Coronavirus and non-performance of contractual obligations
Coronavirus outbreak represents an extraordinary event that is casting doubts about the sustainability of economic and societal systems. One of the most dominant effects is the non-compliance with contractual deadlines. Due to inevitable decline of incomes and subsequent liquidity crisis, enterprises and individual entities were forced to delay or freeze payments to suppliers and employees determining current liquidity shortage. Such “liquidity crunch” might determine the closing down of enterprises that may generate an unstoppable level of unemployment.
In this context, Italian Government released an urgent decree that takes countermeasures against the future economic crisis. Art. 91 of Italian decree n.181 aims to provide dispositions in context of non-compliance and non-performance of contractual obligations resulting by the implementation of control measures against coronavirus. The decree establishes that non-compliance and non-performance of contractual obligations is justifiable and excusable only if they are direct consequences of control measures against the coronavirus.
In the previous cases, articles 1218 of Italian Civil Code do not apply. Article 1218 Civil Code states that debtor is required to compensate the damage resulting from the non-performance of contractual obligations. Subsequently, in the event contract obligations non-performance is not connected with controlling measures against the virus, the Italian Decree does not apply and art. 1218 expands its normative strength.