Mercantile Law in Spain: Sources, Principles, and Enterprise
Legal Sources of Mercantile Law in Spain
According to the Civil Code (Art. 1 CC), the sources of the Spanish legal system, in descending order of priority, are:
- Law
- Customs
- General principles of law
Constitutional Distribution of Power in Commercial Law
The Spanish Constitution establishes a ‘state of autonomies,’ recognizing a degree of autonomy and self-government for various territorial entities while proclaiming the indissoluble unity of the Spanish nation.
Principal Authority in Commercial Law
The executive legislative power to regulate mercantile matters is granted to the state. This is to guarantee market unity and equal civil rights for citizens within the entire national territory (Art 149.6.9.11 CE).
Constitutional Aims in Commercial Law
This framework protects the principle of private property (Art. 33 of the Constitution), restricted due to its social function in accordance with the Law. The State maintains the power to regulate all commercial law matters (Art. 149.1.6 of the Constitution) to protect market unity. The Spanish Constitution acknowledges economic freedom, including the right to a free market, freedom of contract, and free enterprise.
Role of Court Decisions in the Spanish Legal System
Court decisions are not considered sources of law. According to legal theory, court decisions largely lack the defining features of law: general character and abstraction. Jurisprudence is not included among the listed sources of the Spanish legal system.
Role of Jurisprudence
Art. 1.6 CC entrusts the role of completing the legal system to the repeated opinions of the Supreme Court when interpreting and applying the sources of law. Therefore, jurisprudence plays a valuable role, despite not being a formal source of law. Court opinions should be related and repeated in at least two decisions.
Classes of Community Laws
- Primary law: The main sources are the Treaties establishing the European Union.
- Secondary law: Secondary sources are legal instruments based on the Treaties. These include unilateral secondary law (regulations, directives, decisions, opinions, and recommendations) and conventions and agreements.
- Supplementary law: These are elements of law not provided for by the Treaties. This category includes Court of Justice case law, international law, and general principles of law.
Enterprise and Entrepreneur: Legal and Economic Definitions
Economic Definition of Enterprise: An organized assemblage of capital and work intended for manufacturing or distributing goods or services to meet market demand. An enterprise designates activity and instrumental organization.
Legal Definition of Enterprise: The legal definition embodies different meanings. The concept of enterprise in competition law does not coincide with that of corporation law. In company law, enterprise refers to the single legal personality of each company, whereas in competition law, a single ‘enterprise’ may be integrated into different corporations.
Theories of Enterprise: Atomistic Doctrine and Unitary Approach
These theories address the legal nature of an enterprise involved in or affected by an economic transaction:
- Atomistic Doctrine: Depicts an enterprise as composed of multiple independent elements lacking unity. Each element is negotiated separately according to its nature.
- Unitary Approach: Considers the enterprise as a new category of patrimonial wealth, a universality. From this perspective, the business is an autonomous subject in commerce.
Obligations in a Business Lease Contract
Lessor’s Obligations (Art. 1554 CC):
- Deliver the business to the lessee.
- Perform necessary repairs to maintain the business in a condition suitable for its intended use.
- Maintain the lessee in peaceful enjoyment of the lease for the contract’s duration.
Lessee’s Obligations (Art. 1555 CC):
- Pay the agreed-upon price.
- Use the leased property as an orderly entrepreneur, in the agreed manner or, in the absence of agreement, according to its nature and local custom.
- Pay expenses arising from drawing up public deeds related to the contract.
Legal Regime of the Foreign Entrepreneur
Companies incorporated abroad may engage in business in Spain, subject to the laws of their country regarding their capacity to contract. Regarding the creation of establishments in Spanish territory, their business operations, and the jurisdiction of Spanish Courts, they are subject to the provisions of the Spanish Commercial Code.