Penner & Associates - Mexico Law Firm and Business Consulting for Mexico

For professional assistance & information on legal & business matters regarding Mexico and Latin America, please contact:

ATTORNEYS AT LAW FOR MEXICO
Please contact us at our Mexico offices located at:
Apartado Postal No. 9
San Miguel de Allende, Guanajuato, Mexico
TEL. US.: (800) 856-5709
Local Phone (415) 152-3648

e-mail E-MAIL

 

BUSINESS CONSULTANTS FOR MEXICO
REAL ESTATE BROKERAGE ASSISTANCE FOR MEXICO
At our Phoenix or Mexico Offices
P.O. Box 42773
Phoenix, Arizona 85080
Tel: (623) 242-7442

e-mail E-MAIL

OUR MEXICO CITY OFFICES
Montecito no. 38 Piso 37 Oficina 37
Edificio World Trade Center
Colonia Napolis C.P. 03810
Mexico, Distrito Federal
Tel: (55)5351-0438

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Law Information

CONTRACTS IN MEXICO

 

Historical Background

The legal system in Mexico has it's historical foundation in the French system and therefore the Old Roman system, where formality and detail are of importance. The basic rules and regulations governing contracts in Mexico are found in the Civil Codes of the several states of Mexico and the Federal Commercial Code of Mexico. As well, where certain types of activities are the basis for the contracting (examples: patent & trademarks, maritime, agrarian, negotiable credit instruments, etc.) , these regulations are to be specifically consulted first, and then the parties are to consult the Civil Codes (Federal or State, depending on the circumstances of the matter).

Creation of Rights and Obligations

Contracts are a fundamental means of creating rights and obligations between parties. In order for a contract to exist in Mexico, it must contain consent and subject matter that is legally possible to be the object (goal) of the contract.

Causes for Invalidation

Contracts may be invalidated because of: 1. The legal incapacity of the either or any of the contractees (example of the preceding: a 3 year old contracts on his own to purchase an automobile, committing to four years of monthly payments); 2. Vices in the consent of any of the parties ; 3. The object (goal) ("object"), motive ("motive")or purpose ("fin") of the contract is illicit. (example of the latter is: a contract for one party to take another to the planet VGA, is not enforceable because it is not possible to perform); 4. The consent was not given (manifested) in the form established by law of Mexico.

Contract Perfectioning

Unless the law of Mexico otherwise so establishes for a particular contract, contracts in general are perfected by the mere consent of the parties.

Determination of Validity

Unless the law determines to the contrary regarding a specific contract or scenario, the determination of validity and compliance of the contracts can not be left at the sole discretion of one of the contracting parties.

Object of the Contract

The object ("object") of a contract is the thing obligated to be given and/or the act that the obligated party is to perform or not to perform.

Modalities

Unless determined by law for particular cases, contracts may be unilateral or bilateral, verbal or written, present or future, and contingent upon events occurring or not occurring (within the realm of reality). As one can rapidly see, the area of contracts is very ample in its regulation.

Interpretation

When the terms of contracts are clear and do not leave doubt as to the intention of the contracting parties, then the literal sense of the clauses will be used. When the words appear contrary to the evident intention of the contracting parties, the the latter will prevail over the former.

Where any of the clauses of the contract will admit diverse understandings, the parties are to understand them in the manner most appropriate in order that they produce effects. The clauses are to be interpreted the ones with the others, attributing to the unclear ones the sense (understanding) that results from the wholeness (joint content) of the others. The words in a contract that will admit diverse understandings (meanings), will be understood in that meaning more in accordance with the nature and object of the contract.

The uses and customs of the country are to be taken into account when interpreting the ambiguities of contracts.

When it is just impossible to interpret the meaning, if the part not interpretable is relative to the accidental circumstances (not a principal part) of the contract and the goal is gratuitous, then the interpretation is to be for the least amount of transfer of rights and obligations. If the goal is onerous (to produce transfer of value), then it will be interpreted in favor of the most reciprocity of interests. If the matter of interpretation falls on the principal objective of the contracts, where it is not possible to understand the intention or will of the contracting parties, then the contract will be null.

Boiler-Plate Clauses

There are some boiler-plate (pre-made) clauses that should be considered when contemplating signing a contract relative to an activity in Mexico, which may have some cross border implications either due to the parties, the purpose or other cause. The clauses include coverage of matter such as: dual language, dual domicile, dual jurisdiction, waiver of immunities, dual courts, dual laws, and appointment of service of process agent.

Types of Contracts

The Civil Code of Sonora identifies the following as contracts:

1 . Preparatory Contracts
2 . Purchase/Sale Contracts
3 . Barter/Exchange (Permuta)
4 . Donations (Donaciones)
5 . Mutuum/Loan (Mutuo)
6 . Lease/Rental (Arrendamiento)
7 . Commodatum (Comodato)
8 . Deposit (Deposito)
9 . Sequestration (Secuestro)
10.Agency (Mandato)
11. Rendering of Services (Prestación de Servicios)
12. Associations (Asociaciones)
13.Civil Companies (Sociedades Civiles)
14.Aleatory (Aleatorios)
15. Bond (Fianza)
16. Chattel Mortgage (Prenda)
17. Mortgage (Hipoteca)
18. Antichresis (Anticresis)
19. Emphyteusis (Enfiteusis)
20. Transactions (Transacciones)

Federal Commercial Code Contracts

1 . Commercial Companies and Corporations (Sociedades de Comercio)
2 . Commercial Commission (Comisión Mercantil)
3 . Commercial Deposit (Deposito Mercantil)
4 . Commercial Loan (Prestamo Mercantil)
5 . Commercial Sales (Ventas Comerciales)
6 . Commercial Exchanges (Permutas Mercantiles)
7 . Insurance Contracts (Contratos de Seguro)
8 . Letters of Exchange (Letras de Cambio)
9 . (Libranzas)
10.(Vales)
11.Promissory Notes (Pagares)
12.Checks (Cheques)
13. Transport by River and other land based water flows (Terrestres Fluviales)
14. Commercial Chattel Mortgage (Prenda Mercantil)
15. Commercial Arbitrage (Arbitraje Comercial)

For Joint Ventures see Corporations

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