Legal Guide for Foreign Investors in Brazil - Apex-Brasil

Legal Guide for Foreign Investors in Brazil
The law has changed the balance in favor of consumers, removing from them
the burden of proof. It is now incumbent upon the manufacturer to produce
evidence that his goods are in compliance with standards, rather than upon
the customer responsible to prove that goods are defective or dangerous. This
is a feature can be invoked when deemed appropriate by a judge, line with l
requirements established in law.
Other new features implemented by the law are: (i) the adoption of the doctrine
commonly known as “disregard of the corporate entity” (with a broader scope
than found in US and European models); (ii) a new treatment of civil liability
in cases of product failure, in which the producer or manufacturer liable is
held responsible even without malice or specific intention to cause damage (a
different principle is invoked in the case of services provided by such professions
as dentists, engineers etc.); (iii) particularly strict advertising rules. In all cases,
the basic constitutional principle of “due process of law” is maintained.
As a consequence of these protective regulations, manufacturers and service
providers must now be much more careful with their products or output. Legal
counsel is recommended and often required, from the pre-manufacturing phase
to actual on-shelf exhibition.
27.4. Enforcement
From the standpoint point of view of a foreign lawyer, Interpreting Brazilian
Consumer Law is a most demanding process. The key to understanding and
mastering this law is accepting that it brings together in a single package, civil,
administrative, and criminal sanctions.
Indeed, many behaviors are now regarded as criminal, yet the code reaffirms the
constitutional right of a defendant to due process of the law. Even the drafting
of contracts is now a much more intricate task, in view of heavy penalties for
abusive clauses. Advertising has also been targeted by policy-makers, raising
great need for caution in pre-contractual commitments implied by press or
media releases.
27.5. Trends
The Brazilian consumer protection code is compatible with the world’s most
modern legislations. Brazilian courts have been cautious in applying the law,
and have so sought to ensure that it attains its main objective, i.e., protecting
consumers whilst at the same time enhancing healthy competition between
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