Legal Theories and Definitions of Credit Instruments in Commercial Law

Legal Theories on the Nature of Credit Instruments

1. Contractual Theory

   Contractual Theory. Influenced by civil law tradition, this theory states that the fundamental obligation of the legal relationship exists between the debtor and the creditor. The legal value of the document lies in the underlying transaction, not merely in the writing itself. It is not a declaration of intent but a mere detachment of the document, which establishes the concurrence between its content and the declaration, thereby giving birth to a commercial transaction through the submission of the document.

2. Unilateral Theory

   Unilateral Theory. The obligation is born from a simple unilateral promise, rather than an offer from the maker requiring acceptance or drafting and subscription. From the moment the instrument is considered valuable paper, it becomes the source of the maker's obligation. Credit instruments include non-receptive unilateral declarations of intent, meaning that non-contractual declarations made by the maker in favor of future legitimate creditors are obligatory. These obligations do not need to be accepted by any creditor to become binding. Mexican legislation approves this theory.

3. Creation Theory

   Creation Theory. The instrument contains monetary value, and its writing generates a credit right—a financial value exercised by any holder, even against the will of the original issuer. The instrument possesses a patrimonial value and may become, at any moment, a source of credit rights. It is subject to a suspensive obligation.

Doctrinal Definitions of Credit Instruments

1. Definition 1: Credit Instruments as Commercial Goods

   1. As commercial goods, instruments may facilitate any legal operation. Being in commerce, they can be freely transmitted or owned.

   2. Article 1 of the LGTOC (General Law of Credit Instruments and Operations) explicitly states: "Credit instruments are commercial goods."

   3. This definition clearly reveals that credit instruments cannot be classified solely under civil law goods, such as movable goods, property, or public and private goods.

   4. The merchantability of these instruments is strictly objective, based on the object itself and not the subject. The civil, commercial, public, or international nature of the person who negotiates them is irrelevant because merchantability derives from the goods themselves.

2. Definition 2: Constitutive and Disposable Documents

   A standard document often serves an evidential purpose, demonstrating the existence of a legal relationship. In such cases, the relationship exists regardless of the document, which only serves as an assumption.

   However, documents can be categorized into three types:

   1. Simple Evidentiary Character: Documents that help demonstrate the existence of an act.

   2. Constitutive Documents: Documents required to give birth to or constitute a right or legal act.

   3. Constitutive-Disposable Documents: This category includes credit instruments.

   For constitutive-disposable documents, not only is a right created, but the document is also necessary to exercise that right. This means that the creation of the right is intrinsically linked to the creation of the document.