On the invalidity of the settlement agreement for unfair exploitation (lesion or danger)

Abstract

Settlement agreements are, under the Brazilian Civil Code, nominated contracts, set out in articles 840 and following. However, some of those provisions seem to give them a differentiated treatment, drawing apart from the rules applicable to contracts in general. This is the case of article 849, which, in its wording, would seem to exclude avoidance of settlement agreements on grounds of unfair exploitation, that is, of lesion or danger (“estado de perigo”). This article seeks new arguments to sustain why that solution should not prevail and further examines some of the consequences of the solution deemed more adequate. For that purpose, it draws on the history and contemporary meaning of lesion in comparative law, since it was from this legal concept that “estado de perigo” emerged. It then scrutinizes the requirements posed by the law to their invoking; and it finishes by debating the consequence that should affect the most severe cases of unfair exploitation.