The fundamentals of Contract Law in Mexico are much the same as they are in the U.S. and Canada. The contract must be in writing, have an offer and acceptance, establish liquidated damages or other penalty provisions, and conditions of default and termination of contractual obligations.
On Large Difference in Mexico Contract Law Does Exist
The big difference is that in Mexico, the principle of “consideration” is not a requirement. The validity of a contract depends only on the existence of the agreement between the parties.
The presence of witnesses to a contract is fundamental in Mexico and public registration of contracts so that third parties to the contract will be legally bound is a peculiarity of Mexican law. As in the U.S. and Canada, contracts involving illegal activities are not enforceable. Contracts in Mexico are subject to more formality and quite often require a “Notario” to certify the legality of certain types of contracts.
As in Civil Law in Mexico, disputes are far better negotiated or resolved through arbitration than litigated.
Unless you are operating a business in Mexico (in which case you will need a competent lawyer to advise you), the most common contracts you will enter into are for services. Such services as electricity, water, telephone, internet, etc., are standard contracts. Other service contracts such as repairs, renovations, construction, personal services (maids, gardeners) are best reviewed with a lawyer to ensure they are legal, protect you in case of dispute and have the full agreement documented.
Some people get contracts for just about any and every service - preferring to have the written contract to fall back on, while others deal with maids and gardeners and others in a much less formal manner. Certainly there are times when you should protect yourself with a formal contract; however, from personal experience we have found that a mutual trust relationship goes a long way.
During a Focus on Mexico Program you will learn from our legal expert all the ins and outs of the legal system. You’ll get all the information and be in a position to make an informed decision specific to your personal situation. You’ll get all the information to keep you out of trouble and avoid costly mistakes. You’ll discover the benefits under the NAFTA Agreement that provides protection when your purchase property in any of the NAFTA countries.