPL. They can refer to some examples to recognize these types of clauses:
Example 1: “By signing this contract, the customer commits not to file any complaints or lawsuits related to the contract's execution, including any amendments or supplements (if any) made by the Company regarding the contract's execution.”
This provision limits or excludes the customer's right to complain or sue and falls under prohibited clauses as per Article 25 of the CPL 2023. The amendment direction is to remove this clause and redraft the content to comply with the regulations.
Example 2: “In case of any disagreement between the Buyer and Seller regarding any term of the Contract, the Seller's interpretation will be applied.”
This provision allows the Seller to interpret the contract if terms are understood differently, falling under prohibited clauses as per Article 25 of the CPL 2023. Therefore, it is necessary to remove this content and revise it so that any interpretation of contract terms will be based on principles favorable to the consumer (in accordance with Article 24 of the CPL 2023) and not unilaterally interpreted by the Seller (in accordance with Article 25 of the CPL 2023).
Example 3: “The Company is not responsible in any form to the Passenger for instructions or notifications provided by the Company's staff or designated agents regarding necessary documents or compliance with laws, regulations, orders, requirements, and guidelines.”
This provision allows the Company to exclude its responsibility when its staff or agents provide incorrect information to the Passenger, falling under prohibited clauses. The amendment direction is to remove and redraft this clause to ensure compliance with the law, specifically that the Company must still bear responsibility related to providing information, instructions, and notifications to the Passenger.
3. Compliance with Consumer Protection Law
Besides requirements on language, form, clarity, comprehensibility, and compliance regarding content and prohibited clauses, consumer contracts, SCs, and GTCs must also comply with consumer protection laws. Some common content in SCs and GTCs that businesses need to ensure compliance with includes: the collection, use, and protection of consumer information (stipulated from Articles 15 to 20 of the CPL 2023); the obligation to keep and provide copies of contracts to consumers (Article 26 of the CPL 2023); the obligation to warranty products, goods, components, and accessories (Article 30 of the CPL 2023); handling and resolving consumer complaints and disputes (Article 31; Chapter V of the CPL 2023); etc.
Example: “By signing this contract, the customer agrees to allow the Company to collect, use, or transfer any of the customer’s information to any third party to provide services to the customer, for marketing, advertising, customer care, internal evaluation purposes of the Company, or any other business purposes without notifying the customer.”
This provision falls into prohibited clauses under Clause 14, Article 25 of the CPL and fails to comply with the legal provisions on the collection and use of consumer information. Therefore, it is necessary to redraft this clause to align with the CPL and detailed guiding regulations.
4. Compliance with Other Relevant Legal Provisions
Alongside adherence to consumer protection laws, Clause 4, Article 23 of the 2023 Consumer Protection Law (CPL) clearly stipulates that "in addition to the basic contents specified in Clause 3 of this Article, standard contracts must comply with other relevant laws" to ensure the completeness and consistency of the legal system.
In practice, standard contracts (SCs) and general transaction conditions (GTCs) are used by businesses in various fields to engage and apply to consumers. Therefore, each SC and GTC in transactions between businesses and consumers is not only governed by consumer protection laws but also simultaneously regulated by other relevant laws such as the 2015 Civil Code (CC); and specific regulations corresponding to the particular field of products, goods, or services addressed by the contract. For instance, contracts for the provision and use of telecommunications services are governed by telecommunications laws; contracts for the provision and use of bank cards and accounts are regulated by banking laws; apartment purchase contracts are governed by housing laws, real estate business laws, and construction laws; life insurance contracts are governed by insurance business laws; and electronic contracts are governed by e-commerce laws, etc.
Therefore, proactively understanding and thoroughly researching the relevant legal provisions related to the scope, subject matter, purpose, and content of the intended contracts and agreements are essential to ensure legality, comprehensiveness, and effectiveness in the transaction process and contract implementation between parties.
5. Additional Considerations in Drafting and Entering into Contracts
(i) For Consumers:
- Request businesses to provide the complete set of intended contracts and related documents, policies (of the business), and necessary information to ensure the right to access and thoroughly review the information before deciding to engage in the transaction.
- Proactively seek or request information from businesses regarding: (i) the fulfillment of the obligation to register SCs and GTCs (if the SCs and GTCs fall within the scope requiring registration by law); (ii) compliance with business conditions (if required by specific industry laws) before entering into SCs and GTCs.
- Take the time to carefully study all terms and contents of the contract set; if any terms or information in the contract are unclear, incomplete, or not fully understood, request the business to explain, clarify, and amend or supplement them before deciding to engage in the transaction.
(ii) For Businesses:
- Fulfill the obligation to register SCs and GTCs as stipulated by the 2023 CPL (if the SCs and GTCs fall within the scope requiring registration by law); meet and complete business conditions (if required by specific industry laws) before entering into SCs and GTCs.
- Proactively provide complete information about the transaction, the complete set of intended contracts, and the business's policies and regulations—which are common transaction conditions—for consumers to review and consider before deciding to engage in the transaction.
- Proactively research and fully update relevant legal provisions during the drafting process of SCs and GTCs; ensure the legality and fairness of the intended contract, and protect consumer rights as stipulated by law.
