Preferential Pact - Scheme

1st Notion of preference pact

Convention by which someone (the obligated party to the preference) assumes the obligation to, in the case of
decide to hire, choose someone else (the preferred one) as the contractor, provided that this person offers him
the same conditions negotiated with a third party. Corresponds, just like the promise contract, to a
preliminary/preparatory contract.

2nd Identify whether the preference is:

Legal: preference arises from the law (granted to certain holders of real or personal rights of
joy; e.g.: the tenant has the right of first refusal in the sale of the leased property;
co-owner, etc.) - legal preferences. In this case, preference always has effect.
real, allowing those who enjoy it to exercise their right of preference, even in the face of
the third purchaser. As for everything else, it is governed by this scheme (by the general rules)
do PP).
Conventional: the parties entered into the agreement of their free will.

3rd. Is there a preference?

It depends on the contract in question. Regarding which contracts is there preference? Articles
414ºC and 423ºC.
The law expressly refers to cases of right of first refusal, but the right of first refusal
it is a more general figure, admitting article 423 equally to the assumption (to assume; subjection) of
obligation of preference in relation to other contracts, typically, onerous contracts, that do not
they have the appearance of intuitu personae (personal nature of the contract).
There is no preference regarding donations and marriages, for example.

4th Characteristics
Unilateral/Monolithic: only the obligated party is bound, only the obligated party to
preference assumes an obligation, leaving the other party (the holder of the preference) free from
to exercise or not your right.
Conditional: the contract is subject to the suspensive condition of the one who promises to
preference if you decide to sell.

4º Forma (só se aplica a preferência convencionais)

Form: article 415; 410/2 and 219.

Form of a preliminary agreement regarding a property: as the final contract requires written form.
(875th), then the provision of 410th/2 is verified. Thus, the form of the PP is a document.
signed by thank you for the preference1.

NOTE: article 410/3 never applies to the PP.

In the case of reciprocal preferences, these necessarily fall on different objects, so we will have two
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preference agreements. If they are included in the same document and a special form is required, both must sign. But the
the lack of signature of one does not affect the constitution of the obligation of the other.
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 PP related to a movable asset or movable subject to registration: the definitive contract enjoys
freedom of form (article 219(+205/2)), so article 410/2 does not apply. Thus, it applies to the
principle of freedom of form.

5th Distinction between right of first refusal and promise contract - when the case raises the issue

Promise contract: it must define the content of the promised contract (the clauses);
Preference pact: thanks is not restricted to a specific content regarding the contract.
future; the PP enjoys autonomy, in contrast to the CP.

6th Preferential rights with mandatory effectiveness vs. with real effectiveness

As a general rule, the right of first refusal only grants its beneficiary a credit right.
against the other party - inter partes - relativity. Unenforceable against third parties.
The law, however, allows that the PP be assigned real effectiveness, provided that it respects assets.
real estate or furniture subject to registration, if the parties explicitly stipulate it, enter into the pact
preferably by public deed or authenticated private document or when not
a specific form is required for this contract promised by private document with signature
thank you, referring to the issuing entity, date, and number of your document of
identification and proceed to the respective registration in the register (article 421; 413). The holder of the
preference does not only have a right to a credit of preference, but also a right
acquisition that can be opposed erga omnes, even to subsequent acquirers of
property.
Possibility of legal preferences - see above, 2nd step.
Assigning real effectiveness to the preference pact raises the issue of its eventual
conflict with the legal rights of preference. Response: Article 422 - the right
conventional preference does not prevail against the legal rights of preference. Not
it would make sense for the parties through convention to have the possibility to affect rights
legally assigned.

7th Analyze the performance of the party entitled to preference

The law regulates the regime of the right of preference in articles 416 to 418 of the Civil Code, likewise
applicable to the legal rights of preference (1091/4; 1409/2 and 1535/2).

1st hypothesis: the obligee never decides to enter into a definitive contract with any third party. In this
case, the one who is thanked for the preference does not have to communicate anything to the preferred one. The preferred one does not have the

right to contract - (the practical case ends here).

2nd hypothesis: thank you decides to enter into the contract (with a third party).

Thank you, you need to make a communication for preference (416th).

It does not require a specific form for communication - 219º. MENEZES CORDEIRO:
a remissão do 415.º não diz apenas respeito à forma do PP, mas também à forma da
communication for preference. Thus, in the case of real estate, the communication must be
made through a signed document, facilitating the proof of compliance with the obligation.
MENEZES LEITÃO: The determination of compliance with the obligation and any eventual
The exercise or expiration of the right becomes difficult to demonstrate in court.

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 Hence, in most cases, the parties obtain by making these communications through
written, as a way to safeguard themselves.
Sales project and clauses: preferred contract, not being able to be considered for
preference for the issuance of contractual proposals or invitations to contract2Requirement of
a negotiation with a third party, with which the clauses to be communicated are agreed upon,
specifically the price and payment conditions. The communication for the
preference must be made before the conclusion of a definitive contract with the
respective third, because, otherwise, the breach of obligation would have already occurred
preferably.
Cif the holder of the preference rejects the contractual proposal or the invitation to contract does not
loses its right of preference, even if the preferable contract has exactly the
the same content as the rejected proposal or invitation to hire. If, however, it comes
to be celebrated a contract under this proposal or invitation, the right of
preference will expire due to uselessness.
Content: must contain the general business elements and all stipulations
particular agreements between the party obliged to the preference and the third party relevant to the
decision of the exercise of preference. Ex.: price, payment method, moment of
payment, delivery location...

In the communication to the preferred party, does the thank you have to indicate the name of the third party?

OLIVEIRA ASCENSÃO: believes that the law only refers to clauses of the
contract and the name of the third party cannot be considered encompassed by this reference, by
that this should not be indicated in the communication of preference.

GALVÃO TELLES and MENEZES CORDEIRO: understand that the principle of good faith
requires that the name of the third party must necessarily be indicated in the communication
for the preference.

PIRES DE LIMA, ANTUNES VARELA and CARLOS BARATA argue that the name
the third does not generally have to be indicated in the communication for the preference,
must do so in situations where there is a legally recognizable interest:

1. the non-exercise of the right of preference implies that legal relations remain in existence
between the third party and the titleholder of preference, examples of which would be the situation of
co-owner and tenant.
2. JOÃO REDINHA adds to these cases others in which the revelation of the name of the
third corresponds to an essential interest, deserving of legal protection of
preferential and recognizable for the thank you, as in the case of alienation to
third parties of family assets with estimated value (for example, a jewel/house of
family).
MENEZES LEITÃO: considers that the name of the third buyer as long as it is
determined must always be indicated in the communication for the preference, having
to mention the situation of indeterminacy in the contrary case3.
It is not therefore communication for preference that simply asks: 'Do you want to buy for
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100?”. It should first inquire: “I’m going to sell to X for 100. Do you prefer?”. The reaction of the other party will be different in
two situations. In the first, the holder of the right will assume that the proposed price derived from the discretion of the proponent,
the market conditions could determine a lower value, so it will tend to want to maintain the preference
to be exercised on a future occasion. In the second case, it is stated that the price was obtained through negotiation with
thirdly, the non-exercise of the preference will definitively preclude any possibility of exercising it in the future.
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Oliveira Ascensão shows opposition: the imposition of revealing the name of the third party would prevent the obligated party from
preference to enter into a contract for a named person. Menezes Leitão argues that the reservation of
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Deadline for communication for preference:
there is no deadline for communication (however, it is necessary to meet the deadline
logical: it must be possible for the preferred to respond in 8 days).
MENEZES CORDEIRO, in doubtful terms, presents the possibility of applying
analogously the period of 8 days of 416.º/2.

8th Analyze the attitude of the preferred

The holder must exercise their right within 8 days, unless the right of first refusal...
link to a shorter deadline, or if the obligation assigns you a longer deadline.
The deadline can never be shortened by unilateral preference; it can only be
can be reduced if the parties agree to the reduction.

Effects of this exercise:

With the communication and exercise of preference, both parties make a proposal for
contract and the respective acceptance that in principle should imply without further ado the celebration of the
definitive contract, provided that its form requirements are met.
When this does not happen (the celebration), these statements may still be valid as
promises to hire, if the respective form has been observed, which allows for
recourse to specific performance as provided in article 830, in case of non-compliance.
If even that form is not observed, there will be pre-contractual liability, in
terms of article 227, the obligation of preference continues to exist, which is only definitively
breached with the celebration of a contract incompatible with a third party.
In case the notification for preference is made through the process of article 1028 and following.
In the CPC, the solution is simpler, requiring the law that the contract be executed within the period of
20 days after the exercise of preference. If this does not happen, the preferred party must, under penalty of
loss of your right (article 1028º/3 CPC) "to request, within the following 10 days, that you
design date and time for the opposing party to receive the price per term of the process, under penalty
to be deposited, with the preferred party being able to deposit it the next day if the opposing party,
"duly notified, not appearing or refusing to accept the price" (article 1028º/2
CPC).
Preferred refusal - thanks to the preference, you can legitimately sell to a third party.
Preferred accepted with reservations. It amounts to a refusal. What has been written applies.
previously.

Celebration of a contract of a nature different from the option agreement:

The right of first refusal only arises if the obligated party decides to enter into the contract in
in relation to which preference has been granted, without failing to comply with the obligation of
preferably if the thank you celebrates a contract of a different nature than the preferable contract,

naming, as a clause of the contract, would have to be mentioned in the communication for preference (art. 416/1), not
finding reason not to mention the identification of the purchaser, when it is
determined.
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even if this contract implies the non-conclusion of the preferable contract in a definitive manner4Except
still two hypotheses in which the law considered they could still justify the maintenance of
preference, which are the cases of the union of contracts (article 417) and mixed contracts (article
418º). (SEE IF APPLICABLE TO THE CASE)

Union of contracts - Article 417: situation of union between various contracts of sale,
by stipulating a common price for several things sold simultaneously. It may
to be
1. External union - there is only a common stipulation of the price, without any
dependency between the various contracts, so nothing prevents the holder from exercising the
preferência pelo preço que for atribuído proporcionalmente à coisa.
[Link] union: there is a dependence between the various contracts, so the exercise of
preference for the holder would affect the entire union of contracts, which justifies that if
allow the thanks to require that preference be given to all sold things.
It is required, however, that the breaking of internal unity causes losses.
objectively appreciable for one of the parties.

Mixed Contract – 418º: relationship with complementary contracts, in which the typical contract
an accessory provision is added (e.g.: purchase and sale with an accessory obligation
of service provision by the buyer), article 418 allows for the exercise of preference,
determining that this accessory provision must be compensated in cash. If not
being assessable in money, the preference is excluded, unless it is lawful to presume, that
Even without the stipulated performance, the contract does not cease to be executed. The law considers
that the stipulation of non-monetary accessory services makes the contract
celebrated differently from the contract for which preference was granted, hence it is
preference excluded, unless this provision is not of great importance for the decision
Thank you for hiring.
There is still a case where the stipulation of the ancillary obligation is not recognized at all.
effect, which is the hypothesis that it was agreed to set aside the preference. In this case
the preferential party can always exercise the preference without having to compensate for that benefit
even if it can be evaluated in money (article 418/2).

Non-compliance with the Right of First Refusal

9th Distinguish effectiveness

Obligational effectiveness - contractual civil liability - article 798

Real efficacy - preference action - art. 1410 ex. vi 421/2; civil liability
obligational – art. 798
For example, if someone commits to giving preference in renting a house and later
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deciding to sell it to a third party does not constitute a breach of the right of first refusal.
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 reaction mechanism recognized to the holder of the right of first refusal with real efficacy
in the face of the breach of the obligation to give preference.
2. consists of judicial numbering (right to a state pronouncement that resolves the dispute,
slide - conflict of interest, claim; or conflict) proposed by the legal preference holder, or by
conventional preference with real effectiveness, in order to request for yourself the transmitted thing
third in relation to which he had a right of preference.

For example: A. had a right of preference with real effectiveness in the sale of B.'s house. However, B.
sold house C. without fulfilling the obligation to give preference to A. He can claim the house.
alienated to C., through the right of first refusal.

3. The right of preference must be initiated (starting a process; proposal

judicially/formulated in court, to assess/judge against someone) within six days
to count from the date on which the preferred party became aware of the essential elements of
alienation, namely of the price and payment conditions.
4. Additionally, it is a condition for the suitability of the action (favorable judgment to the plaintiff;
reasonable basis) the deposit of the due price within fifteen days following the
proposed action. This price, if the action is successful, will be delivered to the third party who
acquired the thing from thank you to preference.
5. In case of the action's validity (decision in favor of the plaintiff), the preferred will remain in
ownership of the asset subject to preference.

Problems that may arise:

1. Passive legitimacy (the one who is called within a given action):

For the action of preference/should or should not the one obliged to preference be called to action? And the
third?

Majority doctrine (MENEZES CORDEIRO, GALVÃO TELLES and ALMEIDA COSTA):

the action should be brought only against the third party, since what is at stake is to know
to whom the ownership of the thing belongs (whether to the third party or to the preferred one). This way it is possible to
a more swift action (because only one party is required). It should only be initiated
also against the obliged if the preference also requests compensation from the obliged.
ANTUNES VARELAeMENEZES LEITÃO: the action must be initiated against the obligated party
preference and the third purchaser. What is at stake is the breach of the pact of
preference and it would not make sense for the one who caused the breach not to be part of the action.
Thus, the holder must file a preferential action simultaneously against the
thank you for the preference and the third acquirer. There is a situation of passive litisconsortium
(33rd CPC).

2. Price deposit - 1410º: the price itself or also the other expenses that,
by law, it should be the buyer's responsibility for transmission taxes or the
notarial and registration fees. The correct solution should be that only is required the
deposit of the price due, even if the preferential must reimburse the third party for the expenses
for it supported, under penalty of unjust enrichment (article 473).

3. Price simulation – 240° and ss. CC

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 If the declared price is higher than the actual: Articles 240º/2 and 241º/1 - the preferential invokes
that the simulated business is null and the dissimulated one is valid. Therefore, the preferred person prefers by
real price (lower), resulting from the concealed business.
If the presented price is lower than the one practiced:
a) The preference is based on the null business, so the preference could only
to be removed through the invocation of this nullity.
b) The preferred party is not interested in invoking the simulation because it interests them.
prefer based on the simulated price (which is lower than the real one).
c) Thank you, can the preference invoke the simulation? Problem: Article 243(1) prohibits the
challenge of the nullity arising from the simulation by the simulators against
good faith third parties, consisting of good faith, in the ignorance of the simulation at the time in
that the respective rights were constituted (article 243/2).

Doctrinal complaint:

ANTUNES VARELAeMENEZES LEITÃO: the preference may be exercised over the

declared price (lower than the actual one). The preferred is a good faith third party, therefore,
the simulator cannot argue that the real price was lower.
MOTA PINTO, ALMEIDA COSTA, MENEZES CORDEIRO, RIBEIRO DE FARIA
CARVALHO FERNANDES and JOSÉ ALBERTO VIEIRA state that it does not allow the
simulators require that the preference be made at the real price, which is equivalent to authorizing
an illegitimate enrichment of the preferred at the expense of the simulators. In other words, to admit
a preference for the declared price (lower than the real) is an unfair situation of
enrichment without cause.
On the other hand, the law is quite restrictive regarding evidence of simulation, given that
excludes the use of witness testimony (article 394º/2), as well as judicial presumptions
(art. 351), which would restrict the possibility for simulators to successfully demonstrate
the simulation in the presence of a third party in good faith.

However, the difficulties of proof have been navigated with a restrictive interpretation of the
Article 394, paragraph 2, according to which a mere beginning of documentary proof would suffice to immediately
to allow for its completion through witnesses, the jurisprudence has followed
this guidance, accepting for this purpose even rectification deeds. For
Furthermore, it has been accepted that the simulators can be heard through
testimonies from the party.
Thus, the question is whether the preferential creditor is a third party for the purposes of Article 243.
doctrine argued that only those who are harmed by the simulation are considered third parties (the
State). Therefore, the preferred is not a third party. It would be permissible to invoke simulation and the
preferentially exercise the right for the real price.
MENEZES CORDEIRO based this position on the interpretation of article 243/2,
not considering the situation of the preferred one in this case as that of a third party in good faith,
initially with the argument that your right to acquire for a certain price
only be constituted with the sentence that judged the preference action as valid, and
then, on the argument that the preferred does not make any investment of
trust that justifies the good faith protection. That is, MENEZES CORDEIRO appeals to
good faith (ignorance of the simulation at the time they were established)
(rights) and the doctrine of the protection of trust. Thus, they should be
filled your four requirements:✓ the existence of a situation of trust✓ a
justification for trust✓ the investment of trust✓ the imputation of trust
to the person who will later bear the consequences.

If the trust deserves protection, the preferred creditor exercises the right for the declared price.
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If the trust does not deserve protection (because there was no investment of trust), the
preferred exercises the right at the real price.

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