On today’s topic, we’ll talk about a peculiar and not so known by people legal entity, which is really important to those who do commercial or legal activities in their everyday life.
To understand the concept, we’ll first define what a contract is as well as a promise.
- A contract is an agreement between two or more people wills with the purpose to create obligations between them.
- A promise is an essential element for this kind of contract and the Royal Academy of the Spanish Language give us the definition:
Promise: “1.- Solemn offering, without religious formula, but equivalent to the oath, to fulfill well with the duties of a charge or role to be done. 2.- Expression of will to give or do something for someone else.
Once defined we can work out a concept:
The Promissory Contract is where a contracting party or both commits in writing to celebrate a future contract within a term along with the definitive contract elements.
With that said, the promise is the preliminary contract where one or both parties commit to celebrating, within a specific term, a contract. In other words, the promissory contract is a “Precontract” where contractually can be taken over the obligation to celebrate a future contract.
EFRAÍN MOTO says that preliminary contracts are previous covenants to the final contract formalization. Which have a temporary nature, since their only goal is to assure the final contract’s fulfillment.
This kind of contract gives place to obligations to be consistent on formalizing the corresponding contract according to what was offered.
If the promisor refuses to sign the necessary documents to legalize the corresponding contract, it will be signed by the judge, except when the offered good had passed to third party property as a good faith action, then the promise would be canceled.
In Estado de Mexico case the promissory contract must be in writing, and if the future contract falls on real property, a public notary must ratify the signatures. Likewise, it must have the final’s contract features and the term of which will be granted, if there wasn’t an agreed term, this will be of three months.
Also in Estado de Mexico, registration is needed so it can have an impact on third parties. If the promisor, in case of promise recorded in the Property Public Registry, refuses to sign the necessary documents to enter into the agreed contract, they will be signed by a Judge; unless at the moment of entering into the contract it was legally impossible to do so, then the promise will be canceled.
A promissory contract can be done upon any other contract specifically regulated by the code, that is, nominate contracts and even innominate contracts, except promissory, since it turns out unnecessary and absurd because it would delay the main goal which is to enter into the first one.
Types of contract promise:
- Unilateral, (parties are liable and beneficiaries); and
- Bilateral, (both parties are liable and beneficiary at the same time).
If there was unfulfillment, if possible, mandatory fulfillment can be asked or damages payment.
Promise termination: the promise ends when:
- The final contract is entered into.
- There is an agreement.
- Promise fulfillment is unclaimed within ten days after term conclusion; in which case, the notation on Public Property Register will expire. (Estado de Mexico legislation).
- (In Mexico City legislation there isn’t a specific term to sue)
Promissory Contract usefulness.
When the parties don’t want or can’t enter into a definitive contract, but they are interested to enter into one in the future, they can agree through this legal instrument.