1. The composition conditions are different.
The conditions for the formation of a contract include: there are two or more parties to the contract subject, and the contracting parties reach an agreement on the main terms of the contract.
The conditions for the effectiveness of the contract mainly include: the actor has the corresponding civil capacity; True declaration of intention; It does not violate the law or the public interest and conforms to the legal form.
2. The legal meaning is different.
Whether a contract is formed or not basically depends on the will of both parties, which reflects the principle of freedom of contract. The significance of contract formation is to show that both parties have reached consensus on specific rights and obligations.
Whether a contract can come into force depends on whether it meets the requirements of national laws, which reflects the principle of abiding by the law. The significance of the contract comes into force is to show that the will of the parties has been unified with the will of the state and social interests, and the content of the contract has been legally guaranteed.
3. The stages of action are different.
The establishment of the contract indicates that both parties have reached an agreement through consensus, and the rights and obligations of both parties reflected in the contract content have been clear.
The effectiveness of the contract indicates that the contract has been confirmed and guaranteed by the national law, and the parties shall fully perform the contract to achieve the purpose of contracting.
4. The forms of responsibility are different.
When a contract is formed, if the parties have to bear the responsibility, it is the responsibility of contracting fault; When a contract comes into effect, if the party is liable for breach of contract
5. The scope of compensation varies.
When the contract is established, the compensation scope undertaken by the parties is limited to the loss of trust interests;
The effectiveness of a contract means that the contract has legal effect. If a party fails to perform its obligations as agreed in the contract, resulting in a breach of contract and causing losses to the other party, it shall bear all losses actually incurred. It includes not only the direct loss of existing property, but also the loss of available profits.
[Legal Basis]
Article 502 of the Civil Code states that a legally formed contract shall become effective upon its formation, except as otherwise provided by law or agreed by the parties.
Where, in accordance with the provisions of laws and administrative regulations, a contract shall go through the formalities of approval, etc., such provisions shall apply. (The effective date of the Civil Code is January 1, 2021)
