Commerce stopped, shopping malls closed, new opportunities disappeared and many people without jobs. This is the reality of many Brazilians with the disaster caused by the covid-19 pandemic.
The year 2020 has arrived with a certain optimism for us Brazilians. With the measures adopted by the Federal Government at the end of 2019, which would take place the following year, Brazilians had great hope for the country’s economic development.
It seems that now… in the midst of the pandemic, this “shock of optimism” was buried by the thoughts of several Brazilians, who now – more than ever – think about just surviving and keeping their accounts up to date as a result of the disaster generated by COVID-19.
At this point, many people ask, Is it possible for me to revise my rental agreement? My contract with suppliers? My fee agreement? My service contract?
Dear readers, This question imposes the analysis of several requirements in the light of the legal system and recent decisions of the Brazilian courts on the subject. I tell you that there is no formula, a recipe to be followed or a strategy that applies to all cases. This question must be examined on a case-by-case basis.
Under the prism of contract law, the full point of the discussion and questioning raised by several Brazilians concerns whether the pandemic will be classified and interpreted by the courts for the purposes of exclusion of liability, review or resilience of contracts. It is still too early to make this clear, but as will be demonstrated throughout this article, some decisions have already been made in this regard.
For a better debate, before entering the decisions themselves, it is necessary to reveal that there are some theories of Civil law that can support the applicant in the request for contractual review.
Finally, is it possible to justify the request for contractual review because of COVID-19?
The direct contemplates, in this very exceptional situation, the rebalancing of the economic-financial area of the contract by the following paths:
Fortuitous event or force majeure:
The first theory that would justify the request for contractual review because of the current pandemic would be whether COVID-19 is a hypothesis of fortuitous event or force majeure[1].
Article 393 of the Civil Code provides that “the debtor is not liable for damages resulting from acts of God or force majeure, if expressly not held responsible for them. Sole paragraph. The fortuitous event or force majeure takes place in the necessary fact, the effects of which were not possible to avoid or prevent”.
From the interpretation of such article, it is understood by the conjunction of three crucial elements for the removal of liability for the occurrence of a fortuitous event or force majeure: (i) necessary fact, that is, a fact that necessarily prevents or impairs the execution of the contract; (ii) effects impossible to be avoided or prevented; and (iii) there is no express contractual provision for the assumption of damages by any of the parties in these cases.
As the jurist Arnoldo Wald asserts about fortuitous events and force majeure, see:
The Civil Code conceptualizes the fortuitous event or force majeure as a ‘necessary fact’ whose effects were not possible to avoid or prevent’ (the term necessary means inevitable). Such a definition covers both natural facts (fire, flood), and the facts of third parties or Public Power (war, act of government, provided that they are characterized by inevitability and irresistibility). In Brazilian law, the fortuitous event or force majeure requires for its proof, which must be made by the person claiming it, the existence of two elements: an objective-the inevitability of the event-and the other subjective – the absence of guilt” (our emphasis) [2]
In our view, the coronavirus can be framed in a situation that characterizes a fortuitous event or force majeure, as long as there is a link, an inseparable link or causal nexus in the cause-and-effect relationship between the pandemic and the impossibility of executing the contractual object. From this premise, the parties may claim the occurrence of fortuitous events or force majeure as excluding their responsibilities. Remember: there must be a real and proven obstacle that justifies non-compliance with contractual clauses and such an event cannot be a pretext for opportunistic practices.
Theory of unpredictability
Another theory that may be presented for the discussion of the need to revise contracts due to COVID-19 is the so-called “Theory of unpredictability”, provided for in Article 317 of the Civil Code, in verbis: “when, for unpredictable reasons, there is a manifest disproportion between the value of the provision due and that of the time of its execution, the judge may correct it, at the request of the party, in such a way as to ensure, as far as possible, the real value of the provision”.
The theory of unpredictability [3] is understood to be implicit in contracts, a clause that releases the contractor to continue executing an unbalanced contract.
According to this dilemma, unpredictable, abnormal facts, beyond the control of the contractors, which make the fulfillment of the contract ruinous for one of the parties, create a situation that cannot be supported solely by the injured contractor and impose immediate review of the adjustment.
Therefore, the Economic-Financial Review of the contract is justified whenever a supervening, extraordinary and unpredictable circumstance compromises the balance of the contract, thus having to occur the recomposition of the agreed interests, to adapt them to the new reality.
The current pandemic fits into the core of this concept, as it will have repercussions on the fateful reality of the contracts in force, breaking their economic-financial balance. An easy-to-understand example is the issue of shopping malls. Most of them are closed and how will the tenants be able to afford the very high rent and other contractual clauses without billing and with the doors closed?
Other examples (I) loss of economies of Scale; (ii) exceptional exchange rate rise; (iii) increase in inputs and outputs; (iv) increase in transportation and logistics costs; (v) more expensive insurance, (vi) late payment (vii) new indirect costs, among other contractual losses.
As previously warned, the application will only succeed if it is properly justified technically, financially and legally.
How is the Judiciary behaving regarding contractual review these days?
Events, buffet and children’s parties Company:
The 2nd Civil Court of Santos granted early guardianship, allowing the reduction, for an initial period of 90 days, of 40% in the amount of rents paid by a company in the buffet and children’s parties business, which totaled R$32 thousand. Due to the current crisis triggered by Covid-19 and the consequent closure of commercial establishments, all planned events have been canceled. According to judge Claudio Teixeira Villar, the pandemic of the new coronavirus and the state conducts resulting from it conform to what is drawn in the theory of unpredictability, authorizing the revision of contracts or a temporary modulation aimed at their continuity. “This is an external event, fortuitous and force majeure, modifying the reality foreseen at the beginning of the contracting and making its object excessively burdensome,” he said.
Restaurants
Judge Fernando Henrique de Oliveira Biolcati, of the 22nd Civil Court of São Paulo, granted an injunction to reduce the amount of rent paid by a restaurant due to the covid-19 epidemic in Brazil, which resulted in the reduction of the establishment’s activities and income. According to the decision, the restaurant will pay 30% of the original rental amount for the duration of the health crisis.
Beauty salons
Law judge Camilla Prado, of the 41st Civil Court of RJ, judged that the beauty salon should reduce its rent by 50%. [4]
Mall lease agreement
Judge Vivian Carla Josefovicz, acting in the 4th Civil Court of the district of Blumenau, partially granted the request for urgent guardianship made by a restaurant and, in addition to determining the reduction of rent to half the monthly minimum, suspended the payment of the promotion and advertising fund and prevented the insertion of restrictions before the credit protection agencies in a lease agreement with a shopping mall in Blumenau. [5]
Educational Law
Judge Flávio César Barbalho, of the 3rd Civil Court of the Mossoró District, granted an injunction to determine that the Potiguar University (UnP) suspend the payment of tuition fees due by a student, for a period of six months, as well as refrain from cutting the university scholarship of 50%, enjoyed by the author of the request, under penalty of blocking in the amount of R$ 10 thousand, based on Article 139, IV, of the Code of Civil Procedure.[6]
Alimony
Due to the Covid-19 pandemic, Judge Fernando Henrique Pinto, of the 2nd family and succession Court of the Jacareí Forum, set for the months of March, April, May and June 2020 the amount of maintenance obligation at 30% of the national minimum wage. After the period, in case of formal employment, the parent of a teenager who lives with her father must allocate 20% of her net income to support her daughter. Previously, a provisional decision had fixed the maintenance obligation at the equivalent of 1/3 of the mother’s salary, but she pleaded for the decrease in the amount. “Unlike the author’s father, who only has this daughter as a dependent, and explicitly reported help from two older children, the defendant has another daughter under her responsibility”, highlighted the magistrate, stating that the covid-19 pandemic, which has forced massive social isolation and reduced the economic activity of countries, is impacting the business activity carried out by the author’s mother.
Payment of Labor Agreement
Judge Renato Barros Fagundes, of the 23ª Labor Court of Porto Alegre, suspended the payment of part of a labor agreement between former employees of two event organization companies because of the crisis caused by the coronavirus. According to Fagundes, the payment of the installments of the labor agreement will remain suspended until the end of the state of public calamity in the country.
Dear readers, in the face of the various cases presented, there are great chances that future jurisprudence will settle in the sense that the coronavirus was characterized as a situation of fortuitous event or force majeure for most situations.
However, the future is still uncertain. It has been months since the declaration of the World Health Organization (WHO) of the covid-19 pandemic. The time is now to focus on feasible measures, adapting to the present situation and respecting the friendly solution and common sense by the parties. In difficult times, the negotiation technique can be an escape valve in the face of judicialization of such issues.
[1] These are facts or events that are unpredictable or difficult to predict, that cannot be avoided, but that cause consequences or effects for others. For example: phenomena of nature, general strikes (e.g. truckers ‘ strike), public calamities, wars, etc.
[2] Civil Law – introduction and General part – Arnold Wald. 2015.
[3] Art. 478. In contracts of continued or deferred execution, if the provision of one of the parties becomes excessively burdensome, with extreme advantage for the other, due to extraordinary and unpredictable events, the debtor may request the termination of the contract. The effects of the sentence that decrees it will be retroactive to the date of citation.
[4] (Case No.: 1026645-41.2020.8.26.0100)
[5] (Autos n. 5010372-55.2020.8.24.0008).
[6] (Autos n. 0804997-71.2020.8.20.5106)
Rafael De Sordi Barbosa Martins
Lawyer, graduated in law, with emphasis in civil law, from Universidade Presbiteriana Mackenzie (2019), enrolled in the Brazilian Bar Association, São Paulo Section (OAB/SP) (2020). Postgraduate in Business Law from the São Paulo School of Law of the Getúlio Vargas Foundation, author of a book and articles.
Leonardo Da Vinci
Lawyer, graduated in law, with emphasis on Business Law, from Universidade Presbiteriana Mackenzie (2012), enrolled in the Brazilian Bar Association, São Paulo Section (OAB/SP) (2012). Post-graduate and Specialist IN Business Law from the São Paulo Law School of the Getúlio Vargas Foundation (2014), Master in political and Economic Law from the Mackenzie Presbyterian University (2017), Vice President of the Business Law Commission of the 33rd subsection of the OAB/SP, author of books and articles, Lecturer, University professor and member of the São Paulo Lawyers Association (AASP). Founding partner of TM Associados.
E-Social: simplifications and changes to the system
In 2019, there were numerous speculations about the extinction of e-Social (unified system used by human resources professionals, accountants, employers, etc. for the transmission of information related to the bookkeeping of tax, Social Security and labor obligations to the government).
Although there are news and statements about the possible extinction of e-Social, what we have seen lately are pronouncements by authorities and news about the update of the system, through the reformulation of a “new e-Social”, and possible creation of two new simplified systems, whose information is still non-existent.
But what would the simplification of the e-Social system look like?
First, it is important to highlight that the purpose of simplification of e-Social by the government is to reduce the information provided by human resources professionals, accountants, employers, etc., in order to achieve the debureaucratization of the system by its users, in view of the bureaucracy regarding the amount of information required by it to its users, in order to make it Complex in its use.
The changes to be implemented in e-Social are based on the following points:
Modernization and simplification of the system;
Exclusion of data entry items considered complex by its users (at this point, system improvements will be based on complaints / suggestions made by system users);
Reduction of tax procedures;
Significant reduction in the volume of information provided by employers;
Not request from users data that is already in the possession of public bodies, and
integrity and continuity of information in accordance with already established standards. In the event of a transition from e-Social to new systems, said transition will be homogeneous, in order to prioritize the investments already made by companies, and
Technical and operational improvements that will ensure the insertion of more optimized and essential data.
Benefits to be generated with the simplification of e-Social
The main benefits to be achieved by simplifying e-Social consist of:
Simplified bookkeeping: through a significant reduction in the volume of information provided system users, especially with regard to information already in the government database;
Information requirements by the system according to the size of the company, the smaller the employer’s size, the lower the information charge will also be, and
In the event of the extinction of e-Social through its replacement by new systems, all the investment made by employers and professionals with the acquisition of systems, training and infrastructure for the use of e-Social will be respected and taken advantage of; the rules for using the new systems will be more simplified with the probability of errors and minor inconsistencies; the government will maintain the way in which information will be transmitted by users to the e-Social through the internet, with the use of a digital certificate (which will continue to be mandatory, given that it has Moderna and encrypted security protocols) etc.; The process of transition from e-Social to other systems will be carried out in a way that facilitates users, in a gradual and simplified way.
Conclusion
This article aimed to expose simplifications and changes to be implemented by the government to the e-Social system, as pronounced by competent authorities.
It is of paramount importance employers, accountants, professionals in the field of Human Resources etc. users of the e-Social system are aware of future changes that may occur in the e-Social system in order to proceed with what is necessary to adapt to a possible transition of the system.
Geovana Caroline Silva de Andrade
Graduated in law from Centro Universitário De Campo Limpo Paulista/SP (2016), enrolled in the Brazilian Bar Association, São Paulo Section (OAB/SP) (2018). Post-graduate in Dir
STF authorizes extension in the term of accession to the agreement of economic plans
With the amendment, the court extended for a period of 30 months the adherence to the agreement.
The Federal Supreme Court (STF) approved the term additive to the collective agreement of economic plans (payment of differences of inflationary purges related to the Bresser, Verão and Collor II economic plans) for a period of 30 months, at the end of which the parties must account for the number of adherents and amounts received and receivable, for possible extension for another 30 months.
The additive was agreed between AGU and representatives of civil consumer protection entities, savers and financial institutions. The STF plenary approved, in 2018, the initial agreement.
In the addendum, the parties informed the rapporteur that the number of accessions to the agreement was lower than initially expected, which justifies the improvement of the terms for the inclusion of the Collor I plan and for the increase in Accessions.
For this purpose, the addendum included savers with accounts in financial institutions covered by PROER; extended the cut-off date established for the eligibility of savers executing collective judgments not yet carried out in court; and provided for financial incentives, such as payments in a single installment and raising the honorary amount to 15% of the settlement amount.
Upon receiving the additive, Lewandowski determined the publication in the DOU and took it to the plenary for homologation in order to give as much publicity as possible to the clauses and conditions of the contract. According to the minister, only in this way will the interested parties be able to freely make their choice to join or reject the agreement, “in the most conscious way possible“.
The minister assessed it as”the largest case of repetitive litigation that has been reported in the history of the National Judiciary”.
The agreement was due to run until March this year. With the amendment, the court extended for a period of 30 months the accession to the agreement, at the end of which the parties must account for the number of adherents and amounts received and receivable, for possible extension for another 30 months.
See the judgment by downloading below:
Plansdownload
Government establishes National Consumer Protection Council
The organ was originally created in 1985, during the presidency of José Sarney, and extinguished in 1990.
Decree 10.417/20 establishing the National Consumer Protection Council was published in the DOU on Wednesday, 8. The purpose is to advise the minister of Justice, André Mendonça, in the formulation and conduct of Consumer Protection Policy, and also to formulate and propose recommendations to the member bodies of the consumer protection system.
The norm establishes that the members of the council and their alternates will be appointed by the minister of Justice, after a public call, according to norms defined in the act, and will have a mandate of two years, allowed renewal.
In accordance with Article 6 of the norm, they will be invited to compose the council, without the right to vote:
I-a member of the State Prosecutor’s Office, appointed by the National Council of Attorneys General;
II-a member of the Federal Public Prosecutor’s Office, appointed by the Attorney General of the Republic; and
III-a member of the Public Defender’s Office, appointed by the National College of Public Defenders General.
According to the decree, the council shall meet ordinarily at least four times a year in Brasilia, and extraordinarily at the request of its president or at the request of at least one quarter of its members.
See the full standard:
DECRETO-Nº-10.417-DE-7-DE-JULHO-DE-2020-DECRETO-Nº-10.417-DE-7-DE-JULHO-DE-2020-DOU-Imprensa-NacionalDownload
How to write an article for the networks?
Review 21.05 from RafaeldeSordi1
Senate approves MP who extends deadline for meetings of members
On 02/07/2020, the Senate plenary approved the provisional measure that extends the deadline, due to the coronavirus pandemic, for companies and cooperatives to hold the ordinary general meetings of shareholders or partners (AGO) required by legislation (MP 931/2020). The MP was approved in the form of the Conversion Bill (PLV) 19/2020 and now goes to the sanction of the presidency of the Republic.
According to the approved text, public limited companies (including open and closed companies, public companies and mixed economy companies and their subsidiaries) and limited companies (Ltda) that concluded the fiscal year between December 31, 2019 and March 31, 2020 will have up to seven months to hold these meetings. Before the MP, this period was four months. During the analysis of the matter in the chamber, deputies further extended the deadline for cooperatives, which will have up to nine months to make the Aug, two beyond what is established by the MP.
Normally, companies hold an ordinary general meeting of their shareholders within four months after the end of the fiscal year (12 months of activities), which does not necessarily coincide with the calendar year, in order to analyze, among other points, the financial statements, the allocation of profits and the distribution of dividends to shareholders. The extension of the deadline is valid even if internal rules provide for the Assembly to be held in a shorter period than provided for in the MP.
Also according to the text, the mandates of directors and members of the fiscal and administrative councils of these legal entities are extended until the general meeting is held within the new term.
Association of lawyers launches digital mediation platform
The Association of lawyers (AASP) has just launched the digital platform of the Mediation Center. It is a tool aimed at professionals in the area and parts of all states in Brazil. The request for mediation should always be made by a lawyer representing your client, as AASP understands that your presence is essential throughout the procedure.
The launch ceremony, held during the webinar “mediation in digital platform”, was attended by the president of the Court of Justice of São Paulo, judge Geraldo Francisco Pinheiro Franco, AASP leaders and authorities on the subject, and was accompanied by 450 participants.
The president of the AASP, Renato Cury, who led the event, when speaking about the launch of the initiative recalled that the AASP created, in 2015, its Mediation Center and the online platform is another step for lawyers to understand the importance of mediation. “We need to leave the culture of litigation and the idea that all issues should be taken to the Judiciary. We know that we must increasingly implement and stimulate the culture of alternative means of conflict. The participation of the president of the Court of Justice of São Paulo in this event shows the excellence of the AASP initiative. We have to spread the practice of mediation more and more,” he said.
Cury also warned: “at the moment we are going through, the pandemic, we are afraid that the numerous demands arising from this period will all land in the Judiciary, causing a collapse in the system and in the judicial provision, so it is important to use alternative methods of conflict resolution.”
It is important to remember that mediation aims to recover the dialogue between the parties, using a third party, the mediator, who helps to flow the conversation between those involved; in the end they decide themselves and, together, reach a consensus.
The digital platform of the AASP Mediation Center is designed so that everything is done in a simple, agile way, in adequate but reduced deadlines, always with the participation of lawyers and the intervention of the mediator, in remote sessions. The tool maintains the criterion of personality and allows interaction between all participants.
She manages the contact between the parties and them with the mediators. It does document management. It allows joint meetings to be held, with the participation of all those involved, and also private meetings. It supports the preparation of collaborative documents online: registration of a possible future composition, of a pre-adjustment, of a pre-contract and even of the final document.
In order to speed up the procedures, the AASP appoints the mediator. However, the parties may object to the appointed mediator and by mutual agreement may request a mediator whom they deem to be most suitable for the case. The environment is completely confidential, ensuring that transactions will be restricted to the platform.
If the parties wish to hold face-to-face meetings, AASP provides appropriate facilities at its headquarters in São Paulo.
Differentials
Check it out! http://www.aasp.org.br
TED or DOC’s days are numbered. Meet the new instant payments (PIX)system
Source: Exame.com
The Central Bank (BC) brought forward to October 5 the registration of addressing keys to receive a PIX, instant payments and transfers system.
The goal of PIX is that the most diverse payments become as easy, simple, intuitive and fast as making a payment with cash.
PIX will increase competition in the market, says Nubank’s David Velez:
In addition to making it faster and more practical to make payments and transfers, it will make payment processing cheaper for all participants, allowing new entrants to arrive in the sector. According to him, this increase in competition benefits the consumer who gains more options when carrying out transactions.
David Vélez
What is PIX?
PIX is a payment method that sends and receives money in a matter of seconds, 24 hours a day, on every day of the year.
In other words, that transfer made at the weekend can now be completed outside the bank’s business hours, faster, cheaper and safer.
This is possible because on the platform the transfers will take place directly from the paying user’s account to the account of the user who receives the amount, without the need for intermediaries.
The speed also happens due to a simplification in the necessary information, which makes them more convenient. Currently an electronic money transfer requires the user to pass various information to who will receive the amount.
Who is on the list to participate in PIX?
There is already a list of almost a thousand financial institutions that have applied to join the service in the Central Bank (BC). It is banks, fintechs and cooperatives that are preparing and testing their systems to offer it. Make sure the institution you have an account with intends to offer PIX from launch.
Among the institutions on the list are the Ame application, from Lojas Americanas; Posto Ipiranga, Renner, BMG, Bradesco, BTG, C6, Sicredi, Crefisa, Digio, BB, Inter, Modal, Original, Pan, Santander, XP, Cielo, Creditas, Itaú, Magalu, Mapfre, Meliuz. MercadoPago, Neon, Nubank, OLX, PagSeguro, Paypal, PicPay, RecargaPay and Stone.
What are the differences between PIX and other payment methods?
See below for Pix’s differences from TED and DOC:
See below the differences between PIX and boleto:
See now the differences between PIX and debit card:
Understand the differences between payment method and credit card:
What do I need to do to join the platform?
The consumer who wants to pay and receive with PIX in November must have a checking account, savings deposit account or prepaid payment account with a financial institution that has been approved on the platform. Only account holders can move accounts. For example, if the parent wants the child to be able to move the account through PIX, he must register him as the holder of that account and give him a key for addressing. There is no figure of the dependent, as in the case of Cards. If the institution you have an account with has not participated in PIX since its launch, it will have a new opportunity to participate starting in December.
See the full story:
Read more: TED or DOC’s days are numbered. Meet the new instant payments (PIX)systemDoes the pandemic caused by COVID-19 justify the request for contractual review?
Commerce stopped, shopping malls closed, new opportunities disappeared and many people without jobs. This is the reality of many Brazilians with the disaster caused by the covid-19 pandemic.
The year 2020 has arrived with a certain optimism for us Brazilians. With the measures adopted by the Federal Government at the end of 2019, which would take place the following year, Brazilians had great hope for the country’s economic development.
It seems that now… in the midst of the pandemic, this “shock of optimism” was buried by the thoughts of several Brazilians, who now – more than ever – think about just surviving and keeping their accounts up to date as a result of the disaster generated by COVID-19.
At this point, many people ask, Is it possible for me to revise my rental agreement? My contract with suppliers? My fee agreement? My service contract?
Dear readers, This question imposes the analysis of several requirements in the light of the legal system and recent decisions of the Brazilian courts on the subject. I tell you that there is no formula, a recipe to be followed or a strategy that applies to all cases. This question must be examined on a case-by-case basis.
Under the prism of contract law, the full point of the discussion and questioning raised by several Brazilians concerns whether the pandemic will be classified and interpreted by the courts for the purposes of exclusion of liability, review or resilience of contracts. It is still too early to make this clear, but as will be demonstrated throughout this article, some decisions have already been made in this regard.
For a better debate, before entering the decisions themselves, it is necessary to reveal that there are some theories of Civil law that can support the applicant in the request for contractual review.
Finally, is it possible to justify the request for contractual review because of COVID-19?
The direct contemplates, in this very exceptional situation, the rebalancing of the economic-financial area of the contract by the following paths:
Fortuitous event or force majeure:
The first theory that would justify the request for contractual review because of the current pandemic would be whether COVID-19 is a hypothesis of fortuitous event or force majeure[1].
Article 393 of the Civil Code provides that “the debtor is not liable for damages resulting from acts of God or force majeure, if expressly not held responsible for them. Sole paragraph. The fortuitous event or force majeure takes place in the necessary fact, the effects of which were not possible to avoid or prevent”.
From the interpretation of such article, it is understood by the conjunction of three crucial elements for the removal of liability for the occurrence of a fortuitous event or force majeure: (i) necessary fact, that is, a fact that necessarily prevents or impairs the execution of the contract; (ii) effects impossible to be avoided or prevented; and (iii) there is no express contractual provision for the assumption of damages by any of the parties in these cases.
As the jurist Arnoldo Wald asserts about fortuitous events and force majeure, see:
The Civil Code conceptualizes the fortuitous event or force majeure as a ‘necessary fact’ whose effects were not possible to avoid or prevent’ (the term necessary means inevitable). Such a definition covers both natural facts (fire, flood), and the facts of third parties or Public Power (war, act of government, provided that they are characterized by inevitability and irresistibility). In Brazilian law, the fortuitous event or force majeure requires for its proof, which must be made by the person claiming it, the existence of two elements: an objective-the inevitability of the event-and the other subjective – the absence of guilt” (our emphasis) [2]
In our view, the coronavirus can be framed in a situation that characterizes a fortuitous event or force majeure, as long as there is a link, an inseparable link or causal nexus in the cause-and-effect relationship between the pandemic and the impossibility of executing the contractual object. From this premise, the parties may claim the occurrence of fortuitous events or force majeure as excluding their responsibilities. Remember: there must be a real and proven obstacle that justifies non-compliance with contractual clauses and such an event cannot be a pretext for opportunistic practices.
Theory of unpredictability
Another theory that may be presented for the discussion of the need to revise contracts due to COVID-19 is the so-called “Theory of unpredictability”, provided for in Article 317 of the Civil Code, in verbis: “when, for unpredictable reasons, there is a manifest disproportion between the value of the provision due and that of the time of its execution, the judge may correct it, at the request of the party, in such a way as to ensure, as far as possible, the real value of the provision”.
The theory of unpredictability [3] is understood to be implicit in contracts, a clause that releases the contractor to continue executing an unbalanced contract.
According to this dilemma, unpredictable, abnormal facts, beyond the control of the contractors, which make the fulfillment of the contract ruinous for one of the parties, create a situation that cannot be supported solely by the injured contractor and impose immediate review of the adjustment.
Therefore, the Economic-Financial Review of the contract is justified whenever a supervening, extraordinary and unpredictable circumstance compromises the balance of the contract, thus having to occur the recomposition of the agreed interests, to adapt them to the new reality.
The current pandemic fits into the core of this concept, as it will have repercussions on the fateful reality of the contracts in force, breaking their economic-financial balance. An easy-to-understand example is the issue of shopping malls. Most of them are closed and how will the tenants be able to afford the very high rent and other contractual clauses without billing and with the doors closed?
Other examples (I) loss of economies of Scale; (ii) exceptional exchange rate rise; (iii) increase in inputs and outputs; (iv) increase in transportation and logistics costs; (v) more expensive insurance, (vi) late payment (vii) new indirect costs, among other contractual losses.
As previously warned, the application will only succeed if it is properly justified technically, financially and legally.
How is the Judiciary behaving regarding contractual review these days?
Events, buffet and children’s parties Company:
The 2nd Civil Court of Santos granted early guardianship, allowing the reduction, for an initial period of 90 days, of 40% in the amount of rents paid by a company in the buffet and children’s parties business, which totaled R$32 thousand. Due to the current crisis triggered by Covid-19 and the consequent closure of commercial establishments, all planned events have been canceled. According to judge Claudio Teixeira Villar, the pandemic of the new coronavirus and the state conducts resulting from it conform to what is drawn in the theory of unpredictability, authorizing the revision of contracts or a temporary modulation aimed at their continuity. “This is an external event, fortuitous and force majeure, modifying the reality foreseen at the beginning of the contracting and making its object excessively burdensome,” he said.
Restaurants
Judge Fernando Henrique de Oliveira Biolcati, of the 22nd Civil Court of São Paulo, granted an injunction to reduce the amount of rent paid by a restaurant due to the covid-19 epidemic in Brazil, which resulted in the reduction of the establishment’s activities and income. According to the decision, the restaurant will pay 30% of the original rental amount for the duration of the health crisis.
Beauty salons
Law judge Camilla Prado, of the 41st Civil Court of RJ, judged that the beauty salon should reduce its rent by 50%. [4]
Mall lease agreement
Judge Vivian Carla Josefovicz, acting in the 4th Civil Court of the district of Blumenau, partially granted the request for urgent guardianship made by a restaurant and, in addition to determining the reduction of rent to half the monthly minimum, suspended the payment of the promotion and advertising fund and prevented the insertion of restrictions before the credit protection agencies in a lease agreement with a shopping mall in Blumenau. [5]
Educational Law
Judge Flávio César Barbalho, of the 3rd Civil Court of the Mossoró District, granted an injunction to determine that the Potiguar University (UnP) suspend the payment of tuition fees due by a student, for a period of six months, as well as refrain from cutting the university scholarship of 50%, enjoyed by the author of the request, under penalty of blocking in the amount of R$ 10 thousand, based on Article 139, IV, of the Code of Civil Procedure.[6]
Alimony
Due to the Covid-19 pandemic, Judge Fernando Henrique Pinto, of the 2nd family and succession Court of the Jacareí Forum, set for the months of March, April, May and June 2020 the amount of maintenance obligation at 30% of the national minimum wage. After the period, in case of formal employment, the parent of a teenager who lives with her father must allocate 20% of her net income to support her daughter. Previously, a provisional decision had fixed the maintenance obligation at the equivalent of 1/3 of the mother’s salary, but she pleaded for the decrease in the amount. “Unlike the author’s father, who only has this daughter as a dependent, and explicitly reported help from two older children, the defendant has another daughter under her responsibility”, highlighted the magistrate, stating that the covid-19 pandemic, which has forced massive social isolation and reduced the economic activity of countries, is impacting the business activity carried out by the author’s mother.
Payment of Labor Agreement
Judge Renato Barros Fagundes, of the 23ª Labor Court of Porto Alegre, suspended the payment of part of a labor agreement between former employees of two event organization companies because of the crisis caused by the coronavirus. According to Fagundes, the payment of the installments of the labor agreement will remain suspended until the end of the state of public calamity in the country.
Dear readers, in the face of the various cases presented, there are great chances that future jurisprudence will settle in the sense that the coronavirus was characterized as a situation of fortuitous event or force majeure for most situations.
However, the future is still uncertain. It has been months since the declaration of the World Health Organization (WHO) of the covid-19 pandemic. The time is now to focus on feasible measures, adapting to the present situation and respecting the friendly solution and common sense by the parties. In difficult times, the negotiation technique can be an escape valve in the face of judicialization of such issues.
[1] These are facts or events that are unpredictable or difficult to predict, that cannot be avoided, but that cause consequences or effects for others. For example: phenomena of nature, general strikes (e.g. truckers ‘ strike), public calamities, wars, etc.
[2] Civil Law – introduction and General part – Arnold Wald. 2015.
[3] Art. 478. In contracts of continued or deferred execution, if the provision of one of the parties becomes excessively burdensome, with extreme advantage for the other, due to extraordinary and unpredictable events, the debtor may request the termination of the contract. The effects of the sentence that decrees it will be retroactive to the date of citation.
[4] (Case No.: 1026645-41.2020.8.26.0100)
[5] (Autos n. 5010372-55.2020.8.24.0008).
[6] (Autos n. 0804997-71.2020.8.20.5106)
Rafael De Sordi Barbosa Martins
Lawyer, graduated in law, with emphasis in civil law, from Universidade Presbiteriana Mackenzie (2019), enrolled in the Brazilian Bar Association, São Paulo Section (OAB/SP) (2020). Postgraduate in Business Law from the São Paulo School of Law of the Getúlio Vargas Foundation, author of a book and articles.
Leonardo Da Vinci
Lawyer, graduated in law, with emphasis on Business Law, from Universidade Presbiteriana Mackenzie (2012), enrolled in the Brazilian Bar Association, São Paulo Section (OAB/SP) (2012). Post-graduate and Specialist IN Business Law from the São Paulo Law School of the Getúlio Vargas Foundation (2014), Master in political and Economic Law from the Mackenzie Presbyterian University (2017), Vice President of the Business Law Commission of the 33rd subsection of the OAB/SP, author of books and articles, Lecturer, University professor and member of the São Paulo Lawyers Association (AASP). Founding partner of TM Associados.
The challenges of parents and children who decided to undertake together
On this special day, our founding partner, Leonardo Theon de Moraes, was quoted in the article on “the challenges of parents and children who decided to undertake together” of the magazine Pequenas Empresas & Grandes de Negócios.
Check out the interview in full: https://revistapegn.globo.com/Administracao-de-empresas/noticia/2020/08/os-desafios-de-pais-e-filhos-que-resolveram-empreender-juntos.html
How to deal with package cancellations and fines
Overnight, one of the most promising sectors of the Brazilian economy was directly affected by the effect of the pandemic, and many Brazilians arrived with the same question: what to do with this already purchased holiday?
Travel agencies are organized daily to check and reduce the losses that passengers and travelers would possibly suffer, and it is already imaginable to understand a more guilty and transparent communication channel between these corporations and their consumers.
The ANAC (National Civil Aviation Agency), above all, has already regulated that the passenger may withdraw from the acquisition with the full refund of the amounts paid, within 24 hours after receiving the transport voucher, but provided that the purchase is positioned up to 7 days before the flight date.
In addition, the Consumer Protection Code also establishes that if the acquisition were made over the internet (or outside the advertising establishment), it would possibly be canceled within 7 days.
When the passenger requests a refund, airlines have up to 7 days (from the date of the request) to make the payment to the customer responsible for the purchase of the air ticket, following the same one used at the time of purchase. customer made the payment with their credit card, the airline has up to 7 days to send the credits to the card operator.
However, in cases where the request for cancellation of the price of the air ticket arrives after 7 days of purchase, the TJSP and the STJ agree that the airlines will have to refund the price of the ticket (including promotional price tickets), retaining from 5% to 20% of the amount of the registration fee , but eye to eye, the cancellation must be made at least in advance, so that these price tickets can be resold through the ventures.
There are a lot of fears and hypotheses on this topic, and it turns out that the closer to the end of the year (the time when tourism in Brazil is even more in demand), the more others worry about their scheduled trips.
Procon even asked passengers to look for agencies where the package was purchased, to learn more about how to proceed with the cancellation, but reminded consumers that, according to the CDC, what was agreed in the contract will have to be fulfilled.
This means, for example, that in case of postponement of promotional or off-season packages, the postponement will have to adhere to the same time and regime and, according to the contract, fines will possibly be charged in case of cancellation.
It is worth mentioning that everything can still change, since the Brazilian legislature itself has worked to pacify this issue and thus guarantee greater legal certainty, not only for consumers, but also for corporations in the tourism sector.
A Pernambuco state law has suspended the billing of additional fees for flight cancellations and package travel from the Covid-19 pandemic. The law will be valid for one year after the completion of the state of public calamity.
According to this law, airlines and agencies are prohibited from charging additional fees for cancellation or postponement due to the novel coronavirus pandemic.
The law also provides for reimbursement of amounts paid by the consumer within 12 months after the end of the pandemic. In case of non-compliance with state law, the company must pay a fine of R$ 6. 000,00 (six thousand reais) for the assessment made, and this amount collected from the fines will be donated to the State Consumer Protection Fund.
Therefore, when it comes to travel and tourism, there will probably still be news about the pandemic and attempts to damage caused to so many Brazilians who had to travel, and in this way, it is mandatory to be aware of any news on the subject. have greater legal protection.
Giovanna Luz Carlos Abogado, graduated in law in Civil Law from Centro Universitário Padre Anchieta – FADIPA (2019) enrolled in the Brazilian Bar Association, São paulino segment (OAB/SP), graduate student in civil proceedings at Faculdade Damsio De Jesus. Attorney at TM Associates.