The coronavirus crisis has had a series of impacts on economic life, disrupting global supply chains and shutting down a whole raft of services. As a result, many people are having problems honoring their commitments and complying with their contracts, explains Professor Mariana Pargendler of the FGV´s Sao Paulo Law School.

She was the moderator and participant at the first webinar in a series called “Law and the Coronavirus Crisis – The Legal System’s Contribution to Fighting the Pandemic and Measures to Overcome Its Economic and Social Effects,” organized by the FGV Sao Paulo and Rio de Janeiro law schools. The event’s participants also included Ary Oswaldo Mattos Filho, a senior professor at the FGV´s Sao Paulo Law School and former director of the Brazilian Securities and Exchange Commission (CVM); and Luciano Godoy, a former federal judge and lawyer, and currently a professor at the FGV´s Sao Paulo Law School.

“The consequences of the novel coronavirus pandemic are affecting Brazil and the world in an unparalleled way. I believe we will have to work with prevailing norms and rules, but they need to be adapted in line with this global event. Contractual good faith, the identification of economic foundations at the time contracts are signed and their rebalancing due to force majeure will be points to be debated by economic players. Disputes will be settled by courts and arbitration chambers, which will help us bridge the crisis. Ultimately, I believe that mediation will be one of the most appropriate solutions following the pandemic,” Luciano Godoy said.

Ary Oswaldo Mattos Filho said that we are faced with a new legal situation. “We are experiencing a crisis completely unlike any other. The crisis of 2008 was a banking crisis but this is a general crisis, meaning one that affects the whole chain. The example of the fashion industry provides a good illustration of this moment, because when the sector’s companies display their products, they make financial commitments to produce and they expect to meet these commitments using part of the profit made from selling goods. I am not sure whether our existing legal structure is prepared to deal with new kinds of lawsuits that will arise from contract terminations during the pandemic,” he explained.

On Thursday, April 30, the second debate in the “Law and the Coronavirus Crisis” series will take place. The topic will be “Provisional Decrees Regarding the Right to Work.” The moderator will be Professor Paulo Sergio João of the FGV´s São Paulo Law School, while the debaters will be Daniela Brandão of the FGV´s Rio de Janeiro Law School and Marcos Fava of the FGV´s Sao Paulo Law School.