Commercial Law: Legal Certainty for Every Business Operation

Commercial law in Spain — also known as corporate law (Derecho Mercantil) — is the body of law governing commercial activity between businesses, including company formation and governance, commercial contracts, competition, intellectual property, insolvency, and securities. Whether you are searching for commercial law Spain or corporate law Spain advice, this practice covers both: the distinction matters in English-language usage, but under Spanish law both concepts fall within a single unified discipline. Commercial law is primarily regulated by the Spanish Commercial Code of 1885, the Ley de Sociedades de Capital (Legislative Royal Decree 1/2010), the Ley Concursal (Legislative Royal Decree 1/2020), and a broad framework of EU harmonisation regulations. Spain's commercial courts (Juzgados de lo Mercantil), established in 2004, have exclusive jurisdiction over most commercial disputes including insolvency, unfair competition, and intellectual property infringement.

Our commercial law and corporate law department supports businesses of all sizes in protecting their commercial operations. We combine legal rigour with a practical approach that prioritises actionable solutions and measurable outcomes.

This service is part of our legal advisory practice.

Company Formation in Spain: Choosing the Right Legal Structure

For any foreign founder, investor, or group establishing operations in Spain, the first corporate law decision is the choice of legal entity. Spanish commercial law offers several structures, each with distinct governance, liability, and tax implications.

Sociedad de Responsabilidad Limitada (SL) — Private Limited Company

The SL is the most commonly used entity for foreign-founded and owner-managed businesses in Spain. Key characteristics:

• Minimum capital: EUR 3,000 (reduced to EUR 1 nominal capital under the empresa de trabajo personal introduced by the Ley de Startups 2022, subject to reserving profits until EUR 3,000 is reached).
• Liability: limited to capital contribution. Shareholders are not personally liable for company debts beyond their investment (except in cases of fraud, undercapitalisation, or piercing of the corporate veil).
• Management: one or more administrators (Administrador Único, Administradores Mancomunados, or Consejo de Administración). No board of directors requirement for smaller companies.
• Governance: regulated by the Ley de Sociedades de Capital (LSC) and the company’s Estatutos Sociales (articles of association).
• Restrictions on share transfers: shares (participaciones) are not freely transferable — pre-emption rights apply under the LSC. Transfer requires a public deed before a notary.
• Typical use: subsidiaries of foreign groups, family businesses, professional service firms, startups, holding companies.

Sociedad Anónima (SA) — Public Limited Company

The SA is the appropriate structure for larger companies, listed entities, and situations where share transferability or access to capital markets is required.

• Minimum capital: EUR 60,000 (at least 25% paid up at incorporation).
• Shares (acciones) are freely transferable as a default (though restrictions can be included in the articles). Bearer shares were abolished in Spain in 2017.
• Management: Consejo de Administración (board of directors) with a minimum of 3 directors where a board structure is used.
• More rigid governance requirements than the SL: mandatory auditing for larger companies, additional LSC compliance requirements.
• Typical use: companies seeking investment from a broad investor base, companies targeting an IPO, financial services entities subject to regulatory capital requirements, or any entity where shareholders expect free transferability of their investment.

Sociedad Limitada Unipersonal (SLU) — Single-Member Private Limited Company

The SLU is structurally identical to the SL, but owned by a single shareholder (individual or legal entity). It is the standard choice for:

• A sole founder establishing a business vehicle.
• A foreign parent company establishing a Spanish subsidiary (the parent is the sole shareholder).
• A holding company structure where one entity holds 100% of the operating subsidiary.

The SLU must declare its unipersonal status in the Registro Mercantil, and transactions between the SLU and its sole shareholder must be documented in writing (art. 16 LSC) to prevent piercing of the corporate veil.

Branch (Sucursal) — Not a Separate Legal Entity

A branch (sucursal) is an extension of the foreign parent company, not a separate legal person. The parent company is fully liable for the branch’s obligations. Branches are used where the foreign group wants a registered presence in Spain without creating a separate entity — typically for representative offices, project-specific operations, or initial market-entry phases. Branches must be registered in the Registro Mercantil and file their own accounts (or those of the foreign parent).

Entity choice for specific investor profiles

We handle the full incorporation process: preparation of Estatutos Sociales, coordination with the notary (escritura de constitución), registration in the Registro Mercantil, tax registration (modelo 036), and NIE/NIF procedures for foreign founders who require them.

Corporate Law in Spain: Governance, Shareholders’ Agreements, and M&A

Corporate law in Spain — the set of rules governing how companies are managed, how shareholders exercise their rights, and how ownership changes hands — is one of the most complex and consequential areas of commercial law practice.

Shareholders’ Agreements (Pactos Parasociales)

Under Spanish corporate law, the articles of association (Estatutos Sociales) govern the relationship between the company and its shareholders and are public documents registered at the Registro Mercantil. Shareholders’ agreements (pactos parasociales) complement the articles: they are private documents between shareholders that can include provisions which cannot or should not be in the articles (drag-along rights, tag-along rights, anti-dilution mechanisms, governance arrangements for management).

The critical difference between Spanish and common-law practice: under Spanish law, pactos parasociales are binding between the signing parties but do not directly bind the company or its governing bodies. This means that governance provisions in a shareholders’ agreement must be carefully coordinated with the articles of association to ensure they are actually enforceable. A drag-along provision in a shareholders’ agreement that has no corresponding mechanism in the articles may be challenged as unenforceable against the company.

We draft shareholders’ agreements that are coordinated with the articles of association from the outset, including:

• Deadlock mechanisms (when decisions require unanimity or a supermajority and the shareholders cannot agree).
• Pre-emption rights and right of first refusal on transfers.
• Drag-along and tag-along provisions.
• Valuation mechanisms for exits and buyouts.
• Anti-dilution provisions (full ratchet or weighted average) for venture-backed companies.
• Restrictive covenants (non-compete, non-solicitation) within the limits of Spanish law.
• Reserved matters requiring shareholder approval beyond the statutory minimum.

Corporate Governance and the Board of Directors

Spanish corporate law (LSC) distinguishes between the Administrador Único (sole administrator), Administradores Mancomunados (joint administrators) and the Consejo de Administración (board of directors). The choice has significant governance implications:

• An Administrador Único has full management authority and can bind the company in all ordinary and extraordinary acts.
• The Consejo de Administración requires a minimum of 3 members, must keep minutes of meetings, and decisions are made by majority vote unless the articles require higher thresholds.

Directors in Spanish companies (administradores) owe fiduciary duties to the company: the duty of care (diligencia de un ordenado empresario) and the duty of loyalty (lealtad). Breach of these duties can generate personal liability (art. 236 LSC), and in insolvency situations, the overlap between director liability under company law and the insolvency law calificación culpable creates substantial personal risk.

Mergers, Acquisitions, and Corporate Restructuring

Commercial law intersects with M&A at every stage:

Due diligence. A commercial law due diligence audit of the target company covers: review of the target’s articles of association and shareholders’ agreements (identifying pre-emption rights that could block the acquisition, change-of-control clauses in key contracts, and consent requirements from counterparties); review of the material commercial contracts (distribution agreements, key customer contracts, supply agreements, IP licences) for assignability and change-of-control provisions; and an assessment of regulatory approvals required (CNMC merger control for above-threshold transactions, sector-specific approvals).

Transaction structure. The choice between a share purchase (compraventa de participaciones or acciones) and an asset purchase (compraventa de activos o negocio) has fundamental commercial law implications for the transfer of contracts, employees, and regulatory licences. Share purchases transfer all assets and liabilities of the target; asset purchases allow selective acquisition but require novation of contracts and may trigger employee consultation obligations.

Post-closing. Commercial law work continues after closing: notification of contract counterparties of the change of ownership, novation of agreements where required, updates to the Registro Mercantil (change of administrator, new articles of association), and integration of the target’s contract portfolio into the acquirer’s standard documentation framework.

Our commercial law team works in close coordination with our mergers and acquisitions practice to ensure legal continuity through every stage of a transaction.

Distribution Agreements, Agency Contracts, and Commercial Contracts in Spain

Spanish commercial law has specific mandatory rules for certain types of commercial relationships that apply regardless of the contract terms. Understanding these rules before entering into or terminating commercial agreements is essential for managing cost exposure.

Commercial Agency Agreements (Ley 12/1992)

Spain’s Law on Commercial Agency (Ley 12/1992) transposes EU Directive 86/653/EEC and grants commercial agents statutory protections that cannot be contractually waived:

• Goodwill indemnity (indemnización por clientela): on termination of the agency, the agent is entitled to compensation for the goodwill they have generated for the principal, calculated on the basis of average annual commissions over the previous five years (capped at one year’s average commission). This right applies even if the agency contract says otherwise and even if the contract does not exist in writing.
• Damages for abusive termination: if the principal terminates the agency without cause or with insufficient notice and the agent has incurred costs to develop the principal’s business, the agent may claim damages in addition to the goodwill indemnity.
• Minimum notice periods: except for fixed-term contracts within their term, the notice period for termination increases with the duration of the contract (1 to 6 months for contracts exceeding 5 years).

The practical consequence: every business operating in Spain with commercial agents — whether they are called agents, commercial representatives, brokers, or any other title — needs to assess whether the relationship falls under Ley 12/1992 and, if so, to quantify and manage the goodwill indemnity exposure before any termination.

Distribution Agreements (No Specific Statute, Competition Law Overlay)

Unlike agency agreements, exclusive distribution agreements in Spain are not governed by a specific statute. However, they are subject to:

• EU competition law (VBER 2022/720): the Vertical Block Exemption Regulation applies to all vertical agreements with a counterparty whose market share does not exceed 30%. Restrictions not covered by the block exemption (primarily resale price maintenance and certain territorial restrictions) require individual assessment for compatibility with Art. 101 TFEU and may be void.
• Spanish case law on implied goodwill indemnity: Spanish courts have increasingly applied the agency law goodwill indemnity by analogy to exclusive distribution agreements where the distributor has generated substantial business for the supplier. This creates a contingent liability on termination of long-standing exclusive distribution relationships.

Franchise Agreements (Royal Decree 201/2010)

Franchise agreements in Spain are subject to specific pre-contractual disclosure obligations under Royal Decree 201/2010: the franchisor must provide the franchisee with a full disclosure document (documento de información precontractual, DIP) at least 20 working days before signing the franchise agreement or any pre-agreement payments. Failure to comply can render the agreement voidable.

Franchisors operating in Spain must also register their franchise network in the Registro de Franquiciadores. We advise both franchisors structuring a Spanish network and franchisees evaluating entry into a franchise system.

FAQs on Commercial Law and Corporate Law in Spain

Is there a difference between commercial law Spain and corporate law Spain? In English-language usage, “corporate law” typically refers to company formation, governance, and transactions, while “commercial law” covers contracts, agency, distribution, and trading relationships. Under Spanish law (Derecho Mercantil), both fall within the same unified body of law. Our practice covers the full spectrum, from company formation and shareholders’ agreements to commercial contracts and dispute resolution.

What is the fastest way to incorporate a company in Spain? The fastest route to incorporation is the Sociedad Limitada Exprés, which can be incorporated through a notary in a single session using a standard set of articles of association (Estatutos Tipo approved by Royal Decree 421/2015) and registered within 48 hours. This route is suitable for simple structures. For companies with foreign shareholders, specific governance requirements, or bespoke articles, a customised incorporation with a 2 to 4 week timeline is standard.

Can a non-resident foreigner be the sole shareholder and director of a Spanish SL? Yes. Spanish corporate law places no nationality restriction on who can hold shares or act as administrator of a Spanish SL. However, the administrator must obtain a NIE (Número de Identificación de Extranjero) for registration purposes, and the company must have a registered address in Spain. If the administrator is non-resident, the company must appoint a tax representative in Spain for certain tax obligations.

What corporate law protections apply to minority shareholders in a Spanish SL? The LSC grants minority shareholders (holding 5% or more) the right to request the calling of a general meeting, to request judicial appointment of an auditor, to challenge corporate resolutions, and to bring a derivative action on behalf of the company against directors. Additional protections must be established by contract in the shareholders’ agreement, as the default LSC majority rules can allow the majority to take decisions that significantly affect minority value.

What are the key differences between an SL and an SA for a foreign investor? The SL is more flexible and less regulated, making it the preferred choice for most foreign-founded companies in Spain. The SA is necessary where free share transferability is required (the SA’s acciones are more freely transferable than the SL’s participaciones), where the company plans to list on a stock exchange, or where Spanish regulatory requirements mandate the SA form (e.g., certain financial services entities). The SA has higher minimum capital requirements (EUR 60,000) and more extensive governance obligations (mandatory board structure, external audit for larger companies).

What shareholder agreement clauses are enforceable in Spanish corporate law? Shareholders’ agreements (pactos parasociales) are binding as contracts between the parties but do not directly bind the company. To ensure enforceability, key provisions — particularly governance rights, veto rights, and transfer restrictions — must be reflected in the company’s Estatutos Sociales. Purely contractual remedies (damages for breach) apply to SHA provisions not mirrored in the articles, but specific performance is difficult to obtain for governance decisions. We coordinate SHAs and articles of association to close this enforceability gap.

What is the commercial law due diligence process in an M&A transaction in Spain? A commercial law due diligence in Spain covers: review of the target’s corporate documents (articles, shareholders’ agreements, board minutes, Registro Mercantil extract); commercial contract review (identifying change-of-control clauses, consent requirements, and assignability restrictions in material contracts); regulatory licence review; and IP ownership verification. The due diligence findings are reflected in the representations and warranties in the SPA and, where material issues are identified, in price adjustments or specific indemnities.

The Three Highest-Risk Commercial Law Situations in Spanish Mid-Market Companies

Commercial law risk rarely arrives as a court summons. It arrives much earlier — in a distribution contract without enforceable territorial clauses, a commercial agent who has been operating for years without a written agreement, or a supplier whose overdue invoices are generating automatic interest under the Late Payment Act that nobody has claimed.

Distribution contracts without solid legal architecture (Act 12/1992). Spain’s Commercial Agency Act directly governs commercial agents, but courts apply it by analogy to many exclusive distribution agreements. A distributor who has been operating your client network for five years may have a statutory goodwill indemnity claim on termination — equivalent to up to one year of average commissions — even if the contract says otherwise or does not exist at all. Many companies discover this contingency only when it is too late to structure the exit correctly.

Agency contract misclassification. An agent with genuine autonomy who bears commercial risk and acts on their own account may in practice be a distributor or a concealed employee. Incorrect classification creates two risks: a labour risk (if the relationship is reclassified as an employment contract) and a commercial law risk (if the agent claims the statutory indemnity they are owed under the Act). A preventive contractual audit resolves this at minimal cost.

Systematic failure to claim Ley 3/2004 interest on late payments. The Late Payment Act grants B2B creditors automatic interest at the ECB rate plus 8 percentage points from the moment payment is overdue — with no court action required. On meaningful transaction volumes, this accumulated interest can be significant. Many companies negotiate payment plans without ever invoicing the interest they are legally entitled to, missing a negotiating lever that changes debtor behaviour.

Why Commercial Law Cannot Be an Afterthought

Every commercial relationship begins with a promise — a delivery date, a payment term, an exclusivity window. When those promises are not captured in enforceable legal language, disputes are not a matter of if but when. Spanish commercial law is sophisticated, and the courts expect precision: a poorly worded force-majeure clause, an ambiguous termination provision, or a missing dispute-resolution mechanism can turn a straightforward disagreement into years of litigation.

Our team drafts contracts that anticipate conflict rather than react to it. Before we write a single clause, we understand your commercial objectives, your risk appetite, and the counterparty’s leverage. The result is documentation that stands up under pressure and gives you a clear path forward in every scenario.

From Contracts to Corporate Governance

Strong commercial law practice extends well beyond individual contracts. Corporate governance — how decisions are made, how shareholder disputes are resolved, how management is held accountable — is the legal architecture that determines whether a company can grow without fracturing. We design shareholders’ agreements that include clear deadlock mechanisms, pre-emption rights, drag-along and tag-along provisions, and fair-value formulas for share transfers.

When businesses undergo due diligence in the context of investment or acquisition, the quality of their contract portfolio and governance documents directly affects valuation. Undocumented arrangements, expired agreements, and missing counterparty consents become liabilities that sophisticated buyers will price in. We help you maintain a legal framework that enhances your company’s value.

Regulatory Compliance as Competitive Advantage

Regulatory compliance in Spain spans multiple regimes — competition law, consumer protection, sector-specific rules, and European directives that are transposed at varying speeds. Companies that monitor these changes proactively avoid the cost of reactive legal work and the reputational risk of non-compliance. Our commercial law team provides ongoing compliance retainers that include legislative monitoring, quarterly reviews of your documentation, and management team briefings on emerging obligations.

For businesses navigating restructuring or significant operational change, commercial law advisory ensures that contractual obligations are correctly managed, counterparties are properly notified, and continuity of key agreements is preserved through the transition.

Dispute Resolution: Speed and Value Preservation

When disputes arise — and in active commercial environments they always do — the quality of the legal strategy determines whether value is preserved or destroyed. We prioritise negotiated settlement because it is faster, cheaper, and preserves commercial relationships. When litigation is unavoidable, our team has deep experience in Spanish commercial courts and international arbitration, with a track record of achieving favourable outcomes in high-value contractual disputes.

Commercial Law in Spain: The Regulatory Compliance Dimension

Spanish commercial law intersects with a growing body of regulatory obligations that companies cannot ignore. Competition law (enforced by the CNMC, with fines up to 10% of global group turnover), consumer protection obligations under the Consolidated Consumer Protection Act (TRLGCU), and sector-specific regulation for industries from financial services to retail distribution create a compliance landscape that most commercial contracts must navigate.

For companies operating distribution networks or franchises, the Vertical Block Exemption Regulation (VBER, EU Regulation 2022/720) governs the restrictions that can be included in vertical agreements — particularly restrictions on resale pricing and online sales. The revised VBER that entered into force in June 2022 introduced significant changes to the rules on dual distribution and online sales restrictions that many existing distribution agreements have not yet been updated to reflect. Outdated distribution contracts can expose companies to CNMC enforcement risk with substantial fines.

Agency Contracts and Commercial Representatives: Spanish Law Specifics

Spain’s Law on Commercial Agency Agreements (Ley 12/1992, transposing EU Directive 86/653/EEC) grants commercial agents specific rights that cannot be waived by contract: entitlement to indemnification for goodwill (indemnización por clientela) upon termination of the agency relationship, calculated on the basis of the average annual commission earned over the previous five years (or the duration of the contract if shorter) and capped at one year’s average commission; and compensation for damage where the agency is terminated in circumstances that do not entitle the principal to terminate without notice.

These mandatory protections apply regardless of the contractual terms and have been consistently upheld by Spanish courts. Principals who terminate agency agreements without proper cause or without accounting for these statutory rights face claims that can reach the equivalent of six months to one year of the agent’s average annual remuneration. Understanding the mandatory legal framework before structuring and terminating agency arrangements is essential for cost management.

Insolvency and Pre-Insolvency: The Commercial Law Dimension

When a commercial counterparty faces financial difficulties, the commercial law response — accelerating enforcement of security, exercising early-termination rights, preserving documentary evidence of claims — is often more important in practice than the insolvency proceedings themselves. The reformed Insolvency Law (Ley 16/2022, transposing EU Directive 2019/1023) introduced significant changes to pre-insolvency mechanisms, including the microenterprise special procedure and the restructuring plan homologation process.

For creditors, understanding when to enforce commercial remedies and when insolvency proceedings offer a better outcome requires coordination between commercial law and restructuring expertise. For debtors, proactive management of commercial creditor relationships during a pre-insolvency phase can preserve key supplier and customer relationships that a formal insolvency proceeding would destroy. We coordinate commercial law and restructuring advisory so that companies facing financial stress have a coherent strategy across all dimensions.

Sectors with specific commercial law complexity

Technology, software, and digital services: the commercial law issues most frequently encountered in technology company advisory include SaaS and software licence agreement structuring (liability caps, SLA/credit mechanisms, IP ownership for custom development under Articles 97-99 TRLPI, data processing as processor under GDPR Article 28), marketplace participation agreements, and digital reseller network structuring compliant with the revised VBER 2022/720. Cross-border IP licensing requires analysis of Rome I Regulation (593/2008) for governing law and Brussels I Recast (1215/2012) for jurisdiction selection.

Distribution and retail: franchise agreements (governed by Royal Decree 201/2010 — mandatory pre-contractual disclosure 20 working days before signing) and exclusive distribution agreements (unregulated by statute, but subject to VBER competition law analysis for all agreements above de minimis thresholds) generate the most complex commercial law advisory in the retail sector. The interface between commercial law and tax (transfer pricing for intra-group distribution, IVA on intra-group charges) requires coordination between our commercial and tax teams.

Construction and real estate development: commercial law in this sector covers construction management agreements (contrato de obra — fixed price versus cost-plus, milestone payment mechanisms, retention, and defects liability under LOE), subcontracting networks, off-plan buyer protection (Law 57/1968, Bank guarantee requirements for residential advance payments), and the enforceability of penalty clauses (cláusulas penales, Article 1152 Civil Code) which Spanish courts regularly moderate under Article 1154.

Professional services: service agreements for management consulting, IT advisory, legal services, and financial advisory have specific enforceability issues — Spanish courts apply the locatio operis/locatio operarum distinction (outcome-based versus effort-based obligations) when assessing whether a professional services firm has met its contractual obligations. Defining the scope of the service obligation precisely is critical for limiting liability and managing client expectations.

Food and agribusiness: the Law on Measures to Improve the Functioning of the Food Chain (Ley 16/2021) prohibits certain commercial practices in the agri-food supply chain — below-cost sales, retroactive price modifications, unjustified payment terms exceeding 30 days for perishables — and applies to all parties in the chain regardless of size. AICA (Agencia de Información y Control Alimentarios) inspects and sanctions violations. Companies in the food distribution chain require specific commercial contract auditing against this regulatory framework.

Company size segmentation

Startups and newly incorporated companies: company constitution documentation (SL, single-member SL for solo founders), standard commercial contract templates (NDA, software licence, service agreement), shareholders’ agreement with basic VC-compatible provisions, and IP assignment agreements for founding team members. Fixed-fee engagement for the standard startup documentation package.

SMEs in growth phase (EUR 2M–EUR 30M): distribution network documentation (agency versus distributor classification review; franchise disclosure compliance; exclusivity clause VBER analysis), key customer and supplier contracts with enforceable penalty and termination provisions, and shareholder agreement updates as ownership changes or investor entry occurs.

Large companies (above EUR 30M): legal audit of the full commercial contract portfolio (identifying expiry, missing counterparty consents, unfavourable automatic-renewal provisions, and outdated regulatory references), competition law audit of distribution network agreements for VBER compliance, and ongoing commercial counsel providing advice-on-demand for new contracts and commercial situations.

International groups operating in Spain: localisation of group-standard commercial agreements to Spanish law requirements, validation of governing-law and jurisdiction clauses for enforceability in Spain, and compliance with Spanish mandatory law provisions that cannot be contracted out of (Late Payment Act, Agency Law, consumer protection provisions that apply even in B2B contexts in certain regulated sectors).

Worked example: distribution network restructuring for a German machinery manufacturer

A German machinery manufacturer with EUR 85M annual sales had operated a network of 7 exclusive Spanish distributors for 12 years through verbal agreements memorialised only in email exchanges. An acquisition of one of the distributors by a competitor prompted a full review of the distribution relationships.

Situation at engagement:

• 7 distributors, none with a written agreement meeting current legal standards
• 3 distributors operating in territories that overlapped with each other (potential competition law issue under VBER)
• Distributor #4 had been acting as a commercial agent for some product lines (taking orders, not stock) — creating statutory agency indemnity risk on termination
• Late payment interest under Law 3/2004 not systematically claimed; estimated unpaid interest across the network: EUR 48,000

Actions taken:

• Full classification analysis: determined that distributors 1, 2, 3, 5, and 6 were genuine independent distributors (buying and reselling on their own account); distributor 4 was a hybrid — agent for spare parts and distributor for capital equipment. Distributor 7 was fully agent-classified.
• VBER analysis: territory overlaps required restructuring of 2 distributor agreements to eliminate exclusive territory grants that had become unlawful under VBER 2022/720.
• Written distribution agreements drafted and executed for all 7 relationships: 3-year terms, exclusive territories (revised to comply with VBER), price lists updated annually by the German parent, warranty allocation (manufacturer takes product liability; distributor carries commercial warranty administration), and termination provisions reflecting the agency indemnity risk for distributors 4 and 7.
• Late payment interest claims: EUR 48,000 in accumulated interest raised as negotiating positions during the agreement renegotiation process; EUR 31,000 settled and credited against future orders.
• Termination contingency reserve: calculated agency indemnity exposure for distributors 4 and 7 (EUR 145,000 maximum) and reflected in the group’s financial provisions.

Outcome: fully documented distribution network, VBER compliant, with clear termination rights and quantified contingency exposure. Time elapsed from engagement to fully executed documentation: 14 weeks.

Five common commercial law mistakes

1. Verbal or email-only commercial agreements. “We’ve been working together for years” is not a contract. When a long-standing commercial relationship breaks down, the absence of written terms means that each party’s obligations, the duration of the arrangement, the exclusivity scope, and the consequences of termination are all in dispute. Documenting existing relationships retrospectively — even where the relationship is healthy — costs a fraction of litigating its terms when it is not.

2. Not claiming Late Payment Act interest. Law 3/2004 grants B2B creditors automatic interest at the ECB reference rate plus 8 percentage points from day 1 of default, plus EUR 40 collection compensation per invoice. These amounts accrue automatically and can be claimed at any time within the standard prescription period (5 years under the Civil Code for commercial debts). Not invoicing this interest leaves money on the table and reduces the deterrent effect on chronic late payers.

3. Using the same force majeure clause for all contracts regardless of sector. A generic force majeure clause that covers “acts of God, war, and government action” is inadequate for a logistics contract (where supply chain disruption is the primary force majeure risk), a construction contract (where specific weather and material shortage scenarios must be defined), or a digital services agreement (where hosting provider outages, cyberattacks, and internet infrastructure failures are the relevant events). Force majeure clauses must be contract-specific.

4. Choosing an inappropriate governing law for international contracts. Companies that accept whatever governing law the counterparty proposes — often English law for international contracts or French law for contracts with French suppliers — may find that their rights under Spanish mandatory law (Late Payment Act, Agency Law, consumer protection provisions) are not adequately reflected in the foreign law framework. Rome I Regulation analysis should precede any governing law choice in international commercial contracts.

5. Ignoring the competition law dimension of distribution agreements. Every exclusive distribution agreement, pricing restriction, or territory allocation in a contract with a Spanish or EU-operating counterparty should be reviewed for VBER compliance. The CNMC actively investigates and sanctions vertical competition law infringements — and the reputational and financial consequences of a CNMC investigation (fines up to 10% of global group turnover, publication of the infringement decision) far exceed the cost of a preventive VBER review.

How we work: commercial law advisory

Contract drafting and review: fixed-fee quotation for standard contract types (NDA, service agreement, distribution agreement, shareholders’ agreement). Complex or bespoke documentation quoted per mandate. Standard turnaround: 5 working days for review, 10 working days for drafting.

Commercial contract audit: systematic review of a company’s contract portfolio to identify gaps, expiry dates, missing counterparty consents, and regulatory compliance issues. Delivered as a prioritised action report. Typically 3–4 weeks for a portfolio of 20–50 agreements.

Ongoing commercial counsel: monthly retainer providing advice-on-demand for new contracts and commercial situations, legislative monitoring, and quarterly review of priority agreements. Typically EUR 1,500–EUR 4,000/month depending on complexity and volume.

Dispute management: pre-litigation negotiation, mediation support, and litigation preparation. We co-ordinate with specialist litigation barristers (abogados) for Commercial Court proceedings where our team handles the strategy and the litigation specialist handles the pleadings.