In the process of negotiating and performing contracts, a disclaimer of liability is an important clause to ensure fairness in commercial relationships. So, what exactly is a disclaimer of liability, and how is it regulated under current law? To clarify this issue, the following article by KMC will explain the concept and provide key considerations related to the disclaimer of liability in the event of a breach of contract, helping you gain a better understanding and apply it effectively in practice.
What is a Disclaimer of Liability?
A disclaimer of liability refers to the situation where an individual or organization is not held legally responsible for breaching obligations or for any adverse consequences arising from such breach. This typically occurs when the parties involved reach an agreement or when the law explicitly provides for it.
What is a Disclaimer of Liability in a Contract?
Miễn trừ trách nhiệm hợp đồng là gì?
In cases of breach of contract, a disclaimer of liability is typically applied when the breaching party is not at fault or when the breach occurs due to factors beyond the party’s control, such as natural disasters, floods, epidemics, or other force majeure events.
According to the law:
- In civil contracts: Disclaimer of liability clauses must comply with the 2015 Civil Code. These are non-commercial contracts, such as donation agreements, loan agreements, or financial assistance agreements.
- In commercial contracts: A disclaimer of liability must comply with the 2005 Commercial Law and applies to profit-driven contracts, such as sales contracts or service contracts.
Conditions for Disclaimer of Liability
To be exempted from liability for breach of contract, two basic conditions must be met:
- A breach of contract can only be considered for a disclaimer of liability if it falls under one of the following circumstances:
- The disclaimer of liability event has been previously agreed upon and notified by the parties.
- A force majeure event occurs, beyond the control of the parties involved.
- The fault lies entirely with the other party, causing the breach by the breaching party.
- The breach arises from the implementation of a decision made by a competent state authority, and such a decision could not have been foreseen at the time the contract was signed.
- The burden of proof for demonstrating that the breach falls under the disclaimer of liability lies with the breaching party. If no reasonable and legally valid evidence is provided, the breaching party cannot request the application of a disclaimer of liability for their actions.
Để được miễn trừ trách nhiệm cần đáp ứng một số điều kiện
Disclaimer of Liability in Civil Contracts
Disclaimer of Liability by Agreement Between the Parties
In civil contracts, the parties may agree to a disclaimer of liability either before or after a breach occurs. This entirely depends on the goodwill and consent of the entitled party. Such an agreement is usually documented in writing, preferably included in the main contract or an annex to prevent future disputes.
Example: If Party A purchases furniture from Party B and both parties agree that Party B will not be liable for late delivery due to their personal relationship, Party B will not be required to compensate for any delays, even if the delivery is late.
Disclaimer of Liability Due to Force Majeure
Under Article 351 of the 2015 Civil Code, the breaching party may be exempt from liability if a force majeure event occurs. These are unforeseen, unavoidable events that cannot be predicted or remedied despite all reasonable efforts. In such cases, the breaching party will not be held liable for penalties or damages unless otherwise agreed by the parties.
However, to determine whether an event qualifies as force majeure, specific legal conditions must be met according to Article 156 of the 2015 Civil Code.
Disclaimer of Liability Due to Fault of the Entitled Party
According to Clause 3, Article 351 of the 2015 Civil Code, if the breaching party fails to perform their obligations due to the fault of the entitled party, they will not be held civilly liable. If the fault is partially with the entitled party, the breaching party will remain liable to the extent of their breach.
Miễn trừ trách nhiệm đối với hợp đồng dân sự
Disclaimer of Liability in Commercial Contracts
Cases of Disclaimer of Liability in Commercial Contracts
In commercial contracts, the circumstances under which a disclaimer of liability applies are similar to those in civil contracts, but also include cases based on decisions made by competent state authorities. According to Article 294 of the 2005 Commercial Law, a breach by a party due to compliance with a decision from a state regulatory authority is considered a force majeure event, leading to a disclaimer of liability.
Such decisions must impose a specific obligation on the breaching party, requiring them to perform or refrain from performing a particular act. These decisions can be administrative (e.g., penalties for violations) or judicial (such as judgments or rulings). A key condition is that the parties could not have anticipated the decision at the time the contract was formed. If the parties were aware of the decision and still proceeded with the contract, the disclaimer of liability will not apply.
Example: Party A enters into a contract with Party B to deliver 1,000 chickens in July 2024. However, before the delivery date, an administrative decision prohibits the transportation of livestock due to an outbreak, preventing Party B from fulfilling the contract. In this case, a disclaimer of liability may apply.
Procedure for Applying a Disclaimer of Liability
To be recognized for a disclaimer of liability, the breaching party must:
- Clearly demonstrate the grounds for the disclaimer of liability.
- Immediately notify the other party in writing about the situation and the related consequences.
Failure to notify or delayed notification may result in the breaching party being liable for damages.
miễn trừ trách nhiệm trong thương mại
The article above provides information to help you better understand the concept of disclaimer of liability in commercial contracts. If you have any questions, suggestions, or need detailed legal consultation, we are always ready to assist and listen to you!
Contact KMC Consulting Company Limited today!
- Website: https://kmc.vn/
- Hotline: +84 81 489 4789 or +84 91 988 9331
- Email: info@kmc.vn
