The current Coronavirus emergency calls for immediate consideration of possible remedies available to contractual parties who, in bilateral relationships, find it impossible or extremely difficult to perform.

This is a situation which, due to the scale of the phenomenon, is new and therefore, in the absence of previous case law exactly on the point, one can only reason on general principles to give some preliminary recommendations in order to face such an emergency.

The first recommendation is to examine carefully the contractual documentation governing the contract on which one wishes to intervene. While the Italian law makes available only a few general rules (as we shall see), often more sophisticated parties sign ad hoc covenants to regulate cases of force majeure or, more generally, hardship. The latter  term,  borrowed from the common law system, became familiar also in Italy because it has  been  transposed in standard forms recommended by international supranational institutions (e.g. the International Chamber of Commerce, which in 2003 drew up guidelines standard clauses on the subject) in order to identify the hypotheses in which the performance of one of the parties becomes too onerous, such as to involve a disproportionate burden for one party in favour of the other, due to facts occurring after the conclusion of the contract.

The Italian Civil Code provides for a limited protection in cases which can be assimilated to the hardship under Article 1467 ("excessive onerousness subsequent to the execution of the agreement”), but it only provides that (i) the party in difficulty because of extraordinary and unforeseen events is allowed to terminate the contract; whilst (ii)   the other party may avoid the termination by offering to change equitably some of the terms and conditions of the contract (the so-called reductio ad aequitatem), for example an extension of delivery terms or amended production features  without penalty.

The solution  offered by the law is therefore quite rigid, especially insofar the party in difficulty may only seek the termination of the contract, while  a contractual hardship clauses, if well drafted, could provide for more flexible remedies such as temporary suspension of the contract (not provided for by art. 1467 of the Civil Code), the possibility to reduce the performance,  the appointment of an  arbitrator or a mediator for the definition of the equitable remedy, etc..

Once this first assessment has been made, if there is nothing specific in the contract, it is necessary to consider the possible remedies provided by the law, which we will briefly review, on the obvious assumption (also to be verified on a case-by-case basis) that the governing  law is the Italian one.

We have already mentioned art. 1467 of the Civil Code,  which has had wide applications in the past (for example for a large number of cases in the 1970s and 1980s resulting from the difficulties caused by the massive monetary devaluation) and which can certainly be invoked because there is no doubt that the CV 19 epidemic (which is about to end in a pandemic) is an extraordinary and unpredictable event, which is not part of the normal hazard that a party would undertake when signing a contract and therefore justifies the remedy, albeit limited as above, of the termination for excessive onerousness..

But there are hypotheses in which the performance is not only unbearably expensive, but even impossible per factum principis. Think about renting an apartment in an inaccessible site due to the Government’s restrictions or a supply that has become impossible due to a lack of raw material from a foreign country (e.g. China because of the Coronavirus emergency) etc.

In this cases , although  the Civil Code rules are far from being exhaustive (for  for example they doenot give a definition of "force majeure") , remedies may be identified in the following articles:

• Art. 1218 exempts the debtor from damages if its performance or payment has become impossible (or delayed) for a reason not attributable to it;  

• Art. 1256 exempts the debtor from its obligation when the performance became impossible for a cause beyond its control. If the performance became only partially impossible under art. 1257 the debtor’s performance may be partial;

• Art. 1463 and 1464 provide for consequences of the total or partial impossibility of performance in contracts where there are obligation for both parties by providing, respectively, that in the first case, the party released from performance may not seek the performance of the other party and must return any payment already received; in the second case, that when performance by one party has become partially impossible, the other party may claim a reduction in the performance due by it or, if it proves that it no longer has an appreciable interest in the partial performance, withdraw from the contract.

Specific rules are to be found instead:

• in the Tourism Code (art. 41 et seq. D.lg. 79/2011), which provides that in case of impossibility to provide an essential part of the services the tourist who does not accept alternative solutions (which the operator is obliged to offer) can withdraw from the contract without paying withdrawal costs, or request full reimbursement of payments made, but without any right to additional compensation;

• in the 1980 Vienna Convention on the International Sale of Goods, Article 79 of which provides that a party shall be released from its obligation if it proves that the failure to perform was due to "an impediment beyond its control and that could not reasonably be expected to have taken the impediment it into account at the time of conclusion of the contract, or to have avoided or overcome it or consequences ".

In the context of the Coronavirus epidemic a particular  initiative was taken by the Ministry of Commerce of the People's Republic of China, which on 14.2.2020 published a notice on its website announcing that it has granted to six Chinese Chambers of Commerce of import and export the faculty  to  issue "force majeure" certificates for companies operating in China and which have difficulties in meeting contractual deadlines due to the effects of the COVID-2019 epidemic.  The certificates in question (the press reports the issue of about 1600 of them) exempt these companies from providing further evidence of the state of emergency that prevents the exact or timely execution. They are therefore effective at least in terms of evidence, provided that there is a force majeure or hardship clause in the inter partes contract and/or in the applicable regulatory law.

It would be desirable that the Italian Government take similar initiatives both to "certify", on a case-by-case basis, the state of difficulty of certain companies in order to avoid complex disputes about the conditions necessary to invoke the remedies provided by law, and (even better) to articulate more flexible and appropriate remedies, adapting them to an emergency situation that the Civil Code (enacted in 1942) could not foresee.