Mexican commercial legislation, specifically the Commercial Code, does not directly regulate the fulfillment of contractual obligations or the requirements for the formation of a commercial contract, relying instead on the suppleness of the Federal Civil Code. However, this suppleness must always consider commercial uses and customs, as the application of civil legislation cannot be done to their detriment, but by adjusting to what makes more sense in commercial matters.
Regulating obligations in this way in Mexican legislation gives unique characteristics to breaches in commercial matters. For example, civil legislation establishes specific rules for cases where contractual obligations are breached, based on the distinction between obligations to do, not to do, or give something. It also contemplates compensation for the breach of contractual obligations, which translates into the payment of damages and losses by the non-complying party in favor of the party who has suffered from the breach.
Next, we will review how to remedy breaches of general obligations to do, not to do, or give something, in the way that civil legislation establishes:
Obligations to do – If the responsible party fails to fulfill the task, the counterparty has the right to request specific compliance. If it is possible to substitute the compliance, another person may perform the compliance, and the non-complying party must cover the costs.
Obligations of abstention or not to do – If the obligated person fails to abstain from doing something, damages, and losses will be incurred at their expense.
Obligations to give – This type of obligation includes the payment of cash. Therefore, the agreed-upon amount (or goods in their case) must be paid, plus compensation in the form of interest or damages and losses. It should be considered that, if a deadline is not established for compliance, the creditor must first request payment, After 30 days, they can initiate a contentious collection process.
In the event that the controversy results in a contentious procedure, it is essential to consider that the party who suffers from the breach must prove, in general terms, the existence of the commercial relationship and the conditions of the obligation. The party that caused the breach will have the burden of proving compliance or some form of exclusion from responsibility.
The damages and losses claimed can vary and include both emerging damages, which are the direct losses suffered by the affected party as a result of the breach, and lost profits, which are the benefits that the affected party has not obtained due to the contract’s non-fulfillment, or the corresponding interest in the case of a loan or an item that can be substituted for money. In general, for the affected party to claim the corresponding damages and losses, it is necessary to prove the breach of the contract, the real existence of damage, and the causal relationship between the breach and the damage suffered.
Another essential consequence of breaching obligations in commercial contracts is the resolution of the contract. This consists of the retroactive extinction of the contract and the restitution of the parties to the state they were in before the contract was concluded. That is, the parties are released from their reciprocal obligations and must return the benefits they would have received. In any case, for the contract to be declared resolved, there must be an essential breach by one of the parties, that is, a breach that prevents the fulfillment of the fundamental obligations of the contract. In conclusion, a contract’s breach can generate a series of consequences for the parties involved, including the demand for forced compliance, compensation for damages and losses, and the resolution of the contract. It is essential that the parties are informed about their rights and obligations in the event of a breach and seek legal advice in case of doubt or conflict.
