Public law and private law
A contract with a company and a government tender may ask for the same equipment and be governed by very different rules. The difference lies in who is on the other side.
01What law is
Law is the set of rules that regulate people’s conduct in society and that the State can enforce by force if necessary. That last part distinguishes it from morality, from rules of etiquette or from a technical standard: a legal rule has behind it an apparatus —judges, police, oversight bodies— capable of imposing a consequence on whoever does not comply with it.
The word is used in two senses that are best not mixed up. Objective law (“derecho objetivo”) is the set of rules (“Argentine law”). Subjective law (“derecho subjetivo”), that is, a legal right, is the power that a rule gives to a person (“the right to collect fees”).
02Public law and private law
The oldest and most useful division separates relationships according to who takes part and in what capacity:
| Public law | Private law | |
|---|---|---|
| Regulates | The organization of the State and its relations with private parties when it acts with public authority | Relations among private parties, on an equal footing |
| Principle | The State may do only what a rule allows it to do | Private parties may do anything that is not prohibited (Article 19 of the Constitution) |
| Freedom of contract | Very limited: the rules cannot be set aside by agreement | Broad: the parties set their own rules within the limits of the law |
| Branches | Constitutional, administrative, criminal, tax, procedural, public international | Civil, commercial, private international |
Labor law sits in the middle: it regulates a contract between private parties, but many of its rules are matters of public order, meaning they cannot be waived even with the worker’s agreement. The same is true of consumer protection.
If a private company buys a radio-link system, the contract is governed by the Civil and Commercial Code and the parties negotiate the terms. If a municipality buys it, administrative law applies: there is a mandatory selection procedure, a tender specification that is not up for discussion, and powers of the State, such as terminating the contract for reasons of public interest, that a private party does not have.
03The Civil and Commercial Code
Since August 1, 2015, the Código Civil y Comercial de la Nación (Argentina’s Civil and Commercial Code, Law 26,994) has been in force. It replaced the Civil Code of Vélez Sarsfield of 1871 and the Commercial Code. It brought together in a single body the rules on persons, family, contracts, civil liability and property, and eliminated the distinction between civil acts and acts of commerce. It is the rule that will be cited most in this subject.
04Persons
For the law, a person is whoever can hold rights and obligations. There are two kinds:
- Natural person (“persona humana”): each individual. A person acquires full legal capacity at age 18 (Article 25 of the Code).
- Legal entity (“persona jurídica”): an entity to which the law recognizes the capacity to hold rights and obligations of its own, distinct from those of its members (Article 141). Public legal entities are the national State, the provinces, the municipalities and autarchic entities (state agencies with their own legal personality), and private ones are companies, civil associations, foundations and cooperatives, among others.
The separation between the legal entity and its members is the basis of the whole unit on companies: the debts of a company are the company’s, and how far the partners answer for them depends on the type chosen.
05Legal events and legal acts
| Concept | Definition | Example |
|---|---|---|
| Legal event (“hecho jurídico”) | An occurrence that causes legal relationships to arise, change or end (Article 257) | A lightning strike that burns out an insured piece of equipment |
| Legal act (“acto jurídico”) | A lawful voluntary act whose immediate purpose is to create, modify or extinguish legal relationships (Article 259) | Signing a maintenance contract |
| Unlawful act (“acto ilícito”) | Conduct contrary to the legal order that causes harm | Installing without complying with the regulations and causing a fire |
What separates a legal act from a mere event is the will directed at producing legal effects. For the act to be valid, whoever performs it must act with discernment, intent and freedom, and its object must be lawful and possible.
06Where it shows up in electronics
| Situation | Branch of law |
|---|---|
| Selling a piece of equipment to a company | Private: sales contract |
| Selling the same equipment to an end consumer | Private, with public-order consumer protection rules (Law 24,240) |
| Supplying a public hospital | Public: government contracting |
| Applying for a spectrum-use license | Public: administrative, before ENACOM (the national communications regulator) |
| An electrical accident with injured people | Private (repairing the damage) and public (criminal proceedings) |
07Activities
List ten legal relationships of an electronics company (suppliers, employees, customers, AFIP (the federal tax authority), the municipality, banks) and classify each one as public or private law.
Read Articles 257 to 260 of the Civil and Commercial Code and write in your own words the difference between an event, a voluntary act and a legal act.
Consult the public registry of your jurisdiction for the details of a well-known company: type of company, date of incorporation and registered address.
08Common mistakes
- Negotiating with the State as with a private party. The tender specification is not up for discussion and the procedure is mandatory.
- Believing that an agreement can nullify any rule. Public-order rules cannot be waived.
- Confusing the company with its owners. A legal entity has its own assets and obligations.
- Citing Vélez’s Civil Code. It has not been in force since 2015.
09Self-assessment
What distinguishes a legal rule from a moral rule?
That the State can enforce compliance and apply a consequence to whoever does not comply.
What does it mean for a rule to be a matter of public order?
That it cannot be set aside or waived by agreement between the parties.
Is a corporation (sociedad anónima) a natural person or a legal entity?
A legal entity, of a private nature.
What distinguishes a legal act from a legal event?
A legal act is voluntary, lawful and has the production of legal effects as its immediate purpose; an event can occur without anyone’s will.
10Further reading
- Julio César Rivera and Graciela Medina. Derecho civil. Parte general. Abeledo Perrot (in Spanish). Persons, legal events and legal acts explained on the basis of the Code now in force.
- Ricardo Luis Lorenzetti (editor). Código Civil y Comercial de la Nación comentado. Rubinzal-Culzoni, 2014-2015 (in Spanish). The article-by-article commentary, directed by the person who chaired the drafting commission.
- Juan Carlos Cassagne. Derecho administrativo. Abeledo Perrot (in Spanish). The public law of State action, including government contracting.