Understanding Legal Transactions, Invalidity, and Torts in Brazilian Law
Injury – Profit Overstated
Take advantage of the inexperience of parties, state of necessity, recklessness of the other.
Art. 157
Injury occurs when a person under urgent necessity or inexperience is obligated to provide something manifestly disproportionate to the value opposed to the provision.
Par. 1
The disparity of benefits is appreciated according to the values prevailing at the time the legal transaction was concluded.
Par. 2
Annulment of the deal will not be decreed if enough supplement is offered, or if the favored party agrees to a reduction of profit.
Fraud
- Anteriority credit
- “Consilium fraud” – Bad faith intent to harm
Action Pauliana
Action proposed by unsecured creditors to invalidate fraudulent legal transactions.
Art. 158
Free transmission of goods or forgiveness of debt, if practiced by an already insolvent debtor, or if it reduces them to bankruptcy, even if done unknowingly, may be canceled by unsecured creditors as detrimental to their rights.
Par. 1
Equal right to attend to creditors whose collateral becomes insufficient.
Par. 2
Only creditors present at the time of those acts may plead to annul them.
Art. 159
Onerous contracts of the insolvent debtor will also be cancellable when the insolvency is apparent, or there is reason for it to be known by another contractor.
Art. 160
If the purchaser of assets of the insolvent debtor has not paid the price, and this is approximately the current release, it will be deposited in court, with a quotation from all stakeholders.
Single Pair
If less, the buyer, to conserve assets, must deposit the price corresponding to the actual value.
Art. 161
The action, in cases of Arts. 158 and 159, may be brought against the debtor, the person with whom they signed the stipulation deemed fraudulent, or third-party purchasers who have acted in bad faith.
Art. 162
The unsecured creditor who receives payment from the insolvent debtor for a debt that has not expired will be obliged to bring to the benefit of the estate, on which a contest of creditors is to be made, what they have received.
Art. 163
Guarantees of debts that the debtor has given to any creditor shall be deemed fraudulent to the rights of other creditors.
Art. 164
However, ordinary business indispensable to the maintenance of commercial, rural, or industrial property, or the subsistence of the debtor and their family, is presumed to be in good faith.
Art. 165
If the fraudulent deals are canceled, the benefits shall accrue to the benefit of the estate on which a contest of creditors is to be made.
Accidental Elements of the Transaction
Condition
A future and uncertain element that makes the effects of the business event dependent on its occurrence.
Term
An accidental element that makes it clear that the term of the business is tied to a particular time.
Charge
A charge that is attached to the legal transaction, causing an additional effect or burden.
Form and Proof of Legal Transactions
The way in which the parties externalize their will to achieve a particular legal transaction.
Business Not Solemn – Art. 107
The validity of the declaration will not depend on a special form unless the law expressly requires it.
Business Solemn – Art. 104
The validity of the transaction requires: I – A capable agent; II – A lawful, possible, and determinable object; III – The prescribed form or a form not barred by law.
Public Scripture – Art. 108
Unless the law provides otherwise, a deed is essential for the validity of legal transactions aimed at the establishment, transfer, modification, or waiver of rights in real estate worth more than thirty times the highest minimum wage in Brazil.
Art. 215
A deed drawn up in bills of a notary public document is endowed with public faith, making full proof.
Instrument Particular
Proof (admissible, relevant, conclusive).
Evidence – Art. 212
Unless the business imposes a special way, the legal fact can be proved by: I – Confession; II – Document; III – Control; IV – Presumption; V – Expertise.
Invalidity of Legal Business
Business Nonexistent
It has no bearing on the legal world.
Business Non-Zero Effect – Art. 166
The legal transaction is void if: I – Celebrated by a person totally unable; II – Its object is unlawful, impossible, or indeterminable; III – The decisive reason, common to both parties, is unlawful; IV – It does not take the manner prescribed by law; V – It lacks some solemnity that the law deems essential to its validity; VI – It has the objective to circumvent mandatory law; VII – The law categorically declares it void, or prohibits its practice, imputes it without penalty.
Business Nullable
It produces its effects until its nullity is raised.
Art. 171
In cases expressly declared by law, the legal transaction is voidable: I – For relative inability of the agent; II – A defect resulting from error, fraud, coercion, state of danger, injury, or defrauding creditors.
Simulation
The practice of a particular transaction by giving publicity in order to conceal the true intention of the parties or all parties, harming third parties.
Tort – Art. 186
Whoever, by act or willful omission, negligence, or recklessness, violates the law and causes harm to others, even if only moral, commits a tort.
Contract Unlawful Acts – Art. 389
If the obligation is not fulfilled, the debtor responds in damages, plus interest and monetary restatement according to officially established indexes, and attorney’s fees.
Extra-Contractual Tort
- Voluntary action or omission
- Causation
- Damage
- Fault
Liability – Art. 927
Whoever, in tort (Arts. 186 and 187), causes harm to others, is obliged to repair it.
Par. Single
The perpetrator will be obliged to repair the damage, regardless of guilt, in cases specified by law, or when the activity normally undertaken by the perpetrator implies, by its nature, risk to the rights of others.
Abuse of Law – Art. 187
The holder of a right also commits a tort if, by exercising it, they clearly exceed the limits imposed by its economic or social purpose, good faith, or good morals.
Acts Contrary to the Law That Are Not Illegal – Art. 188
The following do not constitute unlawful acts: I – Acts practiced in self-defense or in the lawful exercise of a recognized right; II – The deterioration or destruction of something unrelated, or injury to a person, to remove danger.
Sole Paragraph
. In the case of section II, the act is legitimate only when circumstances make it absolutely necessary, not exceeding the limits of what is necessary to remove the danger