Tatiane Bagagí Faria
Lawyer at Marcos Martins Advogados
Due to the Covid-19 pandemic that has taken hold globally, many companies have sought to have their contracts reviewed by the courts, on the grounds of financial incapacity due to the adoption of the quarantine measure in the state of São Paulo.
In this regard, a São Paulo retail company filed an Antecedent Preliminary Injunction in the District of Guaratinguetá/SP, seeking an injunction to suspend or reduce the amount paid monthly as rent for a commercial building, on the grounds of lack of income due to the suspension of non-essential activities, under the terms of São Paulo State Decree No. 64.881/2020.
In his ruling, the judge in the case stated that
“There are events that are impossible to predict, given their extreme rarity, and which have catastrophic consequences, as is the case today. In the Consumer Protection and Civil Codes, Brazilian legislation has sought a way to regulate contractual relations in the event of unforeseeable circumstances or force majeure.”
In this sense, he accepted the company’s subsidiary request to reduce the rental value of the property to 40% (forty percent) of the contract value, during the period of restriction of non-essential activities, due to the sharp drop in turnover and serious risk of compromising the continuity of business activities. In view of this, the magistrate ruled that, in the case in question, considering unforeseeable fortuitous events, it was appropriate to adjust the contractual relationship in order to establish a balance between the contracting parties and avoid excessive burdens on the temporarily insufficient party.
Faced with the whole situation involving the Covid-19 pandemic, the Marcos Martins law firm is attentive to new case law in order to provide adequate and effective advice to our clients.
