Part 2: Commercial Law and Securities

Question 1

General guarantee of obligations

Answer 1

the debtor’s assets that can be seized (bank account, estate, capital)

Question 2

A personal guarantee is as good as a guarantee from an owned asset in what situations…

Answer 2

if the guarantor is also well off/financially capable.

Question 3

The Civic procedural code states that some things/assets are… (in regards to seized assets)

Answer 3

unsuitable (they cannot be seized no matter what)
partially unseizable (only partially seized)
relatively unseizable (only seized under certain circumstances)

Question 4

Example of things that cannot be seized

Answer 4

things in public domain
things that cannot be assigned
objects that if seized can offend common decency or lack economic justification

Question 5

Example of things that can be partially seized

Answer 5

2/3 of liquid salaries, wages, other social benefits (insurance)

Question 6

Personal securities

Answer 6

A person’s guarantor, with their assets to the fulfilment of the debtor’s obligations

Question 7

in rem securities

Answer 7

a fixed charge attached to a particular asset and gives the creditor preference in payment for the value of the sale of the assets

Question 8

What is the difference between personal security and in rem securities?

Answer 8

in rem securities are registered and are more secure and guaranteed to be seized, while personal security can be faked.

Question 9

what does the provision of personal security mean?

Answer 9

a third party guarantees with their own assets to comply for someone else’s obligations and becomes liable to the creditor.

Question 10

The guarantor has the benefit of prior excussio, what does this mean?

Answer 10

The guarantor can refuse payment to the creditor until all the assets of the debtor are seized first.

Question 11

What two situations can a guarantor not use the benefit of prior excussio?

Answer 11

1. if they have renounced the benefit
2. if they assumed the role of primary payer

Question 12

Pledge

Answer 12

grants the creditor right to have his credit paid with preference over other creditors in relation to certain movable things.

Question 13

Pledge of things

Answer 13

when someone offers a physical item, like a piece of property or valuable possession, as security for a debt or obligation

Question 14

Example of pledge of things…

Answer 14

if you borrow money from a friend to start a small business. To ensure that your friend gets their money back, you offer your expensive watch as collateral.

Question 15

Pledge of rights

Answer 15

when someone gives up certain rights as security for a debt or obligation

Question 16

An example of pledge of rights…

Answer 16

if you owe someone money, you might pledge your right to receive future payments from a customer as security until the debt is repaid

Question 17

Difference between a mortgage and a pledge when it comes to it guarantee?

Answer 17

Mortgage is registered, immovable things and a pledge cant be registered (unless its a pledge of shares)

Question 18

Mortgage

Answer 18

A legal document offering a building or land (or things deemed immovable) as security (for a loan).

Question 19

For the purposes of a mortgage, what movable things can be equivalent to immovable things and why?

Answer 19

Cars, ships, aircrafts. The reason why is because they can be registered in a registry.

Question 20

What are the three types of mortgages?

Answer 20

Legal
Voluntary
Judicial

Question 21

Voluntary mortgage

Answer 21

result from an agreement or an unilateral statement (art. 712 to 717 of the Civil Code)

Question 22

Judicial mortgage

Answer 22

Granted by the court, more accurate safer to the law.

Question 23

Prior ranking

Answer 23

Allows creditors to be paid over anyone else regardless of registration.

Question 24

Right of retention

Answer 24

When you incur expenses because of a thing, then you hold the right of holding the thing until expenses are paid.

Question 25

Bank guarantee

Answer 25

A personal guarantee provided by the bank, undertaking the payment of a certain amount.

Question 26

Acts of Commerce

Answer 26

All acts that are regulated in the commercial code

Question 27

Objective acts of commence

Answer 27

classified as such by the law (included in the code or any other legislative act)

Question 28

Examples of objective acts of commerce

Answer 28

Mergers (of companies)

Question 29

Subjective acts of commerce

Answer 29

All contracts that are not exclusively civil in nature

Question 30

Example of subjective acts of commerce

Answer 30

When someone prefers one brand of a product over another based on personal taste or perception

Question 31

Who can carry out acts of commerce?

Answer 31

Traders
Individuals with capacity to exercise, even if they are not traders

Question 32

Special rules applicable to acts of commerce and traders

Answer 32

• Simplification of formalities and means of proof
• Joint and several liability
• Time-barring

Question 33

Simplification of formalities and means of proof

Answer 33

legal provisions or practices aimed at streamlining (making it faster) the documentation and evidence requirements in commercial transactions.

Question 34

Joint and several liability

Answer 34

It provides a mechanism for ensuring that obligations are fulfilled and harms are compensated, even if one or more parties are unable to meet their responsibilities. It also offers greater flexibility for creditors to receive compensation

Question 35

Time-Barring

Answer 35

Time-barring is a rule in commerce that sets a limit on how long someone can take legal action against a trader for certain issues.
Be aware that it’s 2 years in the Portugal

Question 36

Example of time barring

Answer 36

buying a product from a store, and later you realise there’s a problem with it.
If the time limit is two years, you must file a complaint or lawsuit within two years of discovering the issue.

Question 37

Fundamental principles applicable to business names

Answer 37

Principle of truth
novelty or exclusivity principle
capacity to distinguish (different from other companies)
Unity principle
Principle of Lawfulness

Question 38

How long are traders under obligation to keep proper records of their commercial
activity?

Answer 38

10 years

Question 39

upon first demand bank guarantee

Answer 39

A personal guarantee provided by the bank, in which the bank pays the creditor if the debtor’s obligations are breached, without discussing wether it happened or not. The debtor must then pay the bank instead.

Question 40

What happens when debts are incurred by both spouses, or one spouse with the consent of the other?

Answer 40

both spouses are liable for the payment of the debt

Question 41

What happens when debts are incurred by one of the spouses?

Answer 41

Except when provided by the law, only the spouse that incurred the debt is liable for the payment of the debt

Question 42

in certain cases, both spouses are responsible for the debts incurred by one of them. One of those cases, inter alia, are when…

Answer 42

the debts incurred by a trader spouse in the exercise of his/her commerce

Question 43

Pursuant to article 1691(1) (d) of the Civil Code, regarding debts incurred by the trader spouse in the
exercise of his commerce:

Answer 43

Both spouses are liable for the debts incurred by the trader spouse in the
exercise of his commerce, unless it is proven that it was not incurred in the
common interest of the couple or if the couple is married in a separate
property regime.

Question 44

What are individuals that do not classify as traders?

Answer 44

incompatibilities (the law doesn’t allow people in positions of trading activities.
Culpable insolvency and bankruptcy fraud (disqualifying incompetent people who led things to bankruptcy)

Question 45

What does culpable insolvency and bankruptcy fraud mean?

Answer 45

means that someone is responsible for becoming bankrupt due to their own actions. If a judge determines that insolvency was culpable, they must identify who is at fault. The judge can disqualify these individuals from participating in business activities.

Question 46

What are traders?

Answer 46

Individuals who have the capacity to carry out acts of commerce

Question 47

The quality of trader is acquired when:

Answer 47

The person executes acts that reveal the intent of pursuing a commercial gain as its profession.

Question 48

Commercial companies take the legal form of:

Answer 48

• general partnership
• private limited company
• public limited company
• limited partnership
• partnership with shares

Question 49

What are the specific obligations of the traders?

Answer 49

• Adopt a business name
• keep proper records of their commercial activity
• comply with registration obligations at the commercial register
• prepare annual report and accounts
• other

Question 50

A business name is mandatory for…

Answer 50

Individuals and commercial companies, composed entirely of words.

Question 51

Three types of business names:

Answer 51

• Composed of the name of one or more people (Silva & Tamang, Lda)
• Composed by an expression that indicates activity (Fruit & Vegetables)
• Composed by a mixture of two types

Question 52

Protection of business name is guaranteed through…

Answer 52

preventive (certificate of admissibility RRNPC) and repressive means (RRNPC declare loss of right to name if it infringes principle of truth and novelty).

Question 53

Company names can’t contain words, expressions, abbreviations that are…

Answer 53

misleading.

Question 54

Company names can’t include elements that suggest activities different from…

Answer 54

what’s actually being carried out by the trader.