1. Maria Giulia Roversi Monaco
PRINCIPLES OF LAW
A.A. 2018/2019

2. Principles of italian private law
G. Iudica, P. Zatti, Language and rules of italian private law: an introduction
11, 12, 13, 14

3. Principles of italian private law Iudica Zatti Chapter 11 – The law of obligations
Art CC – Sources
Contracts (art ff CC)
Unlawful acts (art ff CC)
Any other acts or facts capable of creating obligations = specific rules for each case (promise to the public, unjust enrichment)
The performance (object of the obligation) must be capable of economic evaluation and must correspond to an interest of the creditor (1174 CC)
1) obligation to give: to deliver something, both material thing (car) and the right of ownership on it

4. Principles of italian private law Iudica Zatti Chapter 11 – The law of obligations
The performance/object of the obligation is the act of delivering the thing, which is the subject matter of the performance.
2) obligation to do something: performing an activity to satisfy the creditor’s interests (contract of mandate). The obligation to give always comprehends as well an obligation to do (duty to safeguard the thing until delivery – art CC)
3) obligation to restrain from doing something: refraining from doing a specific activity (refrain from competition – art CC)

5. Principles of italian private law Iudica Zatti Chapter 11 – The law of obligations
The system favors the creditor to promote the circulation of wealth.
The creditor strenght springs from the debtor’s solvency
1175 CC = duty to behave according to the rules of fairness
1375 CC = duty to behave according to good faith in performing the contract
1176 CC = duty on debtor to apply good pater familias diligence, normal due diligence
General rules, then specific contracts may have specific prescriptions (carriage contracts = duty to ask for instruction)

6. Principles of italian private law Iudica Zatti Chapter 11 – The law of obligations
1206 ff and 1227 ff CC = the creditor has the duty to cooperate with the debtor to get the performance and, in case of non performance, must avoid additional damages
Obligation = not a mere duty, but also a constraint. Legal duty and liability (art CC = the debtor is liable with all his present and future property for the performance of his obligations)
Due performance = exact execution of the performance

7. Principles of italian private law Iudica Zatti Chapter 11 – The law of obligations
If the debtor does not give the due performance, he is in default unless he proves that the non performance is not imputable to him
Diligence in performance
Art CC = diligence of the good pater familias, reasonable person. When lacking = fault by the debtor
Art. 1176, 2 CC = in case of professional activity the diligence is checked according to the rules of the art = technical diligence

8. Principles of italian private law Iudica Zatti Chapter 11 – The law of obligations
Result of the performance = aimed to satisfy of an interest of the creditor.
In some cases the exact performance requires the achievement of the result (delivery of a thing, payment of a sum of money)
Each contract draws the nature and the content of the obligations on the debtor.
Obligations of means = lawyers, doctors, professionals
Obligations of result = duty to produce a certain result (art CC = the contractor has the duty to perform the work or the servic)

9. Principles of italian private law Iudica Zatti Chapter 11 – The law of obligations
Exact performance requires compliance with all the criteria outlined in the CC and in each contract: place, time, person carrying out the performance, person receiving the performance, identity of performance
Portable performance = executed at the creditor’s address (payment of a sum of money)
Delivery of a determinate thing = where the thing was when the obligation arose
Querable performance = carried out at the debtor’s address

10. Principles of italian private law Iudica Zatti Chapter 11 – The law of obligations
Time is either specified, or the creditor can ask for immediate performance
Person who performs the obligation = art CC = the obligation can be performed by a third, if the creditor does not have a specific interest in having the original debtor perfoming it personally
The obligation is performed when it is executed in the hands of the creditor or of an agent of the creditor

11. Principles of italian private law Iudica Zatti Chapter 11 – The law of obligations
Thus the payment must be repeated unless the creditor approved it
Apparent creditor: (i) unambigous circumstances; (ii) good faith of debtor; (iii) faulty conduct of real creditor = no repetition of payment to the real creditor (art CC)
Identity of performance = a new performance can be substituted to the original one (if the original had securities, the stay on – art CC)

12. Principles of italian private law Iudica Zatti Chapter 11 – The law of obligations
Non performance = mismatch between exact performance and the one carried out. The system seems to charge the debtor with the liability for non performance
1218 CC = the debtor is liable unless he proves that the impossibility of due performance derives from a cause non imputable to him. He must apply any effort to execute the obligation.
Thus due diligence does not always exonerate the debtor from liability

13. Principles of italian private law Iudica Zatti Chapter 11 – The law of obligations
Impossibility must be objective and absolute: hazard, force majeure, act of authority = strict liability regardless of any faulty conduct by the debtor
Impossibility never works with replaceable things (money)
The system makes the contractual constraints as solid as possibile, thus due diligence is a mean to check the exactness of performance, not a criterion to exonerate the debtor (obligation of means = diligent conduct)

14. Principles of italian private law Iudica Zatti Chapter 11 – The law of obligations
Obligations may become non–actionable when, even if still possible, the performance has become so difficult that it goes againt the rule of fairness to ask for its execution (Jewish not paying rent because hidden during the IIWW)
Non performance = liability for damages: (i) lacking; (ii) flawed; (iii) delayed
The creditor can sue for coercitive execution: (a) in case of payment of a sum of money or delivery of replaceable thing, expropriation of debtor’s properties and sale (2910 CC)

15. Principles of italian private law Iudica Zatti Chapter 11 – The law of obligations
b) specific performance = mandatory delivery of a specified thing (2930 CC); enforcement of obligations to do or not to do something (2931, 2933 CC)
Default of creditor (1207 CC) = (i) risk upon the creditor of supervening impossibility of performance due to cause non imputable to debtor; (ii) interests are not longer due and the fruits that have not been taken as well; (iii) creditor is liable for damages deriving from his default and for expenses for the conservation of the thing

16. Principles of italian private law Iudica Zatti Chapter 11 – The law of obligations
1223 CC = damages are the actual loss and the loss of profits when direct and immediate consequences of the non performance
Compensation covers only the predictable damages (predictability is checked when the obligation arose), unless the non performance is intentional (1225 CC)
In case of contribution to damages by the creditor and in case of negligence on his side, and when they could have avoided by using ordinary diligence, damages are reduced according to the consequences (1227 CC)

17. Principles of italian private law Iudica Zatti Chapter 11 – The law of obligations
Link of causation = directness and immediateness = free of extraneous and intermediary causes = the criterion is to examine the primary cause of the damages and see whether the event was potentially apt to create the damges themselves
Adequate causation = damages are awarded in case of reasonable consequences = consequences expected to derive from a certain event

18. Principles of italian private law Iudica Zatti Chapter 11 – The law of obligations
Nominate contracts = regulated by the legal system
Innominate contracts = created by the parties
Leasing, factoring, franchising were innominate contracts which have then be disciplined by the system
The limit to the freedom of contract and contents of contract is that the interests which are pursued must be protected by the legal system
The general rules of contract (good faith etc) apply to innominate contracts

19. Principles of italian private law Iudica Zatti Chapter 11 – The law of obligations
1226 CC = when damages cannot be assessed, Courts can liquidate the equitably
Obligations may be discharged also for (i) novation (substitution of the old obligation with a new one – 1230 ff CC); (ii) declaration of remission of debt (1236 ff CC); (iii) compensation (the parties are bound one to the other to execute different obligations having different sources and they are both debtor and creditor depending on the obligation: the exact performance of each of them is considered as discharging the other one – 1241 ff CC); (iv) merger (debtor and creditor becomes the same person); (v) supervening impossibility

20. Principles of italian private law Iudica Zatti Chapter 11 – The law of obligations
Primary performance and secondary performances spring from a fundamental obligation
Alternative obligations = more than 1 performance as subject matter (1285 CC), one or the other are ok depending on the choice of the debtor (1286 CC). If one becomes impossibile, then the obligation is considered simple
Elective obligations = the parties agree, in the sole interest of debtor, to discharge the obligation by electing another performance. So if it becomes impossible, the debtor is free when the impossibility is not imputable to him

21. Principles of italian private law Iudica Zatti Chapter 12 - The law of contract
Contract = from reality to legal concept
Covenant between parties – pacta sunt servanda as principle of civilisation
Initially the covenant was a preliminary operation which gave more strenght to the commitment. In modern time the covenant is reduced to its essence.
1321 CC = A contract is an agreement between 2 or more parties to establish, regulate or estinguish a patrimonial legeal relationship among themselves

22. Principles of italian private law Iudica Zatti Chapter 12 - The law of contract
Any agreement capable of economic evaluation and having an economic content is a contract
Thus not any agreement is necessarily a contract. The definition is very broad and covers all kind of relations where we can find an economic content (from buying a pair of shoes to sign a merger)
The common feature is that the subject matter is economically measurable

23. Principles of italian private law Iudica Zatti Chapter 12 - The law of contract
Requisites: agreement, causa, subject matter, form
The main purpose of contracts is to regulate the behaviours of the parties = 1372 CC = it has the force of law between them
Art CC = agreement to establish a certain set of interests between the parties
1) it can transfer ownership or establish and transfer property rights
2) it can create obligations
3) it can produce both the effects

24. Principles of italian private law Iudica Zatti Chapter 12 - The law of contract
Agreement: conformity of intents, meeting of wills, concurrence of interests
It is also made by facts (gestures, behaviors). Different wills converge in setting up the discipline of the different interests
Agreements need more than one party
Unilateral acts = promise, notice of termination, exercise of voting right, power of attorney, notice to perform, the declaration of renunciation

25. Principles of italian private law Iudica Zatti Chapter 12 - The law of contract
Party = center of interests. We have 2 or more parties when we have more and different centers of interests. Thus an act can be unilateral even if it is made by more than 1 legal or natural person
The parties are holder of conflicting interests and the lawmakers must find the correct balance between these interests when they create the abstract type
1324 CC = rules appliable to unilateral acts to the extent compatible (most rules require 2 parties to make sense)

26. Principles of italian private law Iudica Zatti Chapter 12 - The law of contract
1337 CC = principle of good faith = parties must behave according to good faith - Fair dealing
1338 CC = duty to inform the other party of any reason for invalidity of the contract. The breach of the good faith principle in such a case does not affect the validity of the contract but it can create pre-contractual liability if the other party has relied on the validity of the contract

27. Principles of italian private law Iudica Zatti Chapter 12 - The law of contract
1366 CC = good faith works in the interpretation of the contract as well, so one party must give to the behaviour of the other the “good faith” meaning
1375 CC = good faith must be respected in performing the contract (see 1175 CC on debtor and creditor relationship), so good faith integrates the effects of contracts
Contractual autonomy = fundamental value of economic liberalism – people are free to pursue their own economic ends and to elect their own relations

28. Principles of italian private law Iudica Zatti Chapter 12 - The law of contract
Evolution of the contractual autonomy concept which becomes restricted by
1) protection of specified interests prevailing over the free market = art. 41 Cost. economic initiative must not conlict with social utility or prejudice human safety, freedom and dignity
Limits = urban planning, environmental protection, development of the distribution network
2) protection of free competition = antitrust rules
3) protection of the weaker parties: rates of services, prices of commodities

29. Principles of italian private law Iudica Zatti Chapter 12 - The law of contract
Contractual autonomy is linked to the rule that the contract has binding force between the parties, thus everyone cannot manage others interests
An economic advantage cannot be imposed, so a gift is a contract because it must be accepted by the receiver
Fundamental freedom to enter or not enter a contract.
Exceptions: 1) duties to contract based on a law (legal obligations to contract) = companies holding a legal monopoly ( transport service, water service) have a duty to contract with customers; 2) duties based on a precedent contract (voluntary obligation to contract) = preliminary contract stating the obligation to enter the final (enforceable through art CC)

30. Principles of italian private law Iudica Zatti Chapter 13 – The elements of contract
1325 CC: agreement, causa, subject matter, form. When they lack, the contract becomes void or voidable
AGREEMENT: persons, having legal capacity to act, and expression of wills
Explicit will = the manifestation is communicated through words, or it is written down (gestures as well: auctions)
Tacit will: no express sign, but the behaviour of the person is objectively expressing the will of entering a contract = conclusive conduct (getting on a bus, buying groceries at supermarket)

31. Principles of italian private law Iudica Zatti Chapter 13 – The elements of contract
When a person acts like a party in a contract, the contract is supposed to exist
De facto partnership company = people acting like partners in a partnership company. That creates legal consequences, including the joint and unlimited liability for the company’s debts
Implied renewal of a contract = 1597 CC: when the lease ends, the lessee is left in the possession of the thing or notice of termination is not given

32. Principles of italian private law Iudica Zatti Chapter 13 – The elements of contract
Formation of contract = exchange of offer and acceptance
Offer: manifestation of will = the offeror offers to the other party (offeree) to enter a contract
Acceptance (1326 ff CC) : the offeree accepts the offer = exchange of the 2 manifestations of will. From that moment the offeror is bound to the contract
1335 CC = the acceptance is known at the moment it reaches the address of the offeror. To rebutt the presumption, the offeror must prove that it was impossible to have received notice of the acceptance
Common law _= mail box rule: acceptance from the moment it is mailed by the offeree

33. Principles of italian private law Iudica Zatti Chapter 13 – The elements of contract
If no acceptance is required to begin the performance, the contract is concluded when the performance begins and the offeror must notify the offeree, otherwise he is liable for damages (1327 CC).
The offer may be revoked BEFORE it is accepted. If the offeree has started his performance in good faith, he must be indemnified for the expenses and losses
Irrevocable offer: offer open for a certain time
The offer must have all the essential elements of contract, otherwise it is an invitation to treat, which must be followed by an offer (for sale on a car)

34. Principles of italian private law Iudica Zatti Chapter 13 – The elements of contract
Acceptance must mirror the offer = it means it cannot change it, otherwise there is a counter-offer and the contract is not concluded until the original offeror accepts it
Acceptance must reach the offeror within the time set by the offeror or the time ordinarily necessary according to the nature of the specific transaction
Mere silence is not acceptance.
When a specific form of acceptance is required, it must be complied with, otherwise the acceptance is not effective

35. Principles of italian private law Iudica Zatti Chapter 13 – The elements of contract
Preliminary contract: it is not an offer. It is a contract where the parties bind themselves to stipulate the definitive contract within a certain time
2932 CC = specific enforcement of the obligation to make the contract
In case of immovable things, preliminary contracts can be registered and the definitive contract must be stipulated within 3 years
Preliminary contracts must have the same form of the definitive ones, otherwise they are void

36. Principles of italian private law Iudica Zatti Chapter 13 – The elements of contract
Standard terms contracts = 1 party drafts the content and the other party accepts it or not. They concerns a lot of transactions in business dealings and are aimed to rule an indefinite number of contracts
Contracts of adhesion = the aim is to create uniformity in obligations to make transactions faster
1341 CC: standard trade terms are effective if the other party knew or should have known them
Thus the offeror must just provide the possibility for the other party to know the standard trade terms
1341, 2 CC = terms which impose limitations of liabilities, powers of withdrawing, arbitration clauses, extensions of contracts must be specifically signed by the offeree to be effective

37. Principles of italian private law Iudica Zatti Chapter 13 – The elements of contract
Thus the offeror must focus on them to have them accepted by the offerees
Terms must clearly worded. In case of doubt, they are interpreted in favour of the party who did not draft them
EU directive on unfair terms in consumer contracts (Consumer Code - legislative decree 206/05): it concerns transactions between a business (legal or natural persons within the trade) and a consumer (natural persons out of trade)
It applies to terms drafted by the business, whether they are general or individual

38. Principles of italian private law Iudica Zatti Chapter 13 – The elements of contract
Unfair term are void. The unfairness is not related to the subject matter or to the price or remuneration, if they are stated in a clear and comprehensible way = principle of transparency
When it is respected, the consumer who makes a bad bargain must bear the consequences
Terms reproducing legal provisions or implementating international treaties are not considered unfair

39. Principles of italian private law Iudica Zatti Chapter 13 – The elements of contract
Clauses which are negotiated by the parties are deemed to be fair
3 exceptions which causes nullity:
1) exclusion or limitation of liability in case of death or injury of consumer by an action or omission of the business
2) exclusion or limitation of the claims against the business in case of non performance
3) provision of total acceptance by consumer of terms that could not be known before entering the contract

40. Principles of italian private law Iudica Zatti Chapter 13 – The elements of contract
Individual negotiations within the Directive = the consumer is made aware before the contract of the otherwise unfair terms
CAUSA:
Any contract must have a lawful causa = social and economic function protected by the legal system (causa of sale is the transfer of the right of ownership for a price)
Unlawful causa = contrary to mandatory rules, public policy or morals (1341 CC), or aimed to circumvent mandatory rules
It brings the nullity of the contract

41. Principles of italian private law Iudica Zatti Chapter 13 – The elements of contract
SUBJECT MATTER
It must be possible, lawful, determinate or determinable (art CC)
It the subject matter is not determined, either expressely or tacitly, the contract is void unless there are sufficient elements to determine it
If for instance the price in not set, in a sale contract, at CC states that (1) it is presumed to be the price normally set by the seller, when not established by the public authority; (2) in case of things having an exchange market price, the price is the one of the quotation or price lists of the place of the delivery or the nearest one; (3) if the parties referred to a fair price, it is determined by a third person appointed by the president of tribunal

42. Principles of italian private law Iudica Zatti Chapter 13 – The elements of contract
CONTINGENT CONDITIONS
Uncertain or future event that the parties have indicated for the contractual obligation to acquire effectiveness (condition precedent) or to end (subsequent condition)
1354 CC = unlawful conditions make void the contract to which they are attached
Conditions are impossible when they prevent the contract to ever start having effects or to end

43. Principles of italian private law Iudica Zatti Chapter 13 – The elements of contract
Merely potestative conditions = the event depends on the simple will of one of the parties and it is an event to which the party is indifferent
1355 CC = merely potestative precedent conditions are void
1358 and 1359 CC = parties who have subjected the contract to a condition must act in good faith. If not the sanction is constructive fulfillment = the condition is considered fulfilled if it does not occur for a cause imputable to the party whose interest is contrary to its fulfillment

44. Principles of italian private law Iudica Zatti Chapter 13 – The elements of contract
FORM
Simple written form: required for contracts which transfer ownership or property rights of immovables (1350 CC)
Written form with authenticated signature = the signature will be made in front of a public official who will identify the signatory (registration in Land Register). Digital signature corresponds to it
Written form whose content has been authenticated = public deeds. The public official ascertains that the content – as shown to him - corresponds to the will. Necessary for gifts unless of moderate value
If the authenticated document has been drawn up by an unauthorized public official, it is considered as simple written

45. Principles of italian private law Iudica Zatti Chapter 14 – The binding force of contract
1372 CC = a contract has the force of law between the parties. It cannot be dissolved except by mutual consent or for a cause permitted by law
No party can unilaterally withdraw from a contract
The right to withdraw can be provided by law (contract for the rendering of professional servuices) or by the contract
Sometimes the right can be limited and subject to the existence of a serious motive or a justified motive or a just cause
The right to withdraw can be exercised as long as the performance has not started (1373 CC)
In long terms contracts, where the perfomance is continuous or periodic, the parties can withdraw if so allowed, but the dissolution of the contract is not retroactive and does not affect the perfomances already given

46. Principles of italian private law Iudica Zatti Chapter 14 – The binding force of contract
The right of withdrawal can be subject to the payment of a compensation (1373 CC)
Earnest = money given when the contract was made. It can be used as compensation for withdrawal. The one who withdraws forfeits the earnest or pays double of what he received (1386 CC)
The right of withdrawal is given to consumers in all contracts negotiated away from the business premises (door to door, telematic contracts, distance contracts, mail order catalogues)
Law provides for the so called cooling off period: the consumer has a certain time to withdraw; the item must be returned undamaged

47. The buyer becomes the owner from the moment the contract is concluded
Principles of italian private law Iudica Zatti Chapter 14 – The binding force of contract
Transfer of ownership or other property rights is made effective by virtue of the lawfully expressed agreement of the parties = principle of mutual assent (art CC)
The buyer becomes the owner from the moment the contract is concluded
In other systems it is necessary to deliver the thing, or to register the sale in the Land Register to have the transfer

48. Principles of italian private law Iudica Zatti Chapter 14 – The binding force of contract
Interpretation of the contract
It is a free act between parties to regulate their interests
Interpretation means to give meaning to the content of the contract in the light of the behaviour of the parties and their overall conduct
1362 CC = the common intent of the parties, not limited to the literal meaning of the words, shall be sought in interpreting the contract

49. Principles of italian private law Iudica Zatti Chapter 14 – The binding force of contract
The system does not aim to find the inner intent of the parties, but to determine their will according to their conduct at that time, in the place and context where it happened
Common intent = coincidence of the wills and interests
Legal criteria of interpretation
1) 1366 CC = good faith flowing from the principle of reliance
2) 1362 CC = not only the literal meaning of words, but context, connections and conduct must be used to interpret the contract
3) 1363 CC = each clause must be interpreted in connection to the others and must be given the meaning resulting from the act as a whole

50. Principles of italian private law Iudica Zatti Chapter 14 – The binding force of contract
In case of ambivalent clauses one of the 2 or more possible meanings must be given to the contract = the subjective interpretation (common intent) is left to use an objective interpretation (choice between a variety of meanings according to objective opportunity)
1367 CC = applying the good faith principle, a clause will be interpreted in the way it can have some effects
Ambiguous clauses will be interpreted according to the practice of the place in which the contract was made, or in case of business contracts, where the business has its headquarters (1368 CC)

51. Principles of italian private law Iudica Zatti Chapter 14 – The binding force of contract
1369 CC = if more meanings, the choice will be on the sense most suitable to the contract
1370 CC = if drafted by 1 party, the clause will be interpreted in favor of the other
1371 CC = if still obscure, the contract will be interpreted in the sense less burdensome to the debtor in case of gratuitous contracts, and in the sense wich reconcile equitably the parties interests in case of non-gratuitous contracts
When a contract is incomplete, it can be integrated: in case of prices set up by the law, they are automatically inserted in the contract (1339 CC)

52. Principles of italian private law Iudica Zatti Chapter 14 – The binding force of contract
Customary terms are considered to be included in the contract unless it appears the parties did not intend so (1340 CC)
1374 CC = the contract binds to what it has been agreed by the parties, to all the consequences deriving from it by law and, if there is no law, by usage and equity
These criteria can be used by the Courts to integrate the contracts
In case of innominate contracts, Courts can draw principles from similar cases

53. Principles of italian private law Iudica Zatti Chapter 14 – The binding force of contract
A contract does not produce effects towards thirds except when provided by law (1372 CC). Of course contracts can affect indirectly other persons (transfer of land and neighbors rights)
1411 CC = a contract in favor of a third is effective when the stipulator has an interest (life insurance contracts)
Contracts can be concluded by representatives of the parties