Many companies in Brazil seek differentiated contractual regimes, to avoid the incidence of the Brazilian Sales Representation Law.
However, such strategy does not always have the intended effect when the dispute reaches the Judiciary.
The Brazilian Sales Representation Law (Federal Law n. 4.886/1965) is target of criticism, as it is very protective towards the sales representatives and, consequently, is excessively burdensome to the represented companies. Therefore, the tendency is to try to frame the contractual relationship in another category, such as service provision, intermediation, or agency.
Companies that operate Brazil should be aware of the following points of attention to increase chances of success in the event of litigation.
Check below 5 points that have been decided by Brazilian case law courts on the matter:
1. The name given by the parties to the contract will not be decisive in a legal claim.
2. If the elements of sales representation are present, the respective law will be deemed applicable.
3. The Sales Representation Law will remain applicable even if the parties expressly waive its incidence in the contract.
4. If the sales representative is not registered in the professional council, the Sales Representation Law will not apply, but he/she must receive payment for the services provided under the terms of the contract.
5. Sales representation may also cover services (and not only products) if they are provided by the represented company and only intermediated by the representative.
