The purpose of this paper is to examine the current scope of Italian pre-contractual liability, recently broadened by case law to embrace the conclusion of a «valid but disadvantageous» contract for the victim of a breach of good faith during negotiations. A preliminary focus on the traditional view followed by Italian case law shows that the rule contained in the Civil code’s article 1337 (which obliges the parties to act in accordance with the principle of good faith during the phase of negotiations), although it contains a general principle, has been considered as operative only in cases of unjustified withdrawal from the negotiations and in cases where one party, aware of the existence of a ground of invalidity in the concluded contract, fails to warn the other party (article 1338 Civil Code). The penalty of such behaviour is the payment of damages to the extent of the so-called “negative interest”: costs incurred during the negotiations and lost opportunities for income. In recent years, the Courts have gradually abandoned this strict interpretation: at first, the detriment suffered by one party as a result of the delay of the other party in signing the contract was considered compensable. In a second step, the Sezioni Unite of the Italian Court of Cassazione accomplished the revirement, stating clearly that pre-contractual liability also works when a contract is concluded that is “valid but disadvantageous” for the victim of a breach of good faith. In this case, the damages cannot be limited to traditional “negative interest”, but must refer to the “decrease of profitability” or “increase of economic burden” produced by the unfair dealing. Thanks to this new interpretation, culpa in contrahendo becomes the remedy for breach of good faith during negotiations which affect the profitability of the contract. When this occurs, the disadvantage may be objective - when the contract terms are not adjusted to market values - or subjective - when the contract terms are less profitable than one party could reasonably expect taking into account the other party’s statements made during negotiations. In both cases, as case law states clearly, the party who breaches good faith is liable for any economic gap in contract terms. Such a remedy provides more effective protection than invalidity of the contract and right of withdrawal, as it entitles the aggrieved party to the legitimately expected profits (or savings). In this way, the Italian legal system seems to incorporate and generalize to all contractual relationships a kind of remedy that has already been adopted in European contract law with reference to business to consumer relationships.
PRE-CONTRACTUAL LIABILITY IN ITALY TOWARD THE EUROPEAN PATTERN
FEBBRAJO, TOMMASO
2012-01-01
Abstract
The purpose of this paper is to examine the current scope of Italian pre-contractual liability, recently broadened by case law to embrace the conclusion of a «valid but disadvantageous» contract for the victim of a breach of good faith during negotiations. A preliminary focus on the traditional view followed by Italian case law shows that the rule contained in the Civil code’s article 1337 (which obliges the parties to act in accordance with the principle of good faith during the phase of negotiations), although it contains a general principle, has been considered as operative only in cases of unjustified withdrawal from the negotiations and in cases where one party, aware of the existence of a ground of invalidity in the concluded contract, fails to warn the other party (article 1338 Civil Code). The penalty of such behaviour is the payment of damages to the extent of the so-called “negative interest”: costs incurred during the negotiations and lost opportunities for income. In recent years, the Courts have gradually abandoned this strict interpretation: at first, the detriment suffered by one party as a result of the delay of the other party in signing the contract was considered compensable. In a second step, the Sezioni Unite of the Italian Court of Cassazione accomplished the revirement, stating clearly that pre-contractual liability also works when a contract is concluded that is “valid but disadvantageous” for the victim of a breach of good faith. In this case, the damages cannot be limited to traditional “negative interest”, but must refer to the “decrease of profitability” or “increase of economic burden” produced by the unfair dealing. Thanks to this new interpretation, culpa in contrahendo becomes the remedy for breach of good faith during negotiations which affect the profitability of the contract. When this occurs, the disadvantage may be objective - when the contract terms are not adjusted to market values - or subjective - when the contract terms are less profitable than one party could reasonably expect taking into account the other party’s statements made during negotiations. In both cases, as case law states clearly, the party who breaches good faith is liable for any economic gap in contract terms. Such a remedy provides more effective protection than invalidity of the contract and right of withdrawal, as it entitles the aggrieved party to the legitimately expected profits (or savings). In this way, the Italian legal system seems to incorporate and generalize to all contractual relationships a kind of remedy that has already been adopted in European contract law with reference to business to consumer relationships.I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.
