Contract law and negotiations in Mexico

What do you need to know about Mexican business culture?

Mexicans follow an unperturbed style and are warm and affable individuals. Mexican business deals are essentially made via the family. In other words, to know a person and conduct business with him or her, you must know their family. It’s not always possible to know everyone’s family, especially when you are from out of town. Hence, people use local intermediaries for introductions with the targeted people.

What are negotiation tactics in Mexico?

If you wish to negotiate with a Mexican, know that Mexicans intrinsically enjoy a good confer. They are adept at expressing their side of the story and time is not an issue. They will use as much of it as they require so be ready for lengthy discussions. Mexicans are emotional and follow their hearts over their minds, and some of their arguments may seem illogical to a non-Mexican. So finding mutual ground may seem tough at times.

Ways of negotiation

  • Come well prepared with your case, backed with necessary proof
  • Allow a warm-up period in which you assess your Mexican counterpart as he/she assesses you
  • Offer a long-term business option rather than a short-lived one
  • Understand that Mexicans don’t believe in deadlines
  • Do not initiate a handshake if your client is a woman, and you are a man. Wait for her to initiate it
  • Address Mexican businesspeople with their professional titles, followed by their surnames, or a courtesy title such as Senor

How much is the contract worth in Mexico?

There are three important aspects involved when devising a contract in Mexico:

  • What is the applicable contract law?
  • What are the essential elements that must be present for the agreement to be valid?
  • Which formalities are required to enforce it under Mexican law.

We advise making a written note of the main points post any negotiation with a Mexican party. Do not rely on oral commitments or interim agreements.

The average Mexican businessman believes more in a business partner’s commitment rather than a written documentation so often even a signed contract may not be duly honoured. Be open to changes and unexpected eventualities. The best way to stick to the terms agreed upon is by nurturing a close and trustworthy bond with your Mexican businessmen partners.

What are pricing policy, pressure and restraints in Mexico?

Commodities’ price in Mexico is not only affected by a manufacturer’s internal factors but also by exchange rate, government’s policies, as well as the global economy. Mexicans are adept at bargaining and the pricing process can be a long one in Mexico due to this.

What is Mexican legal system?

The following are the laws regarding business deals in Mexico:

  • The Federal Antitrust Law
  • The Foreign Investment Law
  • The General Corporation Law
  • NAFTA and other relevant treaties

What is the arbitration and litigation in Mexico?

The Mexican courts have both a federal and local court system. Litigation costs are borne by the losing party though Mexican law is quite open to how attorneys and clients sort out their fees. Mexico has a thorough though lengthy legal system. It is only due to the excess amount of cases being filed in the courts that alternative settlement methods such as arbitration have resulted.

Any private dispute can be arbitrated in Mexico under a system that combines a few international rules and some local ones. Post recent amendments provisions related to arbitration include:

    • Proceedings are to be conducted in Spanish or a foreign language in a location closest to both parties
    • The rules of the procedure may be freely determined by the parties involved
    • Parties are entitled to decide the applicable substantive law. If they do not address this, the arbitrators must do so

The Mexican business culture is unique to its people. It’s a close-knit community that’s traditional in nature. Mastering their language and ways of life is a good way to get your step into the Mexican door to establish long-term professional relationships.

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