Each person at least once in his life came across the concepts of “agreement” and “contract”, without delving into their meaning and considering the terms as absolute synonyms. In general, both documents are similar, but there are some legal subtleties. What these definitions mean, as well as the differences between them, will be discussed in the article.
What is a contract and its features
According to Article 420 of the Civil Code of the Russian Federation, an agreement is an agreement between several persons establishing or completing certain obligations that the parties have assumed or are taking on.
When drawing up a contract, relevant requirements are imposed on the document, parties and relationships. Its function is to satisfy the goals of each participant.
The features of the agreement are as follows:
- two or more parties take part in the signing;
- legal relations are regulated by the legislation of the Russian Federation;
- is made orally or in writing;
- any entity can be a party;
- the text contains all the main conditions of obligations;
- establishes or terminates legal relations between the parties.
This list cannot be called complete, since there is a constant improvement and updating of contractual relations.
What is a contract and its features
Persons working in the legal field often encounter the concept of a contract. There is often confusion between the two terms. This is due to the fact that the legislation does not give a clear definition of the concept of “contract”. Therefore, the terms are simply compared with each other.
According to lawyers, a contract is a specific form of an agreement containing a certain subject composition. The main requirement is a written form.
This definition is made more understandable by Federal Law No. 44, which contains information on the purchase of goods and the provision of services for the needs of the state.
The main features of the contract include:
- one of the parties is always the state or municipal authorities;
- has an expiration date;
- Only one party can terminate the agreement. If the contract relates to labor law, then this is the employer, to civil law – the customer or state authority;
- can only be made in writing;
- if one party is injured in the termination of the contract, it receives compensation.
On the basis of the contract, the relationship between the state and its citizens is regulated.
The difference between an agreement and a contract
In their legal origin, both concepts have a similar meaning. However, the main differences between them are considered from two points of view:
From a legal point of view
According to the interpretation of modern economic dictionaries, a contract is a legally binding transaction between certain persons, which clearly defines the actions to be strictly performed by the parties, and also provides for liability for violation of obligations under the terms of the contract. A contract is an instrument for obtaining or granting rights by one of the parties or by both parties.
One more thing can be confusing. In the Russian Federation, a law has been adopted that regulates the procedure and conditions for drawing up contracts. It is called the “Law on the contract system”, i.e. The very name of the normative legal act is misleading.
Therefore, even experts cannot agree on how and where to use the appropriate term correctly, as well as what legal force to assign to a particular document. The terms themselves are often considered interchangeable.
Usually a document takes on a clearer meaning in a particular case. And it is much easier to understand the differences, for example, between a contract and a contract for the supply of products, than to argue about which document has more legal weight.
To specify the terminology, the contract implies the fulfillment of the obligations of one of the parties (for example, the delivery of goods on time), and the contract provides for the responsibility of two parties. At the same time, it is possible to break off relations only in the cases and in the manner prescribed in the document.
The Civil Code of the Russian Federation is the main regulatory document, the action of which is aimed at regulating the procedure and conditions for concluding, making transactions, the “contract” is used to designate agreements. In this case, one side is the state. The same term for the settlement of these legal relations is used by the Budget Code of the Russian Federation.
In accordance with Chapter 30 of the Civil Code of the Russian Federation, the concepts between the two definitions are delimited as follows:
- the state municipal contract is signed on the basis of the results of the tender;
- the contract for the supply of goods for state and municipal needs is signed in the second place, indicating all the terms of the transaction, which are agreed between the two parties.
However, a contract where one of the participants is the state falls under the definition of a civil law contract from a legal point of view.
Another legal act worth mentioning is the Tax Code of the Russian Federation, which refers to contracts foreign trade relations related to the export of goods outside the Russian Federation. Such transactions are subject to a zero rate, and in order to receive a tax deduction, the document must be called a contract. Its legal force will not change if it is called a “contract”, but difficulties in filing a declaration and trying to get a tax deduction will certainly arise.
From a labor law point of view
The Labor Code of the Russian Federation excludes the concept of “contract” from its terminology. Previously, there was a document that used this term (Labor Code), but it lost its force in 2002.
There is an opinion that the contract is a fixed-term contract, valid from one to 5 years. This opinion is erroneous, since the contract can be concluded both for a limited period and indefinite. For example, military personnel, as well as employees belonging to paramilitary organizations (the police), enter into contracts. Nevertheless, the main conditions from the moment the transaction is concluded to the termination of the relationship correspond to the contractual ones.
On the basis of the contract, the employee can be sure of the stability of relations that are not limited in time. If necessary, a citizen has the right to terminate contractual obligations regardless of the period, having previously notified the employer of his decision.
If we talk about the contract, then at the time of its signing, the duration of the relationship between the parties (employee-employee) is immediately stipulated. At the same time, it is concluded for a certain period of time. After the time specified in the document, the employee may be dismissed without explanation or hired again.
Another nuance is that it is possible to break off relations unilaterally and at the initiative of the employee only if the employer does not fulfill the terms of the contract. In other words, a person is actually tied to his workplace, which he cannot leave without negative consequences for him.
Therefore, to the question related to the difference between the two terms, there are only two most appropriate answers:
- origin of concepts;
- the status of the parties to the agreement.
For clarity, the main differences are presented in the table.
|Validity||Doesn’t always have a clear deadline||Clear expiration date|
|Termination conditions||Can be terminated by either party||Unilateral termination procedure, the right to which only one of the parties participating in the agreement has the right.|
|Parties||Any subjects||One of the parties must be state bodies or the municipality.|
|Compensation to the party found injured||Not provided||Paid|
Which is better: contract or contract?
When choosing the form of an agreement, it is necessary to be guided by several criteria:
- the area of activity in charge of the rights and obligations of the parties indicated in the document. Legislative regulations for a particular case may require the use of one form or another of securing legal relations between the parties. At the same time, it should be taken into account that calling a deal with foreign partners a contract, there is a risk of causing misunderstanding on the other side;
- counterparty category. For example, if one of the parties is the state, only a contract is concluded, in other cases an agreement is signed. With regard to recruitment, for some employees only a contractual form of agreement is provided.
A subtle connection between the two definitions still exists. Therefore, for a clear understanding of each of them, it is necessary to consider each specific case. In order to choose the right name and form of the agreement, it is necessary to carefully study the main requirements of the relevant industry legislation.