Contract law in Brazil operates on civil code

November 28, 2012
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Brazilian Civil Code

Businesses often have to develop transactions on an international basis and creating and signing contracts are all a part of this process. In Brazil, contract law has variations from the United States. It is based on the Brazilian Civil Code and may even take the Consumers’ Code into account, which protects the a product’s end user.

Operating under a civil code instead of a common law code means that there are specific requirements and regulations written out for practically every type of contract available, including lease agreements, business relations, insurance contracts, and patents or copyright law.

Overall, most parties can enter into a contract as long as it isn’t illegal, immoral or the agreement sets forth impossible standards that either party cannot meet. Once a contract has been signed, it becomes binding for both parties to fully achieve the agreement set forth.

A major part of the Brazil contract law includes the prohibition of favoring one party in an agreement over another. In plainer terms, one person cannot gain all of the advantages while the other must overcome challenges.

When breaking contracts, the business owner or executive will technically be committing an illegal act. Another major illegal action was taken by former Brazilian officials who allegedly gave contracted work to businesses in exchange for bribes, according to The Rio Times. Some experts have been analyzing whether former President Luiz Inácio Lula da Silva will be implicated in the scandal.

“[Lula’s] image is very solid as the president who improved the lives of Brazilians,” Alberto Almeida of Instituto Análise, a political consulting firm, told the news source. “Furthermore, he appointed a successor who is doing a good job. So he is very highly rated and respected by most of the population.”

In order for U.S.-based businesses to understand the contract laws in Brazil, they should contact a Brazilian law firm with experienced attorneys who have vast knowledge on the country’s legal system.

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