1. Introductory Note
 

The national legislator approved Decree-Law no. 3/2022, of 25 May, which passes the Legal Regime of Commercial Contracts (RJCC).

It is taken from the preamble of the aforementioned normative act, that the ratio behind it was the revision and autonomisation of the Third Book of the Commercial Code, approved by Decree-Law no. 2/2005, of 27 December, and its transformation into the RJCC, with the purpose of harmonizing the provisions on obligations and contracts with other legal regimes which are more progressive and friendly to the market economy and development,  occurred in recent years, as well as to adapt to modern trends in international trade, and the need to respond to the demands dictated by integration in the regional and continental market.[1]

In pursuit of this desideratum, the new RJCC, adopts different types of commercial contracts, of which, for the purpose of this article, we would highlight the "Operational Renting", which, in this case, finds its legal framework in the figure of "Commercial Renting", and the "Commercial Leasing".

An important prior point to be made for the correct understanding of this regime is to fully grasp the fact that the RJCC will only be applicable when contracts are concluded between entities that enter into them while in the exercise of their business activity. In this sense, and since the object of this article is the classification of renting and operational leasing services in the legally typified categories of commercial leasing and commercial rental, as provided for under the RJCC, this contractual premise regarding the quality in which the parties to the respective contractual figures act is the basis to our analysis for the qualification of these socially typical services.

 

2. Commercial Contracts

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The legislature defines the commercial contract as "... the agreement of wills, concluded between two or more parties, in the exercise of their business activity, aiming to create, alter or extinguish rights and obligations."

An important note is that the "Operational Renting", which concerns us here, does not configure a type of contract specified or named by the national legislator, but is incorporated into the so-called legal typified category of " Commercial Renting" contracts.

In this sense, at first, we will address each of these legal institutes provided for in the diploma, namely the "Operational Renting" and the “Operational Leasing”, as being encompassed under the legally provided institutes of “Commercial Renting”, and "Commercial Leasing", respectively, with regard to its definition and characteristics, in order to, in a second and last moment, present the main differences of the same.

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3. Operational Renting (Commercial Renting)

3.1. Definition

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As previously clarified, Operational Renting resulting from a contract concluded between entities in the exercise of their business activity, is a figure that finds framework in the so-called Commercial Renting, so that it is to this legal figure that we will refer for a better understanding of the case in study.

Commercial Renting, consists of the agreement by which, one party, the lessor, undertakes to provide to another, the lessee, the temporary enjoyment of one or more goods, by way of consideration in cash or in kind.[2]

Two fundamental moments emerge from this notion, the first of which is characterized by the availability of the rented property, which translates into the obligation of the lessor to make the property available to the lessee at the beginning of the rental period and at the place of execution[3], while the second moment is characterized by the return of the good, translating into the obligation of the lessee to return the good, under the terms of the contract and in the agreed place.[4]

 

3.2. Form

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Under the RJCC, in general, for commercial contracts, the legislator establishes the principle of freedom of form, meaning that the conclusion of the commercial contract does not depend on the observance of a special form, except when the law requires so, and its proof can be made by any means, including witnesses.[5]

In this sense, in the cases where the legislator does not provide for a form requirement in relation to the legal regime established for Commercial Rental Contract, freedom of form will be observed, as the general rule. However, examples may be given regarding specific cases where the legislator requires the written form to be observed for the valid conclusion of the commercial rental contract, as is the case with contracts for the use of aircrafts, to which the civil aviation legislator refers that, where an air operator uses aircrafts which are not its property, it is obliged to celebrate a written contract.

 

3.3. Duration and Term of the Commercial Renting

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The commercial renting contract may be of a fixed duration or of an indefinite duration or term.

In the case of a fixed-term renting, it expires within the period stipulated in the contract and cannot be terminated by one of the parties without cause before such period, unless otherwise stipulated by the parties.

On the other hand, the renting for an indefinite period, observes its expiry within the period specified in the notification of termination of the contract made by either party. Meaning that in this case the renting can be terminated by notification from one party to the other.

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4. Commercial Leasing

4.1. Definition

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Commercial Leasing has its discipline established in articles 256 to 267 of the RJCC.

Commercial Leasing is a means by which the lessor grants the lessee the temporal right to use certain goods, upon payment of rent, and the option to purchase the good at a price[6].

Moreover, the exercise price of the call option must be fixed in the contract or determinable according to the agreed procedures and guidelines.

Again, as in the Operational Renting, the RJCC only applies when the contract is concluded between entities in the exercise of their business activities, and therefore does not apply to similar contracts but concluded with consumers.

Commercial Leasing differs from the so-called financial leasing, since this figure is regulated activity in Mozambique under Law no. 20/2020, of 31 December (Legal regime of credit institutions and financial companies), reserved for banks and financial leasing companies (pursuant to article 34 of Decree no. 56/2004 of 10 - Regulation of the Law on Credit Institutions and Financial Companies).

 

Financial leasing is defined under that regime in the following terms: "– a contract by which one of the parties (lessor) undertakes, in return, to transfer to the other (lessee) the temporary enjoyment of a thing, movable or immovable, acquired or built at the direction of the lessee, which may or may not be allocated to a productive investment or to services of manifest economic or social interest,  and that the lessee may purchase, after the agreed period, at a price determined or determinable by simple application of the criteria laid down in the contract."

 

In this regard, the distinguishing feature between financial leasing and commercial leasing is that, while the former presumes that the lessor transfers a thing, movable or immovable, that did not originally belong to him and that he had to acquire from a third party by indication of the lessee (extracting from this fact its framework as a regulated activity, as it falls within the modality of consumer credit operations), the latter is characterized by the fact that the leased object belongs ab initio to the lessor (thus removing the credit component of the operation).

 

4.2. Form

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Similar to what happens with Commercial Renting, the general rule that guides the formation and execution of Commercial Leasing, is that of freedom of form, except when the law determines otherwise.

However, it is important to refer that the commercial leasing can only be invoked against a creditor of the parties if the contract is executed in written form.

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4.3. Duration of Commercial Leasing

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As is established by the very purpose of the commercial leasing, consisting of a contractual relationship, through which the lessor grants the lessee the temporal right to use certain goods, against the payment of a rent, and the option to purchase the property, at a price, it follows that the commercial leasing always has a fixed duration.

Thus, the time of the rents to be paid for the use and enjoyment of the goods, determines the duration of the commercial leasing, regardless of whether or not the right of purchase option is exercised by the lessee, at the end of the period of payment of the rent.

 

5. Main Differences between Operational Renting (Commercial Renting) and Commercial Leasing

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First of all, it should be noted that both commercial renting and commercial leasing are intended to be a granting, by the lessor, of a temporary enjoyment of one or more goods to the lessee, by way of remuneration, which is the rent, with the essential difference that, in the case of commercial leasing, a call-option to purchase the leased property by the lessee is added,  upon payment of a price to the lessor.

From this aspect common to both regimes, it can be drawn that, if the leased asset is a passenger motor vehicle or goods motor vehicle, the Rent-a-Car legal regime will apply, the activity of which is defined in the Law as "that which consists of the rental of a passenger or goods motor vehicle, under the responsibility of the lessee". Being this activity subject to the Rent-a-Car regime implies that providers of renting and/or commercial leasing services are subject to the regulatory requirements imposed in this regime.[7]

However, from a careful analysis of each of the legal regimes, there are some aspects or criteria that differentiate these legal institutes, namely:

 

(i). Rent Criterion

In commercial renting, the rent may not have been stipulated by the parties and, in that case, will be determined by resorting to circumstances similar to those at the time of conclusion of the contract.

In turn, in commercial leasing, because the fixing of the rent is a determining element of the duration of the contract and the possibility of acquiring the asset, commercial leasing cannot be conceived without having stipulated the rent to be paid for it and the price to exercise the option to purchase the asset.

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(ii). Contract Duration Criterion

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It follows from the legal regime of commercial renting that it may be concluded for a definite or indefinite period.

However, the commercial leasing regime is not compaginable to the situation of duration for an indefinite period, so that, ab initio, a clear definition of the position of the parties is required, indicating  the quantum of the rents to be paid, which will allow to assess at what moment the lessee can exercise his call-option.

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(iii). Return and/or Option to Purchase Criteria

According to this criterion, it is acquiesced that, while the commercial renting generates the obligation for the lessee to return to the lessor the leased property at the end of the contract, under the terms of the contract and at the agreed place, in the case of commercial leasing, the lessee has the option to purchase the property at a price, agreed by the parties and there is only an obligation to return the leased property if the lessee does not choose to exercise the option of purchase.

 

6. Consultation Sources

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• Law no. 20/2020, of 31 December (Legal framework of Credit Institutions and Financial Companies);

• Law no. 5/2016, of 14 June (Civil Aviation Law);

• Decree-Law no. 3/2022, of 25 May (Approves the Legal Regime of Commercial Contracts);

• Commercial Code;

• Civil Code;

• Decree no. 56/2004, of 10 December (Approves the Regulation of the Law on Credit Institutions and Financial Companies).

• Decree no. 35/2019 (Regulation for Transportation in Automobile Vehicles and Trailers).

 

[1] See Preamble to Law no. 3/2022, of 25 May.

[2] See Article 233 of the RJCC.

[3] See Article 235 of the RJCC.

[4] See Article 251 of the RJCC.

[5] See Article 5 of the RJCC.

[6] See Article 257 of the RJCC.

[7] Decree n.º 35/2019