Does the leasing contract have a legal basis in Nicaragua?
In Nicaragua, the Leasing contract has become one of the most important methods of financing and mainly financial institutions have opted for this mechanism. However, although it has a significant impact on Nicaraguan trade, it lacks specific regulation.
And here is the question, what is the legal basis of the leasing contract in Nicaragua?
The Leasing Contract is an atypical commercial contract, which is defined as a legal business in which the lessor grants the use and enjoyment of certain goods, furniture and real estate, for a period of forced compliance to the lessee, the latter being obliged to pay a lease fee and other costs established by the lessor. At the end of the stipulated term, the lessee has the option of purchasing the good at a predefined price, returning it or extending the term of the contract for further periods.
Its legal basis and the application of the contract of Leasing or financial lease is based on the principle of autonomy of will that governs our contracting system where the parties can determine its content and effect as long as they are not contrary to law, morality and public order. In the absence of a regulation of their own, the parties are governed by the general rules applicable to civil and commercial contracts with regard to the general contracting conditions enshrined in the Civil Code.
Although it is true, we currently lack legislation regulating the Leasing Contract or Financial Leasing, in Nicaragua there have been some regulatory initiatives, such as the proposed law presented by the Nicaraguan Chamber of Commerce in 2009 before the National Assembly. Currently, the General Law of Banks authorizes financial institutions to carry out financial and operational leasing operations.
In conclusion, despite the fact that leasing is limited by the absence in Nicaraguan legislation of a particular legal framework, which also regulates its practice, it is important and necessary for the State to create an applicable legal framework for this activity that has enormous potential for development, and through this framework the legal business of leasing can be stimulated and can provide security to the parties to the contract.
Valeska Fonseca Torrez
Associate
García & Bodán
Nicaragua