Understanding Legal Obligations and Business Law

Posted on Jan 21, 2025 in Law

Legal Obligations

A legal obligation is a relationship that binds two selected subjects, a creditor and a debtor, whereby the debtor must give, do, or not do something for the creditor. The creditor may enforce this obligation.

  • Personal Element:
    • Debtor
    • Creditor
  • Objective Element
  • Technical Element

Source: Obligations arise from:

  • Contract
  • Quasi-contracts
  • Civil Offenses (Unintentional Tort)

Creditor’s Actions Against Debtor’s Default

What are the actions that the creditor has against the debtor’s default?

Contract

An act by which one party agrees with another to give, do, or not do something.

The Offer

When coupled with acceptance, the offer becomes binding.

Lease

A contract in which both parties agree mutually, one to grant the enjoyment of a thing and the other to pay for that enjoyment.

Corporate Entities

A legal person is a fictitious person, capable of assuming rights and civil obligations, and being represented in and out of court. There are people involved from both characters.

Classification

  • Profit: Those who pursue material pecuniary gain or profit-sharing, so that it increases the wealth of those who compose it (companies).
  • Non-profit: Those where the profits derived from the development of its activity cannot be divided between those who compose it.
  • Mixed: Those who participate in either character (Universities, except the University of Chile and Pontifical University).

Attributes

  • Name: The name that distinguishes it from the rest and corresponds to the firm.
  • Address: The place where the legal entity has its administration.
  • Nationality: Distinguishes the law by which it is governed.
  • Heritage: Resources to allow for its purposes.

General Elements of Business Law

In order of priority:

  1. Commercial Law: The Commercial Code and other business laws that supplement it.
  2. Civil Code: When a situation is not regulated by the Commercial Code or laws, the rules of the Civil Code should be used additionally.
  3. Commercial Customs: If a situation is not governed either by trade laws or the Civil Code, we must resort to commercial practice.

Acts of Trade

The legislature does not define “commercial”; instead, it has described it practically by listing acts of trade with due order, precision, and clarity.

Obligations of Traders

  1. Obligation to keep financial records
  2. Required to register certain documents with the Register of Trade
  3. Required to register with certain records
  4. Obligation to pay municipal patent
  5. Obligation to issue invoices

Partnerships

A partnership is an instrument with the following elements:

  1. The Contribution: Putting something in common.
  2. Benefits: Dividing among themselves the benefits derived therefrom.
  3. Losses
  4. Intent to Form a Company

Partnerships for People

Those who are formed in care for the people who compose them.

Capital Companies

Those that are formed because of the contributions.

Collective Partnerships

Those in which all partners manage by themselves or through a representative chosen by mutual agreement.

If the debtor fails to comply with his obligations, and this is due to a fact attributable to them, the creditor can make this responsibility effective on the debtor’s assets.

It is for these reasons that, to ensure the effective enforcement by the creditor of the debtor’s obligations, additional precautions are required beyond the law of general pledge.