At a Credit Congress session on “Doing Business in Mexico”, presenter Romelio Hernandez, of HMH Legal, stressed just how critical it is to ensure proper documentation when doing business in the fast-emerging Mexico.
“Forget about witnesses, documentary evidence is key,” Hernandez divulged. Whereas only a very small percentage of cases go to court in the United States, more 90% of Mexican legal actions end up in the court system, creating a bottleneck that results in lengthy judgments. Moreover, each jurisdiction in Mexico has its own issues, so he advised to investigate the area/region where your customers are. He also advocated for notaries when having documentation signed so as to diminish the chance that your terms and conditions cannot be contested. As a notary must also be an attorney, they “act as advisors to a certain extent.”
Hernandez noted that all security devices require a lot of formality – such as being signed by notary and the necessity to be filed in public registry – which scares away a lot of customers. And, although a security device will guarantee a quicker proceeding, he warns, “never fax a pagare (promissory note).”
He did, however not that purchase orders could be sent by fax, pending on the situation, as it was easier to prove consent in court, and that terms and conditions must also prove consent.
-Darren Rudham, FCIB/NACM staff contributor
(Note: You can see Hernandez’s recent Executive Development Series Doing Business in Mexico webinar in the Education On Demand section on the FCIB website, www.fcibglobal.com).