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Proposition vs Policy: Definition, Example and Related Terms

What is the differnce between Proposition vs Policy ?

A 'proposition' and a 'policy' are two terms often used in the world of business and can sometimes be confusing. To make it simple, let's think of a proposition as a promise, and a policy as a rule. A proposition is what a company offers or promises to its customers.

It's like a commercial proposal that a company makes to attract customers. For example, a company might propose to deliver high-quality products at affordable prices. On the other hand, a policy is a set of rules or guidelines that a company follows in its operations.

For example, a company might have a policy of not using harmful chemicals in its products. Both propositions and policies are important in business contracts because they help define what the company is offering and how it operates. A commercial contract manager would be interested in both because they help ensure that the company is meeting its promises and following its rules. They also help protect the company from legal issues. For example, if a company fails to deliver on its propositions, it could face legal action from its customers. Similarly, if a company doesn't follow its policies, it could face legal penalties.


  • Scenario Description
    A company that manufactures eco-friendly products In this case, the company's proposition might be to offer high-quality, eco-friendly products. Its policy might be to only use sustainable materials in its products. The commercial contract manager would ensure that the company is delivering on its proposition and following its policy.
    A software company that offers personalized software solutions Here, the company's proposition could be to offer software solutions that are tailored to the customer's needs. Its policy could be to ensure the privacy and security of the customer's data. The commercial contract manager would make sure that the company is meeting its proposition and adhering to its policy.

Related terms