From the Confirming Contract to the Confirming Policy

The confirming contract occurs when a business outsources its payment management and entrusts an entity with the payment of the debts it has with its suppliers (whether for goods or services), usually at their due date, or, if agreed, through advance payments.

It is common for the entity entrusted with the payment of debts to be financial or credit institutions. These assume the payment to suppliers while financing the business for the payments, with the corresponding commissions and interest.

The notarial confirming policy is a document drafted before a Notary where it is established that the financial institution will act as the payment manager to suppliers.

The operation of the confirming contract begins with the payment orders sent by a company to its credit institution through an invoice issued by a supplier. The company orders the payment to the financial institution (confirming the invoice), which informs the supplier of the invoice's due date and the possibility of early payment.

The termination of the confirming contract occurs when the conditions agreed upon by the parties involved are met.

According to the payment formula, we find different confirming contracts:

• Financed payment: the invoice is paid to the supplier at the due date, financing it with the bank.
• Financed immediate payment: the entrepreneur and supplier agree on conditions such as discounts for immediate payment of the invoice and reach an agreement for payment before the invoice due date. The entrepreneur is the one who sends the invoice to the bank, which is paid immediately by the financial institution.
• Standard confirming: the bank manages payments to suppliers and offers to advance pending invoices.

The non-recourse confirming contract takes place when the supplier does not assume risks in the event of non-payment by the debtor, as the financial institution manages the payment of the invoices. In this case, it is the financial institution that assumes the risk.

The non-recourse confirming contract offers a number of advantages for both the supplier and the debtor company. It allows the supplier to obtain liquidity and not worry about non-payment, and the company improves its relationship with suppliers by offering them a secure payment option.

However, by activating a recourse confirming policy, if the debtor company does not pay its debts, the financial institution can claim from the supplier and, therefore, the supplier assumes part of the default risk.

The recourse confirming contract occurs when the supplier accepts the advance payment and the financial institution provides it. In the event that the debtor company does not pay, the bank can claim the money from the supplier.

The confirming contract offers several advantages for both creditors and suppliers. Firstly, it allows debtor companies to improve their business relationships by guaranteeing the payment of invoices, which generates trust and can result in more favourable conditions in future transactions. Additionally, it facilitates financing, as suppliers can receive advance payments, improving their cash flow. This system also reduces the administrative burden by outsourcing payment management, allowing companies to focus on their core activity. Finally, it offers flexibility in payments and access to detailed financial information, which helps companies maintain stricter control over their transactions.

However, confirming also presents disadvantages. One of the main drawbacks is the additional costs involved, such as the commissions charged by the financial institution, which can affect profitability. Furthermore, reliance on third parties for payment management can be a risk if the institution does not meet expectations. There is also the possibility that some suppliers may increase prices to compensate for the commissions, which could affect the debtor company's competitiveness. Likewise, if confirming is perceived as a tool to delay payments, it can damage business relationships. Lastly, not all suppliers are willing to accept this system, which limits the company's options when selecting business partners.

It is common for the confirming contract to be signed before a Notary. This document, formalised in the form of a policy, is called a confirming policy. The Notary plays a fundamental role and is involved in granting legal validity, certifying the signature and the consent of the operation.

Likewise, it facilitates enforcement in the event of non-compliance with the agreed terms through judicial means, reducing the risk of litigation.

The figure of the Notary plays a fundamental role in this process as they will guide and assist you, resolving your doubts and advising you on the best options for you. You can choose the Notary you wish to sign your policy.

Contact us for your enquiry wherever you are through our Online Notaries service, as this policy can also be signed digitally and remotely, if you wish, in which case the signing of the confirming policy before a Notary will take place.

• Identification documents of the policy signatories
• Documents proving representation, in case of intervening companies
• Policy with the confirming conditions.

The fees for a confirming contract at a notary are regulated in the notarial tariff. The cost of the policy depends, among other aspects, on the amount of the debt, the number of pages of the policy, and the possible existence of a guarantee.

The price of notarial acts is regulated by the Government and complies with the regulatory framework of the NOTARIAL TARIFF (RD 1426/1989, of 17 November, regulating the Notaries' Tariff).

However, the exact price of a notarial document cannot be calculated until its specific content is known, that is, until it is signed, as there are many circumstances that can cause it to vary. The number of copies requested of a document, the amount of the transaction, the pages it contains, as well as possible changes or additions, can slightly alter the final price.

If you wish to receive a detailed quote, we invite you to contact us directly through the method that is most convenient for you. You can do so via the contact form on the main page of this website, through the contact section found in the footer of the website, using the direct WhatsApp access at the bottom right of this page, by sending an email to bcn@jlanotarios.com, or by calling us at 93 159 17 62.

As a guideline, we can inform you that, according to the current regulatory framework, the usual price for the formalisation before a Notary of a CONFIRMING POLICY for an amount of €50,000 with a maturity of less than 6 months is about €250, including VAT.

This indicative price is calculated for a document of usual content.