A further economic analysis of lesion as established under article 157 of the Brazilian Civil Code

Abstract

Article 157 of the Brazilian Civil Code states that “lesion occurs when a person, under grounds of necessity, or due to inexperience, agrees to perform an overtly disproportional obligation in face of the value of the opposite obligation”. By analyzing such article, it is certain that there is no mention of either an intention to commit fraud by one of the parties or to economically exploit their counterpart (dolo de aproveitamento), an aspect that is usually neglected by legal scholarship and precedents in Brazil. In this sense, the purpose of this paper is to criticize the literal interpretation of such provision, while taking into consideration the legal scholarship views that include such malicious intent as a requirement to the occurrence of lesion. This paper shall focus on the study of “lesion” as defined in the Brazilian Civil Code and shall not analyze “lesion” as established under the Brazilian Consumer Law. The paper shall also bring examples of situations, including some of those which have risen in the context of Covid-19 pandemic. In order to set the proper framework for the analysis, the paper shall investigate the legal framework of lesion in contract law in several jurisdictions, specially in Italy, France, the US, Austria, Germany and Portugal, as well as UNIDROIT regulations. In sequence, the paper shall promote an analysis of lesion under the lens of law and economics, with an economic perspective on the contract holdup doctrine. Finally, the paper concludes that there are two possible alternatives for the understanding of lesion in Brazilian law. Both alternatives have in common the need for well-defined ownership rights in the Brazilian legal system, while overcoming the interpretation set forth on Statement (Enunciado) 150 of the Brazilian Federal Justice Council or demanding legislative initiative to rewrite article 157 in order to address the issue analyzed herein.