This guide is for U.S. companies that sign contracts with Mexican suppliers, distributors or customers. The short answer: Mexican law lets the parties choose the governing law and the forum, and a Mexican court can enforce a contract governed by foreign law, a foreign judgment or an arbitral award. What decides whether the contract works on the day of a breach is where the other party keeps its assets, whether the person who signed had authority, and whether the dispute clause is well written. This guide covers the Mexican side only. If you need your own company in Mexico, see how a foreign company opens a company in Mexico.
Governing law: what Mexican law lets the parties agree
The effects of a contract are governed by the law of the place where it is to be performed, unless the parties have validly designated another law (Article 13, section V, Federal Civil Code, Código Civil Federal). A Mexican judge will not apply foreign law if the result is contrary to Mexican public policy (Article 15). And real estate and assets located in Mexico, employment relationships, taxes and customs rules are governed by Mexican law whatever the contract says.
Forum: which courts
In commercial matters, the competent judge is the one the parties clearly and conclusively submitted to (Articles 1092 and 1093, Commercial Code, Código de Comercio). A foreign judgment will have to be recognized in Mexico before assets here can be attached, and it will not be enforced if the contract submits the parties only to Mexican courts (Article 1347-A, section III).
Who signs: authority and the notarial power of attorney
A Mexican company is represented by its directors or managers and by the attorneys-in-fact to whom it has granted a power of attorney before a notary (poder notarial) (Article 10, General Law of Commercial Companies). General powers come in three types: lawsuits and collections, acts of administration, and acts of ownership (Article 2554, Federal Civil Code), and they may carry limits.
Arbitration
The arbitration agreement must be in writing (Articles 1416 and 1423, Commercial Code). An award is recognized as binding whatever the country where it was made and needs no homologation; the grounds for refusing enforcement are limited (Articles 1461, 1462 and 1471). Mexico is a party to the New York Convention.
Enforcing a U.S. judgment in Mexico
A recognition proceeding, called homologación, is filed with a Mexican judge; the merits of the case are not reopened. Article 1347-A of the Commercial Code requires, among other conditions, that the court of origin had jurisdiction, that the defendant was served personally, that the judgment is final and that it is not contrary to Mexican public policy. Personal service is the requirement that stops the most judgments.
What happens if the Mexican side of the contract is not reviewed
Without sufficient authority on the signer's part, the other party will argue it was never bound, and a judgment won abroad without service that Mexico recognizes cannot be enforced here. In addition, many commercial actions expire before the ordinary ten-year limitation period (Article 1047, Commercial Code).
What is at stake is being able to collect in Mexico on the day of a breach. The first step is to have a Mexican attorney review the contract or the draft and the signer's authority, preferably before signing.
How we help
Mariela Cárdenas, LL.M., attorney admitted in Mexico, reviews and drafts the Mexican side of your contracts from the Nuevo Laredo, Mexico office: governing law and forum, the Spanish version, the signer's authority, security and the arbitration clause, and she represents your company before Mexican courts. She works alongside your company's own counsel at home; her practice is Mexican law only. Companies with recurring contracts can rely on the legal department in Mexico.
Frequently asked questions
Is a contract governed by another country's law valid in Mexico?
Yes. The Federal Civil Code lets the parties designate the governing law, within the limits of Mexican public policy and of the matters that Mexican law always governs.
Does the contract have to be in Spanish?
Not to be valid (Article 78, Commercial Code). To file it in a Mexican court, a Spanish translation will be needed (Article 1055).
Which is better, courts or arbitration?
It depends on where the other party's assets are, the amount and the type of contract. An arbitral award has a more direct enforcement path in Mexico than a foreign judgment; a case filed in Mexican courts avoids the recognition step.
How do we know the person signing can bind the Mexican company?
The authority is set out in the company's deed of incorporation and in the deed granting the power of attorney, and it must cover that contract. It is a short review done before signing.
General information on Mexican law, updated October 2026. It does not replace legal advice for a specific case.
Request a first review
Send us the contract or the draft and tell us who your counterparty in Mexico is: Schedule a consultation, mariela@cardenaslegal.mx or +52 (867) 187 0075.