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Commercial
Contracts
SYNOPSIS
A.
COMMERCIAL CONTRACTS IN GENERAL 6.101
B.
MANDATE AND COMMISSION 6.106
C.
AGENCY OR BROKERAGE CONTRACT.
CONSUMER
GOOD DISTRIBUTION
AGREEMENT
D.
COMMERCIAL PURCHASE AND SALE 6.114
E.
STATUTE OF LIMITATIONS 6.118
A.
COMMERCIAL CONTRACTS IN GENERAL
6.101
Under
Argentine law there are no fundamental
structure differences between civil and
commercial contracts, both being
instrumental to business traffic as in
comparative law. And though
interpretation of commercial contracts
must follow specific principles set down
in commercial law, except where
otherwise expressly established or
modified civil law applies to commercial
contracts and matters in general1.
1 Art. 207 of
the Code of Commerce.
6.102 A
contract may be deemed commercial due to
either or both of the parties involved
being merchants, or to its object being
of such a nature, or to the fact that it
is pertaining to a mercantile sphere of
activity1.
1 Arts. 1
through 8 of the Code of Commerce.
6.103
Commercial
contracts may be evidenced by public
instruments or deeds, broker’s notes
and certified book records, private
instruments, letter and telegraphic
correspondence, trade books and accepted
invoices, by admission or under oath and
by witnesses, in this last case if the
value involved is under a certain minor
amount or when some written proof of the
matter coming from the other party also
exists1.
1 Arts. 208
and 209 of the Code of Commerce.
6.104
As
is the case with civil contracts, unless
a particular form be legally required,
the parties are free to employ the one
best suited to the circumstances, and
though commercial practice is not
inclined to formalities, wherever
certain forms or solemnities are
required by law none other may be
substituted and the act is of no effect
if argued in court1.
1 Art. 210 of
the Code of Commerce.
6.105
The
Code of Commerce includes certain
contract interpretation guidelines. The
words of a contract must be understood
in the sense of their general use and if
it be necessary to expound the meaning
of a certain provision, the following
principles should be taken into account:
(i) Interpretation of ambiguous words
must lead to the parties’ common
intentions prevailing over the words’
literal sense. (ii) Ambiguous provisions
must be understood by recourse to others
where recurring words have a clear and
precise meaning and as suited to the
whole context. (iii) Clauses admitting
of two opposite meanings, one leading to
the contract being valid and the other
to it being void must be understood in
the former sense. If both
interpretations are for the contract
being enforceable, the sense most suited
to the contract’s nature and to the
rules of fairness must be chosen. (iv)
The parties acts following execution and
regarding the contended matter shall be
deemed to be the best explanation of
their intention on executing the
contract. (v) Merchants’ acts are
never presumed gratuitous. (vi)
Established commercial usages and
practice and particularly customs at the
place of expected performance of the
contract shall prevail over any contrary
suggested meaning of the words employed.
(vii) In doubtful cases that cannot be
decided in accordance to the aforesaid
principles, ambiguous provisions must be
always expounded in favour of the debtor
and in the sense of his release. If a
provision necessary to performance has
been omitted and the parties are
unagreed as to the real sense of the
obligation, the law presumes them to be
bound in accordance to usage and
practice among merchants in other such
cases at the place of expected
performance of the contract. When words
with a meaning comprising different
values or quantities are employed in a
contract in reference to the currency,
weight or measure therein designated,
the obligation shall be understood to
have been undertaken in such a species
of currency, weight or measure as is
customary in contracts of a similar
nature1.
1
Arts. 217 through 220 of the Code
of Commerce.
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B.
MANDATE AND COMMISSION
6.106
In
general terms, a commercial mandate,
that is never presumed gratuitous, is
defined as a contract whereby one of the
parties commits to handle one or more
lawful business matters that are
entrusted to him by the other. A
commercial mandate is specifically known
as such when the business is undertaken
in the mandator’s name and is known as
a commission when the person in charge
of another’s business transactions
acts in his own name or under that of
the company he stands for1.
1 Arts. 221
and 222 of the Code of Commerce.
6.107
A
commercial mandate, whatever its terms,
can only be given for the purpose of
performing commercial acts and therefore
never is extensive to acts of another
nature unless otherwise expressly stated
in the mandate document1.
The mandatory may resign his mandate at
any time with due notice to the
mandator, but is liable if damage were
to follow to the latter unless
performance were dependent on the
provision of missing funds by mandator,
or if same becomes impossible without
considerable personal harm to the
mandatory2.
In the absence of instructions, mandator
is liable for mandatory’s reasonable
commitments in performing the mandate3.
1 Art. 223 of
the Code of Commerce.
2 Art. 224 of the Code of
Commerce.
3 Art. 226 of the Code of
Commerce.
6.108
Save
if otherwise provided for by law, a
commission performed by a person acting
in his own name for another´s interest
is governed by the same rules as the
mandate1.
The commission personally binds the
acting person toward third parties, who
are not otherwise bound to the person
giving the commission unless the former
assigns his rights to either of the
ultimately interested parties2.
If the assignment were in favour of the
person granting the commission, except
for the acting person’s inability, any
other reason concerning the latter shall
be admissible to contend the other
party’s claims arising from the
transactions3.
The person commissioned is free to
accept or refuse the commission and, if
refusing, must give prompt notice to
avoid liability for damages. A
commission cannot be refused when loss
of credit rights or legal actions is
implied in the refusal4
and even when refused obliges the
requested person to ensure the safety of
the goods involved in the matter until
further instructions are received5.
A commission can be expressly or
implicitly accepted, but is indivisible
and must be accepted as a whole6.
The person commissioned must render
accounts punctually7
and if so required by the nature of the
business or by unforeseen circumstances
or if expressly allowed to do so can
substitute another in his place, be it
the person granting the commission or a
third person, in which cases he is not
liable for the latter8.
1 Art. 232 of
the Code of Commerce.
2 Art. 233 of the Code of
Commerce.
3 Art. 234 of the Code of
Commerce.
4 Art. 235 of the Code of
Commerce.
5 Art. 236 of the Code of
Commerce.
6 Arts. 238 and 239 of the
Code of Commerce.
7 Art. 245 of the Code of
Commerce.
8 Arts. 251 and 252 of the
Code of Commerce.
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C.
AGENCY OR BROKERAGE CONTRACT. CONSUMER
GOOD DISTRIBUTION AGREEMENTS
6.109
There
are no specific law provisions governing
agency agreements, meaning those
agreements that provide for certain
business matters to be entrusted on a
regular professional basis and
transacted on behalf of the principal by
an agent or broker, be it an individual
person not in the principal’s
employment or a company acting as an
independent concern, with a right to a
commission.
6.110
Agency agreements should not be mistaken
for dealership or consumer goods
distribution agreements, that imply
independent distributors working in
their own interest and at their own risk
for a profit obtained on the resale of
bought goods, as opposed to agency
agreements in which the agent earns a
previously agreed upon commission,
usually established as a percentage on
the involved transactions.
6.111
No
special law governs agreements between
manufacturers or suppliers and
distributors, dealers or similar
middlemen, failing which the Supreme
Court has ruled that parties to such
contracts are governed by their own
agreements following general principles
of contract law.
6.112
Normally
the possibility of termination at will
is expressly provided for and, when
given to both parties, is not in itself
void, but may be considered misused if
the middleman has not been allowed a
fair opportunity to amortize his
investments and make a profit.
6.113
When
the contract term is indefinite, it is
generally understood in prevailing case
law that it may be freely terminated at
any time by either of the parties with
the agreed upon prior notice or, in the
absence of such a provision, with
sufficient notice according to usage,
except when the other party is in
default. Prior notice has been required
by all court precedents if the right to
terminate the contract without cause is
to be deemed to have been reasonably
exerted, thus creating a specific source
of liability because of notice not
having been adequate to the other
party’s chances to adapt to the new
situation and other prevailing
circumstances.
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D.
COMMERCIAL PURCHASE AND SALE
6.114
Under
commercial law a purchase and sale
contract is that whereby one of the
parties, be it or not the owner or in
possession of the thing subject to the
agreement, undertakes to deliver it or
to cause ownership to be acquired by the
other, who in return undertakes to pay
an agreed price and who buys it for
reselling or hiring its use. A sale is
reputed to be commercial only if of
goods, chattels, merchandise or
movables, including coin and paper
money, public bonds, company shares and
commercial papers, for wholesale or
retail sale, as they were bought or in
any other shape, or to let or lease
their use. Purchase of real estate, or
of things for personal consumption, or
sales of harvests and cattle by farmers
or of things received in payment of any
sort or gift, or resale of surplus goods
acquired for personal consumption are
not considered commercial1.
1 Arts. 450
through 451 of the Code of Commerce.
6.115
Sale
of property belonging to others is
allowed unless the buyer, on entering
the agreement, knows the thing to be
other than the seller’s, in which case
it is void. Sale promises of alien
property are valid. Indeterminate offers
contained in prospectus or offering
circulars do not obligate the issuer1.
1 Arts. 453
and 454 of the Code of Commerce.
6.116
Delivery
expenses up to the moment when the
goods, duly weighed and measured, are at
the buyer’s disposal, are to the
vendor’s charge, whereas conveyance or
transport and receipt expenses are to
the buyer’s charge, in both cases
unless otherwise established1.
Delivery must be performed at the agreed
place or, if none be established, at the
site where the goods were on the date of
the contract. If no definite place has
been established for delivery to buyer
or no person designated to receive the
goods in his name, delivery shall be
performed by remittance to buyer’s
domicile2.
When no date has been fixed for delivery
and payment, seller must have the goods
at buyer’s disposal within the day
following execution of the contract and
buyer has a ten day term to pay for the
goods, but may not demand delivery
without payment3.
The obligation to pay the price exists
as from the moment the seller puts the
goods at the buyer’s disposal, be it a
cash price or a sale on credit, and
since then the vendor is considered a
bailee and is liable as such for the
goods maintenance4.
If the goods are delivered in packings
that do not allow for inspection and
unless the vendor demands recognition of
the wares on delivery, buyer may claim
any missing quantities or because of
quality defects within three days
immediately following delivery, proving
that the ends of the packages are intact
in the first case or that the defects
are not due to an act of God or to
buyer’s fault in the latter5.
Vendor is liable for vices or defects of
the goods during a period to be
established by the courts but not
exceeding six months from delivery6.
1 Art. 460 of
the Code of Commerce.
2 Arts. 461 and 462 of the
Code of Commerce.
3 Art. 464 of the Code of
Commerce.
4 Art. 465 of the Code of
Commerce.
5 Art. 472 of the Code of
Commerce.
6 Art. 473 of the Code of
Commerce.
6.117
Seller
cannot refuse the buyer an invoice of
the goods that have been sold and
delivered nor a receipt for payment of
the price. Such invoices are presumed
liquidated accounts if not contested by
buyer within ten days from reception1.
1 Art. 474 of
the Code of Commerce.
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E. STATUTE OF LIMITATIONS
6.118
Where
not specifically modified by commercial
law the Civil Code statute of
limitations also applies in commercial
matters1
thus resulting, not in the
extinguishment of the obligation itself,
but in the loss of the right of action
for claiming its enforcement due to not
exercising such a right during the
required period.
1 Art. 844 of
the Code of Commerce.
6.119
Save
for a court release of the consequences
of a statute of limitations that has
become applicable because of the
established time period having run out
while the creditor was materially unable
to act, and on condition that legal
actions be taken within three months
following of such an inability having
ceased1,
time periods applicable to commercial
statute of limitations run relentlessly
and cannot be extended2.
1 Art. 3980 of
the Civil Code.
2 Art. 845 of the Code of
Commerce.
6.120
The
period applicable to commercial statute
of limitations is ten years unless a
shorter one be established by law, as is
the case, among others, of the four year
period applied to debts of invoiced
liquid accounts, or debts of interest on
loans and due to any cause of yearly or
shorter term payments, for the
rescission or annulment of commercial
acts in the absence of specific rules;
of the three year period applied to
actions involving company law or
endorsable commercial papers1.
1 Arts. 846,
847 and 848 of the Code of Commerce.
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