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Covid -19 and contracts – the guidance of the Italian Supreme Court

In the case of contracts, the Covid-19 outbreak has sometimes led to a contractual imbalance, altering the original interests of the parties. The provisions of the Italian Civil Code regarding impossibility and excessive onerousness (i.e. art. 1256 and 1467 of the Italian Civil Code) may not be sufficient to restore the contractual balance and, in the absence of specific provisions, the parties are entitled and, at the same, bound to renegotiate the agreement.

According to the report no. 56 dated 8 July 2020 issued by the Italian Supreme Court, the general principles of fairness and good faith in the performance of the agreement, imposed up to the parties according the Italian Civil Code, require that the parties, in case of contingencies altering their contractual relationship, renegotiate the agreement in order to safeguard the underlying economic relationship. According to such report of the Supreme Court, the Judge may also intervene to integrate the contractual relationship that has become unfair due to the contingencies.

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