Brazil: The New Rules On The International Sale Of Goods

Last Updated: 24 October 2014

By Eduardo Amaral Gurgel Kiss1

Twenty four years after being executed by Brazil, the Brazilian government, through Decree 8 327, of October 16, 2014, put in force the United Nations Convention on Contracts for the International Sale of Goods (the "Convention").

Pursuant to Brazilian rules, the Convention shall be considered and treated as ordinary law. Consequently, it has modified many articles of the Civil Code as the latter did not distinguish between internal and international sale of goods nor ruled the former differently from the local transactions.

While published in Portuguese, as required by Brazilian law, the official languages of the Convention are Arabic, Chinese, English, French, Russian and Spanish. The texts in any of those languages are equally authentic (Part Four of the Convention, Final Clauses, item 36). In Brazil, the Portuguese version published in the Official Gazette shall prevail. So, in the case of discrepancies between the translation approved by the Brazilian government, and that of the Convention, the former shall prevail in Brazil.

The Convention's rules have the potential of being applied to a large number of transactions, as many important partners of Brazil in the international trade are a party to it. Just to name of few we can indicate Argentina, Chile, China, France, Germany, Japan , Mexico, South Korea, Spain, Switzerland, United States and Venezuela.

The Convention establishes which are the international purchase agreements subject to its provisions: (1) its rules apply to contracts of sale of goods between parties whose places of business are in different States that are a party to the Convention, when the States are Contracting States; or when the rules of private international law lead to the application of the law of a Contracting State. (Article 1).

Neither the nationality of the parties nor the civil or commercial character of the parties or of the contract is to be taken into consideration in determining the application of the Convention (Article 1item (III)). Consequently, it is not relevant if the parties to an international purchase agreement have the same nationality. If they have places of business in different States and such States are parties to the Convention or if the rules of private international law lead to the application of the law of a contracting State, the Convention shall apply. Presently many Brazilian companies have businesses and operate outside Brazil either through branches or subsidiaries. Consequently, it is possible to envision Brazilian companies having their sale and purchase agreements governed by the Convention.

Another interesting question is whether or not its rules are mandatory. Article 1 states that the Convention applies to contracts of sale of goods between parties whose places of business are in different States, and makes no exception. However, the basic freedom of trade is respected and the parties may exclude the application of Convention or in some circumstances, derogate from or vary the effect of any of its provisions (Article 6 of the Convention). So, the possibility of choosing the law in the case of an international purchase of merchandize has been kept.

In forthcoming Articles we shall proceed in the review of the Convention.

1 Partner of Demarest Advogados

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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