An economic analysis of the adjustment of farming contracts terms by Brazilian courts

Abstract

Farming contracts are frequently affected by the change of circumstances under which such contracts were executed. In this sense, such changes provide substantive ground for lawsuits claiming the adjustment of such contracts terms by court and emphasizes the importance of understanding the institutional environment on which such contracts are executed. Therefore, this paper analyses court precedents established by the Brazilian Superior Tribunal of Justice (Superior Tribunal de Justiça – the higher court for Private Law affairs) on claims related to adjustment of contracts terms, while evaluating the impact of such precedents in terms of transaction costs economics by means of interviews with lawyers of sugarcane producers and buyers in the outskirts of Ribeirão Preto, Brazil.