Negotiable Instruments and Credit Operations Q&A

Posted on Nov 14, 2024 in Law & Jurisprudence

1. Definition of Claim

A claim refers to documents incorporating a right of way in its economic forms. These documents are supported as means of transportation, instruments of credit, payment, exchange, collateral, and protection against theft, looting, abductions, or membership theft.

2. Elements of a Claim

  • Autonomy
  • Literalness
  • Circulation
  • Abstraction
  • Incorporation

3. Classification of Receivables

  • Public and Private Titles
  • Nominative and Denominations
  • Unique and Prints
  • Simple and Complex
  • Individual and Series
  • Credit and Payment
  • Abstraction and Grounds

4. Definition of Incorporation

Incorporation is the action of joining two or more things into one. The law printed on the title displays the right.

5. Definition of Economy

Economics is the social science that studies social relations related to the production, exchange, distribution, and consumption of goods and services.

6. Definition of Literalism

Literalism is explained according to law and empowers the indication of legal requirements, depending on the document, such as bills of exchange, promissory notes, or checks.

7. Underlying Movement

Underlying movement is defined or based on motion or rotation for commercial transactions.

8. Definition of Abstraction

Abstraction, according to Article 14, Paragraph 2 of the General Law of Securities and Credit Operations, allows for the fulfillment of requirements and the validity of the title.

9. Modes of Transmission

  • Bearer Title
  • Endorsement on Property
  • Titles to Order
  • Endorsement on Procurement
  • Endorsement Monies
  • Currency Exchange
  • Extracambiaria

10. Exchange vs. Extracambiaria

EXCHANGE: Sustains recognized documents that can be endorsed and used. It is in constant motion or rotation.

EXTRACAMBIARIA: Allows for application based on causality or enrichment, forgetfulness, risk, ignorance, or neglect. Extinction is subject to judicial process.

11. Debt Cancellation

  • Payment
  • Prescription
  • Forfeiture
  • Termination
  • Cancellation

12. Definition of Replacement

Replacement occurs when the landlord requires care and protection of the law.

13. Basis of Forfeiture

Forfeiture is a form of extinction over time, where a document’s scope may become invalid.

14. Enforceable Exceptions in LGTOC

  • Incompetence or lack of personality of the author
  • The right not to have been sued
  • Lack of legal presentation
  • Prescription
  • Alteration or omission
  • Items not covered in the application

15. Exchange Solidarity

Exchange solidarity is acting with respect to autonomy and compliance with debt or payment.

16. Bill of Exchange

A bill of exchange is a legal document that identifies the issuer, trader, responsible party, and recipient.

Classifications:

  • At sight
  • Printed in a time
  • Knowledge of the recipient
  • Determined on a fixed date

Requirements:

  • Mention of “bill of exchange”
  • Place and date of subscription
  • Amount of money
  • Recipient’s name
  • Payment terms
  • Payer’s name
  • Issuer’s name
  • Signature

17. Acceptance of a Bill of Exchange

A bill of exchange is accepted when it meets all legal characteristics and requirements.

18. Checks and Promissory Notes

Check: A payment instrument with a named party obligated to pay a certain amount unconditionally.

  • At sight
  • Bearer
  • Can specify place and time
  • States the name of the book and endorsement
  • Explains the firm given

Promissory Note (Pagare): Unlike a check, this document attributes one drawer and a descriptor, failing to endorse its tenure.

19. Definition of Bond

Bonds are debt instruments representing the holders’ participation in a collective credit, typically issued by a corporation (SA).

20. Bond Payment

Payment is the essential right of the bond holder to receive the maturity benefit of the exchange requirement.

21. Payment Options

  • Normal
  • Abnormal credit
  • Early
  • Overtime
  • Extemporaneous

22. Definition of Guarantee

A guarantee is when someone is responsible for a debt that does not belong to them.

23. Definition of Protest

Protest is the certification given to a bill of exchange, specifying endorsement, rejection, or inappropriateness.

24. Difference Between Promissory Note and Bill of Exchange

A promissory note is always date-specific and has an endorsement. A bill of exchange is payable on the appointed day.

25. Types of Bonds

  • Mortgage
  • Turn
  • Financial
  • Founder Bonds

26. Legal System Guarantees

  • General Law on Negotiable Instruments and Credit
  • General Law of Commercial Companies

27. Definition of Trust

A trust is a contract where a person makes certain assets available for a particular purpose.

28. Definition of Credit Card

A credit card is a payment method using an electronic network.

29. Bank Right Support

  • Banking system
  • Financial groups
  • Filiales
  • Agencies
  • Auxiliary services

30. Documentary Credit Basis

  • LGTOC Articles 30 to 73
  • Commercial Code
  • LGSM

31. Definition of Commercial Contract

A commercial contract is an agreement between two or more parties, establishing rights and obligations regulated by law.

32. Definition of CETE

CETEs (Treasury Certificates) are instruments issued since 1978, representing part of the public debt.

33. Mexican Financial System Basis

The Mexican financial system comprises banks, financial groups, branches, and agencies.

34. Credit Rating and Avió

Avió credit is a contract obligating the borrower to invest the credit amount in instruments that benefit a third party.

35. Open Call Credit

Open call credit involves a subject making credit available to another accredited party for a certain amount.

36. Support Agencies in Credit Agreements

General deposit warehouses, leasing, and factoring are considered financial support agencies under LGTOC.

37. Legal Concepts Governing Credits

The General Law on Negotiable Instruments and Credit Operations governs credits.

38. Types of Contracts

  • Trade
  • Loans
  • Appropriation
  • Deposit
  • Insurance
  • Warranty
  • Surety bond
  • Security
  • Joint venture

39. Role of PROFECO

PROFECO protects consumer rights, ensures equity, and provides legal certainty.

40. Laws Governing Mass Legal Acts

  • Collective Bargaining Agreement
  • LGSM
  • LGTOC
  • All arising from legal acts

41. Definition of Legal System

A legal system governs contracts between individuals and corporations.

42. Bail Institution

The bail institution regulates organizations, their operations, and activities, including processes determining securities in companies, construction, savings, and loans, protecting the interests of savers.

43. Definition of Commercial Deposit

A commercial deposit is a warranty given in payment or in kind receivable.

44. Objectives and Functions of LGTOC

LGTOC regulates the documents required to exercise the literal and self-expressed right.

45. Relevant Laws

  • General Law of Organizations and Auxiliary Credit Activities
  • Federal Law on Bonding Institutions
  • Loss or theft of Nominative
  • Cancellation of Titles
  • Replacement Parts

46. Role of the Secretary of Finance and Public Credit

The Secretary of Finance and Public Credit is a financial institution responsible for collecting contributions from Mexicans for public spending.

47. Special Deposit Procedures

Special deposit procedures involve notifying the institution, which then conveys the demand to initiate the process. The judge determines the sentence, refund, and payment of damages, especially for real estate. The institution pays, puts the property on sale or purchase, and proceeds according to the sentence.

48. Definition of Real

“Real” refers to assets, including buildings or lease obligations, permitting their use.