Not every commercial breach is a crime. However, certain conduct that takes place within a business relationship can go beyond the contractual sphere and give rise to a criminal investigation.
This difference is especially important for entrepreneurs, merchants, investors and people who maintain contractual relationships.
Understanding where a commercial dispute ends and when elements of criminal relevance may exist makes it possible to assess the facts properly, along with the legal avenues available.
What is a commercial dispute?
Commercial relationships are based on agreements, obligations and commitments between the parties.
In the course of business, disagreements can arise over payments, delivery of goods, provision of services, product quality or the interpretation of contracts.
For example, a company may miss a delivery date, a customer may stop paying an invoice, or two partners may hold different positions regarding certain obligations.
These situations can give rise to contractual liability and to claims through the appropriate legal channels.
Breach of an obligation, by itself, does not prove the existence of a crime.
When can criminal conduct exist?
The situation can change when the facts present elements that correspond to conduct expressly defined in the Criminal Code (Código Penal).
One example is fraud (estafa).
In Panama, the Criminal Code covers obtaining an unlawful benefit through deception, to the detriment of another person.
Consequently, it is not enough to show that someone lost money or that the other party breached a contract.
It is necessary to examine whether there was legally relevant deception, its relationship to obtaining the unlawful benefit and the harm caused.
The difference between breaching and deceiving
Consider two hypothetical situations.
First scenario: commercial breach
A company contracts a supplier to receive certain goods. The supplier faces unforeseen financial difficulties, cannot complete delivery and subsequently defaults on its obligations.
This situation can give rise to a contractual dispute. However, the failure to perform does not, by itself, show that fraud occurred.
Second scenario: possible criminal conduct
A person offers goods that they know they cannot supply, uses false information to persuade the buyer and obtains a payment through that deception.
In this case there could be elements that justify examining possible criminal conduct.
The difference does not depend solely on the economic result, but on the facts, the conduct carried out and the elements required by criminal law.
How important is intent at the time of contracting?
One aspect that can become relevant is determining what the person knew and intended when making the statements that led to the commercial transaction.
Accepting an obligation that later proves impossible to perform is not the same as inducing another person to hand over money through deception.
However, intent should not be presumed automatically from a later breach. Assessing it requires examining the circumstances and the evidence available.
Contracts, communications, payment receipts, commercial documents and acts before or after the transaction can help clarify what happened.
Does every criminal complaint related to a contract mean a crime was committed?
No.
Filing a complaint brings certain facts to the attention of the competent authorities, but it does not by itself establish criminal liability.
It is for the authorities to investigate and determine whether the facts meet the elements necessary to justify criminal action.
A dispute arising from a contract may remain exclusively within the civil or commercial sphere. In other cases, the same events may present contractual and criminal aspects that require independent analysis.
The existence of a contract also does not automatically rule out the possibility of criminal conduct.
What should be done when a commercial conflict presents possible irregularities?
Before deciding what legal steps to take, it is advisable to reconstruct the facts in an orderly way.
It is important to keep contracts, annexes, invoices, transfer receipts, emails, messages and any other documentation related to the transaction.
It is also necessary to identify which obligations were assumed, which were breached and which statements or conduct could be relevant in determining the nature of the conflict.
A legal assessment makes it possible to establish whether it is appropriate to bring a contractual claim, to consider dispute-resolution mechanisms or to examine the possible existence of facts with criminal relevance.
This assessment is also important for someone who receives a criminal complaint as a result of a commercial dispute.
Conclusion
In business, not every economic conflict is a crime, but not every act carried out within a contractual relationship falls outside the reach of criminal law either.
The fundamental question is not only whether there was a financial loss, but how it came about and whether the facts meet the elements of conduct punishable under criminal law.
Correctly identifying this difference makes it possible to choose the appropriate legal avenue and to avoid confusing a contractual breach with possible criminal conduct.
At ArosemenaLaw we provide legal advice to analyze commercial disputes, assess their possible criminal implications and determine the legal alternatives that apply to each situation.