COVID-19. EFFECTS ON THE CONTRACTUAL RELATIONSHIP

1. LOOK AT LAW on emergency epidemiological

The current emergency situation, determined by the pandemic covid-19 in place, under the contracts with correspondent performances (including those with a continuous or periodic execution) in progress, It involves a series of consequences in the management of the same.
Within these contractual case is then necessary to consider the subject of the contract and its performance. And in fact in the area of ​​energy services, the competition authority (ARERA) He has already made arrangements with regard to services (Light, gas, water) with different procedures depending on whether it's consumers / company or on the basis of the power supplied in each report.
In contractual sphere the legislature intervenes with Article. 91, 1º what., d.l. 18/2020 [care Italy].

Given the above, git effects on the individual case must be considered thinking obligation:

• sorts in the era before the disaster;
• born in part before and partly during the same;
• Poor in the future, regardless of the birth of the debt before or after the emergency start.

If you think, the art., with rents in progress, compared to those prior to and subsequent ones. The present case concerns serious situations, which are such as to call into question the balance of its bilateral contracts, except then establish the usable remedy.
Indeed, termination for non-excessive burden and does not produce retroactive effect only in contracts to run continuously or repeatedly (art.1458 c.c.), while the supervening impossibility free the debtor from the obligation in whole or in part it becomes impossible.

2. EMERGENCY COVID-19 FROM THE CREDITOR

2.1. The resolution infringement and its limits

The general principle of fairness in meeting their obligations and good faith in the execution of contracts [Articles. 1175 e 1375 c.c.] - expression under private law duty of solidarity based on Article. 2 the Constitution - requires each of the parties ratio obligatory "act to protect the interests of"And it constitutes an essential and autonomous legal duty borne by the contractual parties.
In addition to the duties of honesty and good faith, the failure may refer to the contract obligations. Detects then Article. 1218 c.c., establishing a general principle: “debtors who do not exactly run the benefit due is required to pay damages, if not proof that the failure or delay has been caused by impossibility of performance arising from causes not attributable to him”.

Art. 91, 1º what., d.l. 18/2020 ago system with the latter provision, providing fact:
“compliance with the epidemiological emergency containment measures [N.d.a.] referred to in this decree is always evaluated for the purposes of exclusion, pursuant to and for the purposes of articles 1218 e 1223 c.c., the debtor's liability, Also regarding the application of any forfeitures or penalties related to delayed or omitted obligations”.
Given that the rule - despite his side heading think otherwise - also apply to the private contracts, art. 91, 1º what., d.l. 18/2020 “does not identify a hypothesis (ex lege) default 'not due', or establishes an automatic rule of judgment, or a presumption” [in Angioni, Conti, Coronavirus and breach of contract: such as compensation for solutions, fines and forfeitures, in www.quotidianiipsoa.it, 2020].
The recent legislation, therefore, It adds nothing to the legal codes on the failure of obligations and contracts, sending to the judge rather "a stern recommendation”, that the same "can easily disregard” [Angioni, Conti 2020].
Welcoming the statement, It doubts the real benefits to art. 91, 1º what., d.l. 18/2020, making on the other hand useful examination of codicistica legislation made herein.

2.2. Practical Guidelines for the creditor

Because it will not be possible for creditors clients dispute the existence of a force majeure [officially declared by Article. 91, 1º what., d.l. 18/2020] and the temporary inability of the borrowers customers to provide the service during the pandemic, it is appropriate to adopt common guidelines, to be modified according to the type of contract and the related object.
In the case of payment plans underway (Agreements resulting from practices already in progress), the installments due in emergency period, since February 2020 until the end of the same, must necessarily be postponed, taking the example of the provisions for the rate of the Treasury [namely, currently, until the 31 May 2020].
In the case of debt exposures and past due receivables arising, in whole or in part, before the emergency coronavirus, the debtor would have to pay all at once in instant contracts [the art., Trade] or immediately pay the old debt and the other by means of a recovery plan for long-term contracts. The latter, moreover, It is a purely equitable solution, since the partial impossibility of performance involves the extinction of the corresponding obligation.
As a further alternative you may negotiate a rescheduling, having regard to the fact that the previous debts should be paid more quickly.
In the case of new credit practices, subject to the directives that each customer will provide, you will have to analyze when it created the obligations and manage payment plans and perhaps even contract termination requests.

3. EMERGENCY COVID-19 ON THE SIDE OF THE DEBTOR

3.1. The impossibility of performance

In base all’art. 1256 c.c., entitled "ultimately impossible, and temporary inability”, the obligation is extinguished when, for reasons not attributable to the debtor, the performance becomes impossible (the impossibility must be occurred at the time of signing).
If the impossibility is only temporary, the debtor, until it endures, It is not responsible for the delay in.
The obligation is extinguished if the inability lasts until, in relation to the title of the obligation or the nature of the object, the debtor shall not be considered obliged to provide the service that the lender has no more interest in achieving it.
It is believed that there is "impossibility of performance" for leaders When sopraggiungano legal measures, or administrative nature issued by the competent authorities, that, to protect the public interest, impose behavioral requirements or prohibitions that make it impossible for the obligor performance beyond its control.
In the current case, however, the intervention of the public authority does not directly affect the relationship between the creditor and the debtor. The latter, for the time indicated by the epidemiological emergency measures for the containment, can not carry out their activities towards third and, Consequently, It does not have the necessary liquidity to fulfill all their financial obligations. This situation will also be assessed according to the type of debtor (consumer, individual entrepreneur, society) and debt.
The fact outside, therefore, it reflects only indirectly the position of the debtor, but it produces the same effects that the Civil Code relates to its inability to fulfill shuffled.
Art. 1258 c.c., Moreover, provides that if the performance has become impossible only partially, the debtor is released from the obligation by executing performance for the part that remained possible.
Art. 1464 c.c. finally plans: when the performance of a part has become impossible only partially (the art. to cause only temporary force majeure, as in this case), the other party is entitled to a corresponding reduction of the benefit due from that, and it can also terminate the contract if it has no appreciable interest in partial fulfillment.
In the latter case, from a practical point of view, you can evaluate price reductions, or the lengthening of the period of duration of long-term contracts with predetermined price ab origine, resulting in dilution of payment installments already agreed.

3.2. The excessive burden

It should be noted the lack, into Italian, of a specific rule and a precise, single, agreed, definition of force majeure.
According to doctrine and jurisprudence there is force majeure in case of events (natural disasters, earthquakes, hurricane, riots, war, national strikes, fire, or other event still unpredictable as the current epidemiological emergency) that, for their unpredictability and uniqueness, They can not be controlled and therefore outside the control of the parties.
However, there is a norm, art. 1467 c.c., entitled as "contract with correspondent performances”, that it provides some coordinates of reference standards, thanks to which specify the concept of force majeure.
this rule, which applies in the case of construction contracts continued, Periodicals, or deferred (c.d. long-term contracts: the art., administration; procurement of continuous or periodic services), prescribes fact that in the case in which the provision of one of the parties has become prohibitively expensive due to the occurrence of extraordinary and unforeseeable events (major force), foreign to the sphere of action of the debtor and his control over events , the part that should such a benefit may request termination of the contract, giving evidence from which the excessive cost and its derivation from the extraordinary and unforeseeable events. In the present case, such evidence is facilitated by the character known epidemiological emergency, plus certified by WHO with the recent declaration of a pandemic.
The onerousness evaluation as excessive falls to the court; That, anyhow, It must be occurred at the time the agreement was entered into and is irrelevant if the person who invokes it is already late with his performance and is therefore in default.
It should here be so regardless of any consideration of the particular conditions of the debtor, of supervening impediments in its asset ball: regard must be had solely to the intrinsic content of the performance, compared with the intrinsic contents of counter-. Indeed, art. 1467 c.c. talk about performance becomes excessively onerous, performance and not become such a party.
The "excessive deviation" between the utility of the two performance must be determined by extraordinary and unforeseeable events.
The excessive cost per article. 1467 c.c.si always resolves and necessarily - as seen - in a relationship between the two enrichments fees, waves a well can be said to be excessively onerous performance when, while not requiring its subsequent running one more effort than initially requested to the debtor, the fee already agreed for this benefit came in the meantime to be (for unpredictable causes) considerably lower than the current market value of that performance.
In contracts to run continuously or repeatedly, which is deferred execution, if the performance of one of the parties has become overly burdensome for the occurrence of extraordinary and unpredictable events, the part that should such a benefit may request termination of the contract, with the established art effects. 1458 c.c. In contracts to run continuously or repeatedly, the earlier services are not to be returned, while the subsequent bonds are not fulfilled.
The party against whom it is sought resolution can avoid it by offering to equitably modify the conditions of the contract.
The rule operates only in action, no exception, unlike what happens in case of failure (v. art.1460 c.c.: exception of default).

3.2.1. Compare impossibility andd excessive burden

From what has been said so far it is clear that are so different assumptions as the principles governing the inability of the former performance art. 1463 c.c. and contractual contingent (excessive burden) ex art. 1467 c.c.:

A) First, in the first case (art.1463 c.c.) it is impossibility of performance, In the second (art.1467 c.c.) simple objective difficulty, linked to the occurrence of extraordinary and unpredictable events;

B) The scope of the impossibility occurred is constituted solely by the agreements with corresponding attributions; the scope of the contractual occurrence also extends to contracts with bonds of a single part (art.1468 c.c.);

C) The impossibility of performance must depend on reasons not attributable to the debtor (art.1256 c.c.), but it not required that this is an extraordinary event and unpredictable, while this assumption is required for the application of Articles. 1467 e 1468 c.c.;

D) The impossibility of performance ipso iure (art.1256 c.c.), while the resolution for excessive burden should be pronounced judicially (art.1467 c.c.). If for exclusive work of the parties it addivenisse to the neutralization of the contract effects, then, It would have a consensus contrarius;

E) so the impossibility occurred since the contractual occurrence place limits on the principle contained in. 1218 c.c.

3.3. Practical Guidelines for the debtor

If the debt was incurred and fell due before the D, L. 18/2020, the declaration of a pandemic (11 March 2020, or otherwise of the emergency situation in some parts of Italy – 23 February 2020) apply Article. 1258 c.c., having the debtor, in this case, fulfill prior performance.
They are not due (duly) performance with front constitutive title to the D, L. 18/2020, the declaration of a pandemic [or the creation of the original "red zone"] and falling due after such facts.
The same applies to fully developed bonds in period after the adoption of restrictive measures of economic activities.
In such cases you will need to negotiate a postponement of payments.
In the current situation, except in special cases, it is not considered appropriate to contest the excessive cost per article. 1467 c.c., which requires a judicial decision, as well as an immediate exception before commissioning blackberry, while it is appropriate to recall Articles. 1463-1464 c.c. that rely on an unpredictable event [and today ex lege] not attributable to the debtor (the pandemic), which concerns a limited period of emergency and thus representing a total and / or partial impossibility (temporary) of performance.
Then, or in Law or equivalent, the interest of the debtor (natural or legal person in difficulty because of the pandemic) not terminate the contract, Despite the imbalance of the bilateral constraint, but "freeze" in whole or in part the obligations.
After that, during (in case of lengthening of the times) or at the end of the pandemic, you can still ask the former contract Article. 1467 c.c., or better for revision of conditions to test the reaction of contractor. this procedure, remember, It will be precluded if the other party has objected to the failure, for example by means of formal notice of default.