Breach of contract in Italy

A breach of contract happens every time that a contract obligation is not performed in time or according the agreed modalities. There is a breach of contract, for example, when the supplier does not deliver his goods on time, or when the buyer does not pay on time the goods received, or when the principal doesn't pay on time or does not intend to pay the commissions to the agent.

For example, an Italian industrial machinery company undertakes to deliver a weaving machine to a Dutch company within a certain period of time and the Dutch company undertakes to pay in advance the total of a part of the amount. However, at the expiration of the deadline set for delivery, the Italian company does not deliver the machine to the Dutch company and doesn't communicate a reasonable period for the delivery. In this case, there is a breach of the contract by the Italian manufacturer.

Giving other example, an Italian ceramic manufacturing company delivers its products to an Indian distributor within the term established in the contract. However, the Indian distributor, which has undertook to pay for the goods within 15 days of delivery, at the expiration of the term of 15 days it doesn't pay for the goods and it ignores all the reminders of the Italian company. In this case we are faced with a breach of contract by the Indian company.

The Italian Law provides for several kinds of legal actions against the responsable of contract's breaches, depending from the nature of the contract, the kind of the breach, the interests of the creditor and other.

The main means to ensure the respect of the contract and the interests of the fulfilling party are:

- Judicial application for the exact enforcement of the contract. For example, if a buyer is still interested in buying an industrial machine from the manufacturer, it may ask the court to order to the manufacturer to delivery the machine.

- Resolution of the contract. The party of the contract who fullfiled with its contractual obligation, may ask the court to declare the resolution of the contract, if it doesn't have longer any interest in the execution of the contract by the defaulting party. For example, in the case the seller doesn't deliver the products to the buyer, who has already paid for the total or a part of the amount agreed, the buyer can apply for the judicial resolution of the contract, asking for the restituition of the amount already paid and also the compensation of the damages.

These are just some of the standard and generic legal actions that can be made against a breach of contract. These procedures may be different depending from the individual case, the text of the contract, the existence of specific clauses (such as force majeure or penalties for delay), the circumstances of the breach of the contract.

Also, the Italian law provides for different judicial proceedings, depending from the kind of contract, the amount and the evidences of the debt. For example, for some cases it will be necessary to start a mediation proceedings (ADR) before to apply in the court, while for other cases (generally if  there is a strong written proof) it will be possibile to obtain a quick injuction for payment against the debtor.

Feel free to contact us for every query about the contract law in Italy.

Our law firm provides a full legal assistance about the drafting and interpretation of business contracts, as well as for litigations before all the Italian courts (click here to contact us or use the fast contact form on your right).

Please, see also:

Distribution contract in Italy

Contract Law in Italy

Termination clause and essential term in Italy

Termination of the contract for non-performance and the notice to comply

Non-compete clause in the distribution contract in Italy

Special court for foreign companies in Italy

Sponsorship contract in Italy

Agency contract in Italy

The obligations of the Agent under the Italian Law

English speaking lawyers in Italy