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Introduction
Under Panama Civil Law the general rule is that all contracts are
consensual, which is to mean that they are perfected by the mere
consent of the parties. Consequently, and except if expressly
established by law that a contract is formal or real, it must be
understood to be consensual, without prejudice to the liberty
granted by law to the parties to give a consensual contract the
character of formal.
By the same token, under Panama Commercial Law contracts of
commerce are not subject for their validity to special forms. Any
form or language utilized in the execution of said contracts, will
obligate the parties in the manner and under the terms which
appears that they wanted to be obligated. The exception to this
general rule would be those contracts that pursuant to the
Commercial Code or special laws, must be executed in a notarial
deed or require certain formalities for their validity.
Formal Contracts
I . Acts or contracts that must be done in writing :
1) The sale or assignment of hereditary rights.
2) Certain special sales, such as those forced by Ministry of Law,
of real property belonging to minors that have been habilitated of
age, etc.
3) The sale of chattels with reserve of ownership. When the amount
of the balance owed is $4,000 or less the contract must be in
writing and the signature recognized before a Notary Public. If
the balance is $4,000 or more the contract must be done in a
notarial deed.
4) The mercantile, judicial and legal surety.
5) Any contract or obligation that is worth more than $5,000.00,
however, in this particular case it is only a formality ad-probationem,
except if they have been technologically stored.
II. Acts or contracts that must be done in a notarial deed:
1) The acts and contracts that have as purpose the creation,
transmission, modification or extinction of real rights on real
estate.
2) The lease of real estate for a period of six or more years
provided that it is to affect third parties.
3) Marriage contracts, provided that the intent is to make them
valid against third parties.
4) The assignment, repudiation and renouncement of hereditary
rights or of the conjugal partnership.
5) The power of attorney to marry, the general power of attorney
for lawsuits and the special ones that must be presented in trial,
except as stated in the Judicial Code; the power of attorney to
administer assets and any other one that has for its purpose an
act written or that must be written in a notarial deed or that is
to affect third parties.
6) The assignment of acts or rights derived from an act consigned
in a notarial deed.
Notarize Or Recorded Contracts
The following are contracts that must be notarized and / or
recorded at the Public Registry :
1) Pledge Agreement . For the agreement to be binding on third
parties the signatures placed thereon must be recognized before a
Notary Public, with the exception of bank loans where the pledge
is binding on third parties as of the date of the respective
agreement .
2) Purchase and sale of real estate. For property title to pass to
the buyer the notarial deed must be recorded at the Public
Registry.
3) Sale or assignment of credits. In the case of credits
pertaining to chattels for the assignment to bind third parties
the signatures placed on the assignment agreement must be
recognized before a Notary Public and in the case of real estate
the agreement must be contained in a notarial deed and recorded at
the Public Registry.
4) Lease agreement. Any real estate lease agreement is subject to
registration. However, for said agreement to bind third parties it
must be recorded at the Public Registry. On the other hand, for a
chattel lease agreement to bind third parties the signatures
placed thereon must be recognized before a Notary Public.
5) Mortgage deed. For any mortgage deed, of any kind, to bind
third parties the corresponding notarial deed must be recorded at
the Public Registry.
6) Antichresis. In order for the antichresis to exist it must be
contained in a notarial deed and recorded at the Public Registry. |
