Mexico is undergoing a process of modernizing its legal system, especially in the areas of foreign investment, commercial transactions and international trade. As a result of the substantial increase of business and trade since NAFTA became effective in 1994, certain Mexican legal areas, which were under the exclusive control of the Federal Government, are now being updated and privatized. This closer commercial relationship recently developed by Mexico with the United States has led some commentators to suggest that the Mexican legal system is being subject to a gradual but pervasive process of "Americanization."

An improperly done agreement is the biggest cause of civil litigation and/or loss of investment in Mexico. Too many times foreigners will sign agreements in Spanish without fully understanding the legal implications of what they are signing. When this happens, the outcome of the agreements is often not favorable for the investor. We recommend that any time you sign an agreement in a foreign country you understand the intent of the agreement as well as the legal ramifications of the entire agreement.

Mexico legal information is brought to you by Connell & Associates, a Mexico law firm with offices in Mexico City, Puerto Vallarta and Ixtapa/Zihuatanejo.