What is the difference between civil contracts and commercial contracts?

1. What is a civil contract?

Pursuant to the provisions of Article 385 Civil Code 2015 regulations The concept of contract is as follows:

A contract is an agreement between parties on the establishment, change or termination of civil rights and obligations.

Accordingly, a civil contract is a civil transaction in which the parties exchange their will with each other in order to come to an agreement that gives rise to certain rights and obligations governed by the Civil Code. the.

2. What is a commercial contract?

Commercial contracts are contracts arising in commercial activities. These are profit-making activities including buying and selling goods, providing services, investing, promoting trade and other profit-making activities carried out by traders and regulated by the Government. Commercial Law 2005.

3. Distinguish between civil contracts and commercial contracts?

Although both types of contracts are essentially civil transactions. Both types are established based on equality, agreement and willingness of the parties to enter into the contract. All aim at the common and legitimate interests of the participating parties. However, there are specific differences between the two concepts as follows:

- Subject entering into contract:

+ Civil contracts: Subjects are any individuals or organizations (may or may not be traders).

+ Commercial contract: At least one party must be an individual or organization with business registration as a trader.

- Purpose of the contract:

+ Civil contract: Aimed mainly at consumption activities that may or may not be profitable.

+ Commercial contracts: Aim to make a profit, seek profit.

- Form of contract:

+ Civil contract: Can be written, verbal or other specific acts. However, there are also some civil transactions that are required to be in writing and notarized, such as real estate and vehicle purchase and sale contracts...

+ Commercial contract: In writing, forms with equivalent value include telegram, telex, fax, data message and other forms as prescribed by law.

- Dispute resolution agency:

+ Civil contracts: Court

+ Commercial contracts: You can choose a court or a commercial arbitration center.

- Penalty for breach of contract:

+ Civil contract: The penalty level is not limited to a maximum, because the parties agree on the penalty level.

+ Commercial contract: The party that violates the contract is only subject to a penalty if the parties have agreed on a penalty for violation of the contract.

The 2005 Commercial Law stipulates that the total penalty for violation of a commercial contract must not exceed 8% of the value of the violated contractual obligation, except in the case of violation of the appraisal service contract.

- Governing law:

+ Civil contracts: Adjusted by the Civil Code.

+ Commercial contracts: Civil Code, Commercial Law, Investment Law, Enterprise Law.