Libro IV Título I. Disposiciones generales

Commercial obligations and contracts shall be interpreted, executed and performed in accordance with the principles of known truth and maintained good faith, so as to preserve and protect the upright and honorable intentions and desires of the contracting parties, without limiting their natural effects by arbitrary interpretation.

Whoever has given occasion, by positive acts or serious omissions, for it to be believed, in accordance with commercial usages, that some person is empowered to act as his representative, may not invoke the lack of representation with respect to third parties in good faith.

Commercial contracts are not subject, for their validity, to special formalities. Whatever the form and the language in which they are entered into, the parties shall be bound in the manner and on the terms in which it appears that they wished to bind themselves. Contracts entered into in Guatemalan territory and that must produce effects therein shall be drawn up in the Spanish language.

Excepted from this provision are contracts that, in accordance with the law, require special forms or solemnities.

Contracts entered into on forms intended to regulate uniformly certain contractual relationships shall be governed by the following rules:

1º.They shall be interpreted, in case of doubt, in the sense least favorable to the person who prepared the form.

2º.Any waiver of right shall only be valid if it appears underlined or in characters larger or different from those of the rest of the contract.

3º.The additional clauses shall prevail over those of the form, even when these have not been left without effect.

In contracts whose means of proof consists of a policy, invoice, order, request or any other similar document signed by one of the parties, if the other finds that said document does not agree with his request, he must ask for the corresponding rectification in writing, within the fifteen days following the one on which he received it, and the stipulations of the latter shall be considered accepted if the aforementioned rectification is not requested.

If within the following fifteen days the contracting party who issues the document does not declare to the one who requested the rectification that he cannot proceed with it, the request of the latter shall be understood as accepted in its terms.

The two previous paragraphs must be inserted textually in the document and, if they are omitted, the terms of the original request shall be adhered to.

The rules established in the previous article are applicable to the contracts to which this article refers.

In commercial obligations the co-debtors shall be jointly and severally liable, unless otherwise expressly agreed. Every surety of a commercial obligation, even if he is not a merchant, shall be jointly and severally liable with the principal debtor and with the other sureties, except as stipulated in the contract.

Obligations for whose fulfillment no term has been fixed in the contract are immediately demandable, unless the time limit is a consequence of the nature of the contract itself.

In commercial obligations and contracts, every extension must be express.

In commercial obligations and contracts, default is incurred, without the need of demand, from the day following the day on which they mature or become demandable. Excepted from the provisions of this article are negotiable instruments and the obligations and contracts in which the contrary has been expressly agreed.

If the obligation has as its object a certain and determined thing, or one determinable by its genus and quantity, the debtor in default shall pay, by way of damages, in the absence of agreement, the legal interest on the value of the thing. The value of the thing shall be that fixed by the parties in the contract and, in the absence of such fixing:

1º.The one it has in the market on the day of maturity.

2º.That of its quotation on the stock exchange, if it concerns negotiable instruments.

3º.In the absence of either, the one fixed by experts.

If the creditor considers that the damages caused to him by the breach were greater than those fixed in the preceding article, he may claim the excess.

The effects of commercial contracts and acts are not impaired or suspended by non-compliance with tax laws, without this provision releasing those responsible from the sanctions that such laws impose.

No one may be compelled to contract, except when refusing to do so constitutes an unlawful act or an abuse of right.

The creditor whose credit is demandable may retain the movable or immovable property of his debtor that is in his possession, or of which he has the disposal by means of representative negotiable instruments.

The one who retains shall have the obligations of a depositary.

The right of retention shall cease if the debtor consigns the amount of the debt, or gives sufficient guarantee for it.

The right of retention shall not cease because the debtor transfers the ownership of the retained property.

In the event that the retained thing is attached, the one who retains it shall have the right:

1º.To keep the thing with the character of judicial depositary and take the necessary measures if the property could suffer decomposition or considerable loss of its value.

2º.To be paid preferentially, if the retained property was in his possession by reason of the same contract that gave rise to his credit.

3º.To be paid with priority over the attaching party, if the creation of the latter's credit is subsequent to the retention.

The one who exercises the right of retention is obliged to pay the costs and the damages:

1º.If he does not file the lawsuit within the legal term.

2º.If the lawsuit is declared inadmissible.

Only in contracts of successive performance, and in those of deferred performance, may the debtor demand the termination if the obligation on his part becomes excessively onerous, due to the occurrence of extraordinary and unforeseeable events.

The termination shall not affect the obligations already performed nor those with respect to which the debtor has incurred in default.

Termination shall not proceed in the cases of aleatory contracts; nor in commutative ones, if the supervening onerousness is a normal risk of them.

The nullity affecting the obligations of one of the parties shall not annul a plurilateral legal transaction, unless the realization of the purpose pursued with it becomes impossible if those obligations do not subsist.

If the species or quality of the merchandise to be delivered has not been precisely determined, only the delivery of merchandise of average species or quality may be demanded of the debtor.

In commercial obligations, the capitalization of interest may be agreed, provided that the interest rate does not exceed the weighted average rate applied by banks in their active operations, in the period in question.

When a contract is entered into, one party may reserve the power to designate, within a time limit not exceeding three days, unless otherwise agreed, the name of the person who shall be considered as the definitive contracting party.

The validity of this designation depends on the effective acceptance of said person, or on the existence of a sufficient representation. If, after the legal or agreed time limit has elapsed, the designation of the contracting party has not been made, or, if made, is not valid, the contract shall produce its effects between the original contracting parties.

When it has been stipulated that the obligation is to be paid in successive installments, unless otherwise agreed, the lack of one payment shall declare the entire obligation due and demandable.

Only in the absence of provisions in this Book shall the provisions of the Civil Code be applied to commercial transactions, obligations and contracts.