Letters of Credit: Acceptance and Payment

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Questions and Answers

What is the purpose of a letter of exchange?

To present a document for acceptance

To request a guarantee for payment

To issue a protest against a debtor

To present a document for payment (correct)

Who is responsible for paying a letter of exchange if the drawee fails to do so?

The avalist (correct)

The recommender

The endorser

The intervener

What is the purpose of a protest in a letter of exchange?

To notify the drawee of payment

To authenticate the letter of exchange

To request a new payment deadline

To prove that the letter was presented in time and the obligor failed to accept or pay it (correct)

What type of letter of exchange is accompanied by documents representing merchandise?

Documentary letter Signup and view all the answers

Who is the person for whom the avalist provides a guarantee?

The avalado Signup and view all the answers

What are the reasons for which a letter of exchange must be protested?

Lack of payment and lack of acceptance Signup and view all the answers

What is the purpose of the number of order in a certificate of deposit and a pledge bond?

To match the bond with its corresponding certificate of deposit Signup and view all the answers

What is the characteristic of a multiple pledge bond?

It is divided into equal parts for each bond issued Signup and view all the answers

What law regulates the General Warehouses of Deposit in Mexico?

The Law of Organizations and Auxiliary Credit Activities Signup and view all the answers

What is the definition of a sale?

A contract where one party agrees to exchange a good or service for money Signup and view all the answers

What is the purpose of 'arras' in a sale contract?

To give the buyer the option to cancel the sale Signup and view all the answers

What is the obligation of the seller in a sale contract?

To deliver the good sold and guarantee its quality Signup and view all the answers

What is a 'venta en corto'?

A sale of securities through a stock exchange, financed by a loan Signup and view all the answers

What is the difference between a sale and a permuta mercantil?

One involves money, the other does not Signup and view all the answers

What is the right that the holder of a bill of exchange has to demand payment from the obligated parties?

Acción cambiaria Signup and view all the answers

How many cases can the acción cambiaria be exercised?

3 cases Signup and view all the answers

What is the type of acción cambiaria that is exercised against the drawer or endorser?

Acción cambiaria de regreso Signup and view all the answers

What is the effect of prescripción negativa on an obligation?

It extinguishes the obligation Signup and view all the answers

What is the result of not performing certain positive acts required by law in a timely manner?

Caducidad Signup and view all the answers

What is a characteristic of a pagaré that is not found in a letter of exchange?

It can have stipulations of interest Signup and view all the answers

What is required to be done if a pagaré is not paid?

Raise a protest Signup and view all the answers

What is the name of the person who promises to pay a certain amount of money in a pagaré?

Suscriptor Signup and view all the answers

Who is responsible for delivering the goods in the agreed conditions, place, and time?

The shipper Signup and view all the answers

What is the carrier's responsibility during the transportation of goods?

To take care of the goods during transportation Signup and view all the answers

What is the consequence of the shipper not complying with fiscal laws?

The shipper will be fined Signup and view all the answers

What is the carrier's obligation regarding the delivery of goods?

To deliver the goods to the consignee Signup and view all the answers

What is the main obligation of the acreditante in an apertura de crédito?

To place a sum of money at the disposal of the acreditado Signup and view all the answers

What is the consignee's responsibility upon receiving the goods?

To open and inspect the goods Signup and view all the answers

What happens when the acreditado makes a partial or total repayment before the expiration of the credit term in an apertura de crédito en cuenta corriente?

The acreditado can withdraw the repayment again Signup and view all the answers

What is the price of transportation compensated by the carrier?

The freight rate Signup and view all the answers

What is required to be included in the bill of lading?

The name and address of the shipper and the carrier Signup and view all the answers

What is the purpose of a garantía personal?

To obligate a third party to pay in case of default Signup and view all the answers

What happens if the shipper fails to deliver the goods on time?

The shipper will be fined Signup and view all the answers

What is NOT a type of garantía real?

Penal clause Signup and view all the answers

How can an apertura de crédito be extinguished?

By the acreditado's total repayment, expiration of the credit term, or denunciation of the contract Signup and view all the answers

What is the characteristic of an apertura de crédito simple?

The acreditado cannot make repayments before the expiration of the credit term Signup and view all the answers

What is the role of the acreditado in an apertura de crédito?

To receive a sum of money from the acreditante Signup and view all the answers

What is the consequence of the acreditado's default in an apertura de crédito?

The garantía personal is triggered Signup and view all the answers

Study Notes

Bill of Exchange

A bill of exchange is a payment order that requires payment from the bearer, with the payment serving as the best proof of acceptance.
Recommenders are individuals listed on the bill of exchange to ensure payment or acceptance in the event of default.
Interveners are individuals who accept or pay the bill of exchange in place of the drawer or recommenders.
Avalist is a person who guarantees payment on a bill of exchange, while the avalado is the person being guaranteed.
Protest is a formal act that verifies the presentation of a bill of exchange and the obligatory party's failure to accept or pay it, which can be done by a notary or public official.

Types of Bills

Documentary bills: bills accompanied by documents representing goods, which are delivered to the drawer upon acceptance or payment.
Actionable bills: bills that can be enforced in court, exercisable in three cases:
- Failure of acceptance or partial acceptance
- Failure of payment or partial payment
- Bankruptcy or insolvency of the drawer or acceptor

Prescription and Caducity

Prescription is a means of extinguishing obligations through the passage of time, where no demand is made for fulfillment.
Caducity is the loss of the right to pursue an action due to the non-performance of certain acts required by law.

Promissory Note

A promissory note is an unconditional promise to pay a sum of money at a specified place and time, to the order of the bearer.
Parts of a promissory note:
- Drawer (issuer)
- Bearer (beneficiary)
Requirements:
- Unconditional promise to pay a sum of money
- Name of the person to whom payment is to be made
- Date and place of payment
- Date and place of issuance
- Signature of the drawer
Differing from a bill of exchange, a promissory note can include:
- Interest stipulations
- Penalty clauses

Purchase and Sale

Purchase and sale contract: a contract where one party (seller) agrees to transfer ownership of a thing or right to another party (buyer) for a price.
Mercantile when made with commercial speculation.
Essential elements:
- Consent
- Thing (goods or services)
- Price
- Sometimes, "arras" (guarantee)
Obligations of the seller:
- Deliver the goods
- Guarantee quality
- Provide eviction
Obligations of the buyer:
- Pay the price
- Receive the goods

Permutation

Permutation contract: a contract where one party agrees to give one thing in exchange for another.
Parties involved are called permutants.

Short Sale

Definition: a sale of securities made through the stock exchange, where the seller liquidates the sale with borrowed securities.
Obligations of the shipper:
- Deliver goods in agreed conditions, place, and time
- Provide necessary documents
- Suffer losses and damages due to inherent vice or fortuitous events
- Send the bill of lading to the consignee in a timely manner
Obligations of the carrier:
- Receive goods in agreed time and place
- Begin and complete the journey within the stipulated timeframe
- Care for and conserve the goods under their exclusive responsibility
- Deliver goods to the holder of the bill of lading
Obligations of the consignee:
- Receive goods without delay
- Open and inspect the goods upon receipt
- Return the bill of lading or issue a receipt
- Pay the carrier's fees and expenses

Credit Opening

Definition: an agreement where the creditor agrees to make a sum of money available to the debtor, who agrees to restitute the sum and pay interest.
Types of credit opening:
- Simple credit opening
- Credit opening in current account
Credit opening can be guaranteed with:
- Personal guarantee (fianza)
- Real guarantee (pledge or mortgage)
Causes of credit extinguishment:
- Total dispensation of the credit amount
- Expiration of the agreed term
- Denunciation of the contract

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Description

Learn about the roles and responsibilities of parties involved in letters of credit, including the girado, recommendatarios, and intervenores.