Credit Titles: Types, Characteristics, and Legal Aspects
Credit Titles: Key Features and Characteristics
Credit titles are documents necessary for exercising literal and autonomous rights. They have the following characteristics:
- Literalism: Only what is written on the document is considered.
- Cartularity: It is a documented paper (cartula). For the holder to exercise the rights arising from the credit, the presentation of the document is necessary.
- Autonomy: Independence in the obligatory relationships established within the title.
Classification of Credit Titles
A) Model
- Unbound: There is no defined standard for their creation. They can be issued freely, observing the requirements of the law (e.g., promissory notes and bills of exchange).
- Bound: The law attributes a specific standard, not allowing free creation (e.g., checks and duplicates).
B) Structure
- Promise of Payment: Presents two legal relationships: issuer (drawer) and beneficiary (holder) (e.g., promissory note).
- Order of Payment: Presents three legal relationships: drawer (who gives the order), drawee (target of the order), and payee (beneficiary of the order) (e.g., check or duplicate).
C) Emission
- Non-Causal: Their creation does not depend on the origin (e.g., check and promissory note).
- Causal: They require an origin for their creation (e.g., commercial duplicate).
D) Circulation
- Bearer: Titles in which the issuer does not identify the recipient. These were practically abolished in the 1990s.
- Nominative: The issuer identifies the beneficiary.
- Order: Titles capable of endorsement.
- Blank Endorsement: The signature is launched without indicating to whom it is endorsed.
- Full Endorsement: With identification of the endorsee’s name.
Bills of Exchange
According to Decree-Law 57663/66 and 2044/08 (Uniform Law), a bill of exchange is an order of payment, at a term or at sight, in which the drawer orders the drawee to pay a certain amount to a third person.
Parties:
- Drawer: Gives the order for payment.
- Drawee: To whom the order is directed.
- Payee: Beneficiary of the order.
Acceptance: The acceptance of a bill of exchange is an order given by the drawer to the drawee. The drawee is not obliged to obey the order against their will. Only after acceptance does the drawee become bound to comply with the order.
Endorsement: A creditor of a title with an “order” clause transfers their rights to another person (Article 12 of the Uniform Law).
Assignment of Credit: The holder of a title that does not allow circulation by endorsement can insert a “not to order” clause.
Check
A check is an order of payment at sight.
Modalities:
- Bearer: The name of the person to whom it should be paid is not shown.
- Crossed: Two lines are plotted vertically, or it is stamped. This indicates that payment can only be made to a bank.
Invoicing for Liberal Professionals
For loans or services, the creditor can send the debtor an invoice or account that mentions the nature, value of the services rendered, the date, and the place of payment.
This invoice must be registered in the Registry of Titles and Documents. It must be forwarded to the debtor. If not paid, it can be protested.
Requirements: Performance of the service, default, notification through the invoice by the Registry of Titles and Documents. If not paid, it can be protested.
Credit Notes
Credit notes are a promise of payment. Characteristics:
- They are securities that evidence civil or commercial promises of payment in money, with or without a real guarantee.
- They are certain, liquid, and enforceable.
- They have exchange action for their collection.
- The rules of exchange law are applicable.
- Registration in the Real Estate Registry is required for effectiveness against third parties. A protest is not necessary to constitute a default because it is a promise.
Rural Promissory Note
Used in all agricultural, pastoral, extractive (mining, fishing, breeding) businesses, and between rural cooperatives and retailers in the rural sector. It cannot be used in the city. It must have a mandatory description of the asset.
Rural Duplicate
Used for rural businesses, always with a term. Protest within 10 days. The rules of bills of exchange apply. A commercial duplicate cannot be issued. It is mandatory for rural businesses (Article 60 of the Rural Credit Law).
Rural Product Certificate
It is a contract where a product is agreed upon (e.g., 10 bags of soybeans). The value of the product is not specified, but the nature of the product must be specified. It can be issued by rural producers and their associations in cooperative businesses, banks, and dealers of the genre. By force of the document, the issuer (rural producer) is obliged to deliver, at a pre-established date and place, to the creditor or to their order. Exchange law applies. Collateral can be established, such as a mortgage. Endorsement must always be in full. The debtor is responsible for eviction.
Warrant
A warrant is the right to buy an investment title during a certain time at a certain price.