By: Melissa Morán
The promissory note is a credit instrument that entails an unconditional promise to pay a determined sum of money and must comply with certain general and specific requirements in order to be valid, pursuant to the Code of Commerce, Decree 2-70 of the Congress of the Republic and its amendments (the “Code of Commerce”), among which are those related to the name and signature of the debtor[1].
Likewise, the promissory note must comply with the requirements applicable to Bills of Exchange[2], especially those related to the inclusion of the text “free of protest”[3], in order to guarantee that in case of execution it will not be necessary to formalize the “protest” of the promissory note.
According to the Code of Commerce, the collection of a credit instrument gives rise to enforcement proceedings, without the need for signature acknowledgment or any other requirement, unless the protest is legally required[4]. Likewise, said code establishes that any controversy related to executive titles shall be resolved in accordance with the provisions of the Civil and Commercial Procedural Code, Decree Law No. 107 of the Congress and its amendments[5] (the “Civil and Commercial Procedural Code”).
The promissory note, being a credit instrument, is executed through an executive lawsuit of exchange action regulated in accordance with the Code of Civil and Commercial Procedure, and the existing judicial criterion that the original credit instrument, which in this case would be the original promissory note, must be attached to the lawsuit, must be considered in the execution thereof.
Now that we have determined the main requirements of the promissory note as a credit instrument and the judicial procedure to enforce the unconditional promise of payment contained therein, we must answer whether under Guatemalan law it is feasible for a promissory note to be signed electronically and in case of default, it can be judicially executed.
To answer the above, we must turn to the Law for the Recognition of Electronic Communications and Signatures, Decree 47-2008 of the Congress and its amendments (the “Law”), which states that no legal effects, validity or binding force shall be denied to a contract for the sole reason that such communication or contract is in the form of electronic communication[6].
The Law also provides that where any rule of law requires a contract to be signed by a party, that requirement is satisfied in respect of an electronic communication if a method is used to establish the identity of that party and to indicate that party’s intention with respect to the information contained in the electronic communication and if the method used is reliable and appropriate for the purposes for which the electronic communication was generated or transmitted, having regard to all the circumstances of the case, including any applicable agreement[7].
Finally, the Law also states that the electronic signature or advanced electronic signature, which may be certified by a certification services provider, which has been produced by a secure signature creation device, shall have, with respect to the data recorded in electronic form, the same legal value as the handwritten signature in relation to those recorded on paper and shall be admissible as evidence in court, the latter being assessed according to the evaluation criteria established in the procedural rules[8] (emphasis added).
From the above mentioned according to the Law, it is determined that electronic communications and signatures are valid in Guatemala, so that a promissory note can be formalized with an advanced electronic signature, as long as there are backup mechanisms that can give certainty to the identity of the person who commits to the payment thereof by means of electronic communication and signature, in addition to the conditions and stipulations that will govern the unconditional promise of payment contained in the promissory note.
Notwithstanding the foregoing, it is important to point out that even though the electronic signature of a promissory note is legally feasible and consequently, its judicial execution is also possible, this is not a common practice and this could result in the fact that when a promissory note with electronic signature is presented before a judge, the latter may be required to discuss the validity of the same due to its special nature.
Finally, it should be noted that in the case of judicial enforcement of a promissory note with an advanced electronic signature, it may also be necessary to attach to the complaint sufficient evidence to demonstrate the existence, validity and conditions of the electronic promissory note, which may consist of an opinion issued by a computer expert to demonstrate that the requirements established by the Law are met and therefore the electronic signature is recognized as valid.
[1] Article 490 of the Commercial Code, Decree 2-70 of the Congress and its amendments.
[2] Article 439 of the Commercial Code, Decree 2-70 of Congress and its amendments.
[3] Article 459 of the Commercial Code, Decree 2-70 of the Congress and amendments thereto.
[4] Article 630 of the Commercial Code, Decree 2-70 of the Congress and amendments thereto.
[5] Article 1039 of the Commercial Code, Decree 2-70 of the Congress and amendments thereto.
[6] Article 5 of the Law for the Recognition of Electronic Communications and Signatures, Congressional Decree 47-2008 and amendments thereto.
[7] Article 8 of the Law for the recognition of electronic communications and signatures, Decree 47-2008 of the Congress and its amendments.
[8] Article 33 of the Law for the recognition of electronic communications and signatures, Decree 47-2008 of the Congress and its amendments.