There's no denying the importance of studying business contracts for developing a successful legal practice. 

This is because, in the day-to-day practice of law, legal professionals are called upon to resolve various issues that require them to have in-depth knowledge of the legal framework governing business contracts. 

In this article, I want to invite you to a brief immersion into the world of business contracts, presenting you with a general overview of the study of this type of contract.

What is NOT a business contract?

This time, we'll begin our study from the end to the beginning. You'll see how this will help you better understand business contracts.

In general terms, you know that contracts are agreements of wills between two or more people that create, modify, or extinguish legal relationships.

It turns out that, in many cases, the individuals (natural or legal persons) who entered into the contracts do not have the same negotiating power, so the law needs to protect them.

This is the case, for example, in consumer law, where there is a presumption of vulnerability of the consumer in relation to the supplier ( article 4, item I, of the CDC ).

The same logic can be applied to employment contracts governed by the CLT (Brazilian Labor Law) . There is a relative presumption of vulnerability for the worker in relation to their employer.

In both cases, this means that: if there is a dispute between the parties, the more vulnerable party enters the legal-procedural relationship with some advantage, namely, the presumption of vulnerability.

In business contracts, the logic is diametrically opposed. For this reason, it is important to distinguish between business contracts, consumer contracts, employment contracts, and civil contracts.

The logic behind business contracts

Generally speaking, business contracts are considered to be those entered into by a businessperson within the scope of their business activity. 

This logic of business contracts is very well explained by Professor Paula Forgioni. She says that we are dealing with business contracts when all contracting parties have the intention of making a profit.

In other words, we will be dealing with business contracts when the contracting parties professionally carry out an organized economic activity for the production or circulation of goods and services ( art. 966, CC ).

Furthermore, the Civil Code makes it clear that there is a presumption of symmetry and parity in civil and commercial contracts (art. 421-A, CC/02). Consequently, some rules can be created, such that:

1. The negotiating parties may establish objective parameters for the interpretation of the contractual clauses and their assumptions for revision or termination; 
2. The contract will serve as a risk allocation document defined by the parties and must be respected and observed;
3. Contract revisions will only occur in exceptional and limited circumstances.

The binding force of contracts

There is a classic rule in the Napoleonic Civil Code that states: "the contract is law between the parties." According to this rule, also known as the principle of contractual obligation, contractual clauses cannot be altered, not even by a judge. 

However, it's worth noting that this rule is not absolute, as there is a possibility of invalidating contractual clauses that violate public policy norms.

Furthermore, as an exception to the binding force of contracts, it is important to mention the possibility of contract termination or revision due to excessive burden caused by a supervening event (according to articles 317 and 478 of the Civil Code).

Thus, the rights and obligations assumed in a given contract may be revised if there is a significant and unforeseeable change in the economic conditions that gave rise to the contractual relationship.

Good faith in business contracts

Contractual good faith has led legal scholars throughout Brazil to deepen their studies in the general theory of private law; one of these authorities on the subject is the renowned professor Judith Martins-Costa.

To learn more about this topic, I highly recommend reading the leading book on the subject in Brazil, "Good Faith in Private Law: Criteria for its Application," by the aforementioned author.

In general terms, it is important to mention that there are some functions for which good faith exists in Private Law.

First and foremost, it has an interpretative function, since it guides the interpretation of contractual clauses in order to impose on the parties the obligation to respect good faith.

There is also an integrative function, as it is capable of creating duties of conduct for the parties, such as the duty to inform.

Finally, good faith can be discussed as a function that limits subjective rights, since it has the capacity to censure behaviors that constitute an abuse of rights. 

These issues involving contractual good faith are being widely discussed in the Commercial Law Conferences, organized by the Federal Justice Council.

Furthermore, it is worth remembering that Statement number 26 of the Conference was approved, which states that: "a business contract fulfills its social function when it does not cause harm to diffuse or collective rights or interests held by subjects who are not participants in the business relationship." 

Thus, there is contractual freedom, but it finds its limits in the social function (article 421 of the Civil Code) and in the precepts of public order and respect for good morals.

This is precisely what Article 422 of the Civil Code stipulates, imposing on contracting parties the obligation to observe, both in the conclusion of the contract and in its execution, the principles of probity and good faith.

The validity of business contracts

Since it is a legal transaction, when studying business contracts, we must pay attention to the rules set forth in Article 104 of the Civil Code.

The provision in the Civil Code addresses the validity requirements for legal transactions, which in turn are the same rules applicable to business contracts.

Therefore, when drafting a business contract, one must consider the capacity of the parties, the lawful object, and the prescribed form or one not prohibited by law, as well as specific requirements such as mutual consent between the contracting parties.

Business contracts in practice

There are several types of business contracts, each with its own characteristics and legislation. Typical examples include commercial representation agreements, franchise agreements, and lease agreements, among others.

However, the Civil Code itself allows contracts to be entered into according to the freedom of both parties, the so-called atypical contracts (article 425 of the Civil Code).

Thus, it can be said that atypicality is a general rule in business contracts, since the parties are free to enter into any type of contract, as long as good faith is respected.

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References

"General Theory of Business Contracts" by Professor Paula Andrea Forgioni, published by Revista dos Tribunais.