Creditor’s interest and debtor’s good faith on cases involving substantial performance

Abstract

Substantial performance doctrine is not objectively established in the Brazilian legislation; its acknowledgement derives from legal scholars and precedents based on good faith standard, which establishes duties to both creditors and debtors. For that reason, one shall assess whether the debtor behaved in good faith, in the sense that the debtor should justify the reason for the failure to comply with the obligations established in a contract. In this sense, debtors shall be required to evidence asset liquidity in face of judicial enforcement of defaulted obligations and claims related to damages.