With the adoption of the necessary public measures to contain COVID-19 in Brazil, we are faced with intense developments in the global business ecosystem, developments that greatly affect the dynamics of contemporary Brazilian business, from the reliability of the country’s economic development forecasts to the fulfillment of the most ordinary commercial obligations agreed upon among the various market agents.
In this scenario, it is appropriate to discuss the possibilities existing in the legal system Brazilian law allows for the suspension of obligations and the exemption from liability in the face of facts legally classified as acts of God or force majeure, as well as for the termination or revision of civil and business contracts, in the face of acts or facts that imply a disproportionate imbalance between the parties to a contract.
In general, doctrine, jurisprudence and contractual practice classify fortuitous cases or acts of force majeure (
Force Majeure
or
Acts of God
) those exceptional and unpredictable events or circumstances, which are beyond the control of the contracting parties and are not produced by them.
In view of the occurrence of a supervening and unpredictable (or inevitable) fact that prevents in an insurmountable way, even temporarily, the performance of the preexisting legal business – that is, in view of extraordinary and random events that make it impossible to comply with the contractual obligations within the conditions previously agreed upon by the parties – our legal system allows, in theory, that the obligor of the obligation that has become unenforceable be excused from performing it, either permanently or temporarily – depending on the extent of the unenforceability experienced – without being subject to any burden or obligation to indemnify the counterparty on account of such breach¹..
Furthermore, even in the face of the possible predictability of the extraordinary fact, if it implies a severe onerosity for one of the parties and excessive advantage for the other – considering here only the agreements of successive tract (those of continued or deferred installment) – the prejudiced party may, also in theory, make use of the clause
rebus sic stantibus
also known as the theory of unforeseeability – honored by our Civil Code² – to remedy the contractual imbalance incurred, through early termination of the legal transaction or renegotiation of the terms and conditions applicable to it.
To confirm the applicability of the theses briefly discussed above to concrete commercial relations, it is necessary to analyze in detail the impact actually experienced by each contracting party in the current conduct of its business. In any case, amicable composition and joint review of the terms and conditions applicable to a given legal transaction will always be preferable to the imposition of a new agreement via judicial provision, especially if we consider the burdensome, but not perpetual, pandemic situation to which all market agents are currently subject.
¹ Brazilian Civil Code. Art. 393. The debtor is not liable for losses resulting from acts of God or force majeure, if he has not expressly accepted responsibility for them. Single paragraph. The fortuitous case or force majeure is verified in the necessary fact, whose effects could not be avoided or prevented.
² Civil Code. Art. 478. In contracts for continued or deferred performance, if the performance of one of the parties becomes excessively burdensome, with extreme advantage for the other party, due to extraordinary and unforeseeable events, the debtor may request termination of the contract. The effects of the sentence that decrees it will be retroactive to the date of the summons.
Art. 479. Termination may be avoided by the defendant offering to modify the terms of the contract equitably. Art. 480. If in the contract the obligations are incumbent upon only one of the parties, it may plead that its performance be reduced, or the manner of performing it be altered, in order to avoid excessive onerosity.