In view of the current scenario experienced by Brazilian society due to the spread of the coronavirus SARS-CoV-2 (“Covid-19”), we review below certain key topics of a civil nature triggered by the crisis.

As far consumer relations are concerned and having regard that the general rule is that the supplier of products and/or services is strictly liable (which means, regardless of fault) for damages caused to the consumer, it is extremely important to stress the clarity, objectivity and precision of the information provided to the consumer.
In the event of any flaw and/or defect in the product and/or service, the Brazilian Consumer Protection Code (“CDC”) contains certain exceptions authorizing the exclusion of supplier’s liability, it being certain that, in the current scenario, much will be discussed about the application, or not, of the Act of God provision as a way to change and even dismiss obligations arising from consumer agreements.

Provided expressly by article 393 of the Brazilian Civil Code and implicitly provided for by the CDC, the Act of God provision aims to break the liability tie due to the occurrence of an unlawful act, which causes damage to the consumer, but resulting from an event totally outside of the supplier’s control – which differs from force majeure, since the latter, instead, implies that the supplier of products and/or services must still be held liable for the damage caused, as it is a risk inherent to its activity.

Thus, much will be seen in the Brazilian courts in relation to the allegation of the events of Acts of God in order to justify the impossibility of fulfilling obligations and, therefore, the consequent need of the duty to indemnify.

Having regard that the issue has not yet been properly reviewed by Brazilian courts, and there is currently no consolidated understanding whether the Acts of God provision will, in fact, be applied to readjust/extinguish obligations, it is recommended that disputes be resolved extrajudicially, on a case by case basis, between suppliers of products and/or services and the consumer.

In this regard, the supplier of products and/or services should demonstrate that, within the measures that were within its reach, all measures were adopted to meet the consumer’s satisfaction, when envisaged in the consumer relationship.
Furthermore, with a view to containing the spread of Covid-19, the National Justice Council (“CNJ”) determined that Brazilian courts (with the exception of the Brazilian Federal Supreme Court and Brazilian Electoral Justice), have all of their procedural deadlines suspended until 30th April 2020, except for the processing and judgment of urgent matters, which is a fact that may also delay the processing of indemnification claims ultimately filed by consumers.

Therefore, extrajudicial settlement would be encouraged, on a case by case basis, as the best path to resolve disputes, especially in times of crisis.

Moreover, it is certain that the CDC preserves the consumer’s interests when the supplier of products and/or services cancels the delivery of the product and/or service and it is up to the consumer to request the termination of the agreement with indemnification, as well as losses and damages, if any, pursuant to articles 18 and 20 of the CDC.
Thus, in principle, although the possibility of applying for the existence of an Act of God, the supplier of products and/or services is obliged to comply with what is set forth in the legal articles indicated above. However, it is worth emphasizing that, thus far, both from an economic but also a social point of view, there are alternatives to be applied, within the legal dictates, which can be aligned between the suppliers of products and/or services and the consumers in general.
In addition, notwithstanding the above-mentioned entitlements, it is lawful for the parties to agree, for example, to reschedule the delivery of a product and/or the provision of a service or even the delivery of another similar product and/or adjustment in the service to be provided, once such offer is expressly accepted by the consumer.

The use of the guidelines above may – and it is understood that it should – be applied to all consumer segments, respecting the specific rules in the most varied sectors, such as the aviation industry, e-commerce etc.

When addressing consumer relations in the airline industry, the Brazilian government, in a swift manner, enacted Provisional Measure No. 925/2020, with a view to granting greater financial relief to airlines operating in Brazil and, mainly, to provide the modus operandi regarding refunding of airline tickets in the event of flight cancellations.
It is unanimous the understanding that the airline industry was one of the most affected by Covid-19, such companies having their cash flows drastically compromised. For this reason, although with some omissions, the Provisional Measure ascertains the extension of deadline for payment of fixed and variable contributions due by airlines to Brazilian regulatory entities.
Additionally, the Provisional Measure provides that, agreements having regard transport by air signed until 31st December 2020, airlines have a period of 12 (twelve) months to refund airline tickets. For passengers accepting the refunding of the amount paid for airline tickets in the form of a credit, for use in 12 (twelve) months, counted as from the date of the contracted flight, it has been established that such credit will be exempt from any penalties arising from the policies established in the prior transport agreement.

Due to the nature of the Provisional Measure, which consists of a sole act adopted by the President of the Republic, it is certain that such measure may be reviewed, adjusted and, ultimately, approved by the members of the Brazilian National Congress.
Finally, another topic that deserves attention, concerns matters involving insolvency.

Having regard the economic recession caused by the reduced flow of business due the Covid-19 outbreak, the risk of delay in fulfilling obligations, lack and/or scarcity of inputs, contractual defaults and even stoppage and consequently the closure of companies’ business (mostly small and medium size companies) increases exponentially.
In this scenario, despite the measures adopted by the Brazilian government to encourage the economy (adjustments in employment agreements and extension of deadlines for paying taxes, for example), it is important to adopt measures to make feasible the business flow of the company, duly implemented by extrajudicial or judicial reorganization regimes, if the legal and procedural requirements for such measures are met.
It is noteworthy, once again, that the scenario is extremely dynamic. Therefore, before adopting any measures within a specific civil case, we always recommend seeking legal guidance for the preservation and defense of rights and legal relationships.