Contract Terms in Brazilian Law
Introduction
This glossary defines key terms in Brazilian contract law, particularly those introduced or developed by the Civil Code of 2002. These concepts reflect the Code’s commitment to contractual balance, good faith, and social justice.
Boa-fé Objetiva
Objective good faith (boa-fé objetiva, Article 422, Civil Code) is a principle requiring the parties to act honestly, loyally, and cooperatively throughout the contractual relationship. It imposes ancillary duties (deveres anexos): (i) information; (ii) loyalty; (iii) care; (iv) protection; and (v) clarity. Violation of objective good faith may give rise to pre-contractual, contractual, or post-contractual liability.
Vício Redibitório
Vício redibitório (hidden defect, Articles 441-446, Civil Code) refers to latent defects in the contract object that render it unfit for its intended use or diminish its value, which the acquirer could not have known at the time of contracting. The acquirer may: (i) demand repair; (ii) obtain a price reduction; or (iii) rescind the contract. Claims must be filed within 30 days (movables) or one year (immovables).
Evicção
Evicção (eviction, Articles 447-457, Civil Code) is the loss of possession or ownership of an acquired asset due to a third-party right predating the acquisition. The evicted acquirer is entitled to full indemnification (indenização integral) from the transferor, including: (i) the purchase price; (ii) damages for loss; (iii) costs; and (iv) expenses.
Lesão
Lesão (lesion, Article 157, Civil Code) is a contractual defect arising from disproportionate advantage (vantagem desproporcional) obtained by exploiting another’s inexperience, need, or impulsiveness. Unlike the 1916 Code, the 2002 Code adopts an objective approach — proof of intent is not required. The disadvantaged party may seek contract annulment or renegotiation.
Onerosidade Excessiva
Excessive burden (onerosidade excessiva, Articles 478-480, Civil Code) arises when extraordinary and unforeseeable events render contractual performance excessively onerous for one party while benefiting the other. The disadvantaged party may seek: (i) contract revision; (ii) rescission; or (iii) sharing of losses. This doctrine codifies the theory of unforeseeability (teoria da imprevisão).
Cláusulas Abusivas
Abusive clauses (cláusulas abusivas, Article 51, Consumer Protection Code) are contractual terms that create a significant imbalance between the parties’ rights and obligations, to the consumer’s detriment. Examples include: (i) limitation of liability; (ii) unilateral modification terms; (iii) limitation of judicial recourse. Abusive clauses are void ab initio.
Função Social do Contrato
Social function of the contract (função social do contrato, Article 421, Civil Code) requires that contractual freedom be exercised within limits that serve broader social purposes. Contracts must not harm third parties and should promote social welfare. This principle allows courts to review contractual terms for social compliance.
Pacta Sunt Servanda
Pacta sunt servanda (agreements must be kept) is the traditional contractual principle that agreements are binding on the parties. In Brazilian law, this principle is moderated by: (i) the social function of contracts; (ii) objective good faith; (iii) the theory of unforeseeability; and (iv) abusive clause controls.
Exceção de Contrato Não Cumprido
Exception of non-performance (exceção de contrato não cumprido, Article 476, Civil Code) allows a party to withhold its own performance until the other party performs. This defense is available in bilateral contracts and requires that the party invoking it be ready and willing to perform.
Contrato Preliminar
Preliminary contract (contrato preliminar, Articles 462-466, Civil Code) is an agreement to enter into a future contract. It must contain all essential elements of the definitive contract. Breach of the preliminary contract may be enforced through specific performance.