Closing Deals in Mexico
by Lic. J.E. Beaulne, LL.B.
When is the deal done?
Basically the deal is done when one’s offer is accepted. In Mexico the Civil Law, which regulates purchase and sale OF ANY GOOD, says that there is a purchase-sale (compraventa) when one obligates himself to transfer the property of a good or of a Right and that the other obligates himself to pay an established price and with currency. Art., 2154 C.C.B.C.S.). The Code also establishes that in general the sale is perfect and obligates the buyer and seller when they agree on the good and its price, even if the buyer did not pay and the seller did not remit the good ( art., 2155 C.C.B.C.S.).
This been said we can now look at a real estate property sale case in which a seller refused to remit the property and offered to reimburse the price paid by the buyer and refused to sign the document by which the property transfer is acknowledged on the idea that the property value had increased since the offer was made.
To win this type of case one first presented a penal (criminal) denunciation for invasion (Despojo) against the seller because the seller would not let the buyer occupy the lot, plan of the property and witnesses were presented to prove the case.
At the same time a Civil law suit called (Demanda) was presented, based on facts proven by documents and witnesses, to request that the seller signs and in the event that he refuses that Judge signs the FTD contract (Fideicomiso Traslativo de Dominio) and that the seller be responsible for the damages caused.
In Mexico every step in any law suit must be presented in writing thus one must have a good lawyer who not only can write but write in a logical manner, find the proper jurisprudence and doctrine to support his allegations AND knows the procedural rules regarding the presentation of the proof and the written questions, presented in a sealed envelope, which will be asked to the other party and witnesses.
Regarding the Penal Denunciation (Denunciación penal) once it is presented the DA (Ministero Publico) has the duty to do the investigation but we do know by experience that if the lawyer representing the affected party the case is only going to sit. Thus one’s lawyer must constantly request the state of the investigation in other word PUSH.
Regarding the Civil law suit (Demanda) one must present promotions for every move that is needed to be able to put the witnesses on the stand. Said promotions must be in accordance to the established rules in the Procedural Civil Code otherwise they will be refused.
What happens if the other party does not want to sign? Here the knowledge and experience of the lawyer is important because he has to request not only that the seller signs but that the judge signs for the seller, if it is requested the judge can not do it or offer to do it because the rule “Ultra Petida” would apply.
The first instance Judge was of the opposite opinion of the buyers as far as the presented proof ...once the considerations and conclusion of the sentences were carefully read and analyzed it was decided to an appeal on the grounds that the Judge did not take in consideration the fact that the seller had declared in his testimony that he had agreed to the offer and had received full payment and that the witnesses had testified that yes a deal had been done….In other words he did not respect the words of the legislator on when a deal is done.
Besides the situation regarding the signature, “quid” (important question): Is the seller responsible for damages such as attorney’s fees and higher cost for construction? The logical answer to this is YES, one is responsible of any damage that on causes, thus damages were claimed but the first instance Judge was negative to the buyer’s claim thus was silent on the right to damages. So the question on damages remained unanswered…could this be included in the appeal, yes but logic must prevail, damages would not be claimed at the time of the appeal on the Judge decision; Damages would be claimed later.
Finally the appeal was granted, allegations on both sides were presented in writing, and the lawyer representing the buyer made sure he was received in the Magistrate’s chamber to discuss the case and remind him that the law is the law; the case was reviewed by the Superior Tribunal.
Conclusion, the Superior Tribunal agreed that a deal was done thus the seller had the obligation of signing the documents and if he does not the judge at the lower level would have to sign, case closed at CAN-AM-MEX FIRMA JURIDICA / LAW FIRM.
Lic. J.E. Beaulne, LL.B.