Libro I Título II. Auxiliares de los comerciantes

Factors are those who, without being merchants, have the direction of an enterprise or of an establishment.

To be a factor, it is required to have the necessary capacity to represent another, in accordance with the civil laws.

The factor is appointed by means of a mandate with representation, granted by the merchant, by an appointment that the latter shall issue to him or her or by a written employment contract.

The mandate, appointment or employment contract of the factor must be registered in the Mercantile Registry.

The factor who lacks a mandate with representation granted by the merchant shall always be empowered by operation of law to carry out all the operations and to enter into the ordinary contracts related to the object of the enterprise or of the establishment that he or she directs. The contracts that he or she enters into and the operations that he or she carries out under those conditions shall bind the merchant before third parties in good faith, even when the factor has infringed the instructions of the principal or has committed a breach of trust.

The limitations on the powers of the factor, even if they are registered in the Mercantile Registry, shall not produce effects against third parties in good faith.

The factor shall need special powers to transfer or encumber immovable property of the enterprise, to contract loans, to represent the merchant judicially and, in general, to execute acts that are not pertinent to the normal activities of the enterprise.

In the case of companies, the provisions of Article 47 of this Code shall apply.

Factors shall negotiate and contract in the name and on account of the respective merchant and must state so in the documents that they sign in that capacity.

If, despite that, the factor contracts in his or her own name, the other party may direct its action against the principal, who shall be jointly liable with the factor, if it is shown that the latter acted on account of the principal, or that the contract in question was pertinent to the normal activity of the enterprise.

The principal shall also be liable for the contracts entered into by the factor that are not pertinent to the normal activity of the enterprise, if it is shown that the latter acted on the instructions of the principal or that the principal approved what was done, whether by express acts or by positive acts or omissions that induce the presumption that they have been approved.

If there are several factors, it shall be presumed that they may act separately, unless from the power, the appointment or the contract it is expressly or tacitly deduced that they must act jointly in all the transactions or in some special ones.

Factors and dependents are prohibited from trading on their own account and from taking an interest in their own name or in that of another in negotiations of the same kind as those they carry out on account of their principals, unless they are expressly authorized to do so. If they do so, the profits shall be for the account of the principal, without the latter being obliged for losses.

The status of factor of an establishment or enterprise does not end, nor is it interrupted, by the death of the merchant.

The acts and contracts executed by the factor shall be valid with respect to the principal, as long as the revocation of the mandate, the cancellation of his appointment, the termination of the contract or the sale that the owner makes of his enterprise has not been notified to the factor and, with respect to third parties, as long as the revocation, cancellation, termination or sale has not been registered in the Mercantile Registry.

Dependents are those who constantly perform one or some management tasks proper to the business of an enterprise or establishment, on account and in the name of the owner thereof.

Dependents in charge of attending the public within the establishment in which they work are empowered to carry out the operations that are apparently their responsibility and to receive in the establishment the income from sales and services that they make, unless the principal announces to the public, in visible places, that payments must be made in a different manner.

Travelling dependents shall be considered authorized to operate in the name and on account of the principals and to receive the price of the merchandise they sell. In order for any limitation to such powers to have effect against third parties, it must appear in visible characters on the forms used for the subscription of the orders.

The receipt of merchandise or documents that the dependent makes on the order of the principal shall be considered as made by the latter.

Neither factors nor commercial dependents may delegate to others the commissions they receive from their principals, without the knowledge and consent of the latter; and in any case of making this delegation in another form, they shall be directly liable for the management of the substitutes and for the obligations contracted by the latter.

Dependents may not repeal or modify the general contracting conditions or the clauses printed on the forms of the enterprise, nor demand the price of merchandise of which they do not make delivery or shipment, nor grant an extension of time or discounts other than those customary in the enterprise, unless they are specially authorized and in writing by the principal.

Factors and dependents shall be liable to their principals for the damages they cause to them for having proceeded with intent (dolo), negligence (culpa) or in violation of the law or of the orders or instructions that the principals have given them. All without prejudice to the direct liability of the principal towards third parties.

Commercial agents are the persons who act permanently, in relation to one or several principals, promoting commercial contracts or entering into them in the name and on account of those principals. Commercial agents may be: 1) Dependents, if they act by order and on account of the principal, form part of his enterprise and are bound to him by an employment relationship; 2) Independent, if they act through their own enterprise and are bound to the principal by a commercial contract, an agency contract.

Independent commercial agents may also enter into commercial contracts on their own account, to sell, distribute, promote or place goods or services in the national territory, when they have so agreed with the principal.

Distributors or representatives are those who on their own account sell, distribute, promote, retail or place goods or services of a natural or legal person, national or foreign, called Principal, to whom they are bound by a distribution or representation contract.

The provisions of this chapter shall govern the activity of other agents who engage in placing insurance, capitalization, savings and loan contracts and similar ones, except as provided in special laws. On the contrary, the provisions of this chapter shall not be applicable to contracts or relationships of licenses of use or usufruct of industrial and intellectual property and of commercial franchises.

Unless otherwise agreed, commercial agents may engage in any other kind of activities and businesses and even act on account of other principals whose products or services do not compete with each other.

The general conditions under which the dependent commercial agent may present and process proposals or, as the case may be, enter into contracts, may be altered by the principal and the modifications shall be binding on the agent from the moment they come to his knowledge.

As regards the general conditions that govern the existing contract or legal relationship between the principal and the independent commercial agent, any change shall be governed in accordance with what has been agreed between the parties. The content of the agreement may be proven in any of the forms established by law.

The principal may simultaneously avail himself of several agents, distributors or representatives in the same zone and for the same branch of activity, except when they have been granted by contract the status of exclusive agents, distributors or representatives for a determined zone.

The agent may only enter into contracts in the name of the principal, make collections, grant discounts, rebates or extensions of time and vary the conditions of the contracts or printed forms of the principal, if he is expressly authorized to do so.

The agent may, in any case, receive complaints and claims in relation to the businesses entered into through his mediation, which he must transmit to the principal as soon as possible. The agent may also obtain a surety to guarantee to the principal the fulfillment of the obligations contracted in favor of the latter.

The relations between the principal and the independent agent, except as provided in this chapter, shall be governed by what both parties have agreed. In any case, such agreements shall not affect the contracts entered into and the orders and offers accepted between the independent agent and third parties in good faith.

The agent must transmit without delay to the principal faithful copies of the orders and offers he receives and of the contracts he enters into, if he is empowered to act on account of the latter, in which case the principal is bound before third parties for the contracts entered into and the orders and offers agreed upon.

Except in the case expressed in the preceding paragraph, the orders and offers received by the agent shall have the character of mere proposals, which shall not bind the principal until the moment he answers accepting them. The principal may, at his discretion, accept or not the orders and offers transmitted to him by the agent and shall not be obliged to make known to the agent the causes or motives that determined the rejection.

Natural or legal persons who act as distributors, agents or representatives under this law must register as such in the Registry of Agents, Distributors and Representatives, which the Mercantile Registry shall establish and administer for this purpose.

The dependent agent must fulfill his commission in accordance with the instructions received and provide the principal, when the latter so requests, with pertinent information in relation to the market or to the different businesses carried out or to be carried out through the agent. Except as provided in this chapter, the obligations of the independent agent shall be governed by what has been agreed between him and the principal.

Unless an express agreement stipulates otherwise as regards the remuneration of the agent, he shall be entitled to a commission on the amount of the business carried out through his intervention, in accordance with the uses and practices of the locality.

Under equal conditions, the agent shall also be entitled to receive a commission for the businesses concluded directly by the principal with effects in the zone reserved for the exclusive agent, if such exclusivity was agreed by contract, even if the agent did not intervene in those businesses.

If, through intent or negligence of the principal, a business contracted through the agent is not carried out in whole or in part, the agent shall retain the right to claim his full commission.

If the business is not carried out totally or partially by agreement between the principal and the third party, the agent shall be entitled to receive his commission for the part of the business that has been carried out, unless otherwise agreed.

Contracts of independent agency, distribution or commercial representation may only terminate or be rescinded:

1.By mutual consent between the parties, expressed in writing;

2.Upon expiration of the term, if any;

3.By decision of the agent, provided he gives notice to the principal three months in advance. In this case he shall be obliged to render accounts from the moment he is required to do so and, if the principal so requires, to return the merchandise that is the object of the contractual relationship in his possession, at "C.I.F." price.

The termination of the contract or agency relationship by virtue of the provisions of this subparagraph and the two preceding ones shall not generate for either of the parties any obligation to compensate damages.

4.By decision of the principal, in which case he shall be liable to the agent for the damages caused as a consequence of the termination of the contract or commercial relationship if there was no just cause for having terminated said contract or relationship.

5.For just cause. In this case, the party that causes the rescission or termination of the contract shall be liable for the damages caused to the other party. For this purpose, it is understood that just cause exists and may be invoked in their favor by:

A) either of the parties:

I.for breach or violation by the other party of the obligations that they had agreed upon;

II.for the commission of any crime against the property or person of one of the parties against the other; and,

III.for the unfounded refusal of the other party to render the reports and accounts or to make the settlements relating to the business, at the time and in the manner agreed upon.

B) The principal:

I.If the agent divulges or informs a third party, without due authorization, of any fact, data, key or formula whose secrecy has been entrusted to him by virtue of the respective contract; and,

II.For the decline in the average sales or placement of the goods or services agreed upon, due to negligence or ineptitude of the agent, proven judicially. In the event that such point is not demonstrated, the provisions of numeral 4 of this article shall apply;

C)The agent, distributor or representative:

I.When the principal carries out acts that directly or indirectly prevent or tend to prevent the agent from complying with the contract.

If after the termination or rescission of the respective contract or relationship has occurred, the parties do not reach an agreement on the amount of the compensation that must be paid for the damages caused in the cases provided for in numerals 4 and 5 of the preceding article, the amount thereof must be determined in an arbitration proceeding or in a judicial proceeding in the summary proceeding; for this purpose it shall be understood, unless otherwise agreed, that the parties have opted for arbitration if they do not expressly establish that the dispute must be settled in the summary judicial proceeding. In the event that the dispute is resolved in a judicial proceeding in the summary proceeding, the plaintiff must propose an expert opinion, in accordance with the provisions of the Code of Civil and Commercial Procedure, in order for a ruling to be issued within the proceeding on the existence and the amount of the damages claimed.

In the respective contract, the parties may also opt for arbitration or for the judicial proceeding in a summary proceeding, to resolve any kind of dispute arising from said contract. For this purpose it shall be understood, unless otherwise agreed, that the parties have opted for arbitration if they do not expressly establish that the dispute must be settled in the summary judicial proceeding.

In any case, judicial proceedings must take place, be conducted and be resolved in the Republic of Guatemala, in accordance with the national laws applicable to judicial procedures.

If one of the parties is ordered to pay compensation, the judgment or the award may include a ruling:

a)On the existence or non-existence of losses, and in the event that their existence is declared, the amount thereof that corresponds in equity, according to the nature and circumstances of the business; and

b)On the existence or non-existence of damages, and in the event that their existence is declared, the amount thereof, in the following items:

1)For direct and promotion or advertising expenses that have been incurred on the occasion and for the purposes of the contract, during the last year.

2)For investments that have been made on the occasion or by reason of the contract, provided that they are not recoverable or usable for other purposes.

3)For payment of the existing merchandise that is in good condition and that could not be sold because of the termination or rescission of the contract at the ex-warehouse cost price (C.I.F.). Merchandise whose spoilage is attributable to the principal shall also be considered in good condition.

4)For the compensation to which, in accordance with the law, the employees or workers whose dismissal was due to the termination of the contract are entitled.

A broker is one who, independently and habitually, dedicates himself to putting in contact the parties interested in the conclusion of a business, without being bound to any of the parties by relations of collaboration, dependency or representation.

Nevertheless, the precepts contained in this chapter are not applicable to the activity related to the placement of insurance and surety policies, which shall be governed by the specific legislation.

In order to be able to practice as a broker, it is indispensable to have legal authorization, which the interested party must obtain in accordance with the requirements established by the respective regulation.

Only authorized brokers shall have the right to brokerage for their services and shall enjoy the other rights and advantages that the law grants to brokers.

Merchants are not obliged to request the intervention of a broker for the execution of their contracts; when they employ as such a person who is not authorized, the latter is subject to the provisions that apply to authorized brokers, without prejudice to the criminal liabilities established.

Brokers are obliged:

1º.To be liable for the identity of the persons who contract through their mediation and to make sure of their legal capacity; if they intervene in contracts entered into by persons without capacity, they shall be liable for the damages that result directly from the incapacity.

2º.To carry out by themselves the negotiations entrusted to them.

3º.To propose the businesses with exactness, clarity and precision.

4º.To attend the delivery of the objects that are the subject matter of the business, when any of the contracting parties so demands.

5º.To be liable, in operations over negotiable instruments, for the authenticity of the signature of the last endorser or of the drawer, as the case may be, and to collect them in order to deliver them to the taker.

6º.To keep, marked with their seal and with those of the contracting parties, until the buyer receives them to his satisfaction, a sample of the merchandise, whenever the operation has been made on samples.

7º.To issue, at the expense of the interested parties who request it or by order of authority, certification of the entries corresponding to the businesses in which they have intervened.

8º.To give the buyer a signed and complete list of all the securities negotiated with their intervention, with indication of all the details necessary for their proper identification.

9º.To note in their register the essential points of the contracts in which they have intervened.

10º.To keep secret everything that concerns the businesses entrusted to them, unless by provision of the law, by the nature of the operations or by the consent of the interested parties, they may or must make known the names of the latter.

Brokers are prohibited:

1º.To carry out commercial businesses on their own account or to take an interest in them under their own or another's name, directly or indirectly.

2º.To perform in commerce the office of cashier, bookkeeper or accountant or clerk, whatever the denomination they may bear.

3º.To demand or receive remuneration higher than that agreed with the parties.

4º.To give certifications on facts that do not appear in the entries of their registers. They may, however, declare solely by virtue of an order of a competent tribunal, what they have seen or understood in any business.

Brokers shall keep the following books:

1º.A bound and folioed register book, in which they shall record, day by day, in order of date and under consecutive numbering, all the businesses executed through their mediation.

2º.A book in which they shall record the names and domicile of the contracting parties, the subject matter of the business and the conditions under which it was entered into. The entries shall be made at the moment the business is agreed.

The books must be previously authorized by the Mercantile Registry and shall be kept without abbreviations, blank spaces or alterations.

Brokers must deliver to each one of the contracting parties, within the twenty-four hours following the conclusion of the business, an extract signed by them and by the interested parties, of the entry that they have made in their register. This extract, signed by the parties, proves the contract.

The registers of the brokers do not prove the truth of the contract to which they refer, but when the parties are in agreement about the existence of the latter, in order to determine its character and conditions, the content of those registers shall be followed.

The tribunals, on their own motion or at the request of a party, may order the exhibition in the proceeding of the books of the brokers and require from them the reports that they deem convenient.

The broker may reserve the name of one contracting party with respect to the other, but he shall be personally liable for the execution and the fulfillment of the contract.

If after the conclusion of the contract the name that the broker has reserved is made known, each one of the contracting parties may direct his action directly against the other, without prejudice to the liability of the broker.

By virtue of the brokerage contract, one or more parties interested in the conclusion of a business obligate themselves to pay the broker the brokerage if the business is concluded by effect of his intervention.

Whenever, between the broker and the parties to the business concluded by effect of his intervention, the party in charge of the payment of the brokerage has not been determined, it must be paid by the party that first entrusted the broker.

If the business has been concluded by effect of the intervention of several brokers, each one of them is entitled to a part of the brokerage.

is the person who on account of another carries out commercial activities.

If the commission agent acts as such habitually, he must obtain a license in accordance with the respective regulation.

In order to perform his commission it is not necessary for the commission agent to have a mandate granted in a public deed; it is sufficient to receive the commission in writing or verbally; but when it has been verbal, the principal must ratify it in writing before the business has been carried out.

The commission agent may act in his own name, even if he deals on account of another; consequently he is not obliged to state who the person on whose account he contracts is; but he is directly bound towards the persons with whom he contracts, as if the business were his own.

If the commission agent acts in his own name, the principal has no action against the persons with whom the former contracted in the businesses that he placed in his care, unless a transfer made in his favor by the same commission agent precedes.

The commission agent shall be free to accept or refuse the commission made to him. The commission shall be presumed accepted if the commission agent does not communicate to the principal that he refuses it, within the business day following the one on which he received the proposal.

Even if the commission agent refuses the commission, he shall not be dispensed from carrying out the diligences that are necessary for the preservation of the effects that the principal has sent him, until the latter provides another commission agent. The execution of such diligences shall not imply acceptance of the commission.

When, without just cause, the commission agent fails to give notice that he refuses the commission or fails to fulfill the accepted one, expressly or tacitly, he shall be liable to the principal for all the damages that result to him therefrom.

The commission agent may have the effects consigned to him sold through a broker or at voluntary auction:

1º.When the presumed value of the same does not reach to cover the expenses that he must incur for their transport, storage and receipt.

2º.When, having notified the principal that he refuses the commission, the latter, within the day following the one on which he received said notice, does not provide another commission agent to receive the effects that he has sent.

3º.If an alteration occurs in them such that the sale is necessary to save at least a part of their value. In this case, the principal must be consulted, if it is possible and there is time for it.

The net proceeds of the effects thus sold shall be deposited at the disposal of the principal in a bank of the same city and, failing that, of the nearest one.

The commission must be performed personally by the commission agent, who may not delegate his task without being authorized to do so.

Under his responsibility he may employ, in the performance of his commission, clerks in operations that, according to custom, are entrusted to them.

The commission agent shall adhere to the instructions of the principal in the performance of his charge; by complying with them, he shall be exempt from liability.

In what is provided and expressly fixed by the principal, the commission agent must consult him, whenever the nature of the business permits it. If the consultation is not prudent or he is authorized to act at his own discretion, he shall do what his good judgment dictates and what is most in accordance with commercial usage, taking care of the business as if it were his own.

If an unforeseen accident makes the execution of the instructions received prejudicial, in the judgment of the commission agent, he may suspend the fulfillment of the commission, communicating it to the principal by the fastest means.

In those commissions whose fulfillment requires a provision of funds, the commission agent shall not be obliged to execute them as long as the principal does not make it in sufficient quantity, and he may suspend them when the one made to him has been consumed.

When the commission agent undertakes to advance funds for the performance of the commission, he shall be obliged to supply them, except in case of suspension of payments or bankruptcy of the principal.

The risks that occur in the return of the surplus funds in the possession of the commission agent, after having performed his commission, are on account of the principal, unless in the manner of making the return the commission agent has departed from the orders and instructions that he received from the principal.

The commission agent shall be obliged to give timely notice to his principal of all the facts or circumstances that may determine him to revoke or modify the commission. He must also give him notice without delay of the execution of the commission.

In the operations made by the commission agent in violation or excess of the commission received, in addition to the compensation in favor of the principal for damages, the latter may ratify them or leave them at the charge of the commission agent, who in this case is bound before third parties.

The commission agent shall be liable for the effects that he receives, in accordance with the data contained in the notice of shipment, unless upon receiving them he states the differences.

The commission agent who has in his possession effects on account of another shall be liable for their preservation in the state in which he received them. This liability shall cease when the destruction or impairment is due to fortuitous event, force majeure, lapse of time or inherent vice of the thing.

In cases of partial or total loss due to the lapse of time or vice of the thing, the commission agent shall be obliged to attest the impairment of the merchandise, which he shall bring to the knowledge of the principal as soon as he notices it.

The commission agent charged with the shipment of effects to another place must contract the transport with the obligations of the shipper; he must insure them, if he has an order to do so and counts on the provision of necessary funds, or has undertaken to advance them.

Commission agents may not alter the marks of the effects that they have bought or sold on account of another, nor have effects of the same kind belonging to different owners under the same mark, without distinguishing them by a countermark that designates the respective ownership of each principal.

The commission agent may not, without authorization of the principal, lend nor sell on credit or on deferred terms; in cases like these, the principal may demand payment in cash, leaving in favor of the commission agent any interest or advantage that results from said credit or deferred term.

If the commission agent, with due authorization, sells on deferred terms, he must so notify the principal, informing him of the names of the buyers. If he does not do so, it shall be understood in his relations with the principal that the sales were in cash.

The commission agent who does not carry out the collection of the credits of his principal at the times when they must be demanded or does not use the legal means to obtain payment shall be liable for the damages that he causes to his principal by his delay or omission.

The principal has the power, at any stage of the business, to revoke, amend or modify the commission; but the consequences of all that has been done up to then in accordance with his instructions are at his charge. In this case, he shall pay the commission agent what he has spent up to that day in the performance of the commission.

The commission agent may not buy for himself or for another what he has been ordered to sell, nor shall he sell what he has been ordered to buy, without the express consent of the principal.

The commission agent who has credits against the same person, arising from operations made on account of different principals, or on his own account and on account of another, shall note in all the deliveries made by the debtor the name of the interested party on whose account he receives each one of them and shall state it likewise in the discharge document that he gives the debtor.

When in the receipts and in the books the statement of the application is omitted in the delivery made by the debtor of different operations and owners, as prescribed in the preceding paragraph, the application shall be made pro rata to the amount of each credit.

The commission agent must inform the principal of the progress of his commission and render him an account of his management.

All the savings and advantages that a commission agent obtains in the contracts that he enters into on account of another shall redound to the benefit of the principal, and he is prohibited from charging or receiving a commission from anyone who is not his principal.

Every commission agent is entitled to be remunerated by his principal. In the absence of a prior stipulation, the amount of the remuneration shall be regulated by the custom of the locality where the commission is carried out.

The principal is obliged to satisfy the commission agent in cash, by means of a justified account, the amount of all his expenses and disbursements, with commercial interest from the day on which he made them, including the sanctions that he incurs in compliance with express orders of the principal.

The effects that are really or virtually in the possession of the commission agent shall be understood as specially and preferentially affected to the payment of his commission, as well as of the advances and expenses that the commission agent has made on account of them, and he may not be dispossessed of them without being previously paid.

The commission terminates by death or disqualification of the commission agent; the death or disqualification of the principal does not terminate the commission, but his representatives may revoke it.