Analysis of Regulations on Standard Form Contracts in Real Estate Business

Rather than merely regulating the contents of standard form contracts, the 2023 Law on Real Estate Business and Decree No. 96/2024/ND-CP have established a mechanism for regulating the use of standard form contracts in real estate business. This article analyzes the two most notable new points, namely the principle that enterprises may not arbitrarily amend standard form contracts and the legal liability arising from the improper use of standard form contracts. These regulations have a direct impact on the legal compliance management of real estate enterprises.

1. Principle of Prohibition against Arbitrary Amendment of Standard Form Contracts

A significant new feature of Decree No. 96/2024/ND-CP is that it shifts standard form contracts from merely serving as guidance to becoming mandatory templates for contents standardized by the State. Enterprises may only add information where the standard form contract provides blank fields or where the law permits the parties to reach an agreement. Otherwise, enterprises may not arbitrarily amend, remove, or add provisions that alter the substance of the standard form contract. This regulation aims to prevent enterprises from inserting terms that are unfavorable to customers under the guise of “agreement”. In essence, this represents a balance between the principle of freedom of contract under the Civil Code and the requirement to protect the weaker party in real estate transactions.

From a practical perspective, enterprises should establish a contract version control process to ensure that their business departments use only the duly published standard form. Any amendments, if any, must be reviewed from a compliance perspective in order to avoid the risk of disputes or administrative sanctions.

2. Liability for Improper Use of Standard Form Contracts

The regulations on enterprise liability represent a further step in completing the enforcement mechanism. If an enterprise uses a contract that does not conform to the standard form, does not conform to the contract it has published, or violates the principles governing the use of standard form contracts, it may simultaneously face administrative and civil liability. This regulation encourages enterprises to regard contract management as a mandatory compliance requirement rather than merely an operational matter.

In dispute resolution, the use of a contract that deviates from the standard form or from the contract previously published may also serve as a basis for assessing the legality of the relevant provisions, determining the enterprise’s fault, and considering its liability for damages. Therefore, enterprises should regularly review their contracts, provide training to relevant personnel, and maintain complete records of the published standard form contracts.

In addition to supplementing and improving the system of standard form contracts applicable to real estate business activities, a notable feature of the current legal framework is the establishment of a strict mechanism governing the process of using standard form contracts. Accordingly, the focus of the lawmaker is not limited to issuing standard form contracts, but also extends to establishing mandatory principles concerning the publication, use, amendment, and legal liability of enterprises when applying such standard form contracts.

This approach contributes to enhancing transparency in the market, limiting unfair terms, and reducing disputes. For enterprises, this constitutes a requirement to establish an internal contract control system from the stages of drafting, approval, and publication through to execution and retention.

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Legal Expert: Vu Ha Van

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