Glossary of Mexican Contract Law Terms

Introduction

This glossary defines key terms in Mexican contract law, drawn primarily from the Federal Civil Code and the Commerce Code. These terms are essential for understanding contractual obligations, remedies, and civil liability in the Mexican legal system.

Key Terms

Lesión: Lesion. A doctrine allowing contract rescission when there is a manifest disproportion between the parties’ obligations and the disadvantaged party acted out of extreme necessity or inexperience. Governed by Article 17 of the Federal Civil Code.

Arras: Earnest money or earnest deposit. A sum of money given at the time of contracting as a guarantee of performance. If the buyer defaults, the arras are forfeited; if the seller defaults, they must return double the amount.

Saneamiento: Warranty obligation. The seller’s duty to defend the buyer against third-party claims regarding the property sold. Includes saneamiento por evicción (warranty against eviction) and saneamiento por vicios ocultos (warranty against hidden defects).

Evicción: Eviction. A legal proceeding in which a buyer is deprived of acquired property by a third party with a superior right. The seller must indemnify the buyer for losses suffered.

Vicios Ocultos: Hidden defects. Latent defects in the object of a contract that render it unfit for its intended purpose. The seller must disclose such defects and is liable for damages if they were known but concealed.

Fuerza Mayor: Force majeure. An extraordinary event beyond the parties’ control that prevents contractual performance, excusing liability. Includes natural disasters, war, and government actions.

Causa: Cause or consideration. The legal reason or motive for undertaking a contractual obligation. Must be lawful and not contrary to public policy.

Consentimiento: Consent. The mutual agreement of parties essential for contract formation. Must be free from error, violence, intimidation, or deceit (dolo).

Objeto: Object or subject matter of the contract. Must be physically and legally possible, determined or determinable, and within commerce.

Cumplimiento Forzoso: Specific performance. A remedy requiring the breaching party to perform their contractual obligations as agreed, as opposed to monetary damages.

Daños y Perjuicios: Damages and lost profits. Compensation for actual losses (daño material) and lost profits (lucro cesante). May also include moral damages (daño moral).

Rescisión: Rescission or termination of a contract due to breach, allowing the parties to be restored to their pre-contractual positions.