CONTRACTUAL CAPACITY OF NATURAL PERSONS
The first essential requirement is the civil capacity of the contracting party—that is, their legal aptitude to enter into binding agreements. According to Article 483 of the Civil Code, any legally capable person may contract. This provision allows any Bolivian citizen, regardless of whether they own a formal business, to sign valid contracts with public sector entities, provided that the contract’s object is lawful and feasible.
Furthermore, Article 12 of the Commercial Code establishes that individuals who are legally capable of contracting under civil law may also engage in commercial activities. This includes selling goods or providing services to public entities without the necessity of forming a commercial company or sole proprietorship. For instance, a refrigeration technician may legally contract with a government office to perform maintenance services, even if not registered as a business.
COMMERCIAL TRANSACTIONS WITH THE STATE IN BOLIVIA
Although public institutions are not considered commercial enterprises, they are legally permitted to engage in commercial transactions with private individuals. Article 10 of the Commercial Code states that state-owned, municipal, and other fiscal entities may conduct commercial activities with natural or legal persons. These transactions are governed by the Commercial Code and relevant special laws.
LEGAL RECOGNITION OF THE “PRIVATE INDIVIDUAL” AS A STATE CONTRACTOR
Bolivian administrative-criminal law formally recognizes the figure of the “private individual” as a valid party in contracts with the State. Article 221 of Law No. 004 penalizes both public officials and private individuals who knowingly engage in contracts that harm the State. This confirms that the legal system not only permits but also regulates contractual relationships involving private individuals, even those without formal business structures.
Additionally, Article 222 of the same law establishes that any individual who signs a contract with the State and fails to fulfill it without just cause may be subject to criminal penalties. This reinforces the validity, enforceability, and potential sanctions applicable to contracts between natural persons and public institutions, regardless of business registration status.
OBLIGATIONS OF PRIVATE INDIVIDUALS IN PUBLIC CONTRACTS
Once a contract is signed, it has the force of law between the parties, in accordance with general principles of contract law. The absence of a formal business structure does not exempt the contractor from fulfilling their obligations. As established in Article 222 of Law No. 004, unjustified breach of a contract with the State may lead to criminal penalties, including imprisonment.
In conclusion, Bolivia’s legal framework upholds the validity of contracts between private individuals and the State, provided that legal capacity, lawful purpose, and administrative formalities are met. Current regulations offer legal certainty to both the State and the individual contractor and expressly recognize private persons as valid parties in public procurement processes.
Our law firm offers specialized services in public contracting and legal relations between individuals and government entities. If you need legal guidance on these types of agreements, feel free to contact us today.
Frequently Asked Questions (FAQs)
Can a citizen contract directly with the State without having a registered business?
Yes, as long as they have civil capacity to enter into obligations, they may enter into valid contracts with public entities.
What legal framework applies to a contract between a natural person and a municipal government?
The administrative regime applies; however, if the contract involves a commercial transaction (e.g., sale of goods), the Commercial Code may also apply.
Can an individual supplier be penalized for breaching a contract with the State?
Yes. Unjustified noncompliance may result in civil liability or even criminal prosecution.
Is a Tax Identification Number (NIT) required to contract with the State as a natural person?
It depends on the type of contract and specific regulations, but in many cases, it is required for tax purposes.
Must contracts with the State be formalized in writing?
Yes. Public contracting typically requires written formalization and adherence to administrative procedures.
The content of this article does not reflect the technical opinion of Rigoberto Paredes & Associates and should not be considered a substitute for legal advice. The information presented herein corresponds to the date of publication and may be outdated at the time of reading. Rigoberto Paredes & Associates assumes no responsibility for keeping the information in this article up to date, as legal regulations may change over time.
