EM – Recently, Elevator Magazine received information about a conflict of interest between a customer and an elevator supplier. The incident has even been pushed to the point where the business lock elevator and the user had to order the replacement of the control cabinet. What will we learn from this incident?
Angry customers
Ms. Mai Thi Hanh, residing at apartment BH06 – 27 Vinhome Imperia, Hai Phong, reported to Elevator Magazine the pressing concerns since when she signed the contract to buy an elevator at the beginning of last year until now.
Due to the need to install elevators, Ms. Hanh was introduced by her acquaintance about Mr. Dao Van Duy representing HITEXCO Vietnam Elevator Co., Ltd in Hai Phong. Mr. Duy claims to be the Deputy Director of HITEXCO Vietnam Elevator Co., Ltd., which head office is located at Cu Chinh Lan Street, Khuong Mai Ward, Thanh Xuan District, Hanoi.
After being introduced to the elevator models, Ms. Hanh decided to buy an elevator branded “HITEXCO – European technology” 450 kg, 5 stops for 385 million VND. The two parties signed sales contract No.: 02.2021/HDKT-HVE on February 3, 2021, the contract performance period is 90 days from the date of signing. Right after signing the contract, the customer paid the first installment of 115 million VND.
Sales contract with stamp but no seal on adjoining edges of pages, clearly stating the deadline for implementation is after 90 days from February 3, 2021
However, after 90 days, the seller did not install the elevator as agreed. Ms. Hanh has repeatedly called and worked directly to ask Mr. Duy to perform the contract, but Mr. Duy gave many different reasons to apply for an extension to complete the contract on 31st November, 2021 (including installation and inspection time). But up to the said time, the elevator was still not installed.
Customers were frustrated and after many urgings, it was not until January 2022 that Mr. Duy installed the elevator. On August 19, 2022, the first inspection was carried out. When the inspection was completed, Ms. Hanh asked Mr. Duy to come and resolve the contract and commitments signed together but could not be contacted.
In September 2022, Mr. Hiep, introduced as an employee of HITEXCO Vietnam Elevator Co., Ltd. came to work and asked Ms. Hanh to pay the remaining amount. Ms. Hanh paid an additional amount of VND 100 million. For the remaining amount, Ms. Hanh requested that Mr. Duy come to settle the payment.
According to Ms. Hanh, while the case has not been completely resolved, HITEXCO Vietnam Elevator Co., Ltd. turn off elevator power twice in October 2022 and November 2022, without prior notice. The elevator hasn’t worked ever since.
Frustrated by the above incident, Ms. Hanh was forced to send a notice to the headquarters of HITEXCO Vietnam Elevator Co., Ltd. at the address at Cu Chinh Lan Street, Khuong Mai Ward, Thanh Xuan District, Hanoi and asked her acquaintances to come to investigate. However, HITEXCO Vietnam Elevator Co., Ltd. is no longer at the above address.
Register information of HITEXCO Vietnam
What did the seller say?
On December 8, Elevator Magazine discussed with the representative of HITEXCO Vietnam Elevator Co., Ltd, Mr. Pham Ba Duong. At the meeting, Mr. Duong introduced himself as the Deputy Director of HITEXCO Vietnam Elevator Co., Ltd and who is directly dealing with the above case.
Machine room of the elevator that cause conflict in the sales contract
According to Mr. Duong, in 2021, Mr. Duy is the representative of the company in Hai Phong, signed a contract to provide elevators, and received the amount of VND 115 million from the customer. However, Mr. Duy only transferred part of that money to the company. Due to not having enough money to pay the first installment, this business did not immediately proceed with the production as planned.
After Mr. Duy left the company, Mr. Duong was the one to directly deal with the above contract and although the customer’s advance was lost, the company still tried to advance the money to complete the contract.
The elevator was handed over to Ms. Hanh’s family on July 28, 2022 and inspected on August 19, 2022. After the installation and handover, Mr. Duong on behalf of the seller asked the buyer to pay the remaining amount of VND 170 million. However, Ms. Hanh refused and asked the seller to call Mr. Duy to settle.
According to Mr. Duong, his company offered a solution to waive the maintenance fee for 3 years and give a fingerprint elevator access control system, Ms. Hanh to compensate for the delay in the contract, but Ms. Hanh disagreed. The seller has repeatedly proposed to negotiate, but Ms. Hanh did not cooperate, did not answer the phone, did not agree to work with Mr. Duong …
Mr. Duong shared, due to not being paid, the company was forced to install the software to lock the elevator and did it twice. The purpose of this is explained as to force the buyer to pay the remaining amount.
Unusual points in the deal
After investigating the incident, Elevator Magazine found that there were many irregularities in the above commercial transaction.
Firstly, all stamps in transaction documents are from a single seal “Representative office in Hai Phong – HITEXCO Vietnam Elevator Company”. While the legal entity dealing officially in the sales contract is HITEXCO Vietnam Elevator Company, not a representative office.
Secondly, Mr. Duong, Deputy Director of HITEXCO Vietnam Elevator Co., Ltd. confirmed that Mr. Dao Van Duy is not a member of the company and has not signed any labor contract with the enterprise. HITEXCO’s representative also confirm that they don’t know where he got the stamp with title of Deputy Director which was used in the contract?! This business also does not have any authorization for Mr. Dao Van Duy. However, I don’t understand why HITEXCO allows Mr. Dao Van Duy to represent the business to sign contracts and collect money from customers and this business can’t help but know?
Meanwhile, according to Articles 137, 138 of the 2015 Civil Code, there are two forms: legal representative or authorized representative, who can only sign contracts in enterprises.
Legal experts said that with such irregularities, the sales contract was made not in accordance with the provisions of the law.
Customer Mai Thi Hanh also added that Mr. Dao Van Duy also wrote a commitment (stamped by Hitexco representative office in Hai Phong), which clearly states that if the handover schedule is delayed, he will be fully responsible and compensation for every 1 day is 10 million VND (!?)
The commitment between “Deputy Director Dao Van Duy” and customers
Unfortunately, while the two sides are very tense because one side has not received the full amount of payment, the other side is locked and the elevator cannot be used, Ms. Hanh contacted another elevator company to order a control cabinet, replace the control cabinet of the elevator provided by HITEXCO.
From the complicated issues arising in an elevator purchase and sale transaction mentioned above, it shows the gaps in corporate governance of HITEXCO Vietnam Elevator Co., Ltd. Even the use of seals, making economic contracts, distinguishing legal entities in contracts are not in accordance with the provisions of law, giving rise to complicated problems in contract performance.
Whether this is accidental or intentional, the business is the first party to bear the damage, not to mention that it may involve lengthy complicated legal issues.
On the customer side, before signing contracts to buy products with complex features such as elevators, it is advisable to learn carefully about the product supplier. Choosing a reputable enterprise with good field capacity, the implementation process from signing the contract to committing to progress, product quality and service will also be guaranteed.
In addition, when customers have a better understanding of legal principles in commercial transactions, they will avoid risks and inconveniences that may arise when signing contracts.
Readers of Elevator Magazine can refer to articles such as “Elevator Passwords: Don’t hold customers hostage!“, “ Correct understanding of customs documents“, “Elevator sales contract” – Legal risks”, … and many other related articles to better understand this issue.
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