Notes on the liquidation relationship of terminated contracts (critical analysis of the retroactive conception of termination in Brazilian Law)

Abstract

The legal concept of contract termi­nation has been elaborated in many countries as a retroactive deconstruction of the contrac­tual relationship. According to this opinion, still prevalent in Brazil, the effects of a terminated contract end up, in whole or in part, extinguished ex tunc, and it is based on this premise, not pro­vided for in any law, that most scholars seek to explain the reason and the characteristics of the restitution effect of termination. However, such a retroactive construction of a termination that goes back to the past to extinguish the effects of a contract that has already been partially fulfilled is no longer adequate. As perceived by the unanimity of German doctrine and by great Portuguese scholars, the non-retroactive con­struction of termination is much simpler and more consistent. It understands termination as a simple modification of the existing contractual relationship and justifies its restitutionary effect with the emergence ex nunc of new restitution duties within the scope of that very same con­tractual relationship. Analyzing the various dog­matic implications of adopting one and the other model, this paper argues that, also in Brazil, the retroactive construction of termination should be abandoned.