State intervention in Brazilian Contracts 1 - Consumer contracts

Today we start a series of posts regarding the State intervention in Contracts in Brazil. In this occasion we will discuss the consumer contracts and bring some concerns that foreign investors should have.

As already mentioned here in the blog, the Brazilian government has an annoying interventionist policy ,and this is specially true when  it comes to consumer contracts. 

Here we have a consumer code (Act nº 8.078/90) that overburdens the seller with all the onus of ´producing evidence (even if the evidence is favorable to the other party). So, be aware: if you are prosecuted, you will probably lose. Ther are special courts specialized in consumer issues, where the veredict is all but unpredictable. 

The consumer code also limits party's autonomy to choose forum for litigation. The consumer's residence has priority. 

Arbitration in consumer agreements is possible, but subject to restrictions.

In this context, if we were to analyze Brazilian contract law (regarding consumers) according to J. Adams and R. Bronsword categories, it would definitively fit the "Consumer-Welfarism" definition, since the brazilian consumer code puts the consumer as a weaker party in the contract.

It is important to stress that any final consumer is protected by consumer law. This means that a huge industry purchasing heavy machinery can claim the same legal protection granted to senior citizens who purchase a tv set. 

Importers and distributor are co-responsible, along with the manufacturer, for consumer liabilities. Thus, you must take care to provide your distributor in Brazil with the adequate tools and resources to solve any technical problem, or to provide replacements.

I will write more about it soon.