Uruguayan legislation


Factoring is ruled by law # 17,202 of 09/24/99. In its article 45, said law establishes that factoring is “the financial activity that consists of acquiring credits from the sale of movable property, the rendering of services or the execution of works, granting advances on such credits and assuming or not their risks. The said activity may be complemented with services such as credit collection management or technical, commercial or administrative assistance to the grantors of the credits referred to herein. The credits must come from the transferor’s usual line of business ”.

Likewise, it is established that “in factoring contracts, the clause by which the global assignment is agreed, of part or all of the assignor’s credits, both existing and future, will be valid. In the latter case, such future credits will be required to be determinable. It may also be agreed that the agreement for the assignment of future credits in favor of the factoring company is a sufficient transmission title ”.


Article 46 of the law says that “the global assignment of all or part of the assignor’s credits with their guarantees granted in favor of a factoring company due to a factoring agreement, may be validly carried out and notified by any of the forms provided by articles 33 and 34 of Title V of this law ”. And the aforementioned article 34 says that “the debtors of the credits (…) may be notified by a telegram with acknowledgment of receipt or any other reliable mean, (…) without requiring the display of the title referred to in the second paragraph of article 1757 of the Civil Code. The date of the notifications can be proven by all means of proof admitted by our legislation ”.

Likewise, article 1758 of the Civil Code (which also applies to factoring) establishes that “the assignment of credits is ineffective as for the debtor as long as he is not notified and consents, or renews his obligation in favor of the assignee.” There is, then, a double function of the notification, which is to make the legal business effective to the third party assigned-debtor so that the transferor (old debtor) does not pay the transfer of the credit, and in turn to make said legal business opposable to the third parties, which is a disclosure function.

Although there is no format imposed by law for the notification, it is convenient for a notary public to go to the debtor’s address for the purposes of carrying out the notification by notarial act. By means of the notification by notarial act, a precise date is given to the purchase of the credits, avoiding possible later problems of proof at the judicial level.

Advertising and formality

In Uruguay the factoring contracts must not be disclosed nor registered in a public registry.

Opposition to the sale of credits

The debtor can consent or oppose the sale of the credits to the factoring company. In either case, the debtor may deduct exceptions when paying the factoring company. The debtor who accepted the sale will retain only the actual exceptions, based on the original title of the debt, but not the personal ones that he could have raised against the original creditor.

The opposition of the debtor does not prevent the seller’s credit from being transferred to the factoring company. It simply allows him to interpose the factoring company all the exceptions that he could have interpose to the seller, even the merely personal ones.

The debtor has three days to oppose the sale of the credits. After these three days it is assumed that he consents the sale made (art. 564 Commercial Code).

International factoring standards

For international factoring, the General Rules for International Factoring (GRIF) approved by Factors Chain International (FCI) apply. The GRIF are a set of rules that regulate different aspects of the relationship between two factoring companies from different countries.

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