A delegation agreement is a common type of agreement in civil and commercial transactions, allowing one party to assign another party to perform a specific task. To better understand the legal nature of a contract of delegation under current regulations, please refer to the analysis below by NPLaw.

I. Overview of delegation agreements 

1. What is a contract of delegation?

Currently, there is no statutory definition of a contract of delegation. In practice, a contract of delegation may be understood as an agreement in which one party (the delegating party) transfers certain rights and obligations to the other party (the delegated party) to perform a specific task. Such a form of delegation is commonly applied in business, finance, and management activities.

2. Similarities and differences between a contract of delegation and a power of attorney agreement

Similarities:

  • Both types of agreements involve granting authority to one party to perform tasks on behalf of another. Both may be executed in writing and require the consent of the parties.

Differences:

  • Power of Attorney Agreement:
  • The law does not prescribe specific mandatory contents. The parties are free to agree on the scope of authorization, provided such scope complies with applicable laws.
  • This type of contract is used in various fields such as land transactions, commerce, civil matters, litigation, and dispute resolution.
  • Contract of Delegation:
  • The parties clearly specify the purpose of delegation, the method of performance, and detailed provisions relating to the delegated tasks. These contents must comply with the specialized laws applicable to the particular delegated activity.
  • This type of contract is commonly used in banking, taxation, corporate management, and state administrative activities.

Regarding legal consequences

  • Power of Attorney Agreement: The principal is not liable for acts performed by the agent that exceed the authorized scope, unless the principal knew of such acts and did not object.
  • Contract of Delegation: The delegated party is personally liable for acts that exceed the delegated scope, unless the parties agree otherwise.

In addition to the above similarities and differences, each contract type has its own characteristics depending on the applicable field and specific legal regulation.

II. Legal regulations on the contract of delegation

1. Subject matter of the contract of delegation

The subject matter refers to the specific tasks that the delegating party expects the delegated party to perform. These tasks are typically business-related or service-based, such as asset management, project implementation, or service provision on behalf of the delegating party.

2. Form and contents of the contract of delegation

In terms of form, a contract of delegation must be made in writing to ensure transparency and clarity between the parties.

In terms of content, the contract must specify all essential details, including: information of the parties; description of the delegated tasks; duration of performance; and remuneration, if any. Additionally, the contents must comply with relevant specialized laws applicable to the delegated field to ensure legality and protect the rights of all parties involved.

3. Mandatory contents of a contract of delegation

The parties may agree on specific terms depending on the circumstances and field of application. However, a contract of delegation should generally include the following main contents:

  • Information of the delegating party and the delegated party.
  • The subject matter and specific tasks to be performed.
  • Rights and obligations of the parties.
  • Duration of the contract.
  • Service fees or remuneration (if any).

Besides these principal contents, the contract may include additional terms as agreed by the parties, provided such terms comply with the law.

III. Questions regarding contracts of delegation

1. When may a contract of delegation be unilaterally terminated?

Under Clause 1 Article 428 of the Civil Code 2015, a party may unilaterally terminate the contract in the following circumstances:

  • A party has the right to unilaterally terminate the performance of a contract without being liable for damages if the other party seriously breaches its contractual obligations, or where the parties have agreed, or where the law provides otherwise.

Therefore, a party may unilaterally terminate a contract of delegation if the parties have an agreement permitting such termination, if the other party commits a serious contractual breach, or in other circumstances prescribed by law.

2. Where may a contract of delegation be executed?

A contract of delegation may be executed at any location agreed upon by the parties, although it is commonly executed at the residence or head office of either party. In some cases, to ensure legal certainty and mitigate risks, the parties may choose to execute the contract at a notary office.

IV. Advisory services and assistance regarding contracts of delegation

The above article provides an overview of current legal regulations on contracts of delegation. With an experienced team of lawyers and legal specialists, NPLaw offers reputable and professional legal services, ensuring the best protection of clients’ lawful rights and interests. Should you require legal assistance, please contact NPLaw for consultation and support.