Confidential binding offers: how to comply with the procedural requirements in Spain

One of the alternative dispute resolution procedures (ADRs) contemplated in Organic Law 1/2025 is the so-called "confidential binding offer". This tool has been defined as the offer submitted by a person with the aim of settling a dispute, being such person obliged to fulfil the obligations assumed, once the party to whom the offer is addressed expressly accepts it. It is crucial to ensure that all requirements established by law are properly fulfilled when submitting a binding offer.

Minimum content of the offer

The rule includes two classic concepts of Spanish civil law, namely offer and acceptance. This is relevant for the purpose of determining the content of both the confidential binding offer and its acceptance. In this respect, the Supreme Court established that an offer must be "unconditional, clear and precise", and the acceptance "complete" (Supreme Court's ruling 581/1994, of 15 June).

In any case, article 12 of the Organic Law 1/2025 establishes that the agreement reached as a result of an ADR must specifically include the following information:

• the identity and domicile of the parties;
• the identity of their lawyers;
• the obligations assumed by each party;
• proof that a negotiation procedure has been followed; and
• the signature of the parties. 

If this information is not provided in the agreement, the notary may be reluctant to notarise it as he must ensure that the requirements established in Organic Law 1/2025 are met. If the agreement is not notarised, the creditor would be denied the possibility of enforcing recovery and would therefore be forced to initiate declarative proceedings. In such a case, the offer may be deemed to be invalid because the procedural requirements have not been fulfilled.

Obligation of legal assistance

The law establishes a number of formal requirements that must be met for the binding offer to be considered an ADR and to conform to procedural requirements.

The intervention of a lawyer is required when submitting a confidential binding offer, except if the amount involved in the dispute is less than €2,000.

In order to meet this requirement, it is advisable that the offer and, where appropriate its express acceptance or rejection, is submitted by the lawyer itself or by the lawyer on behalf of the offeror or the offeree.

A question arises as to what happens if one of the two parties is not represented by a lawyer. If it is the offeror, it is advisable that the offeree states clearly that the offer does not meet the requirements. If it is the offeree who is not being represented by a lawyer, it is advisable that the offeror requires in the offer that any reply must be made with the assistance of a lawyer. To that end, it may be worth including a clause in the offer stating that the acceptance or rejection of the offer without legal assistance will be deemed to be a tacit rejection, with the consequences that this may entail.

Mode of transmission of the binding offer

The rule regulates the medium used for sending and accepting the offer. The selected tool must be able to leave a record of:

• the identity of the offeror;
• the effective receipt of the offer by the other party; and
• the date of receipt and the content of the offer.

The simplest and most effective way to do it is sending a certified fax (burofax) with certification of content through the national postal service. The sending of a registered letter or an email without reading confirmation may present difficulties because the registered letter does not certify the content of the communication and the email does not prove that it has been effectively received.

However, the content of the offer is confidential and under no circumstance should it be submitted to the court (except in the taxation of legal costs, a matter that goes beyond this article), so the sending, receipt and object of the offer must be recorded separately and the content of the offer included in a separate document.

Acceptance of the offer

The requested party must expressly accept the offer and this acceptance will be irrevocable. If no response is given to the binding offer, the offer will be considered to have been rejected (tacit rejection). Thus, if no express reply is given within one month – or a longer period if established in the offer – the procedural requirement will be deemed to have been met and the offeror will be entitled to take legal action.

Although the law does not consider this scenario and, therefore, it will be subject to judicial interpretation, the offeree may respond with a counteroffer. In this case, if the recipient of the counteroffer – the initial offeror – does not reply within one month or within the period established in the offer, it may be considered to be a case of termination without agreement under the provisions of article 17.4 of the rule.

Osborne Clarke comment

Leaving aside possible conceptual doubts as to whether an offer is actually a mechanism for negotiation (there will be times when the margin for negation is non-existent, if an offer is sent without the possibility of counter-negotiation), the binding offer, by its nature and the brevity of the procedure, seems to be an ideal mechanism to try to put an end to apparently simple disputes (such as certain claims channeled through an order for payment procedure).

However, it may be necessary to consider whether a binding offer is the appropriate tool to deal with more complex issues, as the offer must be clear and capable of encompassing all the issues at stake. In any case, when a binding offer is submitted, all the requirements established by law must be fulfilled. Poorly prepared documents can lead to serious practical problems which is why legal assistance is essential.