Differences between Contract Law in Italy and England
Contract law in Italy and England reflects the fundamental differences between civil law and common law systems. The contractual discipline in these countries differs in sources, principles of formation, interpretation of contracts, breach, and remedies. Below is a detailed discussion of the differences with judicial references.
- Sources of Law
Italy (Civil Law)
- Codified Sources: Contract law is primarily governed by the Italian Civil Code of 1942. The codified norms provide a systematic and detailed framework for contractual rules.
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- Judicial Example: The Court of Cassation, in decision no. 18777/2017, reaffirmed the importance of codification and the forms prescribed by the Civil Code for the validity of contracts.
- Doctrine: Legal doctrine in Italy plays a significant role in interpreting and applying codified laws.
England (Common Law)
- Uncodified Sources: English contract law is predominantly based on common law and judicial decisions. Judicial precedents are binding (stare decisis).
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- Judicial Example: Carlill v. Carbolic Smoke Ball Company [1893] 1 QB 256 is a landmark case illustrating the importance of precedents in forming English contract law.
- Statutory Laws: Some statutory laws supplement common law, such as the Sale of Goods Act 1979 and the Consumer Rights Act 2015.
- Contract Formation
Italy
- Consent and Cause: Essential elements of a contract include the consent of the parties, a lawful cause, a determined or determinable object, and the prescribed form by law (art. 1321 Civil Code).
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- Judicial Example: The Court of Cassation, in decision no. 13533/2001, highlighted that the absence of cause renders a contract void.
- Written Form: Some contracts require the written form ad substantiam, such as real estate sales (art. 1350 Civil Code).
England
- Consideration: A contract is valid only if supported by consideration, meaning something of value must be exchanged between the parties.
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- Judicial Example: Dunlop Pneumatic Tyre Co Ltd v. Selfridge & Co Ltd [1915] AC 847 emphasized the necessity of consideration.
- Freedom of Form: Most contracts do not require a specific form, except for statutory exceptions like land sale contracts, which must be in writing.
- Contract Interpretation
Italy
- Principle of Affidamento: Contract interpretation aims to determine the common intention of the parties, considering their behavior before and after the contract (art. 1362 Civil Code).
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- Judicial Example: The Court of Cassation, in decision no. 6919/2018, stressed the importance of interpreting clauses according to the parties’ will.
- Good Faith: Essential both in the pre-contractual phase (art. 1337 Civil Code) and in the performance of the contract (art. 1375 Civil Code).
England
- Parol Evidence Rule: If a contract is written, its interpretation must be based on the document itself, limiting the use of external evidence.
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- Judicial Example: Prenn v. Simmonds [1971] 1 WLR 1381 affirmed that the Parol Evidence Rule restricts the use of external evidence.
- Literalism: Contract interpretation tends to be literal, based on the clear meaning of the words used.
- Breach and Remedies
Italy
- Damages: Breach of contract entitles the non-breaching party to compensation for patrimonial and non-patrimonial damages (art. 1218 Civil Code).
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- Judicial Example: The Court of Cassation, in decision no. 11503/2015, reiterated that compensation must cover both actual damage and loss of profit.
- Specific Performance: Possibility to request the forced performance of the contract (art. 1453 Civil Code).
England
- Damages: The primary remedy for breach is damages, aimed at putting the non-breaching party in the position they would have been in had the contract been performed.
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- Judicial Example: Hadley v. Baxendale [1854] EWHC J70 established the principles for awarding damages.
- Specific Performance: Specific performance is an equitable remedy available only in particular cases, generally for contracts involving unique goods.
Conclusion
The differences between Italian and English contract law reflect the distinct legal traditions. The Italian system is codified and oriented towards protecting good faith and reliance, while the English system is flexible, based on precedents, and primarily oriented towards compensation for damages. These differences have significant implications for parties operating within these two legal systems.
Sources
- Italian Civil Code
- Carlill v. Carbolic Smoke Ball Company [1893] 1 QB 256
- Dunlop Pneumatic Tyre Co Ltd v. Selfridge & Co Ltd [1915] AC 847
- Prenn v. Simmonds [1971] 1 WLR 1381
- Hadley v. Baxendale [1854] EWHC J70
- Judgments of the Italian Court of Cassation