Essential Principles of Commercial Law and Trade Regulations
Understanding Commercial Law
Definition of a Merchant
A merchant is a natural or legal person engaged in commerce on a regular basis, such as commercial companies.
Definition of Trade
Trade is a socio-economic activity involving the exchange of materials in the market through the buying and selling of goods and services, whether for use, resale, or processing.
Who Is Considered a Trader?
The law defines traders as individuals who, having the legal capacity to contract, perform acts of commerce as their normal occupation.
Classification of Trade Law
- Acts of trade: Finance and real exchange.
- Subjects: Traders and businesses under trade law.
- Commercial objects: Goods, services, business, credit, currency, and commodities.
- Proceedings: Judicial or administrative actions, such as commercial judgments and bankruptcy processes.
Customary Law
Custom is a source of law derived from traditional practices observed in social relations.
Common Law Application
Common law refers to regulations that apply to the generality of cases, often in opposition to specific or special rights.
Legal Capacity: Enjoyment vs. Exercise
- Capacity to enjoy: The inherent ability to hold rights and bear obligations.
- Exercise capacity: The legal possibility for a person to assert their rights directly.
Restrictions on Engaging in Commerce
Under Mexican law, the following are restricted from commerce:
- Convicted offenders sentenced for crimes against property, securities, or credit operations (fraud).
- Individuals lacking intellectual or legal capacity due to physical, communication, or psychological limitations who have been legally declared incompetent.
- Minors.
Prohibitions and Legal Acts
Who is prohibited from exercising trade? Brokers and counters.
Who cannot perform legal acts? Convicted individuals.
Elements of a Legal Obligation
A legal obligation consists of three elements: subject, object, and cause.
The Subjects
- Creditor: The person with the power to require compliance. The creditor holds a personal right within their assets.
- Debtor: The person with the burden of meeting the agreed service.
Note: Two parties can be mutually debtor and creditor, such as in bilateral contracts, where obligations arise for both parties (e.g., a purchase order).
The Object
The object of an obligation may be to provide something, perform a specific behavior, or refrain from a certain action.
The Cause
The cause is the ultimate purpose that the parties pursue when establishing the obligation.