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COMMERCIAL CODE

^ ] Commercial Code - Table of Contents ] Commercial Code - Table of Article ] Decree-Law no. 40/99/M ] Commercial Code - Art. 1 - 100 ] Commercial Code - Art. 101 - 200 ] Commercial Code - Art. 201 - 300 ] Commercial Code - Art. 301 - 400 ] Commercial Code - Art. 401 - 500 ] [ Commercial Code - Art. 501 - 600 ] Commercial Code - Art. 601 - 700 ] Commercial Code - Art. 701 - 800 ] Commercial Code - Art. 801 - 900 ] Commercial Code - Art. 901 - 1000 ] Commercial Code - Art.1001 - 1100 ] Commercial Code - Art. 1101 - 1200 ] Commercial Code - Art. 1201 - 1268 ]


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Article 501

(Resolutions of members of grouping)

1. Each member has one vote; however, the grouping contract can give various votes to certain members, provided that none of them has a majority.

2. Unanimity of the members is required for the following resolutions:

a) amendment of the object of the grouping;

b) amendment of the number of votes attributed to each of them;

c) amendment of the conditions for passing resolutions;

d) extension of the duration of the grouping beyond the period stated in the grouping contract;

e) modification of the share of each of the members or of some of them in the financing of the grouping;

f) amendment of any other obligation of a member, unless the grouping contract provides otherwise;

g) any amendment to the grouping contract that is not mentioned in this paragraph, unless the contract provides otherwise.

3. In all cases in which the law does not state that resolutions must be passed by unanimity, the grouping contract can state the conditions of quorum and majority for resolutions, or some of them, to be passed; if the silence of the contract, resolutions shall be taken by majority.

4. By initiative of an administrator or upon request of a member, the administration shall organize consultation of members in order for these to pass a resolution.

Article 502

(Supervision)

1. In the absence of a provision of the contract on supervision of management, the general meeting can appoint, for a maximum period of three years, renewable, one or more persons to supervise the management and to give an opinion on the accounts.

2. Supervision of the management by one or more accounting auditors or a firm of auditors, appointed by the general meeting, is compulsory if the grouping issues bonds.

Article 503

(Liability of holders of organs of grouping)

1. The rules that regulate the liability of holders of organs of commercial companies towards the company, the shareholders, and third parties, are applicable to the holders of organs of a grouping.

2. Any member has legitimacy to initiate liability proceedings in favor of the grouping.

CHAPTER III

RIGHTS AND OBLIGATIONS OF MEMBERS

Article 504

(Acts forbidden to members of a grouping)

The provision of article 335 on partners of general partnerships is applicable to the members of the grouping, with the necessary adaptations.

Article 505

(Participation in profits and expenses)

1. Profits arising from the ancillary activities of a grouping are considered as profits of the members and shall be distributed among them according to the proportion mentioned in the grouping contract or, if it is silent, in equal parts.

2. The members of the grouping shall contribute to the payment of the excess of expenses over income, in accordance with the proportion mentioned in the grouping contract or, if it is silent, in equal parts.

Article 506

(Right to information)

Each member has a right to obtain information on the businesses of the grouping from the administrators and to consult commercial accounting records and business documents.

Article 507

(Transfer of participation)

1. Any member of a grouping can transfer his participation in the grouping, or a fraction of it, either to another member or to a third party; the effect of the transfer depends upon the unanimous authorization of the other members.

2. A member of the grouping can only create guarantees over his participation in the grouping after obtaining the unanimous authorization of the other members, unless the grouping contract provides otherwise; the holder of the guarantee cannot, in any case, become a member of the grouping as a result of such guarantee.

Article 508

(Admission of new members)

1. Admission of new members to a grouping can only take place in accordance with the contract or, if it is silent, by an unanimous resolution of the members of the grouping.

2. Any member can be held liable, in accordance with the following article, for the debts of the grouping, including those resulting from activity undertaken prior to his admission.

3. A new member can be exempted from payment of debts contracted prior to his admission, by means of a clause of the grouping contract or of the act of admission; this clause can only be invoked against third parties if it is registered and published.

Article 509

(Liability of members)

1. Members of a grouping are jointly and severally and without limit liable for its debts, regardless of their nature.

2. Until the closure of the liquidation of a grouping, creditors can only take action against a member for payment of the debts mentioned in the previous paragraph after having claimed such payment from the grouping itself and if it has not been executed within an adequate period of time.

CHAPTER IV

EXONERATION, EXCLUSION AND DEATH OR EXTINCTION OF A MEMBER

Article 510

(Exoneration)

1. A member of a grouping can exonerate himself under the terms mentioned in the contract or, if it is silent, with the unanimous agreement of the other members.

2. A member of a grouping can always exonerate himself on the basis of just cause.

3. Besides the cases mentioned in the previous paragraphs, any member can exonerate himself if he has opposed an amendment introduced in the grouping contract, or if more than 10 years have elapsed since his admission and the obligations assumed by him have been fulfilled.

4. Exoneration shall take effect 20 days after its communication to the administration, by means of a registered letter with acknowledgement of receipt.

Article 511

(Exclusion)

1. A member of a grouping can be excluded for the reasons indicated in the contract, and if he:

a) seriously breaches his obligations or provokes or threatens to provoke serious disturbance in the functioning of the grouping;

b) ceases to exercise the economic activity for which the grouping serves as a complement;

c) is declared bankrupt;

d) is in delay in the payment of his contribution to the expenses of the grouping, after being notified by the administration, by means of a registered letter, to execute such payment within a stated time limit, which shall be no less than 30 days.

2. Besides the case mentioned in subparagraph c) of the previous paragraph, the exclusion can only take place by decision of the court, pronounced in proceedings initiated by the majority of the other members, unless the grouping contract provides otherwise.

Article 512

(Death or extinction of member)

In case of death or extinction of a member of the grouping, no other person can take his place, except in accordance with the conditions mentioned in the grouping contract or, if it is silent, with the unanimous agreement of the other members.

Article 513

(Liquidation of participation)

1. If a member ceases to be part of the grouping for causes other than the transfer of his participation under the conditions mentioned in paragraph 1 of article 507, the value of his rights and obligations shall be determined on the basis of the patrimony of the grouping as it stands at the moment at which the member ceases to belong to it.

2. The value of the rights and obligations of the member leaving the grouping cannot be determined in advance.

Article 514

(Liability of former member)

Without prejudice to paragraph 1 of article 520, any member who ceases to be part of a grouping shall continue to be liable, under the conditions mentioned in article 509, for the debts arising from the activity of the grouping prior to the termination of his capacity as member.

Article 515

(Continuation in existence)

Except if there is a provision to the contrary in the grouping contract and without prejudice to the rights acquired by third parties in accordance with paragraph 1 of article 507, or article 512, the grouping shall continue in existence with the other members after one of its members has ceased to be part of it, under the conditions mentioned in the grouping contract or determined by unanimous resolution of the members.

CHAPTER V

DISSOLUTION AND LIQUIDATION

Article 516

(Causes of dissolution)

1. An economic interest grouping is dissolved in the cases mentioned in the law, and also:

a) by resolution of its members, passed by unanimity, if the contract does not provide otherwise;

b) by the expiry of the time limit of its duration;

c) by the accomplishment, extinction or supervening impossibility of its object;

d) by the occurrence of any cause of dissolution mentioned in the contract;

e) by the unlawfulness of its object;

f) by bankruptcy.

2. Dissolution of a grouping, on the basis of subparagraphs b), c) and d) of the previous paragraph, depends upon a resolution of the members confirming it; if, three months after the occurrence of one of the said situations, a resolution of the members verifying the dissolution of the grouping has not been passed, any member can request the court to declare such dissolution.

3. A grouping shall also be dissolved by decision of the remaining member, if the plurality of the members ceases to exist.

4. A resolution of dissolution of a grouping is subject to registration and publication; if the administration does not arrange registration and publication, any interested party can do so.

Article 517

(Dissolution upon petition of certain persons)

1. Upon petition of any interested party or the Public Ministry, the court shall declare the dissolution of a grouping in case of breach of article 490, or of paragraph 3 of the previous article, except if regularization of the situation of the grouping is possible and takes place while the judicial decision can still be appealed.

2. The court can declare the dissolution of the grouping:

a) upon petition of a member, for a just cause;

b) upon petition of the Public Ministry or any interested party, if the grouping breaches competition law or persistently dedicates itself, as a main object, to a directly lucrative activity;

c) upon request of a member who has been held liable for obligations of the grouping which were matured and in delay.

Article 518

(Entry in liquidation)

1. The dissolution of a grouping implies its liquidation.

2. The liquidation of a grouping is made in accordance with the rules applicable to commercial companies.

3. The legal capacity of a grouping continues until the closure of liquidation.

Article 519

(Distribution of patrimony)

The balance of the liquidation of a grouping shall be shared among the members of the grouping, in accordance with the proportion mentioned in the grouping contract or, if it is silent, in accordance with the proportion of their contributions to the formation of its capital, added to any contributions that they have paid.

CHAPTER VI

LIMITATION OF ACTIONS AND DEFAULT RULES

Article 520

(Limitation of actions)

1. Actions against a member to enforce liability related to debts arising from the activity of a grouping are barred five years from the moment when the member has ceased to be part of the grouping.

2. In case of liquidation of a grouping, the time limit mentioned in the previous paragraph is counted from the closure of liquidation.

Article 521

(Default rules)

The rules on general partnerships shall apply to all matters not especially regulated in this Title, with the necessary adaptations.

CHAPTER VII

PENAL PROVISIONS

Article 522

(Unlawful distribution of assets of grouping)

1. An administrator of a grouping who proposes an unlawful distribution of the assets of the grouping to be considered by a resolution of the members is punishable with a fine of up to 60 days.

2. If unlawful distribution is totally or partly executed, the penalty is a fine of up to 90 days.

3. If unlawful distribution is totally or partly executed without a resolution of the members, the penalty is a fine of up to 120 days.

4. The same penalty is applicable to an administrator of a grouping who executes or causes the execution by another person of a distribution of assets of the grouping, in breach of a valid resolution of the members of the grouping.

5. If serious economic or moral damage is caused in any of the cases mentioned in paragraphs 3 and 4, which the perpetrator could foresee, to any member who has not given his assent to the fact, to the grouping, or to a third party, the penalty is imprisonment up to one year and a fine of up to 60 days, or only a fine of up to 120 days.

Article 523

(Unlawful refusal of information)

1. A grouping administrator who refuses or causes the refusal by another person of consultation of documents that the law requires to be made available to interested parties in preparation for resolutions of the members of the grouping, or refuses or causes the refusal of the sending of documents for this purpose, when due by law, or sends or causes the sending of such documents without satisfying the requirements and the time limits stated in the law, is punishable with imprisonment of up to three months and a fine of up to 60 days, unless a more serious penalty is applicable in accordance with other legal provision.

2. A grouping administrator who refuses or causes the refusal by another person of information that he is obliged to provide in accordance with the law and that has been requested from him in writing, is punishable with a fine of up to 90 days.

3. If, in the case of paragraph 1, serious economic or moral damage, which the perpetrator could have foreseen, is caused to any member who has not given his assent to the fact, or to the grouping, the penalty is imprisonment of up to one year and a fine of up to 60 days or only a fine of up to 120 days.

4. If, in the case of paragraph 2, the fact was committed for a reason that does not point to a lack of zeal in defending the rights and legitimate interests of the grouping and of the members, but only a mistaken understanding of the object of such rights and interests, the perpetrator is exempt from the penalty.

Article 524

(False information)

1. Whoever, being in accordance with the law obliged to provide to other persons information on matters of the activity of the grouping, provides it in a untruthful manner, is punishable with imprisonment up to three months and a fine of up to 60 days, unless a more serious penalty is applicable in accordance with other legal provision.

2. The penalty mentioned in the previous paragraph shall apply to whoever, in the circumstances there described, maliciously provides incomplete information which may lead the addressees to mistaken conclusions of an identical or similar effect as would false information on the same object.

3. If such fact is practiced with intention to cause economic or moral damage to any member who has not consciously contributed to the same fact, or to the grouping, the penalty is imprisonment up to six months and a fine of up to 90 days, unless a more serious penalty is applicable in accordance with other legal provision.

4. If serious economic or moral damage, which the perpetrator could have foreseen, is caused to any member who has not consciously contributed to the fact, to the grouping, or to a third party, the penalty is imprisonment of up to one year or a fine of up to 120 days.

5. If, in the case of paragraph 2, the fact was committed for a serious reason, which does not point to a lack of zeal in defending the rights and legitimate interests of the grouping and of the members, but only a mistaken understanding of the object of such rights and interests, the judge can decide on a special reduction of the penalty or exempt the perpetrator from it.

Article 525

(Obstruction to supervision)

An administrator of a grouping who obstructs or hinders, or leads another person to obstruct or hinder acts necessary to the supervision of the activity of the grouping, executed by persons who, in accordance with the law, the grouping contract, or judicial decision, have the duty to exercise supervision, in the terms and forms prescribed by law, or by persons acting under the orders of those who have such duty, is punishable with imprisonment up to six months and a fine of up to 120 days.

Article 526

(Exercise of directly lucrative activity)

The administrators of a grouping found in the circumstances mentioned in paragraph 3 of article 491 are punishable, individually, with a fine of up to 60 days.

Article 527

(Common principles)

1. The facts described in articles 522 to 525 are only punishable if committed intentionally.

2. An attempt to commit facts for which articles 522 to 525 foresee imprisonment, or imprisonment and a fine, is punishable.

3. Intention to obtain benefit for himself, the spouse, or persons related by consanguinity or affinity up to and including the third degree, is always considered as an aggravating circumstance.

4. If, before criminal proceedings have been initiated, the perpetrator of a fact described in articles 522 to 525 has fully compensated the economic damage and has given sufficient satisfaction for the moral damage caused, without any further illegitimate damage to third parties, such damage shall not be considered in determining the applicable penalty.

TITLE III

CONSORTIUM CONTRACT

CHAPTER I

GENERAL PROVISIONS

Article 528

(Concept)

Consortium is the contract by which two or more individuals or collective persons, who exercise an economic activity, bind among themselves to undertake a certain activity or to make a certain contribution, in an organized manner, with the purpose of achieving any of the objects mentioned in the following article.

Article 529

(Object)

A consortium shall have one of the following objects:

a) performance of legal or material acts, preparatory to a certain work or to a continuous activity;

b) execution of a certain project;

c) supply of goods similar or complementary among them, produced by each of the members of the consortium, to third parties;

d) research into or exploitation of natural resources;

e) production of goods that can be shared, in kind, among the members of the consortium.

Article 530

(Form)

1. The contract is subject to written form, which can be a private document, unless another form is required by the nature of the goods with which the members contribute to the consortium.

2. Lack of a public deed, when required, shall only cause the total nullity of the transaction if the final part of article 285 of the Civil Code is applicable, and if it is not possible to apply article 286 of the said Code, so that the contribution is converted into the simple use of the goods of which the transfer requires that form.

Article 531

(Content)

1. The terms and conditions of a contract shall be freely agreed by the parties, without prejudice to the imperative norms of this Title.

2. If achievement of the contractual object involves the payment of any contribution, it shall consist in a tangible good or in the use of a tangible good.

3. Contributions in money are only allowed if the contributions of all members are of such nature.

Article 532

(Duties of members of consortium)

Besides the general duties arising from the law or stipulated in the contract, each member of a consortium shall:

a) refrain from engaging in competition with the consortium, except to the extent to which he is expressly allowed to;

b) supply to the other members of the consortium and especially to its leader, if there is one, all information requested regarding or relevant to the good execution of the contract;

c) allow examinations to activities or goods which, according to the contract, he is bound to render to third parties.

Article 533

(Prohibition of common funds)

It is not permitted to create common funds in any consortium.

Article 534

(Amendment to contract)

1. Amendments to a consortium contract require the agreement of all contracting parties, except if the contract dispenses with it.

2. Amendments shall follow the form used for the contract.

3. Except if there is an agreement to the contrary, a contract is not affected by changes of administration or shareholders of the members, if these are collective persons.

Article 535

(Types of consortium)

A consortium can be external or internal.

CHAPTER II

EXTERNAL CONSORTIUM

Article 536

(External consortium)

A consortium is said to be external if the activities or the goods are supplied directly to third parties by each of the members, with express invocation of such capacity.

Article 537

(Guidance and supervision board)

1. A contract of external consortium can foresee the creation of a guidance and supervision board, to which only members can belong.

2. If the contract is silent:

a) the resolutions of the board shall be passed by unanimity;

b) the resolutions of the board, passed by unanimity or with the majority required by the contract, bind the consortium leader, as instructions from all its principals, provided that they remain within the scope of the powers attributed to or conferred upon it;

c) the board has neither powers to decide on the amendment or rescission of contracts concluded in the framework of the consortium contract, nor to decide on transactions with the purpose of preventing or terminating litigation.

Article 538

(Consortium leader)

In external consortium contracts one of the members shall be appointed as the consortium leader; he shall, in this capacity, exercise both the external and internal functions contractually attributed to him.

Article 539

(Internal functions of consortium leader)

In the absence of a contractual stipulation defining them, the internal functions of the consortium leader consist in the duty to organize cooperation among the members in the performance of the object of the consortium, and to promote measures necessary for the execution of the contract, with the diligence of an ordered and systematic manager.

Article 540

(External functions of consortium leader)

1. If not granted by means of power of attorney, only by means of contractual stipulation or by unanimous resolution of the members it is possible for the leader of the consortium to be conferred powers to:

a) negotiate, conclude, amend or extinguish contracts concluded with third parties in the framework of the consortium contract;

b) receive from third parties any statements related to the execution, amendment or extinction of contracts;

c) address to such third parties statements relating to acts mentioned in the respective contracts;

d) receive from the said third parties any amounts due from them to members of the consortium, as well as to demand from third parties the performance of their obligations towards any of the members of the consortium;

e) ship merchandise;

f) in specific cases, hire economic, legal and accounting consultants or others appropriate to needs, and to remunerate such services;

g) representation in court, including receiving citations, and effecting transactions in order to prevent or terminate litigation.

2. The powers of representation mentioned in the previous paragraph are deemed to be exercised in the interest and in the name of all members, unless they can be specifically related to one of them.

Article 541

(Amounts handed to consortium leader)

In an external consortium, the amounts handed to the respective leader, or retained by him with the permission of the interested party, are considered as supplied to the former under the terms and for the effects of subparagraph a) of article 1093 of the Civil Code.

Article 542

(Trade name of external consortium)

1. The members of an external consortium can designate themselves collectively, joining all their names or firms, with the addition 'consortium of...' ['Consórcio de...'] or '...in consortium' ['...em consórcio']; however, only members who have signed documents in which the name is used or the members on behalf of whom the leader of the consortium has signed, using powers granted, are liable towards third parties.

2. All members are jointly and severally liable towards third parties for damage resulting from the adoption or use of trade names of the consortium likely to cause confusion with other existing ones.

Article 543

(Sharing of amounts received for activity of an external consortium)

1. In an external consortium of which the object is mentioned in subparagraphs b) and c) of article 529, each of the members shall directly receive the amounts due from third parties, excepting the provisions of the following paragraphs and without prejudice to the joint and several liability among the members of the consortium that may have been stipulated with third parties, and without prejudice to the powers granted to any of such members by the others.

2. Members of a consortium can stipulate in the respective contract a distribution of the amounts receivable from third parties different from that resulting from the direct relations of each one with the third party.

3. In the case of the previous paragraph and in connection with relations among the members, the difference payable by one of them to another is deemed to be received and detained for the account of the member who is entitled to it in accordance with the consortium contract.

4. The previous paragraph also applies whenever the performance of one of the members of the consortium does not have material autonomy, in relation to a third party, and the remuneration is therefore included in the amounts received from the third party by another member or members.

Article 544

(Sharing of proceeds of activity of an external consortium)

1. In an external consortium of which the object is mentioned in subparagraphs d) and e) of article 529, each member shall directly acquire part of the products, without prejudice to paragraph 3.

2. The contract shall stipulate the moment at which the ownership of the products is considered to be acquired by each member of the consortium; in the absence of stipulation, usage shall be observed or, in its absence and depending on the case, the moment at which the products enter the warehouse or leave the premises where the economic operation took place.

3. The consortium contract can stipulate that products acquired by a member in accordance with paragraph 1 shall be sold, for his account, by another member, in which case the rules of the mandate shall apply.

Article 545

(Relations with third parties)

1. In the relations of the members of an external consortium with third parties, the former are not presumed to be jointly and severally liable, either actively or passively.

2. Stipulation of fines or other penal clauses in contracts with third parties, payable by all members of the consortium, does not imply a presumption of joint and several liability of the members regarding other active or passive obligations.

3. The obligation to compensate third parties for facts generating civil liability is restricted to those members of the external consortium to whom, by law, such liability is imputable, without prejudice to any internal stipulations regarding the distribution of such liability.

CHAPTER III

INTERNAL CONSORTIUM

Article 546

(Internal consortium)

A consortium is internal if:

a) the activities or the goods are supplied to one of the members of the consortium and only this one establishes relations with third parties;

b) the activities or the goods are supplied directly to third parties by each member of the consortium, without express invocation of such capacity.

Article 547

(Participation in profits and losses of internal consortium)

Article 555 shall apply if the contracting parties to an internal consortium have agreed a participation in profits or losses, or both.

CHAPTER IV

TERMINATION OF CONTRACT

Article 548

(Extinction of consortium)

1. A consortium is extinguished:

a) by unanimous agreement of its members;

b) by the attainment of its object or as a result of it becoming impossible;

c) by the expiry of the time limit stated in the contract, if it is not extended;

d) by the extinction of the plurality of its members;

e) by any other cause mentioned in the contract.

2. In the absence of any of the cases mentioned in the previous paragraph, the consortium shall be extinguished 10 years from the date of its conclusion, without prejudice to any express extensions.

Article 549

(Exoneration of members)

1. A member of the consortium can exonerate himself from it if:

a) it is impossible for him, without fault, to fulfill the obligation to undertake a certain activity or to perform a certain contribution;

b) the cases mentioned in subparagraphs b) or c) of paragraph of 2 of the following article have occurred, in relation to another member, producing important damage, and not all members agreed to rescind the contract regarding the non-performing party.

2. In the case of subparagraph b) of the previous paragraph, a member who exonerates himself from the consortium has the right to be compensated, under general rules, for the damage arising from his exoneration.

Article 550

(Rescission of the contract)

1. A consortium contract can be rescinded, in relation to any of the contracting parties, by means of written statements from all the other members, if there is just cause.

2. It is considered as just cause for rescission of a consortium contract in relation to any of the contracting parties:

a) the declaration of bankruptcy;

b) a breach, serious in itself or by its repetition, with or without fault, of duties of members of the consortium;

c) the impossibility, with or without fault, to fulfill the obligation to undertake a certain activity or to make a certain contribution.

3. In the cases of subparagraphs b) and c) of the previous paragraph, rescission of the contract does not affect the right to any compensation that may be due.

TITLE IV

ASSOCIATION IN PARTICIPATION CONTRACT

CHAPTER I

GENERAL PROVISIONS

Article 551

(Concept and regime)

1. An association in participation contract is that by which a person is associated to a commercial enterprise exercised by another person, the former participating in the profits, or in the profits and losses, resulting from such exercise to the latter.

2. Participation in profits is an essential element of the contract; participation in losses can be excluded.

3. Matters not regulated in the following articles are governed by agreement of the parties and by the provisions applicable to other contracts, according to the analogy of the case.

Article 552

(Plurality of associates)

1. If various persons bind themselves to the same associating party, in a single association in participation, the former are not presumed to be jointly and severally liable towards the latter, either actively or passively.

2. The exercise of the rights to information, supervision and intervention in the management by the various associates shall be regulated in the contract.

3. In the absence of the regulation mentioned in the previous paragraph, the rights to information and supervision can be exercised individually and separately by each of them; the assent required by subparagraphs b) and c) of paragraph 1, and by paragraph 2 of article 556, shall be given by the majority of the associates.

Article 553

(Form)

1. The contract of association in participation is not subject to a special form, with the exception of the form that may be required by the nature of the goods with which the associates contribute.

2. However, the clause according to which an associate is excluded from paying for losses of the business, as well as the clause which, in relation to such losses, states an unlimited liability of the associate, can only be evidenced in writing.

3. Paragraph 2 of article 530 applies to the contract of association in participation.

Article 554

(Contribution of associate)

1. An associate shall perform or bind himself to perform a contribution of a patrimonial nature which, if it consists in the creation or transfer of a right, shall pass to the ownership of the associating party.

2. The contract can exclude the contribution of the associate, if he participates in losses.

3. The contract can stipulate that the contribution mentioned in paragraph 1 shall be replaced by a reciprocal participation in an association between the same persons, agreed simultaneously.

4. A value in money shall be contractually given to the contribution of the associate; however, an appraisal can be judicially made, upon request of the interested party, if necessary for the purpose of the contract.

5. Unless there is an agreement to the contrary, delay by the associate shall suspend the exercise of his legal or contractual rights, but does not prejudice the possibility to claim his obligations.

CHAPTER II

EXECUTION OF CONTRACT

Article 555

(Participation in profits and losses)

1. The possibility to claim, and the amount of, the participation of an associate in profits or losses, shall be determined in accordance with the rules of the following paragraphs, unless a different regime arises from an agreement of the parties or from the circumstances of the contract.

2. If only a criterion to determine the participation of the associate in profits or in losses is stipulated, the same criterion shall apply to determine the participation of the associate in losses or profits.

3. If the participation cannot be determined in accordance with the previous paragraph, but the contributions of the associating party and of the associate are contractually appraised, the participation of the associate in profits and losses shall be proportional to the value of his contribution; in the absence of such appraisal, the participation shall be half of the losses or half of the profits, but an interested party can judicially request an equitable reduction, in accordance with the circumstances of the case.

4. The participation of an associate in the losses of operations is limited to his contribution.

5. An associate shall participate in the profits or losses of operations pending at the date of the beginning or termination of the contract.

6. The participation of an associate refers to the results of the accounting period, determined in accordance with the criteria set by the law or arising from commercial usage, taking into account the circumstances of the enterprise.

7. Losses suffered in previous accounting periods shall be deducted, up to the associate's limit of liability, from the profits which are payable to the associate in a certain accounting period, in accordance with the law or with the contract.

Article 556

(Duties of associating party)

1. Besides other duties arising from the law or from the contract, the associating party has the following ones:

a) to act, in running his enterprise, with the diligence of an ordered and systematic manager;

b) to preserve the essential bases of the association, in such manner as an associate could expect them to be preserved, in accordance with the circumstances of the contract and the functioning of similar enterprises; namely, in the absence of assent from the associate, he is not allowed to terminate or to suspend the functioning of the enterprise, to substitute its object or to modify the legal form of its operation;

c) not to engage in competition with the enterprise in which the association was contracted, unless under terms expressly allowing such competition;

d) to provide to the associate information justified by the nature and the object of the contract.

2. The contract can stipulate that certain management acts shall not be practiced by the associating party without previous consultation of or assent from the associate.

3. The associating party is liable towards the associate for any damage that the latter may suffer as a result of management acts practiced in breach of the contractual stipulations allowed by the previous paragraph, without prejudice to other penalties foreseen in the contract.

4. Changes of shareholders or of management of the associating company are irrelevant, unless the law or the contract provide otherwise.

Article 557

(Rendering of accounts)

1. An associating party shall render accounts at the times legally or contractually stated for the associate to claim his participation in profits or losses, and also in relation to each annual accounting period of duration of the association.

2. Accounts shall be rendered within a reasonable time limit after the end of the period to which they refer; if the associating party is a commercial company, the time limit for the presentation of accounts to the general meeting shall apply for such purpose.

3. Such accounts shall indicate clearly and precisely all operations in which the associate is an interested party and shall justify the amount of the participation of the associate in the profits or losses, if it is to take place at that moment.

4. If the associating party does not render accounts, or if the associate does not accept the accounts presented, the special procedure for presentation of accounts regulated in the Civil Procedure Code shall be used.

5. The participation of the associate in profits or losses can be immediately claimed if the accounts were judicially presented; in the contrary case, the participation in losses, to the extent that it exceeds the contribution, shall be paid within a time limit of no less than 15 days from the demand by the associating party.

CHAPTER III

TERMINATION OF CONTRACT

Article 558

(Extinction of association)

An association is extinguished by the facts foreseen in the contract, and also by the following:

a) complete accomplishment of the object of the association;

b) impossibility to accomplish the object of the association;

c) by intention of the heirs, or the expiry of a certain period of time after the death of a contracting party, in accordance with the following article;

d) by the extinction of a collective person which is a contracting party, in accordance with article 560;

e) confusion of the positions of associating party and associate;

f) rescission;

g) denunciation;

h) bankruptcy of the associating party.

Article 559

(Death of associate or associating party)

1. The death of either an associating party or an associate shall cause the consequences mentioned in the following paragraphs, unless there is a contractual stipulation providing otherwise, or an agreement between the associating party and the heirs of the associate.

2. The death of the associating party or of the associate does not extinguish the association in participation, but either the surviving party or the heirs of the deceased can extinguish it within 90 days from the date of the decease.

3. If the liability of the associate is unlimited, or higher than the contribution paid or promised by him, the association shall be extinguished 90 days after the decease, unless the heirs of the associate declare within this time limit that they want to continue as associates.

4. If the association is extinguished, the heirs of the associate shall not pay for losses incurred after the date of the decease.

Article 560

(Extinction of associate or of associating party)

1. The provisions of the previous article apply to the extinction of a collective person associate; for this purpose, the person or persons who, in the liquidation, become entitled to the position that the collective person had in the association, shall be considered heirs.

2. An association is terminated by the dissolution of the collective person associating party, unless the contract provides otherwise, or if the shareholders of the collective person pass a resolution according to which, during the liquidation, it shall continue its activity; in the latter case the association terminates at the moment of extinction of the collective person.

3. If the association is terminated by the dissolution of the collective person associating party, but if the dissolution is revoked by a resolution by shareholders, the association shall continue without interruption, if the associate so wishes, by means of a declaration addressed to the counterpart within 90 days from gaining knowledge of the revocation.

4. The heirs of the extinguished collective person are liable for any compensation that may be due to the other party.

Article 561

(Rescission of contract)

1. Contracts agreed for a specific period of time or which have as object specific operations can be rescinded by any of the parties, if a just cause occurs.

2. If such cause consists in an action committed with fault by one of the parties, such party shall compensate any damage caused by the rescission.

Article 562

(Denunciation of contract)

1. Contracts whose duration is not specified and with an object which does not consist in specified operations can be denounced by one of the parties, with an advance notice of six months, after 10 years from their conclusion.

2. A party who denounces a contract in breach of the advance notice mentioned in the previous paragraph is obliged to compensate the counterpart for the resulting damage.

BOOK III

EXTERNAL ACTIVITY OF AN ENTERPRISE

TITLE I

COMMERCIAL OBLIGATIONS IN SPECIAL

Article 563

(Rules applicable to unilateral acts of commerce)

An act is regulated by the provisions of commercial law regarding all parties even if the act only is of a commercial nature regarding one of the parties, with the exception of the provisions that apply only to entrepreneurs.

Article 564

(Integration of offer)

All sufficiently precise information or advertising transmitted in any form or by any means of communication in relation to goods and services offered or presented shall bind the entrepreneur who made it or used it, and it shall be part of the contracts that come to be agreed.

Article 565

(Usage)

1. In contracts agreed between commercial entrepreneurs in the exercise of their respective enterprises, the parties are bound by the usage to which they consent and by the practices established between them.

2. Except if there is an agreement to the contrary, it is understood that the parties consider applicable to a contract, or to its conclusion, any and every usage of which they had or should have had knowledge.

3. For the purposes of the previous paragraph, a usage is considered to be any practice or way of acting which, being regularly observed in a certain place or in a certain commercial activity, is such as to justify the expectation that it will be observed in the contract at issue.

Article 566

(Non-necessity of form in certain acts)

1. Those provisions of the Civil Code that impose a need to observe a written form regarding a bond, a promise of performance, or a recognition of debt, do not apply if these acts are practiced by an entrepreneur in the exercise of his enterprise.

2. The previous paragraph does not apply to small entrepreneurs.

Article 567

(Joint and several rule)

Except if there is an agreement to the contrary, the co-obliged under obligations arising from the exercise of an enterprise are jointly and severally liable.

Article 568

(Joint and several liability of giver of bond)

The giver of a bond regarding commercial obligations is jointly and severally liable with the respective debtor, even if he is not a commercial entrepreneur.

Article 569

(Commercial interest)

1. The interest rate in commercial matters is the default rate, without prejudice to a written stipulation to the contrary regarding methods for its determination and variation of rates.

2. In credits of a commercial nature, 2% shall be added to the rate determined in accordance with the previous paragraph in case of delay by the debtor, without prejudice to special laws.

Article 570

(Onerous character)

1. An entrepreneur who, in the exercise of his enterprise, concludes contracts or renders services in the name of a third party, has the right to claim remuneration, even in the absence of an agreement; in the case of a deposit, he can claim the usual deposit fees.

2. An entrepreneur can also charge interest from the date at which funds were disbursed in the form of loans, advances or any other expenses that he has incurred.

Article 571

(Obligations of entrepreneur who refuses mandate)

1. An entrepreneur wanting to refuse a commercial mandate that is proposed to him by another entrepreneur with whom he maintains commercial relations, must communicate this immediately to the principal; however, he is obliged to carry out, until the principal takes action, all the measures necessary for the conservation of any merchandise that may have been sent to him, provided that he is secured as to the payment of such expenses as he may need to incur.

2. If the principal takes no action after having received such communication, the entrepreneur to whom the merchandise was sent can deposit it for the account of the respective owner, under general rules, and can sell any merchandise that it is not possible to preserve, as well as the merchandise necessary to pay expenses that he has incurred.

3. The non-performance of any of the obligations mentioned in the previous paragraph creates for the entrepreneur an obligation to compensate any damage caused to the principal.

Article 572

(Death of principal)

If the exercise of the enterprise is continued, a mandate for the practice of legal acts related to the exercise of a commercial enterprise is not extinguished by the death of the principal, without prejudice to the right of the agent or the heirs to revoke it.

Article 573

(Duty of diligence)

In fulfilling obligations arising from the exercise of his commercial enterprise, a debtor is obliged to act with the diligence required of an ordered and systematic commercial entrepreneur.

Article 574

(Generic obligations)

If an obligation resulting from the exercise of a commercial enterprise has as object goods determined only generically, the debtor must deliver goods of a quality no lower than the average.

Article 575

(Deposit of goods sold)

1. In sales of movable goods made by a commercial entrepreneur in the exercise of an enterprise, if a buyer refuses or fails to take delivery of the goods bought, the seller can deposit them, for the account and at the expense of the buyer, under the terms regulated in the Civil Procedure Code.

2. The seller shall immediately communicate the deposit made to the buyer.

Article 576

(Enforcement procedure resulting from non-performance by buyer)

1. In the sales mentioned in the previous article, if the buyer fails to pay the price, the seller can resell the goods for the account and at the expense of the buyer.

2. Resale shall be done by an auctioneer in the usual terms; the seller is obliged to give timely notification to the buyer regarding the day, time and place of the resale.

3. In the case of goods subject to rapid deterioration, the seller can proceed with a sale by private negotiation, giving immediate notice to the buyer.

4. If the price obtained in the resale is not sufficient to cover the agreed price plus the amount of any damage arising from the non-performance, the seller has the right to claim the difference from the buyer; if the price obtained exceeds the agreed price plus the value of any damage suffered, the difference shall belong to the buyer.

Article 577

(Enforcement procedure as result of non-performance by seller)

1. If the object of a sale agreed between commercial entrepreneurs in the exercise of their respective enterprises is fungible goods and the seller does not fulfill his obligation, the buyer can have the goods bought without delay at the expense of the seller, being obliged to communicate such sale immediately to the seller.

2. The buyer has the right to claim from the seller the difference between the agreed price and the value of the expenses he incurred with the purchase, as well as any damage suffered.

TITLE II

CONTRACT FOR SALE OR RETURN

Article 578

(Concept)

A contract for sale or return is that by which one party delivers one or more movable goods to the other, who is bound to pay the price, unless he returns the goods within a set time limit.

Article 579

(Impossibility of return)

A party who has received goods is not released from the obligation to pay the agreed price if the return of the goods in the condition in which they were received has become impossible, even for a cause not imputable to him.

Article 580

(Disposal of goods)

1. Any acts of disposal of the goods by a recipient are valid; but his creditors cannot judicially seize such goods while their price has not been paid.

2. The party who has delivered the goods cannot dispose of them until they have been returned to him.

TITLE III

SUPPLY CONTRACT

Article 581

(Concept)

A supply contract is that by which a party binds himself to supply goods to another, continuously or periodically, against the payment of a price.

Article 582

(Quantity of supply)

1. If the quantity to be supplied is not determined, it is deemed to correspond to the normal needs of the client, taking into account the moment of the conclusion of the contract.

2. If the parties have established only the maximum and minimum limits for the entire supply or for each individual delivery, the quantity due shall be established, within those limits, by the client.

3. If the quantity of the supply is to be determined in accordance with needs and if a minimum quantity was stipulated, the client is bound for the quantity corresponding to his needs that exceeds the said minimum limit.

Article 583

(Determination of price)

In a periodic supply, if the price is to be determined according to the provisions of article 873 of the Civil Code, the date on which each periodic performance occurs shall be taken into account.

Article 584

(Payment of price)

In periodic supply contracts, the price is paid at the moment of, and in proportion to, each periodic performance; in continuous supply contracts, the price is paid at the stipulated frequency or, in the absence of stipulation, in accordance with usage.

Article 585

(Maturity of each performance)

1. The time limit established for each performance is presumed to have been agreed in the interests of both parties.

2. If the client has the power to set the date of maturity of each individual performance, he shall communicate to the counterpart the date for the supply with adequate advance notice.

Article 586

(Rescission of contract)

In case of non-performance by one of the parties in relation to individual performances, the other party can rescind the contract, if the non-performance, given its seriousness, is such as to cast doubt upon the proper fulfillment of the remaining performances.

Article 587

(Suspension of the supply)

1. The suspension of the supply cannot be effected without a reasonable advance notice, except in the case of fortuitous events or force majeure.

2. If a client is in a situation of non-performance, of minor importance, a supplier cannot suspend the execution of the contract without adequate advance notice.

Article 588

(Pre-emption agreement)

1. An agreement by which a client binds himself to give a pre-emption right to a supplier in the conclusion of a new contract, for the same purpose, cannot be extended for more than five years; if a longer period is stipulated, it is deemed to be reduced to such limit.

2. The client has an obligation to notify the supplier of the conditions proposed to him by third parties, and the supplier, under penalty of lapse of his right, shall declare within the established time limit or, in its absence, within a period required by circumstances or by usage, whether he intends to exercise his pre-emption right.

Article 589

(Exclusive dealing in favor of supplier)

If exclusive dealing in favor of a supplier has been agreed, the counterpart cannot receive performances of the same nature from third parties nor, unless otherwise agreed, can he promote with his own means the production of the goods which form the object of the contract.

Article 590

(Exclusive dealing in favor of client)

1. If an exclusive dealing clause has been agreed in favor of a client, the supplier cannot directly or indirectly perform any supplies of the same nature within the zone for which the exclusive right was granted and for the duration of the contract.

2. A client who assumes an obligation to promote the sale of goods for which he has exclusive rights within the zone assigned to him is liable for any damage in case of non-performance of such obligation, even if he has performed to the minimum limit set in the contract.

Article 591

(Denunciation)

Denunciation is allowed only in supply contracts agreed for an undetermined period of time, and must be made with the advance notice stipulated, or arising from usage; in the absence of stipulation or usage, with adequate advance notice having regard to the nature of the supply contract.

Article 592

(Reference)

The provisions governing the type of contract to which the individual performances of supply correspond shall apply to a supply contract, to the extent that they are compatible with the preceding articles.

TITLE IV

COMMISSION CONTRACT

CHAPTER I

GENERAL PROVISIONS

Article 593

(Concept)

A commission contract is a mandate by which a commercial entrepreneur undertakes to buy or sell goods in his own name, but for the account of another person, against payment.

Article 594

(Revocation of commission)

Before a contract is concluded, the principal can at any time revoke the order for its conclusion; in such case the commission agent shall be entitled to reimbursement of expenses incurred and to a remuneration proportional to the service rendered.

CHAPTER II

RIGHTS AND OBLIGATIONS OF PARTIES

Article 595

(Obligations of commission agent)

A commission agent is obliged:

a) to take adequate measures to protect the interests of the principal, and to follow his instructions;

b) to provide relevant information to the principal, and in particular to promptly communicate the execution of the commission;

c) to render accounts to the principal on transactions effected, and to deliver to him the results of the operation.

Article 596

(Non-performance of commission or disrespect of instructions)

1. A commission agent can cease to execute a commission or deviate from instructions received in the presence of circumstances which, being unknown to the principal and which it is not possible to timely communicate to him, make it reasonable to suppose that, if the principal had known them, he would have given his approval.

2. Besides the cases mentioned in the previous paragraph, a commission agent who does not fulfill a commission in conformity with instructions received or, in their absence or insufficiency, with commercial usage, shall be responsible for the act if the principal does not ratify it, unless the counterpart knew or had an obligation to know of the abuse.

Article 597

(Safekeeping of merchandise and protection of rights of principal)

1. A commission agent is obliged to provide for the safekeeping and conservation of merchandise that he receives for the account of a principal, and to take measures necessary to safeguard his rights regarding the carrier, should the merchandise show visible sign of having suffered damage during transportation or arrive with delay.

2. If deterioration is such as to require urgent measures, the commission agent can have the merchandise judicially sold.

3. The commission agent should give immediate notice to the principal if any of the situations mentioned in the previous paragraphs occurs, or if the merchandise does not arrive.

4. The commission agent is obliged to observe the provisions of the previous paragraphs, even if he has refused a commission proposed by the principal.

Article 598

(Liability of commission agent regarding safekeeping of merchandise)

1. While performing safekeeping and conservation of a principal's merchandise, a commission agent is responsible for its loss or deterioration, except if this is the result of a cause not imputable to him.

2. The commission agent is not obliged to insure the principal's merchandise, except if otherwise agreed or arising from usage.

Article 599

(Verification of damage occurring to merchandise)

Irrespective of its cause, a commission agent is obliged to have any damage occurring to merchandise that he detains for the account of a principal verified in accordance with the law, and to give notice to him immediately, under penalty of liability for damage caused.

Article 600

(Liability of commission agent for defective performance)

1. A commission agent who sells for a price lower than that indicated to him by a principal or, in the absence of an indicated price, for less than the going price, is responsible towards the principal for the price difference, except if he proves that the sale prevented greater damage to the principal, and that circumstances did not allow him to fulfill his instructions.

2. If the commission agent buys for a price higher than that indicated to him or, in the absence of indication, for more than the going price, the principal is not obliged to accept the transaction, except if the commission agent agrees to receive only the price that was indicated to him by the principal or, in the absence of indication, the going price.

3. If the commission agent's excess consists in the fact that the goods bought are not of the recommended quality, the principal can refuse the transaction.

4. The provisions of the previous paragraphs do not affect the right of the principal to demand compensation for damage resulting from non-performance of the commission.

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^ ] Commercial Code - Table of Contents ] Commercial Code - Table of Article ] Decree-Law no. 40/99/M ] Commercial Code - Art. 1 - 100 ] Commercial Code - Art. 101 - 200 ] Commercial Code - Art. 201 - 300 ] Commercial Code - Art. 301 - 400 ] Commercial Code - Art. 401 - 500 ] [ Commercial Code - Art. 501 - 600 ] Commercial Code - Art. 601 - 700 ] Commercial Code - Art. 701 - 800 ] Commercial Code - Art. 801 - 900 ] Commercial Code - Art. 901 - 1000 ] Commercial Code - Art.1001 - 1100 ] Commercial Code - Art. 1101 - 1200 ] Commercial Code - Art. 1201 - 1268 ]


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