Post by account_disabled on Mar 13, 2024 3:08:48 GMT -5
Pandemic is reason, according to judge, for deferral of installments of social quotas
Kateryna Kon
The application of the theory of unforeseeability, to justify the resolution or review of business contracts, will depend on the analysis of each concrete situation, especially the nature and specific consequences, but it is to be assumed that the global event will affect, to a greater or lesser extent, a significant layer of society and may give rise to contractual imbalance in various legal relationships. In other words, this is "wartime."
Based on this understanding, judge B2B Lead Cesar Ciampolini, from the 1st Chamber of Business Law of the Court of Justice of São Paulo, authorized the deferral of the April, May and June installments in a quota assignment contract. The amount must be paid in ten monthly installments, with the first due date 15 days after publication of the decision.
The action was filed by a businesswoman who acquired shares from her former partner in an açaí store, in the interior of São Paulo. Due to the coronavirus pandemic, the store had to close its doors and suspend in-person service. The author claims that she has had a drop in revenue and is unable to continue paying the installments, without harm to the company and employees.
In the first instance, the injunction was denied. However, in a monocratic decision by the rapporteur, the anticipation of appeal relief was partially granted. He applied the theory of unpredictability to the case, adopted by the Civil Code, and which establishes the possibility of termination or contractual review in the event of exceptional situations occurring, which could not be predicted or regulated by the parties.
"Despite the novelty of the issue, it is reasonable to assume that the situation generated by the coronavirus pandemic can be classified as an 'extraordinary and unpredictable event', within the meaning of article 478 of the Civil Code, authorizing the contractual review", stated the judge .
He highlighted that, after the First World War, countries experienced an absolutely unexpected economic situation, which "made all long-term and successive or day-to-day contracts extremely ruinous and unenforceable". Hence the need to resurrect, at that time, the rebus sic stantibus clause , just as it must be done now, in the face of the health crisis.
"In times of war, which is, mutatis mutandis , the one we are experiencing in the face of the coronavirus pandemic, this is how it really should be", added Ciampolini. According to him, it seems "credible" that the restriction on the operation of the açaí store has led to a drop in revenue and, consequently, the momentary impossibility of paying the installments agreed in the quota transfer contract.
The contract, stated the judge, is of continuous execution, is not random and "the new circumstances far exceed what could reasonably be predicted at the time of the contract, having occurred with excessive rapidity, affecting not only the aggravating party, but all contracts of the same nature, concluded with similar clauses".