Royal Decree 55/90 promulgates the Law of Commerce, which governs commercial transactions between merchants alongside the general Civil Transactions Law. This module focuses on the commercial contract rules that most often arise in practice.
Who is a merchant?
Articles 8–14 define a merchant by reference to habitual commercial activity and registration in the Commercial Register. Characterising a party as a merchant matters: commercial contracts attract shorter limitation periods, joint liability of co-debtors is presumed, and evidence rules are more permissive than in civil matters.
Formation and evidence
Commercial contracts may be proved by any means, including witness testimony and correspondence, regardless of value — a significant departure from the civil rule. Silence in response to a course of dealing can amount to acceptance where the parties have transacted regularly on the same terms.
Interest, penalty clauses, and set-off
The Law of Commerce permits agreed interest between merchants within Central Bank limits, and it enforces liquidated damages clauses subject to Article 267 of the Civil Transactions Law, which allows a court to reduce a penalty found manifestly excessive. Contractual set-off between commercial debts is broadly available; check the contract wording carefully before advising a client to withhold payment.