In December 2019, a majority decision rendered by the Superior Court of Justice in  Special Appeal nº 1.831.947-PR considered invalid a contractual clause that determined that a company, when paying monthly commissions to its agents, could include an anticipated indemnity payment for a future unwarranted rescission of an agency agreement.

In the lawsuit, the appellant claimed that such contractual clause shall be considered null and demanded the payment of the indemnity set forth in article 27, “j”, of the Law No. 4.886/1965 (“Agency Law”). The judge, as well as the appeals court, dismissed both claims. However, the Superior Court of Justice reversed the decisions by majority.

According to the reporting judge, Justice Nancy Andrighi, advancing the indemnity’s payment in monthly installments breaches the cogent rule referred in article 27, “j”, which does not provides for the possibility of the company anticipating an indemnity to the agent prior to termination. For Andrighi, this measure distorts the objective of the Law. Besides that, it disregard the interpretation guidelines of good faith and the legal protection of the agent in the relationship established by the parties.

Justice Ricardo Villas Bôas Cueva, in his dissident opinion, repeated the considerations of the lower court judge and of the appellate judge, stating that: (i.) the fact that the agent did not oppose to the wording of the contractual clause at any point, while the contract was valid and that the agreement was then renewed, means that the way of payment was accepted and the current insurgency characterizes venire contra factum proprium, a conduct that violates the trust between the parties; (ii.) the law provides no prohibition of the indemnity prepayment and allows the negotiation based on the parties’ autonomy; (iii.) the anticipated monthly payment would cause the represented party to have to repeat the payment when the agency agreement was effectively terminated, which would be disproportionate.

By majority, however, the Third Chamber of the Superior Court of Justice, followed the vote of Justice Nancy Andrighi. It is important to consider the position adopted by STJ,  although not unanimous, regarding the practice of anticipating the indemnity due to agents in case of termination, given the risk of double payment.

Access here the full version of REsp nº 1.831.947-PR.

In June 11th, 2019, the Third Chamber of the Superior Court of Justice (“STJ”) determined (i.) the validity of a contractual clause that establishes that a third-party guarantee is automatically extended whenever the main contract is extended and (ii.) the criteria to be observed by the guarantor that aims to be released from automatic renewal contracts.

Moreover, STJ held that a contractual clause that provides for the possibility of the guarantor to waive his right of exoneration is only valid when the contract is renewed, whenever it become an evergreen contract, after which such clause is no longer enforceable. Reporting Justice Paulo de Tarso Sanseverino  stated that accepting a guarantee to be bound to a main contract that renews itself automatically is the same as accepting an everlasting obligation of the guarantor, which would be illegal.

Therefore, a guarantor would be able to release himself from the obligation if, and as soon as, the contract is renewed for an undetermined period and if the exoneration is invoked prior to any contractual default or any collection action moved by the debtor. For this purpose, the notification procedure predicted on article 835 of the Civil Code shall be observed, and the release will become effective after the 60-day-period as of the receipt of the notification.

Access here the full version of REsp nº 1.673.383-SP

Enacted on September 20, 2019, Law No. 13,874/2019, known as the “Economic Freedom Act”, aims to reduce the state interference in the regulation of economic activity and to encourage free enterprise through (i) the reduction of bureaucratization, (ii) the promotion of businesses opportunities and through (iii) the development of business innovation.

With regards to the contractual matters, the law brings significant changes to the Civil Code, establishing relevant guidelines to the exercise of the freedom of contract. It sets forth, for instance, the presumption that civil and commercial contracts are symmetrical and entered into by equal parties. However, this presumption can be rebutted with concrete elements, provided that the relationships subject to special regimes are respected (such as consumer relationships, subject to the Consumer Defense Code).

In general terms, the changes in the contractual sphere aim to increase the legal certainty between the parties and the protection of the person against the intervention of the State over valid and effective agreements, establishing that private contractual relationships are subject to the principle of the minimum intervention. Thus, it strives for the preservation of the agreements and of the content validly negotiated between the parties, establishing the exceptional character of the judicial review of the contract.

On November 27, 2019, it was sanctioned by the President the Law No 13.966/2019 (Franchise Act), which revokes the current franchise contract legislation, Law No. 8.955/1994. The Franchise Act come into force as from the end of March of this year.

The purpose of the enactment of the new Franchise Act is to enhance business opportunities and ensure more safety to the players in the market. The main drivers of the Franchise Act are updating previous and out-of-date practices, clarifying matters that needed to be subject to the judiciary to be settled; and improving the legal tools in order to foster this business field, through a simpler and more objective language.

In this sense, it is highlighted the provision asserting that the relationship between franchisor and franchisee does not constitute a consumer relationship, nor a labor relationship between the franchisee’s employees and the franchisor, even during the training period of the franchisee (article 1^st). It is also worthy to point out that the new Act sets forth that not only private companies can adopt the franchise model, but state-owned companies and non-profit organizations as well (par. 2^nd, article 1^st).

Furthermore, it is expressly mentioned the possibility of an international franchise relationship, which could be either franchises where the franchise is Brazilian, or relationships where the franchisee contracts with a foreign franchisor (article 7^th). Finally, the law also expressly refers to the possibility of including an arbitration clause in the franchise agreement (par. 1^st, article 7^th).

Although the Third Panel of the Superior Court of Justice (“STJ”) decided (RESP No. 1.678.551) to withdraw the application of the legal regime established by the Brazilian Agency Law (Law No. 4.886/65) for contracts whose sale agent is not registered with the Conselho Regional de Representantes Comerciais (“CORE”, a Brazilian regional council in which sales agents must be registered in order to practice their profession) in the end of 2018, said interpretation has not been adopted so far by the State Courts.

At that time, by withdrawing the application of the Agency Law, the STJ understood that for a specific person to be defined as a sales agent and be subject to a specific legal regime, said person would have to be registered in the respective professional council. However, the Court emphasized that the absence of the registration does not prevent the agent from claiming commissions, nor from enforcing the contract. The peculiarity, however, is that both the remuneration issues (differences in commissions) and the indemnification for the termination of the contract were decided in accordance with the provisions of the Brazilian Civil Code, therefore not granting the pre liquidated damages of 1/12, based on the application of article 27, item “j”, of the Agency Law.

Despite the innovative interpretation offered by the Third Panel of the STJ, it has been noted that there are Courts of Appeals  continue to apply the previous understanding, in which the lack of registration with CORE would not prevent the Agency Law from being applied to the contract (in this regard, note Appeals No. 1008066-56.2016.8.26.0077 and 0191951-02.2008.8.26.0100 from the Court of Justice of the State of São Paulo, Appeal No. 0007125-84.2018.8.19.0001 from the Court of Justice of the State of Rio de Janeiro and Appeal No. 0164738-34.2019.8.21.7000 from the Court of Justice of Rio Grande do Sul).

It is important to monitor the direction of the upcoming discussions in the STJ regarding this matter in order to identify how the interpretative divergence will be dealt with. Given this scenario, caution is needed in relation to ongoing agency contracts and the possibility that sales agents may claim the amounts provided for in Law No. 4.886/65, even if they are not registered with the professional council.

Access here the full version of REsp nº 1.678.551-DF.