Newsletter I Portugal
1" Quarter 2018
> Manufacturer and Distributor
> National Legislation
> National Case Law
I. Manufacturer and Distributor Warranties
In order to assess the legal framework applicable to a particular sale of goods, a distinction
must be made between the cases where a product is sold directly by the manufacturer or
distributor to a consumer (as defined in Decree-Law 67 /2003 of April 8, on the sale of
Consumer Products and their respective Warranties, "Consumer Warranty Law")
(hereinafter a "82(" transaction) and the ones where the product is sold to non-consumers
or professionals (hereinafter a "828" transaction).
Under the Consumer Warranty Law, consumer means any person to whom goods, services
or any rights are supplied to, and which are intended for non-professional use, by an entity
pursuing an economic activity with the purpose of obtaining economic benefits.
The Consumer Warranty Law is directly applicable to 82C transactions and is indirectly
applicable to 828 transactions, due to the fact that manufacturers and distributors of a
certain product are jointly and severally liable for the products sold and the consumer may
directly trigger the manufacturer's liability for any defects of a product acquired from a
Under the Consumer Warranty Law, consumers benefit, as a rule, from a 2 (two) year
warranty which must be triggered within 2 (two) months upon the acknowledgement of the
respective defect. After triggering the warranty, the consumer has an additional 2 (two) year
period to exercise its rights, i.e. to begin a potential court proceeding in case the
manufacturer or distributor has not complied with the warranty terms.
When a consumer triggers the liability for a defective product, it has the right to request:
> The repair of the defective product (from the manufacturer or from a distributor);
> The substitution of the defective product (from the manufacturer or from a distributor);
> An adequate price reduction (from the distributor);
> The termination of the purchase and sale agreement (from the distributor); and/or
> An indemnity for any damages caused by the defective product (from the manufacturer
or from a distributor).
Case law states that the consumer is free to choose the preferred remedy to the extent that
the chosen remedy is not deemed abusive or disproportionate, taking into account the
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It may occur that the manufacturer or a distributor grants a superior warranty period,
deviating from the scope of the legal warranties, which are mandatory, by granting voluntary
warranties instead, which are governed by the terms and conditions under which they were
agreed upon, provided that they do not restrict the rights of consumers under the Consumer
The Portuguese Commercial Code (the "ComC") is the general law applicable to 828
transactions and the Portuguese Civil Code (the "CC") is subsidiarily applied whenever
certain matters are not covered in the Com(.
I.II.I Sale of Defective Products
Article 913 of the CC states that the purchaser of a defective product has the right to
demand from the manufacturer or distributor:
> The repair of a defective product;
> The substitution of a defective product; and/or
> An indemnity for any damages caused by the defective product;
unless the manufacturer or distributor is not aware of such defect, without fault.
Under article 916 of the CC, the purchaser benefits, as a rule, of a warranty period of 6 (six)
months, which must be triggered within 30 (thirty) days upon the acknowledgement of the
respective defect. After triggering the warranty, the consumer has an additional 6 (six)
month period to exercise its rights, i.e. to begin a potential court proceeding in case the
manufacturer or distributor has not complied with the warranty terms.
Without prejudice, it is important to point out that there is case law defending that the
applicable notification period is in fact the 8 (eight) day period set out in the Come
whenever the sale and purchase of a product is qualified as:
> An objectively commercial transaction (for example the purchase of a product for the
purposes of resale), as opposed to a transaction which is not objectively commercial as
defined in the Com( (for example, when incorporating a company, a product is used by
the purchaser for the performance of the activities of the incorporated company); or
> A subjectively commercial transaction, whenever one or both parties are merchants and
the transaction is not (already) objectively commercial.
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I.II.II Performance Warranty
Article 921 of the CC establishes the legal framework applicable to Performance Warranties,
which may be granted by the manufacturer or distributor voluntarily or mandatory under
applicable conventions (usos). Performance Warranties guarantee the good performance of
a certain product and grant the purchaser the right to demand the replacement or
substitution of such product whenever necessary, irrespective of any fault of the
manufacturer or distributor or, inclusively, erroneous acquisition by the purchaser.
Contractual freedom prevails when setting the Performance Warranty period, except when
such period is dictated by applicable conventions (usos). Whenever there are no applicable
conventions (usos) and no warranty period has been contractually established, the CC sets
forth a 6 (six) month warranty period which must be triggered within 30 days of the
acknowledgment of the product's defect. After triggering the warranty, the purchaser has an
additional 6 (six) month period to exercise its rights, i.e. to begin a potential court
proceeding in case the manufacturer or distributor has not voluntarily complied with the
It is widely debated whether the current technological society has the expectation, and as
such originating an applicable convention (uso) in this respect, that any commercialized
product benefits from a Performance Warranty granted by the manufacturer or distributor,
given that the performance of the products is presented as indispensable to any purchaser.
Although no case law that supports this position has been found, the truth is that most
manufacturers voluntarily grant Performance Warranties as a commercial strategy with the
intention of acquiring and retaining costumers. Nevertheless, even if no Performance
Warranty has been granted, manufacturers remain liable for defective products under the
framework of article 913 of the CC (described above) and of the Consumer Warranty Law, as
described in I.I above. Even though the framework of the CC is also applicable to 82C
transactions, the significantly more favorable framework of the Consumer Warranty law
leads to consumers not having to resort to this framework.
I.II.Ill Suspension and Renewal of Warranty Periods in case of substitution
The Consumer Warranty Law expressly states that the warranty period is suspended for the
period during which a product is being repaired or replaced with a new product, the replaced
product benefiting from a new 2 (two) year warranty period. On the other hand, the CC does
not expressly or implicitly state analog provisions for 828 transactions.
Notwithstanding the absence of case law that supports the analogical application of these
Consumer Warranty Law provisions to 828 transactions, it may not be excluded that courts
decide accordingly, irrespective of this fact (within the respective legally established
periods), invoking, namely, but not limited to, individually or jointly, some of the following
> Analogical application of the Consumer Warranty Law to 828 transactions, which was
enacted at a later stage and interprets and expands the existing legal framework of the
CC in respect of consumers;
> Actualistic interpretation of article 913 and 916 of the CC, which explicitly refer to the
"delivered product" which may include any product, namely and inclusively, the
substitution product; and
> Application of the principle of good faith;
In addition, it may not be excluded that the courts apply the same arguments as above in
respect of a Performance Warranty granted under mandatory applicable conventions (usos).
Even if the warranty is contractually and voluntarily granted by the manufacturer or
distributor, it should not be disregarded that the courts may apply these arguments so as to
avoid uncertainty in the market concerning the scope of such warranties.
11. National Legislation
Law no. 3/2018 - Portuguese Official Gazette no. 29/2018, Series I of2018-02-09
Defines the sanctioning system applicable to the development of crowdfunding activities
and proceeds to the first amendment to the Law no.102/2015, of August 24, which
approves the crowdfunding legal framework.
Law no. 6/2018 - Portuguese Official Gazette no. 38/2018, Series I of2018-02-22
Approves the statute for the company recovery mediator, the person entrusted to provide
assistance to a debtor company that is in a difficult economic situation or insolvent, namely
in negotiations with its creditors with the intention of reaching an extra judicial restructuring
agreement for its recovery.
Law no. 7 /2018 - Portuguese Official Gazette no. 44/2018, Series I of 2018-03-02
Introduces the possibility of
strategies implementation, i.e., the acquisition of
credits over the company in order for its future conversion into share capital, allowing the
creditors to acquire shares of the debtor company.
Law no. 8/2018 - Portuguese Official Gazette no. 44/2018, Series I of2018-03-02
This framework is comprised within the Programa Capitalizar (Capitalize Program), and
intends to allow entities that are in a difficult economic situation or insolvent to negotiate
with its creditors a restructuring agreement, with a free content and as a rule confidential, in
order to ensure its economic recovery.
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Decree-Law no.17 /2018 - Portuguese Official Gazette no. 48/2018, Series I of 2018-03-08
Establishes the framework for the access and development of travelling agencies and
tourism activities, transposing Directive (EU) 2015/2302.
Warning no.1989/2018 - Portuguese Official Gazette no. 31/2018, Series II of 2018-02-13
Publicizing of the Supplementary Rate for Late Payment Penalties, in effect for the first
semester of 2018.
Resolution of the Parlament no. 42/2018 - Portuguese Official Gazette no. 33/2018, Series
Recommends the Government to materialize a program of de-burocratization and support
to micro, small and medium companies.
Normative Dispatch no. 4/2018 - Portuguese Official Gazette no. 24/2018, Series II of
Defines, according to what is provided in subparagraph c) of article 60 no. 2 and article 89 no.
4 of the Law no. 23/2007, of July 4, the regulation of the «Startup Visa,> program, which
consists in the accommodation of immigrants who intend to undertake and innovate in
Portugal, in order to grant respective residence visas or residence authorizations, even if
they have not incorporated a company in national territory or if, having the company been
created in the origin country, want to implant themselves in our country.
Regulation no. 6/2018 - Portuguese Official Gazette no. 4/2018, Series I of 2018-01-05
Approval by the Board of Directors of ANACOM of the Regulation regarding the registry of
companies that offer networks and electronic communications services.
111. Case Law
Court of Appeal of Porto, Decision of 24 Jan. 2018, Process 874/10
Assuming the social resolutions the nature of a legal act, "any interested party" pursuant to
the terms determined in article 286 of the Civil Code may argue the nullity that it may suffer.
The legitimized subject shall have a direct interest in the nulllty and not a reflex, vague and
For this reason, the seizured share depositary lacks material lawfulness for the invocation of
the nullity that a company resolution allegedly suffers, given that, being a mere holder of
securities in the name of another, is not directly targeted in its judicial sphere by that
Court of Appeal of Porto, Decision of 24 Jan. 2018, Process 29987 /15
As a rule, by granting real or personal guarantees to other companies, the granting company
enforces acts contrary to the purpose for which it was incorporated, resulting in the nullity
of such acts, except
two situations occur: the existence of a "justified self-interest of the
granting company", or the existence of a "control or group relationship".
The obligation of the guarantor is independent and separate of the obligation of the
guaranteed, remaining even if the latter is declared null, for any reason that is not a formal
one, being the obligation several with the one of the guaranteed, not benefiting from the
previous excuse benefit.
Court of Appeal of Lisbon, Decision of 1 Feb. 2018, Process 346/15
The company that sells perfumes, comparing them to others of famous brands, establishing
a comparison list between each of its own perfumes and other of a large brand, invoking
similarities, and selling its perfumes at a significant inferior cost, on a low cost business
model, is in breach of the law.
The main reason for this unlawfulness is in the fact that a company that launches an original
perfume has to spend thousands of euros not only in production but in all promotion works
to introduce the product in the market - such as advertising videos, newspaper and
magazine commercials, billboards in public places etc. - and the low cost company takes
advantage of the prestige achieved by the new perfume in the market, fabricating its own
perfume with some similar qualities and presenting them in its shops as a replica, a "generic",
a product with a lesser concentration that may reach a tenth of the price of the original
Court of Appeal of Guimaraes, Decision of 18 Jan. 2018, Process Sn8/15
The nullity of a social resolution is called upon at all times by any interested and may be
declared on its own motion. On the other hand, the annulment of the social resolution may
only be argued by the supervising body or by any shareholder that has not voted in the
defeated direction nor subsequently approved the resolution.
In the cases that the quota is integrated in an estate, the heirs have to exercise the inherent
rights to the quota through a common representative, not being able to do it jointly, given
that the joint exercise would bring inconveniences to the management of the company, in
the commercial world, where speed, streamlining and simplification are key.
Following this, mere co-owners of a quota inserted in an estate in abeyance tack the powers
to, by themselves, even if jointly (and without common representative) exercise the rights of
the shareholders, and therefore are also lacking legitimacy for the deduction of the
annulment action of the social resolution.
Court of Appeal of Coimbra, Decision of 27 Feb. 2018, Process 1744/15
If the parties do not establish termination causes in the commercial concession agreement,
besides a style and generic reference to the law, since this agreement is atypical, in what it is
silent, the framework of the referred commercial concession agreement has to be found, by
analogy, in the legal framework that regulates the agency agreement, namely in matters of
The party that intends to terminate the agreement shall proceed to a written extrajudicial
statement within the period of 1 (one) month after the acknowledgement of the justifiable
facts with determination of the grounded reasons for the termination. Therefore, for this
reason, it may not do it through a request to the court so that it be it to declare said
Court of Appeal of Evora, Decision of 22 Feb. 2018, Process 5019/15
Given its notarial nature, i.e., which results and exhausts itself in the credit note, it is not the
fact that the subscribers of the endorsement having left, in the meantime, the company in
which they were shareholders, that opposes the effectiveness granted by the law to the
Court of Appeal of Evora, Decision of 8 Mar. 2018, Process 3271/15
It is envisaged as a joint venture the written agreement executed between two companies
that dedicate themselves to real estate investment, that has as a purpose the acquisition by
both of them, in equal parts, of a particular unit aggregated in an insolvency procedure.
If that unit end up being purchased by a third-party, the purpose inherent to the joint
venture is unable, extinguishing it.
With the extinction of the agreement, the company to whom was delivered the amount
destined for the payment of half the price for the acqurslnon of the unit stops having
grounds to keep that amount in its possession, having to return it.
Cuatrecasas, Gorn;:alves Pereira &
Sociedade de Advogados, SP, RL
Sooedade proftssronal de responsabrhdade hrmtada
Praca Marques de Pombal. 2 (e 1-8°) 1250-160 Lrsboe Portugal
T cl. (351) 21355 3800 Fax (351) 21 353 2362
Avcnida da Boavista. 3265 5.1 4100 137 Porto Portugal
Tel. (351) 22 616 6920 Fax (351) 22 616 6949
For additional information on the contents of this document, please contact Cuatrecasas.
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