Coronavirus and commercial leasing agreements in Italy
COVID-19 outbreak is impacting worldwide societies and economies. In particular, the pandemic affected the corporate and industrial fabric of majority of developed countries. In such context, COVID-19 has disrupted contractual relationships between enterprises and contractors based on the Italian territory.
Italian Prime Minister’s decree has led to the temporary closure of non-necessary activities within the Country. Therefore, enterprises involved in such forced closure will not soon be able to fulfil contractual obligations within the foreseen time limits.
Art. 1256 Civil Code sets out factum principis as the standard hypothesis of force majeure; the contractual condition where it is objectively impossible to fulfil the contractual obligation. In particular, the force majeure is the result of governmental controlling measures against the COVID-19. In such cases, exemption from contractual liability takes place in the event the non-performance of the contract does not depend on debtor’s will.
In the context of commercial leasing agreements, Italian Court of Cassation (Sentence No. 25777/2013) confirms that contractual impediment must be objective and impossible to remove. Subsequently, it is possible to argue that current situation perfectly fits force majeure definition.