Financial Transactions and Contracts: A Detailed Look

Posted on Dec 10, 2024 in Law & Jurisprudence

Check Against the Bank of Spain

  • Issued by the bank and must pay the Bank of Spain.

Traveler’s Check

  • Checks are in euros or foreign currency issued by banks or other financial intermediaries with a recognized international presence, such as VISA, MASTERCARD, or AMERICAN EXPRESS.
  • Can be exchanged into cash quickly and also used like cash to pay in a store.

Bill of Exchange

  • A document by which a person (drawer) instructs another (drawee) to pay on a certain date (maturity) a sum of money, usually through a third party (the payee or holder).

Involved:

  • Drawer: Creates the letter, who is owed the amount of the bill.
    • Drawee: Accepts the bill, undertakes to pay on the due date.
    • Policyholder: To whom the bill should be paid and acts on behalf of the drawer.

Transactions Related to the Bill of Exchange:

  • Endorsement: Entering into the bill of exchange a guarantor to pay in lieu of the drawee.
    • Endorsement: Transferring ownership of the letter to a third party (endorser: bearer of the letter, endorsee: the recipient).
      • If nothing appears in the lyrics or notes “to order” the letters would be transmitted to the endorsement.
      • The back shall be signed by the endorser, and the identification would be endorsed and unconditional (zero).
      • To prevent transmission, it must contain “not to order.”
    • Protest: When the drawee refuses to pay, the drawer must state by affidavit the protest and then go to the courts. In this respect, the bill of exchange is enforceable.
    • Discount:
      • A financial institution forwards, concerning maturity and payment of commissions to the company, the amount of a bill receivable.
      • Problem: If, at maturity, the drawee does not pay, this entity will reclaim the amount plus the return, and the drawer must make the protest or negotiate a deferment or renewal.

V. Receipt

  • The payment receipt is issued as a document certifying the payment of the transaction.

The receipt has a number and indicates the number of the bill payment object.

It shall also collect:

  • Bill of Exchange
    • Bill payer.
    • Amount (number and letter).
    • The issue date of the receipt.
    • Signature of the person issuing the receipt.
    • 2 copies (customer and internal control).

2. Contracts

It is the agreement between two or more parties, which agree to give, do, or not do something or some service.

Classes:

  • Sales contract.
  • Contract services.
  • Supply contract.
  • Insurance contract.

Contract for Sale

A contract by which the buyer and seller set out the conditions subject to the sale of goods or services.

  • Personal Requirements: Buyer and seller must have legal capacity.

Physical Requirements:

  • The item to which the contract refers must be possible, lawful, and determined.
    • The agreed price will be in cash or a sign to represent a specific and true value.

Seller Notes:

  • Deliver the item sold under the conditions, time, and place agreed upon in the contract.
    • Keep the item sold at the time of delivery.
    • Keep it in perfect condition and proceed with repairs if necessary.
    • Bear the costs of the sale unless otherwise agreed.
    • Respond to hidden faults or defects of the item sold.

Buyer’s Obligations:

  • Deliver the price as agreed in the contract.
    • Get the item under contract.

I. Order

  • The buyer is applying for the product or service.
  • Upon request, the vendor issues the corresponding order (budget or supply).
  • Should be issued with a sequential number as provided in the internal procedures of each company.

Content:

  • Product or service requested by the client.
  • Number of units.
  • Form and payment deadlines.
  • Data from the seller.
  • Details of the buyer.
  • Date and order number.
  • Product delivery times.
  • Discounts.

II. Packing Slip

  • Once the budget is accepted by the buyer, the seller shall deliver the product together with the corresponding delivery note.

The document that details and justifies the goods delivered.

The Buyer Should Check:

  • That the contents of the receipt match the order placed.
    • The goods received are reflected in accordance with the delivery note.

Once you sign the line found for the seller, the buyer has the right to a copy.

The Seller Must Verify:

  • The delivery note is issued under the order received.
    • The merchandise is physically issued pursuant to the slip.
    • Issue copies per tester to return and sign as proof of shipment to the buyer (at least, it could issue another for transport if external).

Content:

  • Date of shipment.
    • Reference number to the request.
    • Product and units shipped.
    • Price is not stated.
    • Types of Charges:
      • Paid: I send the goods, and I pay.
      • Due: The customer pays the postage when the package arrives or when the invoice is issued.

III. Bill

  • Once the goods are accepted by the buyer on the delivery, the invoice is issued.

It is legal proof of the purchase made.

Content for the Validity of the Bill:

  • Vendor identification data (name, address, and registry data CIF).
  • Buyer’s identification data (name, address, and VAT).
  • Invoice number, number called, time, and place of issue. Product description (product, number of units, unit price, and total amount with tax rate breakdown (IVR, …), applicable discounts, if the amount is on the postage due, date of advance payment (if applicable).

IV. Payment Documents

  • In accepting the order, the buyer has agreed with the seller on the form and term of payment for the purchased product.

Form:

  • Payment.
    • Check.
    • Bills.

Term:

  • Cash.
    • 30, 60, 120, 180 days after the invoice date.

Payment Dates:

  • At maturity.
    • Days 5 and 15 of each month.

Check

  • A document that gives a payment to a financial institution to pay a sum of money to the recipient or carrier to submit it for payment.
  • Kinds of checks:

Bearer Check

  • The recipient is not any particular person or entity.
  • In the section “pay to…” write to the carrier.

Check Names

  • The recipient is a specific person or entity.
  • Implies that only the recipient can cash it in with proof of your body.

Crossed Check

  • The recipient is a person or entity specifically, two parallel lines diagonally across the check. Can only charge by bank transfer.

Certified Check

  • The bank confirms that the information provided on the check is true and consistent. The amount appropriated is locked in the current account of the issuer for the period to be determined until it is presented for payment.

Bank Check

  • The issuing and signing of the check is the bank itself.