BRAZIL Trends and Developments Contributed by: Priscila Kei Sato, Arruda Alvim, Aragão, Lins & Sato Advogados
The growing influence of international instru - ments, such as the UNIDROIT Principles of International Commercial Contracts and the Principles of European Contract Law (PECL), has further promoted this harmonisation. These instruments serve as a bridge between legal tra - ditions, fostering a transnational contractual lan - guage that emphasises fairness, balance, and legal certainty. Indeed, international models such as the FIDIC Red Book and NEC3/4 (UK) contracts further influence Brazilian practice. These frameworks encourage proactive risk identification, early warning mechanisms, and compensation events, allowing flexibility within structured contractual obligations. Likewise, Article 6, XXVII of Brazil’s Public Procurement Law (Law 14.133/2021) supports the use of risk matrices – an increas - ingly global technique. In this light, Brazil’s contractual regime may be viewed as both civil law in its foundation and cosmopolitan in its evolution – aligning with international standards and embracing a plural - istic, principle-based approach to modern con - tract law. How should lawyers approach contracts today? Lawyers are well advised to take the following guidance into account in respect of contracts. • Avoid blind reliance on templates – in simple, low-risk deals, standard models may suffice. But in complex or high-value arrangements, contracts should be tailored to the specific risks, dynamics, and goals of the parties. • Recognise the limits of precedent – even the best legal research reflects past reason - ing. As Shakespeare wrote: “What’s past is prologue.” Lawyers must write contracts that
look forward, often intuitively, into an unknow- able future. • Know the client’s business – inspired by Sun Tzu’s Art of War , understanding both the client and the counterparty is key. Lawyers should analyse whether there is any financial or informational asymmetry and address it through well-structured clauses. • Asymmetries and risk – lawyers should assess asymmetries and understand risk. A practical use of Article 421-A lies in demon - strating such asymmetries, especially when one party operates in an unfamiliar market or holds critical information. In these cases, lawyers may: • require regular project reports; • introduce “change of control” restrictions; • define tolerable levels of supply disruption; • tie contractual penalties to economic metrics (e.g. inflation, exchange rate); and • set up risk allocation matrices – inspired by public procurement rules and international templates. Contracts for long-term or indefinite periods should also incorporate revision triggers – such as market volatility or force majeure – avoiding the illusion of stability in inherently unstable con - texts. Multidisciplinary drafting and decision- making Contractual design must no longer be siloed within the legal department. Teams from com - mercial, operational and financial areas should contribute, anticipating real-world tensions that may emerge during execution. These insights help define “walk-away clauses”, minimum ser - vice levels, and acceptable losses, ensuring that default does not automatically result in litigation.
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