Contract provisions

Types of contract

Describe the various types of private banking and wealth management contracts and their main features.

Private banking and wealth management contracts are not specifically regulated by local legislation. Therefore, they may typically assume the form of investment advisory agreements, bank account agreements and asset management agreements.

Brazilian law provides, as a general rule, that obligations arising from acts of the parties are governed by the law of the country in which they are created. Nevertheless, the parties are generally free to choose another law to govern their relationship, to the extent that such choice of law does not violate Brazilian national sovereignty, public policy or good morals. For example, local courts could consider the choice of law clause null and void if they understand that the Brazilian Consumer Protection Code should govern the relationship.

Liability standard

What is the liability standard provided for by law? Can it be varied by contract and what is the customary negotiated liability standard in your jurisdiction?

Under Brazilian law, the general liability standard of individuals and entity depends on the evidence of: that the act or omission has been carried out negligently or maliciously; a loss actually suffered by a third party; and the causal relation between such act or omission and the actual losses suffered by the third party and its extension.

The burden of proof shall fall upon the victim of the loss, who must evidence the relation between the fact and the damage suffered. Nevertheless, the burden of proof is inverted in the case of a consumer relationship, thus falling upon the alleged party at fault.

Provided the contract is not governed by the Brazilian Consumer Protection Code, parties may generally be free to vary the liability standards by contract.

Mandatory legal provisions

Are any mandatory provisions imposed by law or regulation in private banking or wealth management contracts? Are there any mandatory requirements for any disclosure, notice, form or content of any of the private banking contract documentation?

There are no mandatory provisions imposed by law or regulation with regard to private banking and wealth management contracts. These contracts may, however, be affected by sparse regulations from the Central Bank of Brazil applicable to banking contracts in general.

Limitation period

What is the applicable limitation period for claims under a private banking or wealth management contract? Can the limitation period be varied contractually? How can the limitation period be tolled or waived?

The statute of limitations for civil liability for claims in connection with contracts, in general, is three years. This period cannot be varied contractually or waived.

Law stated date

Correct on

Give the date on which the information above is accurate.

3 July 2020.