What are the penalties for the act of not warranting the damaged goods, components, and accessories?

Legal situation: Hi, I recently purchased a cell phone from the ACB shop for 18 million VND. The shop informed me that if any problems were discovered in the goods within 15 days, they would replace it for a new one and offer me with a documented guarantee. However, after a week of usage, I realized that the phone was defective, notably that the touchscreen was unresponsive and that the battery refused to charge. I went to the shop to report the problem and seek a replacement, but they refused to honor my request. Could you kindly tell me if the acts of the shop were legal? What are the possible consequences? Your advice is much appreciated.

FDVN’s Opinion:

Thank you for your concern and for sending your question to the FDVN Law Firm (“FDVN”). After studying the relevant legal provisions, we would like to share our opinions as follows:

1. Legal regulations on warranty

It is stipulated in Article 447 of the 2015 Civil Code on the right to claim warranty as follows: “If a purchaser discovers a defect in a purchased object during the warranty period, it has the right to require the seller to repair the object free of charge, or reduce its price or replace it with another object, or it has the right to return the object in exchange for a refund.”

So, ACB shop’s commitment to offer a new product as a replacement for the defective product is one of the legally valid forms of warranty.

It is provided in Clause 1, Article 21 of Law on Protection of consumers' rights 2010 that: “Goods, components or accessories are guaranteed by the agreement of the parties or guaranteed compulsorily under provisions of laws. Where goods, components or accessories are warranted, organizations or individuals trading goods shall fully comply with warranty obligations for goods, components or accessories supplied by them;”

It is also stated in Article 49 of Law on Commerce 2005 on the Obligation to provide warranty for goods:

“1. Where goods are purchased and sold under warranty, the seller shall have to provide warranty for such goods according to the agreed contents and duration.

2. The seller must fulfill the warranty obligation as soon as the practical situation permits.

3. The seller must bear all warranty expenses unless otherwise agreed.”

So, based on the aforementioned regualtions and the warranty agreement between you and ACB shop, ACB shop is required to replace a new product for you if the previous product purchased is defective and still within the warranty term.

2. The penalty for failing to fulfill warranty obligations

It is provided in Point c and e, Clause 1, Article 56 of Decree No. 98/2020/NĐ-CP dated August 26, 2020 by the Government on the prescribing penalties for administrative violations against regulations on commerce, production and trade in counterfeit and prohibited goods, and protection of consumer rights:

“A fine ranging from VND 5.000.000 to VND 10.000.000 shall be imposed upon a trader for committing one of the following violations, if the goods under warranty are worth less than VND 20.000.000:

c) Failing to provide the consumer with new and similar goods, parts or accessories or failing to take back the goods, parts or accessories and make a refund to the consumer if, at the end of the time limit for settling the warranty claim,  the attempt at a repair or rectification of faults is unsuccessful;

…

e) Failing to fulfill, or improperly or partially fulfilling the responsibility for warranty on goods, parts or accessories as committed with consumers;”

The penalties listed above is levied on people for offenses, whereas the penalty imposed on organizations is double the individual penalty.

In addition to requesting that the appropriate state authorities impose an administrative punishment on ACB shop, you have the right as a customer to file a lawsuit demanding that ACB shop fulfill its warranty duties (replace the goods) as agreed upon by the parties.

FDVN's advisory opinion on your request is based on our examination of the applicable legal laws. We hope that FDVN's advice will be useful to you.

Nguyễn Thị Lan Anh - FDVN Law Firm

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