1. How are credit contracts understood?

It can be understood that credit is a temporary transfer of an amount of value from the owner to the user and after a certain period of time, it will return to the owner an amount of value greater than the original value. head. In Clause 4, Article 4 of the Law on Credit Institutions 2010 (amended and supplemented in 2017): "Credit granting is an agreement for an organization or individual to use a sum of money according to the principle of repayment through lending, discounting, financial leasing, factoring, bank guarantee and other operations. other credit".

Credit granting activities are extremely diverse but also very complex. This activity creates a relationship between credit institutions and customers.

Credit granting activities, if done well, will bring a huge profit to the credit institution. But the higher the desired profit, the greater the risk. Therefore, if not done well, many risks will arise. Risk comes from both sides in the credit relationship. For credit institutions, the cause of risk is such as issuing a lot of credit but customers cannot repay both principal and interest, also known as bad credit or not being careful in considering the Lending conditions for customers of credit institution officials, etc. As for customers, for objective or subjective reasons the customer does not fulfill their obligations according to the agreed terms. , causing risks for credit institutions such as: reducing the credit institution's interest income, affecting the ability to pay, incurring additional costs related to dealing with risks, and also affecting the reputation of the credit institution. For credit institutions, customers' ability to access loans will also become more difficult. If the above situation persists, the credit institution will be at risk of bankruptcy or having its license revoked. The risk that customers do not complete or complete incompletely is called credit risk. According to Clause 11, Article 3 Circular No. 08/2022/TT-NHNNRegulations on banking supervision order and procedures:"Risk is the possibility of loss (financial loss, non-financial loss) that reduces revenue, equity capital, leads to a decrease in capital adequacy ratio or limits the ability to achieve business goals of the company. credit institutions, foreign bank branches".

Credit institutions have reduced credit risk by reducing short-term credit, increasing medium and long-term credit, reducing personal credit, and increasing corporate credit. Or the organization also requires collateral and collateral to be transferred to the credit institution if the customer does not fulfill the debt payment obligation as agreed in the contract. Therefore, granting credit is the activity of someone who has money giving someone who needs money a certain amount of money to use for a certain period of time, then returning it to them according to the principle of repayment.

A credit contract is a form of asset loan contract. Lenders in credit contracts are credit institutions. In Article 463 of the 2015 Civil Code on property loan contracts: "A property loan contract is an agreement between the parties, whereby the lender delivers the property to the borrower; When the repayment is due, the borrower must return to the lender assets of the same type in the correct quantity and quality and must only pay interest if agreed upon or required by law.". The lender lends the borrower an amount of money for a certain period of time. After that period, the borrower must return both principal and interest according to the principle of repaying the lender.

The parties agree on content such as loan conditions, purpose of loan use, method of disbursement and use of loan, loan amount, interest rate, loan term, repayment method and term, etc. .needs to be drafted into a contract.

2. Causes of credit contract disputes

The causes of credit contract disputes are many and varied. Disputes may occur due to customer errors or errors from credit institutions, especially commercial banks.

 2.1. The cause of the dispute is from the credit institution

The first, capacity, quality and ethics of credit officers. Credit institutions and their officers do not evaluate loan applications strictly; lending to customers who do not qualify for loans; lending to customers without collateral when not yet qualified. This situation occurs because credit officers have limited professional capacity.

The person signing the loan is not authorized, is not authorized or signs the contract beyond the scope of authorization, causing the credit contract to be completely or partially invalid. If damage is caused, the person who signed the contract without authority or authorization or signed the contract beyond the scope of authorization will be responsible for compensating for the damage according to Clause 4, Article 131 of the Civil Code. 2015 event: “The party at fault for causing damage must compensate”. 

Credit officers have degraded moral qualities and intentionally violate the law. When receiving a mortgage, credit institutions only consider assets based on documents, not reality. Problems often arise such as differences in actual area or assets at the time of dispute resolution. compared to the current situation when mortgaged. Or there are cases where a credit officer allows the borrower to keep the original documents proving their mortgaged assets, but then sells the mortgaged assets to a third party.

Valuing the mortgaged property higher than its real value, lending an amount greater than the value of the mortgaged property; Using collateral from a finalized loan contract as collateral for another loan contract without the consent of the asset owner and without notifying the asset owner.

Credit institutions only focus on appraising documents before borrowing without controlling the customer's use of loan capital to see if it is in accordance with the purpose stated in the contract or not. Article 94 of the Law on Credit Institutions 2010 (amended and supplemented in 2017): (1) Credit institutions must request customers to provide documents proving feasible capital use plans and financial capacity. their legal purpose of using capital, loan security measures before deciding to grant credit; (2) Credit institutions must organize credit grant approval according to the principle of division of responsibilities between the appraisal stage and credit grant decision; (3) Credit institutions have the right and obligation to inspect and supervise the use of loan capital and debt repayment by customers; (4) Credit institutions have the right to request borrowers to report the use of loan capital and prove that loan capital is used for the correct loan purpose.

Monday, implementation of capital transfer obligations (disbursement issue).

In the credit contract, the customer must clearly state the purpose of the loan, the deadline to repay the loan amount, and then the credit institution is obliged to disburse the correct amount and time stated in the contract. In fact, after signing the contract with the customer, the credit institution does not perform or does not fully perform the disbursement obligation. This affects the customer's business plan, leading to the customer not fulfilling the obligation to repay both principal and interest. In short, the credit institution is still the damaged party so it needs to promote the process of fulfilling its own disbursement obligations well.

2.2. Cause of customer dispute

The customer fails to perform their obligations or does not fully fulfill their obligation to repay both principal and principal. Because of objective or subjective reasons, customers do not fulfill or incompletely fulfill their repayment obligations to the credit institution.

For objective causes, natural phenomena such as rain, floods, fires, storms, tsunamis, volcanic eruptions... or social phenomena such as wars, coups, strikes, bans operations, changes in Government policies, etc. make the borrower's operations unable to be carried out as planned. Those objective causes are called force majeure events, Clause 1, Article 156 of the 2015 Civil Code: "A force majeure event is an objective event that is unpredictable and cannot be overcome despite the application of all necessary and permissible measures..” Therefore, customers cannot carry out business and production activities to fulfill their obligation to repay principal and interest to the credit institution.

For subjective reasons, customers intentionally violate their debt repayment obligations. Customers use fake documents to borrow capital, increase the value of the collateral to borrow beyond the value of the collateral, and use the loan amount for improper purposes; using fake land use rights certificates to sign illegal transfer contracts and credit contracts; forging signatures in guarantee contracts and commitment documents to get loans.

3. Credit contract dispute resolution service of Truong Quyen Law Office - Davilaw Branch

Truong Quyen Law Office - Davilaw Branch is one of the units specializing in providing lawyer services to resolve contract disputes, including credit contracts. With a team of experienced and highly specialized lawyers, the company ensures to provide customers with effective legal solutions and protect their rights in the best way. Services of Truong Quyen Law Office - Davilaw Branch include:

- Legal advice on credit contract disputes: Providing customers with knowledge and legal regulations related to credit contracts and helping customers clearly understand their rights during the dispute process.

- Representing customers to participate in court hearings and negotiate to resolve contract disputes: The company will represent customers to participate in court hearings and negotiate to resolve disputes, protecting customers' rights in an effective manner. the best.

- Prepare documents and legal documents: The company will help customers prepare documents and legal documents necessary to resolve credit contract disputes quickly and effectively.

- Resolve credit contract disputes.

Truong Quyen Law Office - Davilaw Branch is committed to providing customers with effective legal solutions that save time and costs. In addition, the company is also committed to ensuring transparency and honesty in working with customers. A team of experienced, dedicated and responsible lawyers, Truong Quyen Law Office - Davilaw Branch will bring absolute satisfaction to customers.