12 DE FEBRERO DE 2021
| By: Caroll Lezcano |
A somewhat obvious question would be why is it necessary to have a promise to pay letter? In this context, the promise of payment letter allows a good to be acquired without having to pay the price, until it has been transferred.
Obviously, we are talking about goods whose transfer requires certain formalities, or goods that, because they are paid with the proceeds of a loan, require the formalization of a lien in favor of the financed.
That is why the existence of the letter is necessary since without it, the perfection of the main contract would necessarily reach a historical point of inflection where the parties, in order to fulfill the contract, would have to assume the risk of the breach of their counterpart, a situation that the promise to pay letter avoids by guaranteeing payment of the price.
However, what happens when the promise to pay letter includes so many conditions that it puts the final payment of the price at risk? Obviously, the promise letter becomes denatures and loses meaning because it would not offer a real guarantee for the seller and without a doubt it is no longer effective. After meditating a bit, we conclude that this situation occurs when the person who must guarantee the fulfillment of the obligation becomes a guarantor and a part with interest, which in our opinion renders the effectiveness of the promise of payment letter ineffective as regards the principal guaranteed.
The fact that the payment promise letter is subject to condition becomes the main axis of this analysis, since it is very difficult to reconcile the function of guarantee of compliance with the existence of conditions, because this could not only end up denature the instrument but by canceling it to the point that it ultimately loses the effect that at the same time is the necessary basis that justifies the very existence of the card.
It is not unusual for some banks in the market to use a wording of the promise to pay letters that does not reflect at all the guarantee function they must provide. It is common for letters today to include phrases such as “the payment will be made effective only if the client complies with the Bank’s requirements”, which in the end gives the latter an almost discretionary power to decide whether to pay or not based on their The only criterion about the client’s compliance with their own policies, which, not always the guaranteed or the beneficiary know, therefore, they will not always be able to know if they are pre-existing policies or made for the moment.
We have already mentioned that our opinion is that, if the issuer of the promise to pay letter is a guarantor and an interested party at the same time, it would be impossible for the promise to pay letter to provide the desired guaranteed effects. This statement requires a little more explanation: When the transaction to be guaranteed is a sale through bank financing, the Bank issuing the letter is the guarantor of compliance with the obligation to pay against the seller while at the same time ensuring that their own interests are duly insured by registering the corresponding loan and mortgage contracts, so that if the registration of these last contracts fails, the Bank does not pay the Seller either, a situation that in itself is contradictory with the guarantee function of the letter since in principle it exists to guarantee an agreement between two contracting parties that turns out to be alien and unconnected with the agreement that the buyer has with his financier. However, it must be accepted that it is a mechanic imposed and difficult to reject by promoters and sellers, because the reality in the end is that few people can acquire a property or a car without financing.
Extracted from a bank promise letter from a bank in our town:
“We are pleased to inform you (s) that we undertake to deliver to you (s) __ the aforementioned sum, once the public deed that protects the loan to which we refer above, has been duly registered (sic) in a definitive way in the Public Registry, all our requirements regarding mortgage loans have been completed and the settlement is made. ” (Our highlight)”.
Although the payment promise letters are issued as irrevocable, the reality is that the issuer can refuse to make it effective, since compliance is conditional, and in the absence of compliance with the conditions imposed, the disbursement is simply not made. However, in our opinion, in a situation of non-compliance, the Bank would not be free of responsibility as might be thought, since, if you look closely, it issued the promise of payment letter because the debtor qualified and met its requirements accordingly. that could badly later argue that it abstains from complying due to a lack of such requirements.
However, the matter seems to have a way of being resolved in favor of the Creditor, since our Civil Code proposes a kind of solution when it comes to conditional obligations. Seen in detail, the danger for any promoter or seller is that the debtor and its guarantor (the Bank) would find it very easy to fail to comply with the obligations contracted. If we are guided by the text of a bank letter such as the one transcribed above, it is enough for the debtor to stop fulfilling any commitment with the Bank or for the Bank to unilaterally declare the breach of its credit policies, (which are not known by the way) , and with that, according to the promise letter, the Bank would be free to pay and the debtor with ample possibilities of not complying, which means that the guarantee that the letter provides in theory is not such. However, when the fulfillment of the condition depends exclusively on the will of the debtor, the conditional obligation is null, this according to our civil law. Article 1000 of the Civil Code is clear in this regard so that in the end the condition imposed by the Bank would end up being null and void and it would be obliged to pay.
Article 1000 of the Civil Code: When the fulfillment of the condition depends on the exclusive will of the debtor, the conditional obligation will be null. If it depends on luck or the will of a third party, the obligation will have all its effects in accordance with the provisions of this Code.
If we understand that the debtor is the one obliged to do or not do something, this rule applies to the Bank’s obligation to honor the promise letter, likewise if we understand that the Bank is a third party in the contractual relationship, we would also end up with the same result, that the condition will be understood as not set because it is null.
Finally, it is clear that the promise of payment letter is a guaranteed instrument that must fulfill this function, for that it exists and for that it was conceived. Conditioning it to the fulfillment of conditions that endangers its support function denatures it and, in our view, cancels it, not in vain are there provisions such as article 1000 of the Civil Code that seeks to impose balance in this type of legal relationships that in the A concrete case is part of our daily lives and shows how current the law is and how important its understanding is in every part of our lives.