Six clauses account for most B2B disputes — and all of them are negotiable before signing.
Contracts between companies tend to be long documents. Founders and managers, pressed by operational pace, often read the commercial summary and sign the rest on the strength of the business relationship. The problem surfaces when the relationship sours: that’s the moment every word in the contract becomes a legal argument.
This article walks through the six clauses that concentrate most B2B disputes in Brazil and explains what to look for — and negotiate — in each one before signing.
TL;DR
- Limitation of liability can prevent any compensation for a supplier’s failure — check the cap and the exclusions.
- Termination without a penalty or adequate notice can lock you into a bad contract indefinitely.
- Poorly drafted confidentiality clauses don’t protect trade secrets — nor do they define who owns what was developed.
- Change of control clauses can give the other party the right to exit (or renegotiate) if your company is sold or brings in a new significant partner.
- Penalty for breach needs a clear amount and trigger, or it becomes a dead letter.
- Jurisdiction and arbitration clauses decide where a dispute will end up — and how much it will cost to get there.
Table of Contents
- The case of the clause nobody read
- Limitation of liability: the cap you didn’t see
- Termination: who can leave, when, and at what cost
- Confidentiality and intellectual property
- Change of control clauses
- Penalty for breach
- Jurisdiction and arbitration: where the dispute will land
- Frequently asked questions
1. The case of the clause nobody read
An e-commerce company hired an integrated logistics platform to manage its last-mile deliveries. The contract ran 28 pages; the negotiation focused on price per delivery and turnaround SLA. Eighteen months later, a system failure at the platform caused delays in more than 3,000 orders during the Black Friday period. The company lost customers, had to refund shipping costs, and saw its marketplace ratings drop.
When they finally reviewed the contract, they found this: the limitation of liability clause capped any compensation at the amount paid over the last 30 days. The actual loss was ten times that amount. There was no provision for compensation for lost profits (“lucros cessantes” — the Brazilian civil law category for lost profits/consequential earnings that a party can claim as damages).
The contract was the platform’s own template. The company had signed it without negotiating this point. The legal path forward ended up far narrower than it needed to be.
This scenario repeats itself frequently in SaaS contracts, technology services, outsourcing, and specialized supply agreements. The six clauses below are the ones that appear most often in this type of dispute.
2. Limitation of liability: the cap you didn’t see
The limitation of liability clause sets the maximum amount one party can claim from the other in the event of a contract breach or damage caused. It is legitimate — the Brazilian Civil Code (Law 10.406/2002) allows parties to set contractual limits on compensation — and it’s standard in any well-structured B2B contract.
The problem is asymmetry: suppliers often include clauses that cap their liability at very low amounts (the amount paid in the last month, the total contract value, or simply a fixed ceiling) and exclude indirect damages and lost profits. The contracting company signs without realizing that, in practice, it has given up most of its possible compensation in the event of a serious failure.
What to look for:
| Point | What to analyze |
|---|---|
| Compensation cap | Does the amount cover the realistic expected damage in the event of a serious failure? A cap equal to one month’s contract value may be insufficient for critical services. |
| Exclusion of indirect damages | Lost profits and reputational damage are often excluded. For services with direct impact on the end customer, this can be significant. |
| Exceptions to the limitation | The clause usually doesn’t apply to cases of willful misconduct or gross negligence, breach of confidentiality, or personal data breaches — check whether these exceptions are present. |
| Symmetry | Does the limitation apply to both parties, or only to the supplier? |
What to negotiate: a cap proportional to the risk of the service; explicit carve-outs for breach of confidentiality, personal data breaches (LGPD — Law 13.709/2018, Brazil’s data protection statute, similar in spirit to the GDPR but with its own enforcement framework) and willful misconduct; reciprocity between the parties.
3. Termination: who can leave, when, and at what cost
The termination clause sets out the conditions under which either party may end the contract. In B2B contracts for continuous services, it usually covers three scenarios: termination for breach, termination without cause, and termination due to force majeure.
Termination for breach presupposes a failure to meet a contractual obligation. What matters here is the cure period (the opportunity to fix the issue) before the other party can terminate. A 5-business-day cure period for a system failure may be adequate; for a payment default, it may be too short depending on the size of the operation.
Termination without cause is the most sensitive point. If the contract doesn’t provide for it, or only allows it with steep penalties, you could end up locked into a business relationship that no longer works. If it is allowed with a minimum notice period of 30 days, check whether that’s enough time for you to migrate the service elsewhere.
Effects of termination are rarely given proper attention: what happens to your company’s data on the supplier’s system? How quickly is it returned or deleted? In what format? This is especially relevant in SaaS contracts.
What to look for:
- Minimum notice period for termination without cause (recommended: 30 to 90 days, depending on migration complexity)
- Termination penalty: amount, calculation method, and whether it applies to both parties
- Post-termination obligations: data portability, assisted migration, transition period
4. Confidentiality and intellectual property
Confidentiality agreements (called an NDA — Non-Disclosure Agreement — or simply a confidentiality clause) usually appear in B2B contracts in one of two forms: as a standalone agreement signed before negotiations begin, or as a clause within the main contract.
What the confidentiality clause needs to define:
- What counts as confidential information — a definition that’s too broad is hard to enforce in practice; one that’s too narrow leaves relevant information unprotected.
- The duration of the obligation — during the contract and for how many years after termination.
- The exceptions: information that was already public, that the party already knew before, or that was independently developed.
- The obligations in case of breach — immediate notification, containment measures.
Intellectual property is where the contract’s silence causes the most problems. In software development or custom technology contracts:
- Who owns the code developed specifically for your company?
- Can the supplier reuse the solution for other clients?
- Who owns improvements made to the supplier’s product based on your feedback?
The Civil Code (Law 10.406/2002, art. 421 et seq.) and Law 9.279/1996 (the Industrial Property Law) govern contractual relationships and ownership rights. In the absence of a specific clause, interpretation depends on context — which means litigating to settle what should have been obvious.
What to negotiate: a clear definition of commissioned intellectual work and who holds the rights to it; a license to use the work after the contract ends; a prohibition on reusing assets developed specifically for your company.
5. Change of control clauses
A change of control clause gives one of the parties the right to terminate or renegotiate the contract if the other party is sold, brings in a new partner with significant equity, or undergoes a merger or acquisition. It appears frequently in commercial partnership agreements, technology licensing, and strategic supply contracts.
For startups going through a fundraising round or an M&A negotiation, this clause can stall the deal: if a strategic contract with a key supplier allows the supplier to walk away upon a change of control, the investor or buyer needs to know this before closing any deal.
Both sides of it:
| Perspective | Risk |
|---|---|
| Contracting party | A strategic supplier may exit if you receive investment or are acquired — creating instability at a critical moment. |
| Supplier | May not want to keep providing the same service to a competitor that has acquired the contracting party. |
What to look for: whether the contract has this clause, what the exact trigger is (equity percentage, effective change of control), the notice period, and whether there’s a right to negotiate before automatic termination kicks in.
In M&A due diligence, this clause is one of the first items checked in the target company’s contracts. Its absence also matters — it may mean the other party has no way out even if it wants one.
6. Penalty for breach
The penalty clause (“cláusula penal” — a contractual liquidated-damages provision) sets the amount payable in the event of a breach of contractual obligation. The Civil Code (Law 10.406/2002, arts. 408–416) allows parties to agree on it and regulates its limits: the compensatory penalty clause cannot exceed the value of the underlying obligation.
In practice, many B2B contracts don’t define the penalty precisely — or leave it out entirely, betting that any breach will be sorted out through conversation. When that conversation fails, the injured party has to prove the damage, the causal link, and the amount. That’s more expensive and uncertain than having a penalty defined contractually.
What to look for:
- Is the penalty expressed as a fixed amount, a percentage of the monthly fee, or a percentage of the total contract value?
- Is it due only in the event of definitive default, or also for mere late performance (mora)?
- Are default interest terms defined? The statutory rate is 1% per month (Civil Code, art. 406), but the parties can agree on a different rate.
- Does the penalty apply to breaches by both parties, or only one?
What to negotiate: a penalty proportional to the type of breach; a distinction between the penalty for late payment (mora) and the penalty for definitive default; clarity on the grace period to cure the default before the penalty is triggered.
7. Jurisdiction and arbitration: where the dispute will land
The forum-selection clause defines which court (comarca/district and division) will hear any judicial dispute. The arbitration clause (“cláusula compromissória”) establishes that disputes will be submitted to arbitrators instead, excluding the courts.
Neither choice is neutral. It determines the cost, timeline, and likely outcome of any dispute.
Judicial forum:
- Useful for contracts with smaller values, where arbitration costs would be disproportionate.
- Can be set by the parties, as long as there is some connection to the chosen location (Code of Civil Procedure — Law 13.105/2015, art. 63).
- Check whether the chosen forum is the supplier’s home turf — in the event of a dispute, you would need to send lawyers there.
Arbitration:
- Governed by Law 9.307/1996 (the Arbitration Law), as amended by Law 13.129/2015.
- Suited to higher-value B2B contracts (at chambers such as CAM-CCBC, the minimum cost of arbitration tends to make low-value disputes impractical).
- Advantages: confidentiality, arbitrator specialization, relative speed compared to the courts.
- Main drawback: access cost — chamber fees, arbitrators, and arbitration counsel cost more than court litigation.
Mandatory prior mediation: some contracts require mediation as a mandatory step before arbitration or litigation. This can be useful for resolving lower-value disputes without the full formality of arbitration.
What to negotiate: the arbitration chamber and its rules (different rules mean different costs and timelines); a minimum value threshold for triggering the arbitration clause (below that, the judicial forum applies); whether prior mediation has a defined deadline so it doesn’t become an obstacle to resolution.
8. Frequently asked questions
Can a contract that the supplier already drafted still be negotiated?
Yes. B2B contracts are not adhesion contracts in the sense used by the Consumer Protection Code (Law 8.078/1990) — which would only apply if one of the parties were a consumer. Between companies, the governing principle is private autonomy and free negotiation (Civil Code, arts. 421 and 425). The fact that the supplier sent a draft doesn’t mean it’s final. Common practice is for the contracting party to send comments and proposed changes by email or in a tracked-changes document. Clauses such as limitation of liability, termination without cause, and forum selection are frequently negotiated. What prevents negotiation isn’t the law — it’s the failure to recognize that negotiation is possible, or the rush to close the deal. If a supplier refuses to negotiate any clause at all, that itself is useful information about what the business relationship will be like.
This is general information and does not replace consulting a lawyer to review your specific case.
What happens if the contract has no confidentiality clause?
The absence of a confidentiality clause does not mean information exchanged in the business relationship can be freely disclosed. The Civil Code (Law 10.406/2002, art. 422) imposes a duty of good faith on the parties — which includes a duty of confidentiality regarding information obtained in connection with the contract. In addition, information that qualifies as a trade secret is protected under Law 9.279/1996 (arts. 195 et seq.). The practical problem with not having an express clause is one of evidence: in the event of a dispute, it’s harder to prove what was confidential, for how long, and what each party’s obligations were. A well-drafted clause removes that ambiguity. For relationships where sensitive information (financial data, technology, business strategy) is shared, a standalone NDA — signed even before negotiations begin — is safer than a clause embedded in the main contract, since it also protects preliminary discussions.
This is general information and does not replace consulting a lawyer to review your specific case.
When is it worth using arbitration instead of the courts in B2B contracts?
Arbitration tends to make sense in B2B contracts when the amount in dispute is high enough to justify the costs (which include arbitral chamber fees, arbitrator fees, and specialized legal fees); when the parties value the confidentiality of the proceeding — court disputes are public, arbitrations are not; and when the arbitrators’ specialization in corporate law or the relevant industry is important for resolving the dispute properly. For lower-value contracts — services worth up to roughly R$100,000, for example — arbitration costs tend to be disproportionate, and the courts or mediation may be more suitable. An intermediate solution used in some B2B contracts is a tiered clause: mandatory mediation within a set deadline, followed by arbitration if mediation fails, with a minimum value threshold for triggering the arbitral track. Chambers such as CAM-CCBC (the Arbitration and Mediation Center of the Brazil-Canada Chamber of Commerce) and CAMARB (the Brazilian Chamber of Business Mediation and Arbitration) publish fee schedules that let you estimate costs before including the clause.
This is general information and does not replace consulting a lawyer to review your specific case.
Disclaimer and next steps
The information in this article is general and educational in nature. It does not constitute legal advice for any specific situation and does not replace a lawyer’s review of your particular case.
If you’re reviewing a B2B contract before signing, or want to understand the risks in a contract already in effect, the starting point is a review of the specific document.
Alessandra De Paula Souza — OAB/PR 31.133 Practice focused on corporate contracts, M&A, and corporate law.