The First Chamber of the Supreme Court of Justice has published a new legal precedent constituting binding case law. This precedent establishes that the prohibition against the exploitation of one person by another applies to any contract that stipulates default interest or penalties which may result in an excessive economic benefit for one of the parties.
Case Law Data
Thesis 1a./J. 141/2025 (11a.). Digital record 2030472. Heading: “PROHIBITION AGAINST THE EXPLOITATION OF ONE PARTY BY ANOTHER. THIS MAY BE ANALYZED IN ANY CONTRACT CONTAINING DEFAULT INTEREST, PENALTIES, OR OTHER TYPES OF STIPULATIONS THAT MAY RESULT IN AN EXCESSIVE ECONOMIC BENEFIT FOR ONE OF THE PARTIES”. ADR 7997/2023.
Case Background
A company was sued for breach of a lease agreement containing a clause stipulating default interest on the amount of rent due. The court of first instance and the appellate court rendered judgment against the company in accordance with said contract, disregarding the argument that such stipulation was contrary to Article 21.3 of the American Convention on Human Rights, which prohibits the exploitation of one person by another.
The defendant filed a direct amparo lawsuit. The Collegiate Circuit Court held that the stipulated penalty agreed upon did not constitute usury, considering that usury is only established when a person obtains an excessive interest, for their own benefit and in an abusive manner, arising from a loan. However, the Court failed to analyze the stipulated penalty from the perspective of prohibition against the exploitation of one person by another. In response, the complainant filed an appeal for review.
Legal Precedent Published by the Supreme Court of Justice
Prohibition against the exploitation of one person by another may be examined in any contract, regardless of its designation, when default interest, penalties, or other provisions agreed upon generate an excessive economic benefit for one party, since such analysis is warranted when there is a significant disproportion between the obligations that affects human dignity and evidences an abuse or imbalance in the contractual relationship.
Legal Effects of the Case Law Issued by the Supreme Court of Justice
When a ruling issued by the Supreme Court constitutes a case law, it must be mandatorily applied in future cases. Courts are required to consider this new standard when analyzing the validity of contractual clauses and determining whether economic exploitation exists. This may have an impact on the drafting of agreements and other legal agreements, preventing one party from imposing excessive conditions on the other.
Questions and Comments
If you have any questions, or would like more detailed information, or need to review contracts to anticipate possible implications arising from this case law, our Dispute Resolution Practice is fully prepared to provide strategic support. Our team will assist you in evaluating the matter and will propose tailored legal solutions aligned with your organization’s objectives and needs.
