Issue #
October 2008

Listen to this issue

The CCN Mexico Report™ is now available in audio format. Listen to the podcast and follow us on Spotify or wherever you get your podcasts.

Mexico’s Federal Government Announces Contest to Identify the Least Useful Government Procedure

October 17, 2008

On September 26, 2008 the rules for a Contest to identify the least useful government procedure were published in Mexico’s Official Journal of theFederation (Diario Oficial de la Federacion). At the request of President Felipe Calderon and the non-governmental organization TransparenciaMexicana, the contest seeks to determine and identify those federal, state and municipal governmental procedures that should be eliminated or revised inorder to better serve the general public, all within the framework of Mexico’s Procedural Improvement Program (Programa de Mejora de la Gestion). It ishoped that the contest will generate a broad-based response. In our view, this would also be a good opportunity to recognize the “Best Procedure”(Tramite Ejemplar) in order to balance the contest proposed by the government.

Recent Case Decision – Partial Breach of Contract under Mexican Law

October 17, 2008

This past July the First Chamber of Mexico’s Supreme Court issued a decision contradicting prior judicial decisions holding that when a creditor sues forpartial or total breach of contract, such creditor may not simultaneously compel performance of the contract and payment of a contractual penalty clause,but must instead choose only one of the two remedies. The above was based on review of Article 88 of Mexico’s Commerce Code (Codigo deComercio), which does not distinguish between the types of breach, implying that such article covers both partial breach of contract, as well as totalbreach of contract, from which there is no gap in understanding, which means that article 1846 of the Federal Civil Code does not apply as asupplementary authority. As such, and in view of the terms of the Commerce Code, parties to a commercial agreement obligate themselves according tothe terms of the contract expressing their intent, making it even more important to clearly establish procedures for including penalty clauses for partialbreach of such contracts, independent of the possibility of suing for specific performance.