What is the difference between a public contract and a private one?
Difference between a public and a private contract
A public contract and a private one differ mainly in the parties involved and the purpose of the contract. Here is a description of each contract type along with examples to illustrate the differences:
- A public contract is an agreement entered into between a government entity (such as a municipal, state, or federal government) and a private entity (individual, business, or organization) for the provision of goods, services, or construction. These contracts are subject to specific regulations and procedures established by law and are carried out in the name of the public interest.
An example of a public contract would be the following: A municipal government is seeking to build a new bridge. It calls for a public tender in which construction companies can submit proposals. The company that offers the best proposal in terms of cost, quality and technical capacity could win the contract to build the bridge. This contract is a public contract because it involves a government entity and is related to public infrastructure.
- On the other hand, a private contract is an agreement between two or more private parties that establish rights and obligations between them. These contracts do not involve a government entity and are generally governed by private contract laws and business regulations. They can cover a wide range of agreements, such as lease agreements, purchase and sale agreements, employment contracts, etc.
As an example for the private contract, suppose two companies, one that makes electronics and the other that sells electronics, decide to enter into a supply agreement. The component company agrees to provide the necessary components to the electronics manufacturing company for a specified period of time in exchange for an agreed price. This contract would be considered private because it involves two private entities and relates to the supply of products for commercial purposes.
Related concepts
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Contracts
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- Commercial partner agreement
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- Receipt of delivery of goods and/or services
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- Statutes of a Limited Liability Company without a Defined Administrative Body
- Statutes of a Limited Liability Company with Joint Administrators or co-Administrators
- Statutes of a Limited Liability Company with a Sole Administrator
- Statutes of a Limited Liability Company with a Board of Directors
- Business plan
- Customer Reference Agreement
- Investment agreement
- Distribution contract
- Computer systems maintenance contract
- Trademark use license agreement
- Agency Contract
- Corporate administration contract
- Contract of carriage of goods
- Commercial commission contract
- Contract for the assignment of patents, utility models and industrial designs
- Leasing contract
- Software Assignment Agreement
- Minutes
- Contract for the provision of business management and management services
- Contract for the trade of stakes
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Glossary
- Abuse of power
- Donation
- Company
- Abuse of rights
- Trade union
- Retroactivity
- Usufruct
- Typical contract
- Arrears
- Trade
- Obligations to do and not to do
- Procedural law
- Payment-in-Kind
- «Streamer»
- Nominal value
- Pre- and post-money stake
- Sentence
- MVP (Minimum Viable Product)
- Startup
- Co-founder
- Employee with equity
- Capitalization table («Cap Table»)
- Venture capital
- Pitch
- Equity
- Opinio iuris
- Ombudsman
- Public deed
- Deposit
- Collective bargaining agreement
- Social capital
- Erga omnes efficacy
- Inter partes efficacy
- Negotiation
- General principles of law
- Sources of law
- Legal doctrine
- Custom
- Law (Generic concept)
- Legal relationship
- Good faith
- Protective principle in labor law
- Residual price
- Joint ownership
- SWOT analysis
- Businessperson
- Management board
- Preferential acquisition right
- Guarantee
- Commission
- Sublease
- Property
- Down payment
- Legal good
- Work trial period
- Annullability
- Error
- Intimidation
- Violence
- Vices of consent
- Dispositive norm
- Imperative norm
- Labor law
- Commercial law
- Civil law
- Principle of legality
- Private Law
- Public Law
- Nullity
- Atypical contract
- Legal act
- Personal rights
- Debtor
- Creditor
- Real action
- Personal action
- Fortuitous event
- Excessive hardship
- Fruit
- Force majeure
- Related rights
- Employment notice period
- Bad faith
- Mens rea
- Fault
- Right of first refusal and withdrawal
- Notary
- Arbitration award
- Arbitrator
- Mediator
- Invoice
- Limited Company
- Public Limited Company
- Dividends
- Ordinary shares
- Preferred shares
- Nominees shares
- Bearer shares
- Jurisprudence
- Assignment of rights
- Non-Disclosure Agreement (NDA)
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Clauses