By Azucena Marin
The negative cash flow of companies in the supply chain increased the risk of
delays or irrecoverable accounts.
During the last year we experienced an increased number of disputes mainly related
to the collection of credits from our clients' customers in the ordinary course of
their commercial transactions. Some of our clients were forced to invest
unexpected time, money and resources to collect past due accounts receivable.
These disputes generally arise from the lack of written contracts or agreements
supporting the credit or by executing contracts with provisions not enforceable
under Mexican law.
In order to reduce the legal risks when carrying out commercial transactions
and to avoid complicated legal processes when collecting debts, today more than ever we
suggest that you to closely review the terms of your contracts as well as ascertain that the
provisions are enforceable in Mexico and that there is a guaranty to collect
against in case of breach of contract.
Among others, we suggest a careful consideration of the following provisions: payment guarantees
and payment mechanisms; terms of purchase orders and invoices; calculation
of ordinary and late payment interests; products delivery terms and
acknowledgement receipt mechanisms; terms, conditions and payment of costs
related to the products storage, transportation, importation and exportation;
product liability and insurance; dispute resolutions mechanisms, governing
laws and jurisdiction.
