Venezuelan Commercial Law: Sources, Hierarchy, and Commercial Acts

Posted on Dec 6, 2024 in Law & Jurisprudence

Item 2 to 4: Articles 8 and 9 of the Commercial Code (CDC)

Article 8. In cases not specifically addressed by this Code, the provisions of the Civil Code shall apply.

Article 9. Mercantile customs supplement the Act if the facts are uniform, public, usually executed in the Republic or in a particular locality, and repeated over a long period of time, such that the judges appreciate them prudently.

Source Concept

When discussing sources of commercial law, we refer to the concept of formal sources, i.e., the applicable rules of law (positive law or customary law) and their ranking or hierarchy in implementation. Note that historical sources pertain to the legislative process and development of existing rules, while material sources are the political, social, or economic factors influencing these rules.

Sources of Venezuelan Trade Law

  1. The Commercial Code: This code establishes standards and principles relating to merchants, commercial acts, and obligations. It is the primary source governing merchants’ obligations in commercial operations and transactions, even those conducted by non-traders.
  2. Trade Laws: Not all business regulations are in the Commercial Code; some are found in other instruments, such as insurance law (“special laws”).
  3. Commercial Custom: This is a source of commercial law when the following conditions are met:
    • a) Uniformity
    • b) General execution throughout the Republic or a part thereof
    • c) Repeated practice over a long time
    In addition, there must be a mental element (opinio iuris et necessitatis), as indicated in the Commercial Code when it states that the facts must be public and notorious. For a custom to be law, it should be implemented with the conviction that it is a mandatory standard. Article 9 of the CDC states that commercial courts freely judge compliance with these obligations. In our code, commercial usage is recognized. Custom contralege (contradicting the law) is not permitted in Venezuela (Proof of Law, Art. 6 CCV).
    1. Contractual Interpretation Custom: These customs clarify the meaning of technical terms in trade and business, interpreting conventions (Art. 1160 CCV).
    2. Analogy: Application requires a logical process, similar to general analogy but within the commercial field, observing the principle that “where the same legal right exists, there must be the same statutory provision,” or by virtue of similarity between facts, provided no other provision exists under current law for the same reason that both situations have the same system.
    3. The Civil Code has regulations for commercial matters, and in such cases, these standards should apply with priority over any custom, as it is a pure law governing commercial matters (Art. 1871 CCV, ordinal 5).

Hierarchy of Sources: Problems and Solutions

The Commercial Code stipulates that in cases not specifically determined by it, the Civil Code must apply (Art. 8 CDC). Article 9 adds that commercial customs supplement the silence of the law. Two classical rules of dispute arise in our environment:

  1. Carlos Boral: The Civil Code takes precedence over general practice, as this derives from a logical and literal interpretation of the rule, where the legislature directs the application of the Civil Code.
  2. Roberto Goldsmidt: Custom should be applied preferably to the Civil Code.

Reasons

  1. Trade law is an autonomous commercial law (not a law of exception) and must find its integration within itself. The default rule should be the CDC, then express custom, and in the absence of this, analogy (Art. 1140 CDC).
  2. Article 9 of the CDC states that custom supplements the silence of the law. When it says that the Civil Code applies in the absence of a CDC rule, it implies the absence of a positive or customary rule, as the implementation of custom is recognized by the law merchant.
  3. The essential historical source of our Commercial Code (Italian 1882) explicitly recognizes that custom prevails over the Civil Code.

Commercial Acts

Section 2 (23), ordinal

  1. Vivante: The concept is based on whether there is an exchange or a commercial act when a change operation occurs.
  2. Others: The spirit of profit defines a commercial act, i.e., when a profit is obtained.
  3. Alfredo Rocco: Affixed the concept of intermediation when performing a change operation.
  4. Lacour: A commercial act occurs when conducting mediation in the movement of goods for profit. Not all acts are commercial due to the criteria of change, brokering, or profits.
  5. Bolaffi: The list reflects a practical approach; the legislature picked up tradition and historical, social, and economic factors, pointing out commercial acts or acts of trade. Legislative reforms welcome new acts of trade by group consensus, inducing such acts as part of trade. Ultimately, commercial acts are what the legislature intended them to be. A single definition is not prudent; heterogeneous acts are classified according to their characteristic elements.