Contracting in Mexico: A Legal and Practical Guide to Negotiating and Drafting.

This Article is intended as a primer in contracting for the United States attorney counseling clients doing business in Mexico. Thus, this Article begins by surveying the legal foundations of contracting in Mexico. This includes basic contract principles in Mexico’s civil-law system, the distinction between civil and commercial contracts, and procedural formalities applicable to contracts in Mexico. Following the introduction is a discussion of successful contract negotiations in Mexico, including certain cultural factors and Mexican business customs which can affect negotiations. This section includes suggestions for preparing for negotiations and managing the negotiation process to obtain the best result. Next, the Article explores several types of business contracts, including sales of goods, agencies and distributorships, licensing and franchising arrangements, joint ventures, real estate, and service contracts. Finally, the Article concludes by discussing four special contracting issues—letters of intent, translations, drafting style, and planning for dispute resolution. The process of contracting—negotiation, drafting, and execution—is central to business relationships between United States and Mexican parties. In Mexico, contracting provides special challenges for the United States businessperson. They must negotiate a successful agreement while being aware of differences in culture, business customs, negotiating styles, and procedural formalities which may affect the contracting process. Notwithstanding such differences, the freedom of parties to negotiate and define their business relationship is a fundamental principle respected under Mexican law. It provides the foundation for business contracting in Mexico, as it does throughout the world. With careful preparation, attention to business and legal issues, and assistance of competent legal counsel, contracting in Mexico can be the basis of successful transactions and lasting business relationships