Transcript Lao Contract and Tort Law (2008)

“Celebrating the 35th Anniversary of CISG”,
23-24 April 2015, Singapore
Lao Contract and Tort Law (2008)
Presented by: Santisouk Phounesavath
Director of Multilateral Trade Division
Foreign Trade Policy Department
Ministry of Industry and Commerce, Lao PDR
Outline
1.
2.
3.
4.
Overview of Contract Law: Objectives & Best Practices
Commercial Contract
Commercial Contract, Foreign Parties and Arbitration
Lao Contract and Tort Law (2008)
1. Overview of Contract Law: Objectives & Best Practices
Contract Formation:
• Definition, withdrawal, revocation, rejection of an offer, mode and time of
acceptance, contract with terms deliberately left open, etc.
Contract validity:
• Conditions for the validity of contracts
• What may hamper or annul them (definition of mistake, error in expression or transmission,
remedies for non-performance, fraud, threat, gross disparity, etc.
Contract interpretation:
• Conditions under which contracts may be interpreted, inter alia through assessment of the
intention of the parties
• Statements and other conduct, linguistic discrepancies, or omitted terms.
1. Overview of Contract Law: Objectives & Best Practices
Contract Content:
• Content of a contract can also be delineated by contract law
• E.g express and implied obligations, duty to achieve a specific result, duty of best
efforts, etc.
Contract Performance Obligations:
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Conditions for performance of the obligations set forth (time, place, payments, currency used,
imputation of non-monetary obligations, hardship.
Conditions that allow non-performance .e.g. interference of another party, or to grant an
additional period for performing the obligations of the contract.
Contract Termination:
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Conditions for terminating a contract,
Set principles for the termination and compensation of damages caused by the contractors,
modalities for resolving disputes.
2. Commercial Contract
• A majority of Contracts laws are restricted to “commercial” contracts.
This is in no way intended to take over the distinction traditionally
made in some legal systems between “civil” and “commercial” parties
and transactions, and to make the law dependent of whether the
parties have the formal status of “merchants”, or the transaction is
commercial in nature.
• The idea is conversely to exclude from the scope of such laws the socalled “consumer transactions”, which are within the various legal
systems being increasingly subject to special rules, mostly of a
mandatory character, aimed at protecting the consumer, a party who
enters into the “transaction” otherwise than in the course of its trade
or profession.
3. Commercial Contract, Foreign Parties and Arbitration
• When one or more parties to a “commercial contract” is a foreigner, or that the
object of the contract is not only domestic, the parties should be allowed by the
Contract law to freely choose and designate the national law that shall govern
their contract, as far as this does not violate any public policy provisions (that
supersede contractual clauses).
• If the parties agree to submit disputes arising from the implementation of their
contract to arbitration, a contract may even stipulate the arbitrators are not
necessarily bound by any particular domestic law, when they are authorized by
the parties to act as amiable compositeurs or ex aequo et bono.
• But even in the absence of such an authorization parties are generally permitted
to choose “rules of law” other than national laws on which the arbitrators are to
base their decisions: see in particular the UNCITRAL Model Law on International
Commercial Arbitration; see also the Convention on the Settlement of Investment
Disputes between States and Nationals of other States [ICSID Convention].
4. Lao Contract and Tort Law (2008)
Despite some good provisions, the Lao Contracts and Tort Law (2008) does not
administer most of the matter identified above. The following are some issues to
consider for the Lao Contract Law of 2008:
• Ambiguous Scope - The Lao Contract Law of 2008 merges two previous laws (on
contracts and tort), and is ambiguous as to its exact scope, especially as it
combines contractual obligations, civil legal liability due to wrongful acts or
infringement of a right provided under contract [a definition of tort], and liability
for animals or objects either the property or under the custody of a person.
• Limited Areas for Contract - The 2008 Law also sets a limited list of areas that can
lead to an agreement in the form of a contract, whereas there is usually no such
list. It even more gives a narrow definition for any of these contracts, which may
hinder the validity of a contract signed in the Lao PDR.
4. Lao Contract and Tort Law (2008)
• Consumer Contractual Rights - The rights of consumers are not
specifically protected, since this Law addresses both commercial and
civil contracts, while Article 21 in the “Consumer Protection law” adds
more uncertainty when it stipulates “suppliers and consumers must
conclude contracts in accordance with the law on contractual and
non-contractual obligations”.
• Definitional Issues - The relevance of some of these provisions is
questionable, such as the definition of “unilateral contracts”, and
defining when commercial contracts are limited to “business
operation”.
Next Step
• The Ministry of Justice is scheduled to draft the Contract and
Commercial chapters in the Civil Code later this year, which could help
to improve coverage of contract law in Lao PDR, based on best
international practice.
• Contract principles could be set forth in the code, and a new and
separate law on contracts that incorporate international best practice
should be considered.