The impact of COVID-19 pandemic on contractual obligations

By EXP Legal


The spread of Covid-19 pandemic is having a strong impact on contractual relationships, as it poses the question of the legitimacy of a delayed or a missed fulfillment of the obligations undertaken by the parties under the contract.
The Cura Italia Decree explicitly provides that the compliance with the containment measures is always assessed for the purposes of excluding the liability of the obliged party pursuant to and for the purposes of Articles 1218 and 1223 of the Italian Civil Code. Such provisions exclude the liability for damages compensation when the obliged party proves that the failure or delay was caused by the impossibility of the performance deriving from cause not attributable to him.
It follows that, as long as the objective possibility of the performance remains, the obliged party is always liable. Only when the impossibility of the performance occurred, and this may depend also on prohibitions arising from legislative or administrative measures (i.e. factum principis), the obliged person is admitted to the release proof aimed at demonstrating that the impossibility is absolute, objective and unsurpassed, related to force majeure or to unforeseeable circumstances.
It seems reasonable to conclude, therefore, that the extraordinary and unpredictable nature of the spread of the epidemic from Covid-19 can be interpreted as a force majeure cause, like, for example, cyclones, floods, earthquakes, wars, etc., that would exclude the liability on the assumption that the obliged party proves that the performance has become objectively impossible due to the containment measures imposed by the extraordinary legislation (factum principis).
Should the performance not be objectively impossible, the obliged party may invoke the excessive burdensome of his performance asking for the termination of the contract or the reduction of his obligation, pursuant to Articles 1467 of the Italian Civil Code.
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