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Understanding unfair terms in contracts

December 11, 2025
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One of the main reasons for seeking a attorney, when faced with a contract that will generate rights and obligations for the parties, is to seek the best advice to avoid various pitfalls, among them, the dreaded unfair terms, which can cause numerous problems for one of the contracting parties.

Definition of Unfair Term

But what is an unfair term?

An unfair term is a contractual provision that places one of the parties at an excessive or disproportionate disadvantage, contrary to the principles of good faith, equity and contractual balance.

It is important to highlight that unfair terms are most frequently seen in standard form contracts — a type of contract concluded by two parties, in which the rights, duties and conditions are established by the proponent, the adherent being unable to discuss or modify its content or being able to exercise this power only in a very limited way — and in consumer relations, where one of the parties, usually the consumer, has less negotiating power.

For a term to be considered unfair, it must:

  1. Contravene the principles of good faith and balance in contractual relationships.
  2. Impose an unreasonable disadvantage on one of the parties, especially on the consumer.
  3. Restrict fundamental rights, such as waiving legal guarantees or imposing disproportionate conditions.

•Who determines whether a Terms is Unfair?

The identification of an unfair term is not automatic and depends on a joint analysis of the context of the contract, the negotiation conditions and the parties involved.

Who can determine that a clause is abusive:

  1. A Judge: In the event of a legal dispute, a judge will analyze the contract and decide whether a term is unfair, based on current legislation and general principles of law, such as, for example, objective good faith and contractual balance. When declaring the nullity of an unfair term, the judge must maintain the other provisions of the contract valid, whenever possible.
  2. The Contracting Party: Although the judge is the final authority to declare a term unfair, the injured party (usually the consumer) can identify a potentially unfair term and request its review or annulment, either through a direct complaint to the supplier or through the courts. It is true that the contracting parties may also, before a legal dispute is instituted, negotiate the removal or modification of unfair terms.
  3. Consumer Protection Agencies: Entities such as Brazil’s Consumer Protection Office (PROCON) or the Brazilian Consumer Secretariat (SENACON) can also identify unfair terms in adhesion contracts and intervene to protect consumer rights, and may apply administrative sanctions to suppliers of goods or services that use such terms.

However, if there is a divergence of understanding, the judge ends up being the one who has the power to judge and declare a term as unfair in a legal proceeding.

Legal Basis for Identifying and Combating of Unfair Terms in Consumer Relations

The legal basis for identifying and canceling unfair terms in Brazil is found mainly in the Brazilian Consumer Protection Code (CDC), Law #8,078/1990.

The main provisions to help combat unfair terms are found in Articles 6, 39, 46, and 47 of the CDC, as set out below:

                                                                                                                                                                                                                       
               

                   Article                

           		               

                   Description                

           
               

                   6                

           		               

                   Article 6. The basic    rights of the consumer are:                

               

                   I – protection of    life, health, and safety against risks                    caused by practices in the supply of    products and                    services considered dangerous or harmful;                

               

                   II – education and    dissemination on the appropriate                    consumption of products and services,    ensuring freedom of                    choice and equality in hiring;                

               

                   III – adequate and    clear information about the different                    products and services, with correct    specification of                    quantity, characteristics, composition, quality, applicable                    taxes, and price, as well as the risks they present;                

               

                   IV – protection    against misleading and abusive                    advertising, coercive or unfair commercial    methods, as                    well as against unfair or imposed practices and terms in the                    supply of products and services;                

               

                   V – modification of    contractual terms that establish                    disproportionate payments or their review    due to                    supervening facts that make them excessively onerous;                

               

                   VI – effective    prevention and repair of patrimonial and                    moral damages, individual,    collective and diffuse;                

               

                   VII – access to    judicial and administrative bodies with a                    view to preventing or repairing    patrimonial and moral                    damages, whether individual, collective or diffuse,                    ensuring legal, administrative and technical protection to                    those in need;                

               

                   VIII – having the    defense of their rights facilitated,                    including the reversal of the burden of    proof in their                    favor in civil proceedings, when, at the judge's discretion,                    the allegation is plausible or when they are at a                    disadvantage, according to    the ordinary rules of                    experience;                

               

                   IX – (Vetoed);                

               

                   X – the adequate and    effective provision of public                    services in general;                

               

                   XI – the guarantee of    responsible credit practices,                    financial education and prevention and    treatment of                    over-indebtedness situations, preserving the existential                    minimum, in accordance with the regulations, through debt                    review and    renegotiation, among other measures;                

               

                   XII – preservation of    the existential minimum, in                    accordance with the regulations, in the    renegotiation of                    debts and in the granting of credit;                

               

                   XIII – information    about the prices of products per unit                    of measurement, such as per kilo, per    liter, per meter,                    or per other unit, as applicable.                

           
               

                   39                

           		               

                   Article 39. Suppliers    of products or services are                    prohibited from, among other abusive practices:                

               

                   I – conditioning the    supply of a product or service on                    the supply of another product or service,    as well as,                    without legitimate cause, on quantitative limits;                

               

                   II – refusing to meet    consumer demands, to the exact                    extent of their stock availability, and also    in                    accordance with customs and practices;                

               

                   III – sending or    deliver to the consumer, without prior                    request, any product, or providing any    service;                

               

                   IV – taking advantage    of the consumer's weakness or                    ignorance, taking into account their age,    health,                    knowledge or social status, to impose their products or                    services on    them;                

               

                   V – demanding a    manifestly excessive advantage from the                    consumer;                

               

                   VI – performing    services without prior preparation of a                    budget and express authorization from    the consumer,                    except for those arising from previous practices between the                    parties;                

               

                   VII – passing on    derogatory information, referring to an                    act carried out by the consumer in    the exercise of their                    rights;                

               

                   VIII – placing on the    consumer market any product or                    service that does not comply with the    standards issued by                    the competent official bodies or, if specific standards                    do not exist, by the Brazilian Association of Technical                    Standards (ABNT) or    another entity accredited by the                    National Council of Metrology,    Standardization and                    Industrial Quality (Conmetro);                

               

                   IX – refusing to sell    goods or provide services directly                    to anyone willing to purchase them in    exchange for                    immediate payment, except in cases of intermediation                    regulated    by special laws;                

               

                   X – raising the price    of products or services without                    legitimate cause;                

               

                   XI – Device included    by                                            MPV #1,890-67, of 10/22/1999                                        , transformed into item XIII, when converted into                                            Law #9,870, of November 23, 1999                                        ;                

               

                   XII – failing to    stipulate a deadline for fulfilling its                    obligation or leaving the    determination of its initial                    term to its sole discretion;                

               

                   XIII – applying a    formula or adjustment index other than                    that legally or contractually    established;                

               

                   XIV – allowing entry    into commercial or service                    establishments of a greater number of consumers    than that                    set by the administrative authority as the maximum.                

           
               

                   46                

           		               

                   Contracts regulating    consumer relations shall not be                    binding on consumers if they are not given    the                    opportunity to become aware of their content in advance, or                    if the    respective instruments are drafted in such a way                    as to make it difficult to    understand their meaning and                    scope.                

           
               

                   47                

           		               

                   Contractual clauses    will be interpreted in a manner that                    is most favorable to the consumer.                

           

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On the other hand, Article 51 of the CDC lists the types of clauses that would be considered abusive:

                                                                                               
               

                   Article                

           		               

                   Description                

           
               

                   51                

           		               

                   Article 51. The    contractual clauses, among others,                    relating to the supply of products and    services are null                    and void if they:                

               

                   I – make it    impossible, exempt or mitigate the supplier’s                    liability for defects of any    nature in the products and                    services or imply waiver or disposal of rights. In                    consumer relations between the supplier and the legal entity                    consumer,    compensation may be limited, in justifiable                    situations;                

               

                   II – remove from the    consumer the option of reimbursement                    of the amount already paid, in the cases    provided for in                    the present code;                

               

                   III – transfer    responsibilities to third parties;                

               

                   IV – establish    obligations considered unfair, abusive,                    which place the consumer at an    exaggerated disadvantage,                    or are incompatible with good faith or equity;                

               

                   V – (Vetoed);                

               

                   VI – establish a    reversal of the burden of proof to the                    detriment of the consumer;                

               

                   VII – determine the    compulsory use of arbitration;                

               

                   VIII – impose a    representative to conclude or carry out                    another legal transaction on behalf    of the consumer;                

               

                   IX – give the    supplier the option of concluding the                    contract or not, although obliging the    consumer;                

               

                   X – allow the    supplier, directly or indirectly, to vary                    the price unilaterally;                

               

                   XI – authorize the    supplier to cancel the contract                    unilaterally, without the same right being    granted to the                    consumer;                

               

                   XII – oblige the    consumer to reimburse the costs of                    collecting their obligation, without the    same right being                    granted to them against the supplier;                

               

                   XIII – authorize the    supplier to unilaterally modify the                    content or quality of the contract, after    its conclusion;                

               

                   XIV – violate or    enable the violation of environmental                    standards;                

               

                   XV – are in disagreement    with the consumer protection                    system;                

               

                   XVI – allow for the    waiver of the right to compensation                    for necessary improvements.                

               

                   XVII – condition or    limit in any way access to the bodies                    of the Judiciary;                

               

                   XVIII – establish    grace periods in the event of late                    payment of monthly payments or prevent the    full                    reestablishment of the consumer's rights and means of                    payment after the    default is cleared or an agreement is                    reached with creditors;                

               

                   XIX – (VETOED).                

           

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Legal Basis for Combating Unfair Terms in Contracts in General

Although unfair terms are initially associated with consumer relations (at least because the Consumer Protection Code is the only Brazilian law that contains a list of unfair terms, thus named, as described above), there are other contracts of different natures that present excessively disproportionate clauses, which can be even considered leonine, as they harm the contractual balance between the contracting parties.

Law #10,406/2022, better known as the Brazilian Civil Code, addresses the issue of unfair terms and contractual balance in several articles, which can be applied to contracts in general, including those that do not involve consumer relations or even consumers, but civil or commercial relations, involving individuals or legal entities. The following articles must be carefully observed by those responsible for analyzing a contractual instrument:

                                                                                                                                                                                                                                                                                                                                               
               

                   Article                

           		               

                   Description                

           
               

                   187                

           		               

                   Also committing an    illicit act is the holder of a right                    who, in exercising it, manifestly    exceeds the limits                    imposed by its economic or social purpose, by good faith                    or by good customs.                

           
               

                   421                

           		               

                   Contractual freedom    will be exercised within the                    boundaries of the social function of the    contract.                

           
               

                   421-A                

           		               

                   Civil and business    contracts are presumed to be equal and                    symmetrical until the presence of    concrete elements that                    justify the departure from this presumption, except    for                    the legal regimes provided for in special laws, also                    ensuring that:                

               

                   I – the negotiating    parties may establish objective                    parameters for the interpretation of the    negotiating                    clauses and their assumptions for review or resolution;                

               

                   II – the allocation    of risks defined by the parties must                    be respected and observed; and                

               

                   III – contractual    review will only occur in an                    exceptional and limited manner.                

           
               

                   422                

           		               

                   Contractors are    obliged to keep, both in the conclusion                    of the contract and in its    performance, the principles of                    honesty and good faith.                

           
               

                   423                

           		               

                   When there are    ambiguous or contradictory clauses in the                    adhesion contract, the    interpretation most favorable to                    the adherent must be adopted.                

           
               

                   424                

           		               

                   In adhesion    contracts, terms that stipulate the early                    waiver by the adherent of a right    resulting from the                    nature of the business are null and void.                

           
               

                   478                

           		               

                   In contracts with    continuous or deferred performance, if                    the obligation of one of the parties    becomes excessively                    onerous, with extreme advantage for the other, due to                    extraordinary and unpredictable events, the debtor may                    request the    termination of the contract. The effects of                    the decision will be retroactive    to the date of service.                

           

‍

Legal Basis for Combating Unfair Terms in Free Competition

Another extremely important source for combating unfair terms, especially in contracts whose nature impacts free competition, is Article 36 of Law #12,529/2013, also known as the Antitrust Law, which defines as economic infractions, regardless of fault, acts in any form manifested, which have as their object or may produce the following effects, even if they are not achieved:

1. limit, distort or in any way harm free competition or free enterprise;

2. dominate the relevant market for goods or services;

3. arbitrarily increase profits; and

4. abusively exercise a dominant position.

Furthermore, the aforementioned legal provision lists the conduct that characterizes an infraction of the economic order, making it clear that if any other conduct characterizes one of the conditions described above, it will also be considered an infraction of the economic order:

1. agree, combine, manipulate or adjust with a competitor, in any form:

a) the prices of goods or services offered individually;

b) the production or marketing of a restricted or limited quantity of goods or the provision of a restricted or limited number, volume or frequency of services;

c) the division of parts or segments of a current or potential market for goods or services, by means of, among others, the distribution of customers, suppliers, regions or periods;

d) prices, conditions, advantages or abstention in public bidding;

2. promote, obtain or influence the adoption of uniform or concerted commercial conduct among competitors;

3. limit or prevent new companies from accessing the market;

4. create difficulties in the establishment, operation or development of a competing company or supplier, purchaser or financier of goods or services;

5. prevent competitors from accessing sources of inputs, raw materials, equipment or technology, as well as distribution channels;

6. demand or grant exclusivity for the dissemination of advertising in the mass media;

7. use deceptive means to cause third party prices to fluctuate;

8. regulate markets for goods or services, establishing agreements to limit or control research and technological development, the production of goods or the provision of services, or to hinder investments intended for the production of goods or services or their distribution;

9. impose, in the trade of goods or services, on distributors, retailers and representatives resale prices, discounts, payment terms, minimum or maximum quantities, profit margin or any other marketing conditions relating to their business with third parties;

10. discriminate against purchasers or suppliers of goods or services by means of differentiated pricing or operating conditions for the sale or provision of services;

11. refuse to sell goods or provide services, within the payment conditions normal to commercial customs and practices;

12. hinder or interrupt the continuity or development of indefinite-term commercial relations due to the other party's refusal to submit to unjustifiable or anti-competitive commercial clauses and conditions;

13. destroy, render useless or hoard raw materials, intermediate or finished products, as well as destroy, render useless or hinder the operation of equipment intended to produce, distribute or transport them;

14. hoard or prevent the exploitation of industrial or intellectual property rights or technology;

15. sell goods or providing services unjustifiably below cost price;

16. retain production or consumer goods, except to ensure coverage of production costs;

17. partially or totally cease the company's activities without proven legitimate cause;  

18. making the sale of a good subject to the acquisition of another or the use of a service, or making the provision of a service subject to the use of another or the acquisition of a good; and

19. the abusive exercise or exploitation of industrial, intellectual, technology or trademark property rights.

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What to do when faced with Unfair Terms?

When faced with unfair terms, it is recommended that the contracting party adopt the following measures:

1. Seek an amicable solution with the other contracting party, already taking a suggestion to modify the aforementioned clause, in order to seek contractual balance;

2. If the first step is unsuccessful and it is a consumer relationship, it is recommended that consumer protection and defense entities be sought;

3. If the second step is unsuccessful or if it is not a consumer relationship, it is recommended that the injured party seeks to defend their rights before the judiciary, so that the unfair term in question can be declared null and void by the judge.

It is important to remember that, if the unfair term is declared null and void, the remainder of the contract, as a rule, remains in full force; unless such clause is essential to its nature.

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