RIGHTS AND OBLIGATIONS OF LESSORS, LESSEES IN THE TRANSACTION OF LEASING GOODS

Lease of goods means commercial activities whereby one party transfers the right to possess and use goods (referred to as lessor) to another party (referred to as lessee) for a certain duration to enjoy rentals.

1. Rights and obligations of lessors in the transaction of leasing goods

According to the provisions of Article 270 of the Commercial Law 2005, unless otherwise agreed, lessors in the transaction of leasing goods shall have the following rights and obligations:

(i) To deliver leased goods to lessees as agreed upon in lease contracts;

(ii) To ensure that the right of lessees to possess and use leased goods is not disputed by a concerned third party in the lease duration;

(iii) To ensure that leased goods are suitable to the use purposes of lessees as agreed upon by the parties;

(iv) To maintain and repair leased goods within a reasonable duration. Where the maintenance and repair of leased goods cause harms to the use of such goods by lessees, lessors shall have to reduce rent rates or prolong lease duration corresponding to the time of maintenance and repair;

(v) To receive rentals according to agreements or provisions of law; and

(vi) To take back leased goods upon the expiration of the lease duration.

2. Rights and obligations of lessees in the transaction of leasing goods

According to the provisions of Article 271 of the Commercial Law 2005, unless otherwise agreed, lessees in the transaction of leasing goods shall have the following rights and obligations:

(i) To possess and use leased goods according to lease contracts and the provisions of law. Where there is no specific agreement on the manner in which leased goods should be used, such leased goods shall be used in a manner appropriate to their nature;

(ii) To maintain and preserve leased goods in the lease duration and return such goods to lessors upon the expiration of the lease duration;

(iii) To request lessors to perform the maintenance and repair of goods. If lessors fail to perform such obligation within a reasonable period of time, lessees may perform the maintenance and repair of leased goods and lessors shall bear all reasonable expenses for such maintenance and repair;

(iv) To pay rentals as agreed or according to the provisions of law;

(v) Not to sell or sub-lease the leased goods.

ADK & Co Vietnam Lawyers Law Firm