Each individual, regardless of their role in the enterprise, will have their own perspective on a contract to serve their own purposes. If a contract fulfills multiple objectives both within and outside the enterprise, it will help reduce risks, violations, or disputes, thereby enabling the parties to the contract and related stakeholders to perform the contract effectively, ensuring compliance and protecting the rights and interests of all involved parties.
A business consulting lawyer (whether an in-house counsel or a practicing lawyer) must strive to understand and harmonize the different objectives within the enterprise in order to comprehend, draft, review, or amend the contents of any contract to protect the enterprise (including the rights and interests of the enterprise, managers, and owners/shareholders), minimize and limit risks, ensure legal compliance, and provide advice on best practices that can be effectively implemented in the long term (with possible adjustments).
1. Internal objectives within the enterprise:
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For procurement managers: Ensure that procurement activities are carried out in the most efficient and optimal way within the budget, maintaining stability and consistency across the entire system/structure of the enterprise/group.
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For sales managers: Ensure that sales activities achieve results as quickly as possible, with the fastest payments, fewer product returns or complaints, and reduced inventory from customers, distributors, or agents.
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For project managers: Complete projects on time and within the approved budget through proper management of both internal and external resources.
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For production managers: Ensure that production activities achieve results quickly and efficiently, using materials and production costs effectively within the planned budget and timeline.
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For employees in general: Fulfill responsibilities and tasks efficiently, achieve personal and departmental KPIs.
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For accounting/tax and finance managers: Ensure legal compliance in handling tax and financial obligations, maximize financial and tax efficiency, and optimize the company’s cash flow.
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For enterprise managers/boards of management/boards of directors: Allocate risks, generate revenue for the company, protect the company and its executive directors, and maintain interactions with owners/shareholders or government authorities/supervisory bodies.
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For owners/shareholders: Optimize strategies to improve business efficiency, develop business strategies, manage and minimize risks, prevent and combat fraud in corporate management, enhance legal compliance, increase/optimize profits (or reduce losses), and ensure the company’s or group’s long-term stability and sustainability.
2. Objectives of external partners and organizations:
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For contractors/suppliers: Determine how the enterprise can gain more benefits when signing contracts with contractors and suppliers by tightly managing the procurement of goods and services, setting delivery conditions, complaint and warranty procedures that favor the enterprise, including extending payment terms, setting credit limits, or applying post-sale clauses that enhance the responsibilities of contractors and suppliers.
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For customers, distributors/agents: Determine how the enterprise can gain more benefits when signing contracts with customers, distributors, or agents to deliver goods and services to the market as quickly as possible, collect payments promptly, simplify delivery conditions, complaint procedures, warranties, and post-sale services to standardize or reduce the enterprise’s responsibilities; or determine how to set inventory requirements for customers, distributors, or agents to improve cash flow and sales efficiency for the enterprise.
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For public interest: Pay attention to public interest issues when the company is a public or listed enterprise. In addition, communication crises can damage the image of the company, its products, and its services.
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For government authorities: Ensure supervision and management of compliance with prescribed procedures, processes, and licensing requirements; minimize or avoid violations, fines, or sanctions such as refusal or revocation of licenses or other legal penalties.
CONTACT US
CBS Legal, LLC.
7th Floor, 81A Tran Quoc Toan Street
Cua Nam Ward, Hanoi, Vietnam
Email: infor@cbslegal.vn
PROFESSIONAL DISCLAIMER
This update summarises the important and latest changes in legal, tax and related practices in Vietnam. The analysis or comments herein are of general nature and are not intended to be nor should it be relied upon as legal advice for specific cases of any individual or entity.
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