Professional Documents
Culture Documents
CODE OF COMMERCE
COMMERCE commercial contracts (Arts. 1-
It is that branch of human activity, 63)
the purpose of which is to bring products 2. Joint Accounts (Arts. 239-243)
to the consumer by means of exchanges 3. Transfers of non-negotiable
or operations which tend to supply and credits (Arts. 347-348)
extend to him, habitually, with intent to 4. Commercial Contracts of
gain at the proper time and place and in Overland Transportation (Arts.
good quality and quantity. (1 Blanco 36 349-379)
cited in Miravite’s Bar Review Materials 5. Letters of Credit (Arts. 567-572)
in Commercial Law, 2002 ed.) 6. Maritime Commerce (Arts. 573-
869)
“Commerce” and “trade” are used B. Special Laws
interchangeably although the former is 1. Corporation Code
more commonly used in international 2. Negotiable Instruments Law,
dealings and the latter in domestic ones. 3. Insurance Code,
(Pandect of Commercial Law and 4. Insolvency Law
Jurisprudence, Justice Jose Vitug, 1997 5. Securities Regulation Code
ed.) 6. Public Service Law
7. General Banking Law
COMMERCIAL LAW 8. Warehouse Receipts Law
It is that branch of private law 9. Chattel Mortgage Law
governing acts of commerce (business 10. Others
intercourse) and/or the juridical C. New Civil Code (repealed certain
relations arising from such commercial contracts in the Code of Commerce)
acts. (Pandect of Commercial Law and 1. Sales
Jurisprudence, Justice Jose Vitug, 1997 2. Partnership
ed.) 3. Agency
Principal characteristics: 4. Loan
1. Uniform 5. Deposit
2. Universal 6. Guaranty
3. Equitable
4. Customary MERCHANTS
5. Progressive A. Foreign Merchants
Those engaged in business in the
LAW MERCHANT (LEX MERCATORIA) Philippines
An old international law of merchants 1. As to capacity to contract
and mariners growing out of their - governed by the laws of their
customary practices. It was a law country
practiced and enforced by businessman 2. As to the creation of their
and ship owners in their own courts establishments, their mercantile
without professional judges or lawyers. operations and the jurisdiction
(Mellinkoff’s Dictionary of American of our courts
Legal Usage cited in Tristan Catindig’s - governed by the Code of
Notes on Selected Commercial Laws) Commerce
Note: The Corporation Code
COMMERCIAL LAWS OF THE PHILIPPINES applies to corporations.
A. Code of Commerce (portions still in B. Filipino Merchants
force) 1. Natural person
1. Merchants, Commercial Qualifications:
registries, Book of Merchants, a. Legal capacity to engage in
General provisions on commerce (capacity)
i. Of legal age (18 years)
2. Contract of the buyer with the it will undertake the and the applicant
issuing bank issuing bank’s (buyer) revoke his
3. LC proper in which the bank obligation as its own understanding under
promises to pay the seller according to the the LC.
terms and conditions
pursuant to the terms and
of the credit.
conditions stated therein (with a
pour autrui stipulation in favor
OTHER KINDS OF LC
of the seller).
Other contracts may be involved REVOLVING BACK-TO- STANDBY LC
especially where the additional parties LC BACK LC
are present. A credit that A credit A security
provides for with arrangement
Independence principle renewed identical for the
The 3 basic contracts are distinct and credit to documen- performance
independent, and the undertakings of become tary require- of certain
the respective parties in each are available as ments and obligations.
neither subject to claims and defenses soon as the covering the It can be
nor affected by the breach in the others. opening bank same drawn
has advised merchandise against only
Rule of strict compliance the paying as another if another
It espouses that the documents bank that the LC, except business
tendered by the seller/beneficiary must drafts already for a transaction is
strictly conform to the terms of the LC, drawn by the difference permitted.
i.e. they must include all the documents beneficiary in the price.
required by the LC. (Feati Bank vs. CA) have been
reimbursed to
Kinds of LC (Notes and Cases on Banks, the opening
Negotiable Instruments and other bank by the
Commercial Documents, Timoteo B. buyer.
Aquino)
Governing law
1. Code of Commerce
CONFIRMED LC IRREVOCABLE LC
A LC issued by one A definite 2. Uniform Customs and Practice
bank confirmed by undertaking on the for Documentary Credits
another, in which part of the issuing
case both banks are bank and constitutes NOTE: The Uniform Commercial Practice
obligated to honor the engagement of for Documentary Credits allow Letters of
drafts drawn in that bank to the Credit to be payable to order.
compliance with the beneficiary and bona
credit. fide holders of drafts
drawn and or
documents presented
thereunder, that the
provisions for
payment, acceptance
or negotiation
contained in the
credit will be duly
fulfilled, provided
that all the terms and
conditions of the
credit are complied
with.
The correspondent The issuing bank may
bank gives an not without the
absolute assurance to consent of the
the beneficiary that beneficiary (seller)