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The legal business is a kind of legal act that arises from the manifestation of a person's will, aiming to produce effects in the legal sphere of another. Therefore, a legal relationship arises between the parties, respecting the requirements established by law for its validity and effectiveness factors that will impact its production of effects.

A very common example of legal business are contracts between two or more parties.

In terms of existence, the legal business has four elements: (i) agent, (ii) form, (iii) object, and (iv) will. The absence of any of these elements generates a non-existent legal business.

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1. Legal Business Classification

Legal business can be classified according to the will of assets, the form, the number of declarants, the existence, and the moment of the production of effects, as set out below:

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CLASSIFICATION AS TO THE WILL OF ASSETS

1. Gratuitous – occur when only one of the parties is benefited, without compensation. For example: lending, donation, etc.

2. Onerous – occur when both parties gain advantage, with compensation for both. For example: purchase and sale, work by the job etc.

It is also important to point out that onerous legal business is subdivided into (i) commutative – when there is balance and proportionality in the benefits between the parties. For example: lease, purchase and sale, etc. and (ii) aleatory – when there is a dependence on an event for the compensation to occur. For example: insurance, health insurance, etc.

3. Neutral – occur when they are free from asset assignment. For example: institution of family property etc.

4. Bilateral– occur when they can be both gratuitous and onerous. For example: mandate, deposit etc.

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CLASSIFICATION AS TO THE FORM

1. Formal or solemn – occur when a special form provided for by law is required. For example: check, wedding etc.

2. Non-formal or non-solemn – occur when the form is provided at the will of the parties. For example: out-of-court notification, sales of movable property etc.

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CLASSIFICATION AS TO THE NUMBER OF DECLARANTS

1. Unilateral – occur when there is only the manifestation of will of one of the parties: For example: will, renouncement of inheritance, etc.

2. Bilateral – occur when there is the manifestation of will of both parties. For example: purchase and sale, mortgage loan etc.

3. Multilateral – occur when there is a manifestation of will by more than two parties. For example: company contract, group insurance contract, etc.

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CLASSIFICATION AS TO THE EXISTENCE

1. Principal – occur when they exist by themselves, not being linked to other legal businesses. For example: services, purchase and sale etc.

2. Accessories – occur when they depend on a core legal business. For example: fine on a procurement contract, guarantee on lease, etc.

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CLASSIFICATION AS TO THE TIME OF THE PRODUCTION OF EFFECTS

1. Inter Vivos – occur when they produce effects by living parties. For example: services, company contract, etc.

2. Causa Mortis – occur when they produce effects after the person's death. For example: will, codicil, etc.

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2. Interpretation of the Legal Business

Legal business must be interpreted in accordance with the good faith and uses of the place of its execution. Its meaning should consider the following:

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1. If it is confirmed by the behavior of the parties after the business execution;

2. If it corresponds to market uses, habits, and practices related to the business type;

3. If it responds to good faith;

4. If it is more beneficial to the party who has not written the device, if identifiable;

5. If it corresponds to what would be the reasonable negotiation of the parties on the discussed issue, inferred from the other provisions of the business and the economic rationality of the parties, considered the information available at the time of their execution.

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It is important to point out that the parties have the freedom to agree on rules of interpretation, filling gaps, and integration of legal businesses different from those provided for by law. Moreover, in the declarations of will, intention embodied therein will be more relevant than the literal meaning of the text.

Another important aspect is that silence can mean approval, when circumstances or uses authorize it, and the express declaration of will is not necessary.

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3. Legal Business Validity

Legal business validity requirements are the following:

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On the other hand, the following points may invalidate legal business:

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1. Physical or legally impossible conditions, when precedent;

2. The unlawful conditions or of doing illegal things;

3. Incomprehensible or contradictory conditions.

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Impossible conditions are considered non-existent when subsequent, as well as not doing something impossible.

It is important to highlight that if the effectiveness of the legal business is subject to a condition precedent, until it is not verified, the right it seeks will not be acquired. On the other hand, if the condition is subsequent, the legal business will remain in force until the condition is fulfilled, allowing the exercise of the established right since the conclusion of the business.

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4. Legal Business Deadlines

Deadlines are computed excluding the day of commencement and including the day of expiration, unless there is legal or conventional provision to the contrary. If the due date falls on a holiday, the period shall be considered extended until the first following working day.

Something of paramount importance is that the period of months and years expires on the day of the same number from the beginning, or the next day, if exact correspondence is missing.

The deadlines set per hour are counted from minute to minute.

Legal business between the living, without deadline, is immediately enforceable, unless execution has to be done in a different place or depends on time. In that case, the provisions relating to the condition precedent and subsequent shall apply, as appropriate, to the initial and final term.

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5. Error or Ignorance

A legal business in which declarations of will emanate from substantial error, which could be perceived by a person of normal diligence in the face of the circumstances of the business, is voidable. It is considered a substantial error:

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1. Interests to the nature of the business, the principal object of the declaration, or any of the qualities essential to it;

2. Concerns to the identity or essential quality of the person to whom the declaration of will refers, provided that it has influenced it in a relevant way;

3. Being of right and not implying refusal to apply the law, is the sole or main reason of the legal business.

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The erroneous transmission of the will by means filed is voidable in the same cases, as in the case of the direct declaration.

The error of indication of the person or thing in the declaration of will does not invalidate the business when, by its context and circumstances, the considered thing or person can be identified. Otherwise, the calculation error only authorizes the rectification of the declaration of will.

Finally, the error does not affect the validity of the legal business when the person to whom the manifestation of will is addressed offers to execute it according to the actual will of the manifestation owner.

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6. Deceit

The legal business caused by the deceit of the agent or even a third party is voidable if the beneficiary party had or should have knowledge of it.

The deceit can be considered accidental when, although the business was still carried out, it would be done otherwise. In this case, the deceit only obliges the satisfaction of the losses and damages, without nullifying the legal business.

One aspect of maximum relevance is that the intentional silence of one of the parties regarding the fact or quality that the other party has ignored is considered a fraudulent concealment. This occurs in bilateral legal business, if it is proved that without it, the business would not be executed.

When deceit occurs on the part of the legal representative (whose power to represent derives from the law) from one of the parties, the latter will only force the represented party to respond civilly up to the importance of the benefit he received. However, if the deceit is the conventional representative (whose power to represent arises conventionally between the parties with the issuance of will), the represented party will be jointly and severally liable for losses and damages.

On the other hand, if both parties act with deceit, none of them can claim it to nullify the business or claim for damages.

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7. Duress

In order for the declaration of will to be vitiated, the duress must be such that it instills in the person a well-founded fear of imminent and considerable harm to themselves, their family or their property. In assessing the severity of the duress, consideration will be given to gender, age, condition, health, temperament of the person and all other circumstances that may influence the severity thereof.

Likewise, duress exercised by a third party vitiates the legal business if the beneficiary party was or should have been aware of it, and such party will be jointly and severally liable with the third party for losses and damages.

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8. State of danger

The state of danger occurs when someone, pressured by the need to save themselves or a person of their family from serious harm, known to the other party, assumes excessively onerous obligation. An example of this case is the person who comes to an important private hospital with their father, the victim of a stray bullet, and the hospital makes them sign a million brazilian reais check as a guarantee to save their father. The hospital wants to charge an amount absolutely incompatible with the person's income capacity.

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9. Lesion

Lesion occurs when a person, under urgent need, or by inexperience, is obliged to provide a manifestly disproportionate benefit to the value of the opposite provision. For example, an unemployed worker who is hired to build a house containing a bedroom, living room, kitchen, and bathroom, and in return receives only a meal and a payment of BRL 500.00. Due to their situation of need resulting from the unemployment, the professional accepts such condition.

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10. Fraud Upon Creditors

The business of free transfer of assets or remission (forgiveness) of debt, if practiced by the already insolvent debtor that render them insolvent (state of the debtor who is without resources, financial or patrimonial, to pay off the obligations contracted), even if he is not aware of it, they may be canceled by the unsecured creditors (those whose credit is documented by a written instrument, but which does not have any real guarantee, such as mortgages or pawns), as damaging to their rights.

However, the unsecured creditor who receives payment from the insolvent debtor of the debt not yet expired will be obliged to replace what was received, for the benefit of the remaining assets on which collective insolvency proceedings have to be held.

Onerous contracts carried out by the insolvent debtor shall also be canceled where insolvency is notorious or there is reason to be known by the other contracting party.

On the one hand, the guarantees of debts that the insolvent debtor has given to a creditor are presumed to be fraudulent in relation to the rights of other creditors. On the other hand, they are presumed in good faith and are worth the ordinary business indispensable to the maintenance of a market, rural or industrial establishment, or to the subsistence of the debtor and their family.

When fraudulent business is canceled, the resulting advantage will benefit from the remaining assets on which the collective insolvency proceedings have to be held. The acquirer, in order to retain the acquired goods, may deposit the price corresponding to its real value.

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11. Invalidity of Legal Business

Legal business is null when:

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1. Celebrated by an absolutely incapable person;

2. Its object is unlawful, impossible, or indeterminable;

3. The determining reason common to both parties is unlawful;

4. Does not take the form prescribed by law;

5. Any solemnity which the law considers essential for its validity is omitted;

6. Aims to defraud imperative law;

7. The law definitively declare it null or prohibit its practice, without imposing a sanction.

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With respect to the simulated legal business, it will be null, but it will stand what has been concealed if it is valid in substance and form, and the nullity must be pronounced by the judge. For instance, a simulated legal business is considered when:

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1. It appears to confer or transmit rights to people other than those to which they are actually conferred or transmitted;

2. It contains a statement, confession, condition, or non-true clause;

3. The particular instruments are pre-dated or post-dated.

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It is important to point out that the rights of third parties in good faith are protected in the face of the parties to the simulated legal business.

In addition to the cases expressly stated in the law, the legal business is voidable:

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1. Due to the relative incapacity of the agent;

2. Due to addiction resulting from error, deceit, duress, state of danger, lesion, or fraud upon creditors.

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Voidability has no effect before being judged by sentence, nor is it declared on its own and takes advantage exclusively of those who claim it, except in cases of solidarity or indivisibility. The peremptive period to claim voidability is four years, counted as follows:

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However, when the law provides that a certain act is voidable, without establishing a deadline for requesting the annulment, the period shall be two years from the date of completion of the act.

An extremely relevant aspect of the law is that a minor, between sixteen and eighteen years old, cannot, in order to escape an obligation, invoke their age if they intentionally concealed it when questioned by the other party, or if, in the act of obliging, they declared themselves to be of age.

While the null legal business is not subject to confirmation nor does it convalesce over time, the voidable business can be confirmed by the parties. The confirmation must contain the substance of the business concluded and the express will to maintain it, except for the right of a third party.

Finally, respecting the intention of the parties, the partial invalidity of a legal business shall not harm the valid part, if it is separable. Moreover, the invalidity of the principal obligation implies the invalidity of accessory obligations, but the invalidity of these obligations does not induce the invalidity of the principal obligation.