Distinguish Between Civil Contract And Commercial Contract | AS Auditing

In society, everyone has the need to buy, sell and exchange. Specifically, trading and exchanging between people, people to businesses, and businesses to businesses. When this exchange of purchasing is approved by the parties, it can be said that the contract is established. Therefore, a contract can be understood as an agreement, expressed in many different forms, such as orally, by price announcement, sale condition, and written form.

The signing textual form we often call a contract. So the question is when trading whether we make a civil contract or commercial contract. The fastest way to answer this question is to find out the similar and different contents of civil and commercial contracts.

Thorough analysis is very long, so essentially you should remember three similar contents and four different contents.

Three similar contents:

1. One, both types of contracts are established on the principle of voluntary.
2. Two, both types of contracts are signed orally, in writing or by specific acts performed through available notices published from the parties. For example, entering the hotel must understand the hotel rules, entering the zoo, do not disturb the animals.
3. Three, both types of contract have the same basic form and content such as: rights and obligations of the parties, implementation method, payment method, dispute settlement, benefit of the parties.

Four different contents:

1. The parties of the contract: in a civil contract the parties are an individual to legal entity, an individual to an individual, and legal entity to legal entity.

As for a commercial contract, the party entering into the contract must have at least one legal entity.

2. For contract purposes: civil contracts are used for the main purpose of concluding consumer relations, but the law is not limited to labor relations, investment, business, insurance, and finance.

Commercial contract is only for the purpose of buying and selling goods and providing services for profit.

3. Breach of contract and contract compensation

Compensation and fines against violations of civils contract, priority shall be agreed upon in advance by both parties. If no agreement is reached, the settlement shall be settled according to the civil law.

Commercial contract shall impose a penalty for breach which not more than eight percent of the contract value, and the contract compensation shall be calculated in monetary terms according to the fact that the claimant party can be determined.

4. Dispute resolution

When disputes, civil contract is resolved in court.

For commercial contracts, when there is a dispute, it is resolved by commercial arbitration or court.