What are the consequences of the emergency provisions enacted in Italy on the performance of pending contracts? | EN

In the absence of specific agreements among the parties, the general principles of contract law and in particular, Art. 1218 Italian Civil Code, provides for that the debtor not precisely performing its obligation is liable for compensation of damages, unless he/she does not prove that the non-performance or its delay are due to impossibility of the performance for grounds that are not accountable to him/her.

Art. 91, Executive Decree 17 March 2020 no. 18 (Decreto “Cura Italia”) the compliance with the control measures of the epidemic emergency for COVID-19 put in place with Executive Decree 23 February 2020 no. 6 is always assessed for the exclusion of the liability of the debtor according to and for the effect of Art. 1218, Italian civil Code.

Hence, there is no automatic exclusion of liability. The burden to prove the impossibility to perform stays with the debtor. In each specific case, one shall examine whether the ban to carry out commercial or manufacturing activities or the suspension of them, ultimately with the Decree of the Presidency of the Council of Ministries of 22 March 2020, result in a real impossibility for the involved businesses to perform their obligations vis-à-vis their commercial partners. It has also to be taken into account Art. 1 (c) of the latter Provision, according to which the businesses can keep on carrying out the activities, that would be suspended, if they are organized in a way that social distancing and smart working are possible.

COVID-19 Task Force by LawFed
Robert Rudek Federico Maccone