Termination of contract by non-performance in the current Italian legal system
6. Nowadays the timing plays a key role for the entrepreneur as the allocation of investment is carried out taking into account time critical risks. Therefore a legal
system where a judgment is necessary in order to terminate a contract is inefficient because it takes more time to be released from a contract18. Because of the time in-volved in the administration of justice and the unpredictability of court rulings, contracts play a crucial role in our society where there is an ever-increasing need to anticipate different possible outcomes19. Therefore the aim of the parties during the conclusion of a contract is to predict the critical issues that could arise during the relationship and lay down procedures able to resolve them20.
In this social and economic context, would it be possible for parties to put a clause in a contract in which they could terminate a contract without going to court? In other words, could they expand the field of application of the explicit termination, going beyond the specific obligation provided in the contract? On one
17 See Castronovo, Principi di diritto europeo dei contratti, Parte II, Milano, 2001, 467.
18 On a judgment as an inefficient solution for the market, see Padovini, Scioglimento unilaterale del vincolo fra recesso e impugnazione del contratto nella proposta di diritto comune europeo della vendita, in Giust. civ., 2014, 495, Della Casa, Il giudice e la risoluzione del contratto nell’esperienza italiana e nella prospettiva eu-ropea, in Studium iuris, 2006, 538, Schmidlin, La risoluzione del contratto nella prospettiva storico-dogmati-ca: dalla nullità ex tunc al rapporto di liquidazione contrattuale, in Eur. dir. priv., 2001, 825, 840, Conte, L’uniformazione della disciplina giuridica della risoluzione per inadempimento e, in particolare, dell’anticipa-tory breach dei contratti, cit., 481.
19 On predictability as a key constituent element of Capitalism and on contracts as instruments which aim at giving predictability to the system, see Irti, Un diritto incalcolabile, Torino 2016, 3, 39, 48.
20 On the role of contracts in which the parties can rule future issues, see Di Majo, La tutela civile dei diritti, Milano, 2013, 61, Guerrini, Le restituzioni contrattuali, Torino, 2012, 191, Roppo, Il contratto, in Tratt.
Iudica-Zatti, 2011, 975. On the role of the new lex mercatoria, see Rodotà, Un codice per l’Europa? Diritti nazionali, diritto europeo, diritto globale, in Codici, una riflessione di fine millennio, a cura di Cappellini, Sordi, Milano, 2002, 558, Bonell, La moderna lex mercatoria tra mito e realtà, in Dir. commercio internaz, 1992, 315, Giardina, La lex mercatoria e la certezza del diritto nei commerci e negli investimenti internazi-onali, in Riv. dir. internaz. priv. e proc., 1992, 461.
hand it could be said that the rules on the termination of contract are mandatory because termination is a penalty21. Thus a third party, such as a judge, should check non-performance with regard to the interest of the other party. On the other hand it cannot be ignored that in Uniform Private Law a judgment is not necessary in order to terminate a contract.
Can this model influence the interpretation of our rules on termination of a contract?
I believe that it is necessary to go beyond a domestic approach and move towards a European perspective in the interpretation of our current legal system. This means that a distinction has to be drawn between the termination of a contract and the liability of a party. As has been shown, in both models the interest of the termina-tion is to release the party from a contract in order to be able to request performance from another party22. In this case it does not matter if the non-performance is due to intention or fault which are the two alternative requirements for establishing whether the party is or is not liable for damages. Thus if the parties are in an equal position (such as business to business contracts) they could lay down in a contract suitable rules to avoid the need for a judicial termination (as currently required by the Italian civil code) and instead comply with the existing European model. Parties could then choose to be released from a contract more easily. If the parties do not put any clause in a contract ruling out judicial termination, judicial termination would still apply.
21 On termination as a penalty, see Auletta, La risoluzione per inadempimento, Milano, 1942, 147.
22 See Lorenz, Prospettive del diritto europeo dei contratti: la violazione di un obbligo, in Riv. dir. civ., 2010, 104.
Abstract
This paper aims to outline the termination of contract by non-performance in the current Italian legal system, taking into account the rules of European Private Law.The conclusion that can be drawn from the civil code is that a contract can usu-ally be dissolved with a judgment in domestic law. In other words, if the court de-termines that the non-performance has more than slight importance with regard to the interest of the other, the contract is terminated. The ruling produces the termi-nation of contract.
If you widen the research to Uniform Private Law (see Convention on Contracts for the International Sale of Goods, the Principles of European Contract Law, Un-idroit Principles of International Commercial Contracts, the Draft Common Frame of Reference), it can be seen that a judgment is not necessary in order to terminate a contract. The non-defaulting party can terminate a contract by a notice to the other party.
In this paper the author seeks to understand if these rules which are already part of our system can influence the interpretation of the termination of contract by non- performance in the current Italian legal system.