C. EXECUTION FORMALITIES IN CONTRACTUAL OBLIGATIONS

7.133 Section Two of Book Two of the Civil Code, under Chapter III of Title II through Title V, deals with formalities due for the execution of acts that are the cause of contractual obligations. Unless a particular form is legally required, the parties are free to employ the one they judge best suited to the circumstances. Where a written form is required or has been agreed upon, no other proof of execution may be substituted and where a public instrument, or a public instrument of a certain kind, were mandatory none other may be substituted and the act is void, though if signed by the parties it is valid as a private instrument¹.
¹ Arts. 973 to 978.

7.134 Among others, public instruments include public deeds and other instruments enacted by a notary public or by government officials within their competent authority, duly authorized company shares and bank notes. Until falsehood be argued before a court and legal proceedings instituted, public instruments are granted credit and authenticity regarding the parties and third parties as to the facts they record as having been performed by or passed before the public official in charge and as to their content¹.
¹ Arts. 979 and 993 to 995.

7.135 Public deeds before a notary public must be in the Spanish language and are deemed null if the place and date of execution are not recorded or when the name and signature of the parties, and those of the witnesses if required, be missing¹. A public deed is required to transfer property and real rights on immovables, or to confer powers of attorney destined for use in court or for management purposes, or to execute any act that should be done by public deed, or settlements concerning immovable property, or the assignment of rights and payment of debts established by public deed².
¹ Arts. 997, 999 and 1004.
² Art. 1184.

7.136 The parties signature is essential to the existence of a private instrument and cannot be validly replaced by signs or initials. Save for that requisite, private instruments do not require special formalities of any sort and can be executed in any language, though formal evidence of the date of execution binding in regard to third parties only derives from presentation of the document in court or to a government office or acknowledgment of same before a notary public or registration of same in any public registry or after signatory’s or a witness’ decease^1
1 Arts. 1012, 1020, 1034 and 1035.

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D. CONTRACTS IN GENERAL

7.137 Title I of Section Three of Book Two of the Civil Code classifies contracts, meaning any agreement between several parties aimed at governing common interests, in unilateral or bilateral contracts, according to whether one or each of the parties enters into an engagement or assumes an undertaking toward the other; onerous or gratuitous contracts, according to the profit to any one of the parties being intended in consideration of an advantage expected in return, or not; and consensual or real contracts, when considered executed as from the parties’ given consent, aside from due formalities, or since delivery by one of the parties of the thing owed under the contract¹.
¹ Arts. 1137 to 1141.

7.138 Contractual consent must be expressed through offers or proposals by one of the parties and acceptance by the other and may be express, whether written, verbal or by unmistakable signs, or implied¹, when resulting from acts that previously suppose consent or allow consent to be presumed, except when express consent is legally required or has been stipulated by the parties¹. Between absent parties, consent may be expressed by agents or by letter². An offer is to no effect if proponent dies or becomes unable to enter a contract before knowing of its acceptance or if the other party likewise dies or becomes unable before acceptance. Unless irrevocable, an offer may be withdrawn before acceptance and an acceptance before it is known by proponent³.
¹ Arts. 1144 to 1146.
²  Arts. 1147.
³ Arts. 1149, 1150 and 1155.

3. Object of Contracts

7.139 Undertakings of any nature that can be valued in money may be made the object of a contract, whether the obligation be to do, not to do, or to give existing or future things, or litigious, pledged, mortgaged or attached things, or things belonging to others, in which case, if delivery has not been guaranteed, the extent of the obligation is only to employ the necessary means for performance¹.
¹ Arts. 1168, 1169, 1174 and 1177.

4. Effects of Contracts

7.140 Effects of contracts extend to creditor’s and debtor’s heirs and universal successors, unless performance only be possible by debtor due to personal circumstances and qualifications or if otherwise established by law or provision of the parties¹. Contracts are binding on the parties as is the law itself and must be executed, understood and performed in good faith and according to what the parties reasonably meant or could have meant on entering them if acting diligently. In commutative contracts, meaning those when the parties consider their mutual engagements equivalent, any party’s engagements becoming burdensome in excess due to extraordinary and unpredictable events entitles it to terminate the contract if not in default unless the other party offers to better its performance. Effects of contracts do not extend to third parties².
¹ Art. 1195.
² Arts. 1197 to 1199.

7.141 The parties may consent to extinguish their obligations arising form a contract and also agree to terminate a contract. A party to a bilateral contract may not demand performance without proving its own performance or offering to do so, unless subject to a term not yet expired¹. If there be a provision authorizing any of the parties to abstain from performance if the other party does not in its turn comply, the contract may only be terminated by the party not in default and not by the non performing party. All bilateral contracts tacitly include the right to terminate the contract due to the other party’s default unless the party not in default chooses to claim performance and damages².
¹ Arts. 1200 and 1201.
² Art. 1203 and 1204.

7.142 Contracts executed in foreign countries shall be judged enforceable in accordance to the laws ruling the validity of contracts in the place of execution, except when immoral or prejudicial to Argentine interests or contracts aimed at infringing Argentine law, which are of no effect. Contracts executed in or out of the country, by nationals or foreigners, for performance within the country shall be judged enforceable according to Argentine law¹.
¹ Arts. 1205 to 1209.

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E. SALE

7.143 Title III of Section Three of Book Two of the Civil Code deals on sales, a sale being a contract whereby one of the parties undertakes to transfer ownership of a certain thing to the other, who in return undertakes to receive it and pay a certain sum in money. Any existing or future things may be made the object of a sale unless their alienation be forbidden. Sale of alien property is void unless confirmed by owner or if vendor subsequently acquires property by any tittle¹. Transfer of ownership of both movable and immovable property in principle results not from execution of the sale contract but from the material act of delivery, except when title registration is additionally required to convey ownership to buyer, as is the case of automobiles and other such vehicles, ships or aircraft².
¹ Arts. 1323, 1327, 1329 and 1330.
² Arts. 577, 1416, 1417 and 2505.

7.144 Parties to a sale may, by way of special provisions, condition or modify their contractual obligations as they see fit. A provision not to sell the purchased thing to anybody is forbidden, though not to do so to a certain person is allowed, as are provisions conditioning the sale to buyer’s approval, that are considered to be subject to a suspensive condition; or provisions enabling seller to rebuy (sale with right of redemption), or buyer to sell back, in both cases after reimbursement of the price, which may be increased or diminished as agreed, which provisions are valid up to a three year period from the date of the agreement and are considered to have the effect of resolutory or dissolving conditions; or provisions stipulating that vendor, paying the previously agreed price, is to be preferred to third parties if buyer should want to resell the purchased thing; or provisions establishing the sale to be undone if a third party offers to better the price, which are considered to be resolutory conditions unless otherwise agreed¹.
¹ Arts. 1363 to 1403.

7.145 Seller must not change the condition of the thing and must keep it as it was on the date of the contract, free of other possessors or intruders, for delivery on the established date and, if no such date be agreed upon, on buyer’s demand. Delivery must be performed at the agreed place of delivery or, if none be established, at the site where the thing due was on the date of the contract. Vendor is obligated to receive payment of the price in the agreed place or, if none should have been established, at the time and place of delivery, unless there be an established term of payment¹. Vendor is liable for the consequences of eviction if buyer be legally dispossessed by third parties and also for redhibitory vices or defects of the thing. Delivery expenses are for the seller unless otherwise agreed¹.
¹ Arts. 1408 to 1411, 1414 and 1415.

7.146 Buyer is obligated to pay the agreed price at the place and time established by contract or, if nothing be established, at the place and time of delivery. In the absence of a different provision and If there be a term given for paying the price, payment must be made at the buyer’s domicile and conveyance and receipt expenses are at his charge. Purchaser must accept delivery at the agree upon time and, if none be established or customary, immediately following the sale¹ .
¹ Arts. 1424 and 1427.

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F. PROMISE OF PURCHASE AND SALE

7.147 Contracts that, requiring formal execution by public deed before a notary public, fail to be executed in the required manner for conveyance of title, as is the case of sales of immovable property, but set down in a public instrument duly signed by all parties, are not deemed to be executed missing the public deed, but are enforceable as contracts by which the parties are obligated to execute the public deed. The same principle applies if the parties have executed a private instrument whereby, amongst other provisions, they are obliged to perform execution of the said public deed, thus entering a contract consisting in a promise of purchase and sale, i.e. an undertaking by the proposed vendor to transfer title in due form to the proposed buyer in the conditions and in return for payment of the purchase price as thereby also established¹ .
¹ Art. 1185.

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G. ASSIGNMENT OF RIGHTS

7.148 Title IV of Section Three of Book Two of the Civil Code, on assignments of rights, defines them as contracts whereby one of the parties undertakes to transfer to the other a certain right of credit he holds against a debtor of his own, handing over title to the credit if same exists. When for a money price or if received in payment, assignments are governed by the rules on sales, or by the rules applying to exchanges if the credit were swapped for something other than money, or by the rules on donations is the assignment be gratuitous, in each case where not specifically modified by law¹.
¹ Arts. 1434 to 1437.

7.149 Any intangible property, rights and legal actions concerning things that are in the market may be assigned when not expressly or implicitly forbidden by law or contract. Conditional, eventual, aleatory or litigious credits, present or future rights may be assigned¹.
¹ Arts. 1444, 1446 and 1447.

8.150 Assignments are null and void when not executed in writing and, if of a litigious nature, when not executed by means of a public instrument¹. Though consent to the assignment transfers property of the credit and its accessories between the parties, notice to debtor or his acceptance of the assignment -the assignment merely becoming otherwise known to debtor not being enough to this effect- is necessary to consider the latter duly executed vis à vis third parties wishing to contest the assignment, unless the credit be attached, in which case notice or acceptance by debtor is irrelevant concerning such creditors as have obtained prior attachment. The first assignee to notify debtor or obtain debtor’s acceptance of an assignment is preferred to others even though transfer in his favour should be of a later date. Several assignees giving notice of the assignment to debtor on the same day, even when at different times, are considered to be on equal terms. Partial assignees of a credit do not have priority over the assignor unless expressly awarded or if assignor has otherwise guaranteed them collection².
¹ Arts. 1454 and 1455.
² Arts. 1457 to 1459, 1461, 1465, 1466, 1470 and 1475.

7.151 An assignor in good faith is liable for the existence and legitimacy of the credit at the time of the assignment, unless assigned as doubtful, but not for debtor’s or guarantor’s solvency, unless prior insolvency be publicly known¹.
¹ Art. 1476.

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H. EXCHANGE

7.152 Title V of Section Three of Book Two of the Civil Code defines a barter or exchange contract as that in which one of the parties undertakes to transfer ownership of a thing to the other party if the latter undertakes to transfer ownership of a thing in exchange. Legal rules on sales mainly apply also to swaps¹.
¹ Arts. 1485 and 1492.

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I. LEASE

7.153 Title VI of Section Three of Book Two of the Civil Code defines a lease as a contract whereby one of the parties undertakes to let the use and enjoyment of material property for a certain rent or price in money. The contract is deemed executed as a result of the parties’ mutual consent and rules applying to the price, parties consent and other essential sale requirements are extensive to leases. Rights and obligations arising from the agreement pass to the parties heirs and the lease continues after sale or disposal of the property in any way¹.
¹ Arts. 1493 to 1498.

7.154 All things immovable as well as non fungible movable things may be let for an honest purpose. If a specific use be provided for the tenant may not apply the thing to any different purpose. In the absence of such a provision, the thing must be used according to its nature or in the customary way¹. Special rules apply to country or rural leases, such as a minimum three year lease term, irrational land exploitation being forbidden, certain things being unattachable and contract provisions not allowed, as are the election of a domicile by lessee or the possibility of agreeing to a governing law and court jurisdiction other than those pertaining to lessee’s domicile².
¹ Arts. 1499 and 1504.
² Law 13.246 as amended, that includes rules on leases for cattle raising and other agricultural purposes.

7.155 Leases can be executed for a maximum ten year term and if made for a longer time shall terminate on expiry of ten years¹. Two years is the minimum term a furnished or unfurnished urban property may be leased as a household and three years if for other purposes. Leases agreed to for lesser periods shall be considered executed for the aforesaid minimum terms. Leases to embassies, consulates and international government agencies and to diplomatic, consular or agency personnel, or of furnished dwellings in tourist areas and for holiday purposes, or of garages or whatsoever spaces or places for the keeping or storage of animals, vehicles or other things, or of market stands, or when the tenant is a government office, are all exempt from the minimum term requirement. After the first six months lessee may terminate the contract with sixty days notice to the proposed termination date and by paying the equivalent of a month and a half’s rent as damages if termination overcomes during the first lease year or of a month’s rent if termination happens after that².
¹ Art. 1505.
² Law 23.091 as amended by law 24.808.

7.156 Lessor must deliver the thing in a condition fit to serve the lease purpose, unless delivery be agreed in its present condition, and is obliged to maintain the thing in good condition after delivery throughout the term of the lease, making the necessary repairs even when due to force majeure and ensuring lessee’s undisturbed enjoyment. If during the lease term the thing were to be completely destroyed because of force majeure the contract shall be terminated, but if only part destroyed lessee may demand a reduction of the rent or termination of the contract according to the importance of the destruction. If lessee is not able to use or enjoy the thing, or the thing becomes inappropriate to the purpose of the lease, due to force majeure affecting the thing itself, termination of the contract or interruption of the rent for the duration of the obstruction can be demanded. Lessor is liable for all vices and defects that hinder the thing’s use, even when unknown to him or appearing in the course of the lease, cannot oppose works and changes by the lessee ordained to improve the thing’s usefulness and comfort in the absence of provisions forbidding such innovations and must pay all taxes falling on the thing given in lease¹.
¹ Arts. 1514 to 1517, 1521, 1522, 1525, 1533 and 1553.

7.157 Lessee must use the thing as agreed or, if not provided for, according to its previous use or nature, pay the rent punctually, mind the thing, and return it when the lease is up. Lessee must keep the thing in good condition and is liable for damages due to his fault or that of his family, people in his charge, guests or sublessees, as when he abandons the thing, makes harmful innovations or changes its usefulness or shape or innovations that are forbidden by contract, or omits innovations he has engaged to do. Minor repairs, meaning those normally caused by the inhabitants of a house, are to lessee’s charge¹.
¹ Arts. 1554 to 1556, 1561, 1562 and 1573.

7.158 Unless forbidden by law or private agreement, lessee can sublease, lend or assign the thing either as a whole or only in part. The sublease or underlease is considered a new lease to be ruled exclusively by the terms established between lessee and sublessee. Lessor has no obligation toward sublessee, who in turn is liable to the lessor for rents unpaid by the lessee only to the amounts due by him to the latter and for damages caused to the lessor¹.
¹ Arts. 1583. 1585, 1600 and 1601.

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J. HIRING OF SERVICES. WORK OR TASK HIRE

7.159 A hiring of services, meaning a contract whereby one of the parties engages to render a single service and the other to pay a price in return (work for profits as opposed to work for wages), is executed through the parties consent even when the required service be accomplished on an object to be delivered by one of the parties (work or task hire). The contract may provide only for the rendering of the service involved or also for the supply of the needed materials¹. Contractor cannot claim payment when the work is destroyed due to force majeure before delivery unless the other party be in default or destruction is due to bad quality materials and owner was warned of the fact. Contractor is liable for damages when not warning the owner that materials were not adequate and as a result the work is destroyed. Contractor is liable for the performance of the workers he employs in executing the work². Even should material or manpower prices increase and unless extraordinary and unpredictable circumstances concur to that effect, when the task has been undertaken for a definite amount no increase of the price may be demanded by contractor³. The owner is free to stop the work proceeding at any time indemnifying contractor for his expenses, services and expected profit⁴. Contractor is liable for total or part ruin of buildings and other permanent constructions that occurs within ten years of having been received by owner and when due to construction or soil vices or bad quality materials, either provided or not by contractor and whether or not the building site were contractor’s, whose liability cannot be waived. Once the works have been received contractor is free from liability for any apparent defects or for work not conforming to stipulations, unless the difference could not have been observed on delivery or the defects were occult, in which case they may be denounced within sixty days of their discovery⁵.
¹ Arts. 1623 and 1629.
² Arts. 1630 and 1631.
³ Art. 1633.
⁴ Art. 1638.
¹ Arts. 1646 and 1647 bis.

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K. LEASING

7.160 Leasing, as formally referred to by such a name in the Spanish language by Law 24.441, is a contract whereby a purchase option is provided for under a lease agreement in favour of lessee, subject to lessor being a financial institution or a company incorporated specifically for the execution of leasing agreements; that the latter refer to specific movables bought by lessor from a third party for the purpose or of real property belonging to lessor; that the rent be fixed so as to amortize the object’s value during the term of the contract according to generally accepted accounting principles, minimum and maximum lease terms not applying to leasing contracts; and that lessee be given the right to buy and pay a purchase price established in the contract according to the object’s residual value, such right to be exerted only after lessee has paid half of the stipulated rent periods unless otherwise agreed¹.
¹ Art. 27 of Law 24.441.

7.161 Leasing contracts may also be executed by manufacturers and importers of movable equipment for industrial and commercial firms, utility companies, and agricultural and professional firms if such assets are to be used by lessee exclusively for that purpose¹.
¹ Art. 28 of Law 24.441.

7.162 Together with the purchase option, parties may agree to the possibility of lessee choosing to renew the contract by replacing the original things with new ones as agreed to¹.
¹ Art. 29 of Law 24.441.

7.163 Registration in the proper registry as determined by the nature of the leased objects is required for opposition of the contract to interested third parties if contested. If such objects be of a nature not admitting registration, the leasing contract must be registered by the Registry of pledge secured commercial credits¹.
¹ Art. 30 of Law 24.441.

7.164 Transfer of ownership results from exercise of the purchase option and payment of the residual price and performance of all legal requirements and formalities according to the nature of the property to be acquired¹.
¹ Art. 32 of Law 24.441.

7.165 In case of rent payment default in leasing contracts of real estate, lessor may demand lessee’s eviction in the absence of payment, within five days notice if less than a fourth of the rent periods have already been paid; or within sixty days plus five days additional notice if between a fourth and seventy five percent of the rent periods have already been paid; or within ninety days plus five days additional notice if more than two thirds of the rent periods have already been paid or, the purchase option being enforceable, payment of the residual value is not alternatively offered¹.
¹ Art. 34 of Law 24.441.

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L. MANDATE

7.166 Ruled by Title IX of Section Three of Book Two of the Civil Code and defined as a contract whereby one of the parties commits the other to perform one or more lawful acts to be undertaken in the former’s name. A mandate may be performed gratuitously or onerously, entrusted expressly or tacitly and given in general or special terms, when management of all mandator’s business or only one act or acts of a certain nature be entrusted to mandatory. A special mandate is needed for certain specific purposes, such as payments not of an ordinary nature, novation and acknowledgment of preexisting debts, settlements, election of governing law and jurisdiction, remission of debts or statutes of limitations, contracts transferring ownership or leasing or assigning real rights on immovable property, lending and borrowing money, committing mandator as a bailee or guarantor or to hire his services or incorporate companies¹. Mandatory must render accounts and unless forbidden to do so can substitute another in his place². A mandate can be irrevocable if given for a specific act or purpose to be performed in a definite period and in the interest of the parties or of a third party³.
¹ Arts. 1869 to 1888.
² Art. 1909.
³ Art. 1977.

7.167 Business conducted for another in the absence of a mandate by a business gestor is subject to confirmation¹.
¹ Arts. 2288 and following.

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M. BAILMENT

7.168 Deposit may be voluntary or necessary, depending on whether bailor has a free choice to enter into the contract or is obliged to do so by circumstances such as fire, ruin, plunder or shipwreck, and regular or irregular, depending on whether, because of the nature of the things involved, bailee may not or may use them. Bailment is deemed executed only after delivery of the goods. Bailee must care for the goods in his charge as if they were his own and return them promptly, but has a right of retention for whatever he is owed by reason of the deposit¹.
¹ Arts. 2282, 2887 to 2890, 2208, 2202 and 2221.

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N. LOAN

7.169 Loans may be of quantities of consumable or fungible things delivered by lender to borrower, who must return an equal quantity of the same species and quality of things at the agreed time or pay their price if restitution in kind were not possible. Loans may be gratuitous, as is the rule if nothing be established about interest payments, or onerous and are deemed executed upon delivery. A gratuitous loan of movable or immovable things to be temporarily used as stipulated or customary and returned is known as a commodate or commodatum, and is also considered executed upon delivery¹.
¹ Arts. 2240 to 2243, 2248, 2250, 2251, 2255 and 2256.

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