Commercial Contracts: Key Legal Aspects and Practices
**1. What is the Intrinsic Differential Note of Commercial Versus Civil Contracts?**
In the commercial sphere, obligations are objectified, whereas in civil law, they are subjective. Other hallmarks include:
- Fate of the term of compliance: Commercial law prohibits grace periods tolerated in civil law.
- Certainty on the recoverability of pure obligations: Civil contracts are enforceable from the moment they are incurred. Commercial contracts often operate on credit.
- Constitution of arrears: Obligations arising from commercial contracts have some peculiarities regarding arrears.
- The essential term: In civil contracts, the term does not usually have dire consequences for the contract’s existence. In business, a term breach often involves contract termination.
- Protection of legal appearance and traffic safety: Commercial law associates legal outcomes with the situation’s appearance, regardless of its reality.
- Onerous benefits: Commercial contracts always involve a profit.
- Productivity of interest.
- Solidarity of debtors.
- Taxation of commercial business.
**2. Why Have Contracts of Adhesion Arisen?**
Adhesion contracts are those where one party dictates the content, and the other party merely accepts the unilaterally defined schema. This type of contract is linked to an economically stronger contractor who requires the contract outline, leaving the other party with two options: accept the terms or not conclude the contract (e.g., insurance, transport, utilities, banking).
**3. What is the Difference in Term Obligations in Civil and Commercial Law (Art. 61 of the Commercial Code)? What is the Exception in LVPBM, Art. 11?**
Commercial law prohibits grace periods tolerated in civil matters. This rule has exceptions:
- When expressly agreed upon by the parties or their conduct implies belated recognition of the benefit.
- When a rule provides that the time is left to the debtor’s will.
- However, the mandate of Art. 61 of the Commercial Code is depleted by not granting more time than projected by the parties or granted by law.
Article 11. LVPBM – Power of Judges and Courts:
Judges and courts, exceptionally and discretionarily, may indicate new or alter agreed deadlines due to just causes like family troubles, unemployment, occupational accidents, long illness, or other misfortunes. They may also determine the surcharge on the price for the new deferment. Similarly, they have powers over agreed penalty clauses in case of prepayment or default by the buyer.
**4. How is the Matter of Enforceability of Pure Obligations Regulated in Art. 62 of the Commercial Code? What Determines the Uniqueness of Commercial Law?**
Article 62 of the Commercial Code: Obligations without a fixed term by the parties or by this Code shall be due within ten days after incurred if they only produce ordinary shares, and the following day if they bear coupled implementation.
**5. What is the Cause of Delay in Fulfilling Contractual Obligations in Business, and Do They Produce Effects the Day After They Might Have Been Pointed to Comply? Is There Any Specific Law to Combat Late Payment in Commercial Transactions?**
If contracts have a fixed expiration date, the debtor incurs arrears from the day after its due date.
Yes, Law 3/2004, dated December 29, lays down measures to combat late payment in commercial transactions.
**6. Is the Principle of Solidarity of Commercial Obligations Reflected in General or Special Cases? Could You Mention Some?**
There is no general rule imposing solidarity in commercial obligations. According to Art. 50 of the Commercial Code, the provisions of the Civil Code apply. Divisible obligations mean debtors are liable for their part; when not, they respond together. Solidarity must be explicitly imposed.
However, practice often incorporates solidarity, and it is common in banking recruitment. The Supreme Court recognizes solidarity as a general principle of commercial obligations.
**7. While in Different Places, What is the Accepted Theory in Law 34/2002 of July 11, SSIC, (Art. 54 of the Commercial Code)? When is a Contract Concluded by Telephone Perfected?**
Article 54 of the Commercial Code: When the offer and acceptance are made in different places, consent exists from when the offeror knows the acceptance or when the acceptor has sent it and the offeror cannot ignore it without lacking good faith. The contract is presumed to be held at the place where the offer was made.
When contracts are concluded by automatic devices, consent manifests from acceptance.
Telephone recruitment is comparable to determine the moment of perfection.
**8. Why is it Important to Determine When and Where Contract Perfection Occurs?**
Contract perfection determines the birth and other aspects: the parties’ capacity, applicable forum, applicable law in time, court jurisdiction, etc. It is necessary to determine the time to know which rules are in force and the place to know which rules apply.
**9. The Manner of Commercial Contracts is Free, But This Principle Has Exceptions. What Are They?**
Formal contracts in our system are:
- Contracts requiring a deed: Formation of companies, groups, and joint ventures, transfer of shares.
- Contracts requiring registration in the commercial register: Loans.
- Contracts requiring private writing: Sale of property to run, held outside the establishment, transmissive or license patent rights, insurance, preservation, etc.
- Contracts requiring additional formalities: Intervention of a notary public, written and administrative approval, etc.
**10. What is the Probative Value of Business Books (Art. 25 to 33 of the Commercial Code)? What Value Does the Invoice Have as Evidence?**
Traders’ books are regarded as private documents. Judges and courts assess them according to general law rules, integrated into the joint assessment of evidentiary materials.
The invoice’s probative value is akin to any private document and could be considered an extrajudicial confession of its issuer. The invoice signed by the buyer assumes compliance with its contents.
**11. According to the Commercial Code, How are Commercial Contracts Interpreted (Art. 50, 57, and 59)?**
According to Art. 57 of the Commercial Code, commercial contracts require an objective interpretation, giving statements their normal and usual meaning. However, the rest of the provisions dealing with contract interpretation (Art. 2, 50, and 59 of the Commercial Code) call for common law rules.
Priority rules of civil precepts shall apply as stated by merchants, with preferential application of trade usages. If the contract’s meaning cannot be resolved after applying all provisions, it shall be construed in the manner most favorable to the debtor.
**12. A Court Settlement to Resolve Commercial Contract Problems is Arbitration. Can You Describe the Current Legal Situation in Spain?**
In Spain, arbitration is governed by Law 60/2003 of December 23 on Arbitration (L.Ar.). This Act contains general regulations applicable to all types of arbitrations, including those with a special regime (except labor), whether domestic or international, provided it is in Spanish territory. L.Ar. recognizes the international character, which in certain circumstances must be attributed to arbitration, leading to the implementation of specific rules.
**13. Is it Unfair Conduct to Gain a Competitive Advantage Through a Violation of a Rule, Not Necessarily a Discipline of Unfair Competition?**
Yes, according to Art. 15 of the Unfair Competition Act (LCD).
**14. Is a Municipality Subject to the Unfair Competition Act? And an NGO?**
Yes, the prohibition of disloyalty extends to any natural or legal person involved in the market: entrepreneurs, public authorities, corporations, foundations, etc. (Art. 3 LCD).
**15. Where Can We Find a Definition of What is Considered Unfair and What are the Assumptions?**
In the revised text of the General Law for the Protection of Consumers and Users and other complementary laws.
Article 82. Concept of Unfair Terms:
- Unfair terms are those not individually negotiated and practices not expressly consented that, contrary to good faith, cause a significant imbalance of rights and obligations to the detriment of consumers and users.
- Individually negotiated elements of a clause do not exclude the application of unfairness rules to the rest of the contract. The employer claiming individual negotiation bears the burden of proof.
- The unfairness of a clause is assessed considering the nature of the goods or services and all circumstances at the time of its conclusion, and all other terms of the contract.
- Notwithstanding the preceding paragraphs, clauses are unfair as provided in Articles 85 to 90, inclusive, if they:
- a) Link the contract to the employer’s will.
- b) Limit the rights of consumers and users.
- c) Identify the lack of reciprocity in the contract.
- d) Impose disproportionate guarantees on consumers and users or unduly impose the burden of proof.
- e) Are disproportionate in relation to the contract’s development and execution.
- f) Breach the rules on jurisdiction and applicable law.
**16. Can You Point Out Some Laws Where the Principle of Consumer Protection is Adopted?**
- Royal Decree 1/2007 of November 16, approving the Revised Text of the General Law for the Protection of Consumers and Users and other complementary laws (TRLGCU).
- Law 7/1995 of March 23, on consumer credit (LCC).
- Law 42/1998 of December 15, on timeshare real estate and tourist use tax regulations.
- Law 34/1988 of November 11, on general advertising (LGP).
- Other rules incorporated into TRLGCU are those on the staff of the information society and electronic commerce, and television broadcasting.
**17. Article 8 of the General Law for the Protection of Consumers and Users (LGDCU) Provides the Means to Counter the Effects of Misleading Advertising. How?**
Article 8 LGDCU:
- The offer, promotion, and advertising of products, activities, or services must conform to their nature, characteristics, conditions, usefulness, or purpose without prejudice to advertising provisions and in accordance with the principle of conformity with the contract provided in their specific legislation. Its content, benefits, conditions, and guarantees shall be payable by consumers and users, even if not expressly mentioned in the contract or document received.
- Notwithstanding the foregoing paragraph, if the contract contains more beneficial clauses, they prevail over the contents of the offer, promotion, or advertising.
- False or misleading advertising of products, services, and activities will be prosecuted and punished as fraud. Consumer associations are authorized to initiate and intervene in proceedings to stop it.
**18. What are the Consequences in Terms of Legislation of Spain’s Integration into the European Union Framework?**
The Rome Convention of June 19, 1980, which Spain joined in 1993, on the law applicable to contractual obligations (commercial and civil), has been instrumental. It also contains specific rules for recruitment with consumers. This instrument retained the form of an Agreement until July 4, 2008, when Regulation (EC) No. 593/2008 of the European Parliament and of the Council of June 17, 2008, on the law applicable to contractual obligations (Rome I) was published.
**19. How Can We Define Lex Mercatoria?**
Lex Mercatoria can be defined as the types of contracts or general conditions subject to international trade relations between individuals.