According to Mrs. N. (residing in Khanh Hoa province), a 1,000 sqm plot of land in Phu Quoc Special Economic Zone, An Giang province (formerly Duong Dong Ward, Phu Quoc City, Kien Giang province) was originally jointly owned by four individuals. The landowners later granted full authority over the land to Mr. A. and Mr. C. (both residing in Hanoi).
In April 2018, with the intention of investing in a restaurant and hotel, Mrs. N. signed a handwritten deposit agreement with Mr. A. and Mr. C., paying an initial deposit of VND 600 million for the land transfer. Cautiously, she added a clause to the contract stating: “the land is not subject to clearance for public planning.”
A few days later, Mrs. N. signed a notarized deposit agreement, paying an additional VND 12.4 billion to Mr. A. and Mr. C. In total, she deposited VND 13 billion with the sellers.
Upon further investigation, Mrs. N. discovered that nearly the entire plot of land was designated for public use, making it unsuitable for her business purposes. Believing she had been deceived and that there was a misunderstanding in the deposit agreement, Mrs. N. filed a lawsuit to void the contract and reclaim the VND 13 billion deposit.
Thorough research is essential before placing a land deposit. Photo: Nam Khánh |
During the first-instance trial, the landowners claimed they had transferred the land to Mr. A. and Mr. C. prior to the transaction for VND 48 billion. In early April 2018, they formalized an authorization contract allowing Mr. A. and Mr. C. full authority over the land. The landowners asserted they were unaware of and not responsible for the deposit agreement and payment made by Mrs. N.
Mr. A. and Mr. C. confirmed that the deposit agreement with Mrs. N. was executed based on the valid authorization from the landowners. At the time of the agreement, the land was eligible for transfer, and there was no specific discussion regarding planning information. The clause “the land is not subject to clearance for public planning” was added by Mrs. N. herself.
They argued that Mrs. N.’s failure to sign the transfer contract as scheduled constituted a breach of her obligations, resulting in the forfeiture of the deposit.
In the first-instance judgment dated November 22, 2023, the Kien Giang Provincial People’s Court (former) rejected Mrs. N.’s request to void the deposit agreement and reclaim the VND 13 billion. Dissatisfied with the ruling, Mrs. N. appealed the entire first-instance judgment.
During the appellate trial, Mrs. N. argued that Mr. A. and Mr. C. had concealed the fact that the land was designated for public use, leading to her being deceived and mistaken when entering into the deposit agreement. Additionally, according to a local government confirmation in May 2018, the majority of the land had been designated for public use prior to the transaction.
The appellate prosecutor opined that Mr. A. and Mr. C. were aware of the planning status but failed to inform Mrs. N., constituting an act of concealment and deception. Consequently, the deposit transaction was void under the 2015 Civil Code, and the defendants should be compelled to refund the deposit to Mrs. N.
The appellate panel determined that Mrs. N.’s initial intent was to purchase the land for a restaurant and hotel. However, she later discovered that most of the land was designated for public use. There was sufficient evidence to conclude that Mrs. N. was unaware of the planning restrictions at the time of the deposit. Since the planning designation predated the transaction and the sellers failed to disclose this information, it demonstrated an intent to conceal.
Therefore, the deposit agreement between Mrs. N. and Mr. A. and Mr. C. was void due to deception. The appellate court held that the planning status of the land was an objective factor that fundamentally altered the circumstances of the contract, significantly impacting Mrs. N.’s interests.
Even if the parties had not discussed the planning status and the sellers were unaware of it, the appellate court found that Mrs. N. entered into the transaction under a misunderstanding, as per civil law provisions, rendering the transaction void.
Based on these findings, the High People’s Court in Ho Chi Minh City upheld Mrs. N.’s appeal, declared both deposit agreements void, and ordered the sellers to refund the VND 13 billion.
Anh Phương
– 05:45 25/01/2026
