38. What are the key limitation or prescription rules for claims for money and defects (and insofar as you have a mandatory decennial liability (or similar) regime, what is its scope)? What stops time running for the purposes of these rules (assuming the arbitral rules are silent)? Are the rules substantive or procedural law? May parties agree different limitation or prescription rules?
In accordance with article 205, section 5, I of the BCC, if the sums for money are liquid, the statutory limitation for the filing of a lawsuit is five years from the date on which the sum became due.
For damage claims arising out of contractual breaches, the statutory limitation for the filing of a lawsuit is 10 years, according to the Superior Court of Justice most recent case law regarding such matter.
Also, the Brazilian Civil Code provides for time limitations for the assessment and claiming of latent defects. According to article 445, the purchaser loses the right to avoid the contract or a reduction in price in 30 days, if the good is moveable, and in one year, if the good is immovable. In both cases, the term is counted from effective delivery. If it was already in the purchaser’s possession, the term is counted from the date of the transference of possession and is reduced by half. When the defect, by its nature, could only be known later, the time is counted from the moment at which the purchaser became aware of it, for a period of no more than 180 days in the case of movable property, and of no more than one year for immovable property.
With regards to exposure relating to soundness and safety of construction works, article 618 of the Brazilian Civil Code provides for a statutory limitation of five years counted from the date of delivery of the works. Since they relate to the safety of third parties exposed to the construction, this limitation is unanimously considered as a public policy and is not subject to reduction by agreement between the parties. Additionally, in accordance with the sole paragraph of article 618, if the construction owner fails to sue the contractor within 180 days following the appearance of the defect, he will no longer have the right provided for in article 618.
When not otherwise specified by the law, article 205 of the Brazilian Civil Code provides for a decennial statute of limitation for the filing of a lawsuit.
Under Brazilian law, the rules regarding the limitation or prescription of claims have a substantive nature and may not be altered by agreement between the parties, as pursuant to article 192 of the Brazilian Civil Code. Parties may, however, according to articles 209 and 211 of the Brazilian Civil Code, provide for contractual limitations where the law is silent. Furthermore, pertaining to article 191 of the Brazilian Civil Code, parties may agree to waive its statute of limitation rights only after expired the limitation period.
Meanwhile, statutes of limitation may be stopped by a formal notification from the creditor to the debtor. According to article 202 of the Brazilian Civil Code, statute of limitation is stopped by: (i) order of the court to subpoena the defendant, (ii) for registration of debts, (iii) enforcement of bonds before a court, (iv) any judicial act that constitutes the debtor in delay, (v) any act that unmistakably represents the acknowledgement of the rights by the debtor. As per article 19, section 2 of the Brazilian Arbitration Act, the constitution of the tribunal (or confirmation of the sole arbitrator) also suspends the statute of limitation retrospectively to the date of the request of arbitration.
Answer contributed by
Flávio Spaccaquerche Barbosa and
Thiago Fernandes Moreira