EU Regulation No 593/2008 on the law applicable to contractual obligations (the “Rome I Regulation”) is the main rule that governs the determination of the law applicable to commercial contracts signed after 17 December 2009. The parties are free to choose the law governing each contractual relationship (Article 3). However, this freedom is restricted by domestic mandatory rules (Articles 3(3), 3(4)), overriding mandatory rules (Article 9), and forum public policy (Article 21).

In the absence of an express (or implicit) choice of governing law, the Rome I Regulation identifies the law applicable to specific types of contracts based on the criterion of “habitual residence”.

For a detailed analysis, please see 2.1 Choice of Law.

In Italy, the principle of freedom of form applies to the conclusion of contracts, unless the law stipulates that they must be in writing to be valid.

For most commercial contracts, a written form is not required for validity. Under Italian law, unwritten distribution and agency agreements are valid and enforceable.

Franchising agreements constitute the exception in this context. For a detailed analysis, please see 3. Negotiation and Conclusion.

In Italy, the primary source to regulate commercial contracts is the Italian Civil Code. In particular, the provisions reported in Book IV (on contractual obligation) and the specific provisions on different commercial contracts – ie, sales contracts (Article 1470); agency contracts (Article 1742); commission contracts (Article 1731) and supply contracts (Article 1559).

Although Italian legislation does not expressly regulate distribution agreements, the rules of the Civil Code on sale and supply contracts apply.

Italy is a signatory to the United Nations Convention on Contracts for the International Sale of Goods (CISG). The CISG applies to international sales of goods between parties based in different contracting states, including Italy, unless the parties expressly exclude it.

Beyond some minor differences in contract formation and scope of application – ie, sales made in Italy versus international sales – the main differences between Italian law and the CISG consist of a different regime in terms of risk of loss of the goods and in terms of remedies in pathological phases of the relationship.

Pursuant to Article 67 of the CISG, the risk of loss or damage to the goods is transferred at the point when the goods are handed over to the initial carrier, whilst pursuant to the Civil Code, unless otherwise agreed upon, the seller fulfils its obligation and the risk passes to the buyer upon delivering the goods.

With respect to defect-related complaints, the CISG requires the buyer to notify the seller of any defect discovered within a “reasonable time”. Additionally, Article 39 of the CISG provides that such claims are subject to a two-year limitation period from the date the goods were delivered. The Civil Code, on the other hand, stipulates that the buyer must notify the seller of the defects in the purchased goods within eight days (i) as of the delivery thereof in case of apparent defects and (ii) as of the relevant discovery in case of hidden defects, unless the law or the parties provide for a different (reasonable) term. In any case, the above remedy is subject to a time limitation of one year (which may not be subject to different agreements between the parties), beginning on the date of delivery of the goods.

The Italian legal system provides certain mandatory rules that apply to commercial contracts in general, as well as specific rules relating to particular types of contracts.

Before discussing mandatory rules in detail, it is important to clarify the distinction between national mandatory rules – those that cannot be derogated from by the parties if the contract is subject to Italian law – and super-mandatory rules, which are the mandatory rules pursuant to the principles of private international law. 

The Italian legal system distinguishes between “internal public policy” and “international public policy”.

The category of internal public policy includes mandatory rules established by the Italian legislature in a specific area that cannot be derogated from by the parties to a contract.

According to a recent ruling by the Supreme Court, the concept of international public policy is the set of principles that are primarily supreme and/or fundamental to the Italian Constitution (ie, those that cannot be overturned by the ordinary legislature), as well as those that can be inferred from the founding treaties, the Charter of Fundamental Rights of the European Union and the European Convention on Human Rights.

It is in this context that the mandatory overriding provisions defined in Article 9 of the Rome I Regulation can be identified.

Among the mandatory provisions that apply to certain commercial contracts, in particular, those relating to franchising, agency, and automotive distribution are as follows.

Franchise Agreements

The Italian Law No 129/2004 (Italian Franchising Law) stipulates, among other things, that the franchisor must provide the franchisee with a set of mandatory pre-contractual information together with the text of the agreement 30 days before the conclusion of the contract. The Franchising Law also requires a written contract under penalty of nullity and stipulates that the minimum duration of the relationship must be commensurate with the franchisee’s investment recovery period and must not be less than three years (this applies to both fixed-term and permanent contracts).

In franchising relationships subject to Italian law, these provisions appear to have a national mandatory nature (as part of internal public order). Considerable debate exists in legal theory as to whether the rules relating to pre-contractual information obligations in franchise agreements subject to foreign law should be classified as mandatory overriding rules. Despite this, neither the legislature nor the case-law to date have stated that the provisions contained in the Franchise Law qualify as overriding mandatory provisions or that such provisions are aimed at pursuing the protection of a crucial national interest.

Agency Relationships

Article 1751 of the Civil Code (which corresponds to the provisions of Article 17(2) of the Agency Directive – Directive 86/653/EEC) establishes that an agent may be entitled to a termination payment in the form of an indemnity. Both under Article 19 of the Agency Directive and under the legislation that has implemented the Agency Directive in Italy, the statutory provisions on termination indemnity may not be derogated from to the detriment of an agent.

Automotive Distribution Contracts

In 2022, Italian lawmakers introduced a specific regime in favour of dealers in automotive distribution contracts signed directly between car manufacturers/importers and authorised distributors for the marketing of “new” vehicles (ie, vehicles that have not yet been registered, as well as vehicles that have been registered by the authorised distributors for no more than six months and that have not travelled more than 6,000 kilometres). Following the 2023 amendment, it is expressly established that these requirements are non-derogable and therefore apply irrespective of the law governing the contract, classifying them as super-mandatory rules.

Other Rules

In addition to the above, there are also other rules that apply across the board to commercial contracts. The main ones that can be mentioned in relation to commercial contracts are listed below.

• The rules on burdensome clauses, set out in Article 1341 of the Civil Code, apply to any commercial relationship regulated by standard contracts drafted unilaterally and adhered to without negotiation. Such clauses must be specifically approved in writing to be effective. These mandatory rules apply to Italian contracts or those between Italian parties, even if governed by foreign law. For a detailed analysis, please see 3. Negotiation and Conclusion.
• The prohibition of abuse of economic dependence pursuant to Article 9 of the Law 192/1998 on subcontracting law states that an economic dependent position means the situation in which a company is able to determine, in commercial relationships with another company, an excessive imbalance of respective rights and obligations. The established trend in case law is to apply such institution to all commercial contracts, not only to subcontracting contracts as application of a general principle to commercial relations.
1. The main criteria to determine the existence of economic dependency are:
1. the contractual power exercised over the other party in a way such as to impose unfair conditions in a contract (so, determining an excessive imbalance of respective rights and obligations); and
2. the impossibility for the dependent party to find – within a reasonable timeframe – satisfactory alternative sources for its business.
2. The abuse may consist, inter alia, in:
1. the refusal to sell or refusal to buy;
2. the imposition of unjustifiably burdensome or discriminatory contractual conditions; and
3. the arbitrary interruption of established commercial relations. Any abuse of economic dependence is null and void and therefore unenforceable so that the abused party may claim damages in a civil court.
3. In addition, the Italian Competition Authority (AGCM) may impose pecuniary sanctions on the party violating the rules forbidding the abuse of economic dependence. Following recent rulings by the Court of Cassation, the definition of abusive conduct now takes on the characteristics of unfairness and being contrary to objective good faith. Along these lines, violating the principle of good faith in a constitutional interpretation oriented toward the principle of solidarity can translate into a principle of international public order.
• Commercial contracts, and in particular distribution and franchising agreements, must observe the requirements of competition law, irrespective of the governing law applicable to the contract. Commission Regulation (EU) 2022/720 (VBER) provides the principal framework which establishes an exemption from the prohibition under Article 101(1) Treaty on the Functioning of the European Union (TFEU). This exemption applies provided that both the supplier’s and the buyer’s market shares do not exceed 30%, and the agreement does not contain any of the hardcore restrictions delineated in the Regulation.

Among the most interesting decisions is the ruling on franchising, in which the Supreme Court ruled that it is contrary to objective good faith and fairness (as limits to private autonomy), and ultimately abusive and arbitrary, for the franchisor to withdraw from an open-ended contract before the minimum term of at least three years has elapsed, given that this period constitutes the minimum time required for the franchisee to recoup their investment (Cassation Court, No 11737/2024).

In addition, particular importance must be given, especially in view of the growing number of disputes that have arisen in Italy in recent years, to the prohibition of abuse of economic dependence. According to established Supreme Court case law, a contracting party is economically dependent if it has no real economic alternative on the market. In terms of abuse, it is necessary to verify that the arbitrary conduct contrary to good faith and fairness – ie, the intentional harassment of the other company – is aimed at achieving ends that go beyond legitimate commercial initiatives governed by a relatively dominant company’s legitimate interest.

In terms of legal developments, a regime was introduced in 2022 in favour of dealers in automotive distribution contracts. In summary, under Article 7-quinquies of Conversion Law No 108/2022 (as amended by Law No 6/2023), manufacturers must give mandatory pre-contractual information before entering any automobile distribution contract. Contracts must also include minimum terms such as sales provisions and liability assumptions. If a manufacturer ends a contract early, they are required to compensate for unamortised investments and goodwill. These rules apply to all vertical agreements, including agency, distribution or commission contracts.

The principles of private international law establish the rules governing the choice of applicable law for a commercial contract (or, more precisely, a contractual obligation). A specific regime applies depending on when the commercial contract was concluded. Specifically:

• agreements executed before 17 December 2009 will be still subject to the rules set forth in the 1980 Rome Convention on the Law Applicable to Contractual Obligations (the “Convention”). Under the Convention, the parties are free to elect any law to govern the contract. However, the choice of governing law by the parties will be limited by the operation of mandatory rules and/or the public order of the forum. If the contract is silent on governing law, the contract will be subject to the law of the country of residence (or registered office) or principal place of business of the party conducting the “characteristic performance” of the contract; and
• agreements entered into after 17 December 2009 are governed by the Rome I Regulation (593/2008) on the law applicable to contractual obligations. Also, under the Rome I Regulation, the parties to a distribution agreement are free to choose the law governing each contractual relationship (Article 3).

In the absence of an express (or implicit) choice of governing law, Article 4 identifies the applicable law according to the type of contract based on the criterion of “habitual residence”:

• a franchise contract shall be governed by the laws of the country in which the franchisee has their habitual residence (letter e); and
• distribution agreements shall be governed by the laws of the country in which the distributor maintains its habitual residence (letter f).

Similarly to the regime of the Convention, the Rome I Regulation also provides for some limitations to the parties’ freedom of choice. These limitations include domestic mandatory rules (Article 3(3) and (4)), overriding mandatory rules (Article 9) and the public policy (Order Public) of the forum (Article 21).

If an Italian judge has the authority to determine issues concerning an international commercial contract where no governing law has been selected by the parties, the judge will initially consider whether any factors indicate an implicit choice of law. Otherwise, they will determine the applicable law based on the criteria of the Rome I Regulation. If a third country’s law applies, it does so without affecting any overriding mandatory provisions of Italian law.

Pursuant to Article 3(3) of the Rome I Regulation, if all the relevant elements (eg, the parties’ habitual residence, the place of performance and the subject matter) are located in one country, but the parties choose the law of another country as governing law, the chosen law will generally govern the contract, although the mandatory provisions of the country with the closest connection will still apply.

The purpose of this provision is to ensure that the mandatory rules of the country with the closest connection to the contract are not circumvented by choosing a different law.

Consequently, should the parties to a purely domestic contract choose the law of a different legal system, the contract will also be subject to the (local) mandatory provisions of the Italian legal system.

Two different regimes apply to civil and commercial disputes between an Italian party and a foreign party.

With European counterparties, Regulation (EU) No 1215/2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters applies.

With defendants domiciled in non-EU countries, Italian private international law (Law 218/1995) applies, unless the matter is governed by a bilateral treaty.

In the first case, the parties may designate an exclusive forum through the extension clause pursuant to Article 25 of the Regulation (provided it is in writing or evidenced in writing), without prejudice to the exhaustive list of exclusive forums which are therefore mandatory for certain matters, including those concerning immovable properties, the validity of a company’s constitution, its nullity or dissolution and the registration or validity of patents, trade marks, designs, and other similar rights.

According to Law 218/1995, Italian jurisdiction may be waived in favour of a foreign court or arbitration if the waiver is proven in writing and the case concerns available rights.

Even if both parties are domiciled in Italy, they can still agree to submit disputes to a foreign court. Italian courts generally respect party autonomy in jurisdiction clauses (and recognise the decision of the foreign court) provided that: (i) the clause is clearly drafted and mutually agreed; (ii) it does not violate mandatory Italian laws; and (iii) it does not conflict with public policy.

Arbitration clauses are standard and enforceable in Italian commercial contracts. Agency agreements, specifically, are valid provided that the agent is a legal entity as opposed to a natural person. Parties are free to choose arbitration, including international arbitration, as their method of resolving disputes.

However, arbitration clauses must be in writing and clearly specify the nature of the dispute. If they are included in standard terms and conditions subject to Italian law, they must be specifically approved in writing pursuant to Article 1341(2) of the Civil Code.

As a signatory to the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the “New York Convention”), Italy is bound to respect the following:

• Article II(3) – Italian courts will refer parties to arbitration if a valid arbitration agreement exists, unless the agreement is invalid, invalidated, ineffective, or incapable of being performed; and
• Article V(2) – Italian courts may refuse to enforce a foreign arbitral award if the subject matter is not arbitrable under Italian law, or if enforcement would contravene public policy.

Matters that cannot be arbitrated and are instead reserved for national courts include those concerning non-disposable rights. This includes matters relating to family relationships, labour law disputes, business-to-consumer relationships, and cases of abuse of economic dependence.

In Italian law, freedom of form in contracts between private parties is the ultimate expression of the principle of private autonomy.

However, this freedom is subject to exceptions and limitations imposed by law where the lawmaker prescribes a formal requirement for the contract to be valid. This principle is also confirmed by Article 1325 of the Civil Code, which states that form is an essential element of a contract only if prescribed by law under penalty of nullity. In particular, pursuant to Article 1350 of the Civil Code, written form is required for the following acts, inter alia: contracts that transfer ownership of real estate; leases of real properties for a period longer than nine years; acts of division of real property rights; transactions relating to disputes concerning legal transactions; and all other contracts for which the law requires a written form (Article 1350(1,13) of the Civil Code).

In light of the above, most commercial contracts, such as distribution and agency agreements, do not require a specific form to be valid and effective. They can be concluded orally, in writing or by performance (ie, when the parties begin to fulfil their obligations). 

However, the last category of Article 1350 of the Civil Code (ie, 1350(1,13)) includes franchising contracts, for which Italian franchising law requires a written agreement under penalty of nullity.

The Italian legal system acknowledges the concept of culpa in contrahendo or pre-contractual liability in commercial relationships between private parties.

In particular, pursuant to Article 1337 of the Civil Code, when negotiating and drafting the contract, the parties must act in good faith (in accordance with Article 1175 of the Civil Code). Furthermore, pursuant to Article 1338 of the Civil Code, a party that knows, or should know, of a cause that could invalidate the contract, but does not inform the other party, is liable to compensate the latter for any damage suffered as a result of relying, through no fault of their own, on the validity of the contract.

Regarding pre-contractual liability, the law is keen to protect the freedom to negotiate, which must not be undermined by unfair conduct during the negotiation phase.

With regard to the case referred to in Article 1337 of the Civil Code, case law recognises the nature in-tort of pre-contractual liability. Pre-contractual injury may also be recognised if, instead of deliberately engaging the other party in fruitless negotiations, a party has simply failed to assess its own ability to enter into the contract with the necessary diligence. Therefore, from a subjective point of view, animus nocendi is not necessary. 

The remedy for pre-contractual liability under Article 1337 of the Civil Code is an action seeking compensation for damages. However, such compensation is limited to the so-called “negative interest” (interesse negativo).

Negative contractual interest refers to the damage suffered by a party for relying on the conclusion of a contract that then does not materialise. This interest may be relevant:

• in terms of actual damage (danno emergente) – ie, financial losses incurred as a result of relying on the conclusion of the contract, such as expenses and time spent on negotiations; and
• in terms of loss of profits (lucro cessante) that could have been earned from other negotiations that were foregone (lost chances). However, compensation for loss of profit cannot extend to positive interest, particularly compensable loss of profit (pursuant to Article 1218 of the Civil Code), if the contract had not been fulfilled or had been terminated due to the other party’s fault (Court of Appeal of Lecce, No 309/2025 and Civil Cassation, Order No 35170/2023).

From a burden of proof perspective, the injured party must prove the injuring party violated the principle of good faith (Court of Milan, Section V, 03/04/2022, No 1914; Cassation Court, Judgment 10/03/2019, No 24738).

It is common practice for one party in a commercial contract to include standard terms and conditions (T&Cs), but this must be done carefully to ensure that the terms are legally binding and enforceable.

In principle, under Article 1341(1) of the Civil Code, general T&Cs, unilaterally drafted by one of the parties (including standard form ex Article 1342 of the Civil Code), are binding on the other party only if, at the time when the contract is concluded, the other party knew or might have known them using ordinary diligence (as condition of validity).

This rule applies to standard terms and conditions (T&Cs) that are intended to apply to all contracts in a certain series, known as adhesion contracts. These are contracts where the adhering party merely accepts the terms without any room for negotiation.

The requirement of knowledge presupposes that reference to the T&Cs is clearly made in the documentation preceding (either attached to the contract or otherwise made available to the other party) the conclusion of the contract, using ordinary diligence. In this regard, a reference to T&Cs published online may be considered a sufficient means of satisfying the knowledge requirement. However, in the event of a dispute, the drafter must demonstrate that the relevant T&Cs were available on the website at the time the contract was concluded, and show that the correct version of the T&Cs was applicable to the contract in question.

Articles 1341 and 1342 of the Civil Code are generally considered to be mandatory national rules of Italian contract law (falling within domestic public order). As a consequence, such rules cannot be derogated by the parties if Italian law applies or if a purely domestic contract is subject to a foreign law. 

T&Cs, in theory, could include some “burdensome clauses”.

Under Italian law, such clauses would not be binding unless expressly and specifically approved by the adhering party.

Indeed, Article 1341(2) of the Civil Code requires, as a further condition of validity, the so-called express and specific approval of certain burdensome provisions.

More precisely, pursuant to Articles 1341(2) and 1342 of the Civil Code, any clause contained in a standard (pre-printed) form that either (i) limits liability (under any form, whether for wilful misconduct, or for gross or ordinary negligence), (ii) reserves a purported right to withdraw or to suspend performance, (iii) limits the right to object or to enter into agreements with any third parties, or (iv) selects a materially unreasonable venue, must be specifically approved in writing by the party requested to agree.

Italian law does not envisage specific provisions regulating the so-called “battle of forms” scenario (ie, the circumstance in which both the parties want their own terms and conditions to apply to the commercial relationship.

Before identifying the solution most widely accepted by legal scholars, it is necessary to outline the rules underlying the conclusion of contracts between private parties as provided for by the Civil Code. In particular:

• a contract is considered concluded when the person who made the proposal has knowledge of the other party’s acceptance (so-called meeting-of-mind rule) according to Articles 1326 and following of the Civil Code. If the acceptance does not exactly match the contractual offer, it is deemed to constitute a new offer which must be accepted by the other party;
• acceptance may also be tacitly expressed, and the contract is considered concluded by conclusive facts, provided that the behaviour of the parties is unambiguous and unequivocal in expressing their willingness to conclude the contract; and
• T&Cs drafted by one party are binding on the other party if known by the latter at the time when the contract was concluded or if the other party might have known them by using ordinary diligence (Article 1341(1) of the Civil Code).

In light of the above, in case of a battle of form situation, if the two parties have started to perform without objecting to each other’s standard terms, certain Italian commentators consider applicable the “last-shot rule”, pursuant to which a contract is considered to have been concluded on the basis of those terms which were the last to be sent or to be referred to.

It follows that, to solve the battle of forms problem according to the “last-shot rule”, the last party to put forward terms and conditions that were not explicitly rejected by the recipients is the one that sets the terms of the contract and therefore “wins the battle”.

In conclusion, in case of inconsistency between general conditions relied on by each of the parties, the T&Cs referred to in the last form sent shall prevail, with the exception of “burdensome clauses” (for more detail refer to 3.5 Ineffectiveness of Standard Terms due to Unreasonable Disadvantage).

Most commercial contracts, such as those relating to supply, agency, distribution, franchising and services, do not require a notarial deed (for more details, see 3.1 Necessary Form).

Commercial contracts may be signed with an electronic signature, however, pursuant to Regulation (EU) 910/2014 on electronic identification and trust services for electronic transactions in the internal market (the “eIDAS Regulation”) and to Legislative Decree No 82/2005 (Digital Administration Code – DAC), contracts signed with an electronic signature may satisfy the written form requirement, depending on the characteristics of the electronic signature used.

The eIDAS Regulation and DAC provide for three types of electronic signatures that could apply: simple electronic signature (SES), advanced electronic signature (AES) and qualified electronic signature (QES), which includes also “digital signature”.

Commercial contracts may be signed using the AES signature tools (DocuSign).

In this case, electronic documents signed by AES satisfy the requirement of written form as they have the same probative value as paper documents signed with a handwritten signature – ie, they prove that the statements contained in the document are attributable to the signatory, unless the signature is proven to be false (Section 20 1-bis of the DAC). AES can be used to sign contracts for which the written form is mandatory pursuant to Article 1350(1,13) of the Civil Code.

There is no requirement to register and/or notarise commercial contracts (ie, distribution, commissionaire, agency and franchising contracts) with any government/administrative authority in Italy. However, in respect of agency agreements, the principal must register the agents with the ENASARCO fund and pay it the relevant contributions. The ENASARCO fund provides pension benefits, F.i.r.r (retirement bonus fund) termination indemnity, and other social and professional assistance services for agents.

Like all contracts, commercial contracts are subject to the general provisions of the Civil Code regarding essential elements of the contract. According to Article 1325, these elements are:

• mutual consent;
• the cause;
• the subject matter and
• the form (when required by law under penalty of nullity).

The absence of any of these requirements renders the contract invalid, thus without legal effect.

The cause of the contract is understood as the economic and individual function pursued by the parties in practice (causa in concreto). Like the subject matter, the cause must be lawful and comply with mandatory rules and public order.

It is also important to determine whether Italian law requires a particular form or content to be followed when establishing a contract of this type.

Unlike B2B contracts, B2C relationships are characterised by a certain formality and rigidity in the content of contracts, as well as a particularly incisive enforcement practice by AGCM, which is responsible for consumer protection in Italy.

National consumer legislation is primarily set out in Legislative Decree 206 of 2005 (the “Consumer Code”), which incorporates and transposes European Union directives, including the recent twin directives (EU) 2019/770 and (EU) 2019/771 as well as the so-called Omnibus directive ((EU) 2019/2161) which has introduced cross-sectoral changes to consumer protection legislation.

This formalism focuses particularly on off-premises contracts or distance contracts – ie, contracts concluded between a trader and a consumer under an organised distance sales or service provision scheme, without the simultaneous physical presence of both parties, through the exclusive use of one or more means of distance communication, up to and including the conclusion of the contract.

During the initial phase in the formation of the contract, the trader is required to provide a detailed set of mandatory pre-contractual information (Article 49 of the Consumer Code – similar rules apply to offline contracts, too (Article 48 of the Consumer Code). The Omnibus Directive supplemented this rule with specific information requirements for transactions concluded on online markets (Article 49 bis of the Consumer Code).

This information must be made available to consumers. Furthermore, according to Article 12 of Legislative Decree 70/2003, in addition to the pre-contractual information prescribed by the Consumer Code, the contract terms and general conditions provided to consumers must be made available in a way that allows them to store and reproduce them.

Furthermore, this information must be provided in simple, comprehensible language. In this vein, and as a result of the AGCM’s decisional practice, Italian language ensures the comprehensibility required by the aforementioned rule, while also guaranteeing the clarity and completeness of the professional’s conduct necessary to prevent unfair commercial practices.

Still on the subject of the contract’s contents, consumer protection legislation also prohibits unfair terms included in general terms and conditions, as well as in forms, templates and documents prepared by companies for use in dealings with consumers. According to the Consumer Code (Articles 33 et seq), a clause is considered unfair if it creates a significant imbalance between the consumer’s rights and obligations under the contract.

The Consumer Code provides a broad list of terms deemed unfair, which is open (unlike the exhaustive list of burdensome provisions). The most relevant unfair terms include contractual provisions that have the object or effect of:

• excluding or limiting the professional’s liability in the event of the consumer’s death or personal injury resulting from the professional’s act or omission;
• excluding or limiting the consumer’s legal rights vis-à-vis the professional or another party in the event of total or partial non-performance or inadequate performance by the professional;
• requiring any consumer who fails to fulfil, or delays in fulfilling, their obligation to pay a sum of money by way of compensation, a penalty clause or similar which is manifestly excessive;
• allowing the professional to increase the price of goods or services without giving the consumer the right to cancel the contract if the final price is significantly higher than the originally agreed price; and
• establishing a jurisdiction other than the place where the consumer is resident or has their domicile of choice as the forum in case of dispute. 

Any terms deemed unfair under Articles 33 and 34 shall be invalid, while the rest of the contract shall remain valid. This nullity shall only operate for the benefit of the consumer and may be ascertained ex officio by the ordinary court.

Pursuant to Article 37 bis of Consumer Code, AGCM, ex officio or in response to complaints, in ascertaining the unfair nature of the term(s) included in contracts between professionals and consumers, may declare them null and void and – starting from 2023 – impose a fine ranging from EUR5,000 to EUR10 million.

The main consumer rights when contracting with professionals can be summarised as follows.

Right of Withdrawal

The consumer has the right to withdraw from a distance or off-premises contract within 14 days without giving any reason and without incurring any costs (except for any additional costs arising from the consumer’s choice of a delivery method other than the least expensive method offered by the trader, and the costs of returning the purchased product).

However, legislation provides for certain mandatory exceptions, which are listed in Article 59 of the Consumer Code. For example, the right to withdraw can be excluded in relation to goods that are liable to deteriorate or expire rapidly; goods that are inseparably mixed with other items after delivery; goods that are made to measure or personalised; and sealed goods that are not suitable for return for hygiene reasons.

Apart from these exceptions, excluding or hindering the exercise of the right of withdrawal constitutes a violation of the regulations on distance contracts and, according to the AGCM’s consistent practice, an unfair commercial practice. 

Statutory Warranty of Conformity

The seller is liable to the consumer for any lack of conformity of the goods at the time of delivery that becomes apparent within two years of that time.

To be in conformity with the contract of sale, the goods must meet the subjective and objective requirements set out in the Consumer Code, particularly that they correspond to the contractual description, type, quantity and quality, and possess the functionality, compatibility, interoperability and other characteristics set out in the contract of sale, as well as being suitable for the purposes for which goods of the same type are normally used.

In the case of goods with digital elements where the contract provides for the continuous supply of digital content or digital services for a period of time, the seller is also liable for any lack of conformity of the digital content or digital services that occurs or becomes apparent within two years of delivery of the goods. If the contract provides for a period of continuous supply exceeding two years, the seller shall be liable for any lack of conformity of the digital content or digital service that occurs or becomes apparent during the period of time during which the digital content or digital service is to be supplied under the sales contract.

In any case, the action for defects not wilfully concealed by the seller shall be time-barred within 26 months of delivery of the goods.

If the goods do not conform to the agreement, the consumer may seek restoration of conformity or a proportional price reduction or termination of the contract.

For the purpose of remedying the lack of conformity of the goods, the consumer may choose between repair and replacement, provided the chosen remedy is not impossible or disproportionately expensive for the seller, taking into account the value of the goods without the lack of conformity, the extent of the lack of conformity, and whether the alternative remedy can be pursued without significant inconvenience to the consumer.

Right to Receive True and Complete Information in Order to Make Informed Consumer Choices

This right is embodied in the related prohibition of unfair commercial practices and misleading advertising.

As a general rule, a commercial practice is unfair, and therefore prohibited, if it is contrary to professional diligence, false or is likely to distort to an appreciable extent the economic behaviour, in relation to the product, of the average consumer it reaches or to whom it is directed (Article 20 of the Consumer Code).

In this context, the AGCM plays an active role in Italy aimed at countering all forms of unfair commercial practices and misleading advertising (including new and increasingly sophisticated forms) which are used to “extort” a commercial decision from consumers.

This is confirmed by the interventions in areas of hidden marketing (mainly perpetrated through influencers), dark patterns and obscure models (employed to exert undue pressure on consumers to make commercial decisions they would not otherwise make) and, finally, in the area of green claims as well as ethical and social sustainability claims.

In the latter case, although Italy has not yet transposed Directive 825/2024 (greenwashing) and is awaiting the adoption of the proposed Green Claims Directive, the fight against misleading or false environmental claims and the phenomenon of greenwashing has always been central to the AGCM’s enforcement actions (see for example PS4026 of 2009).

Recently, the AGCM has increasingly focused not only on claims of lower environmental impact, but also on sustainability claims more broadly – that is, the environmental, social and ethical characteristics of products and companies. According to the AGCM, environmental or green claims, as well as sustainability claims suggesting or hinting at a product’s reduced environmental impact, have become a significant advertising tool capable of influencing consumers’ purchasing choices, given their increased sensitivity to these issues. As these elements play a crucial role in consumers’ purchasing decisions, they must be truthful and accurate; otherwise, they constitute an unfair commercial practice.

The Italian legal system distinguishes between the following:

• the liability of the debtor in cases of non-fulfilment of a pre-existing obligation, even if it originates from a source other than the contract (contractual liability under Article 1218 of the Civil Code); and
• the liability for unlawful acts. According to this principle, anyone who intentionally or negligently causes unjust damage to others is obliged to compensate the victim (in tort liability –responsabilità aquiliana pursuant to Article 2043 of the Civil Code).

According to established case law, the distinction between the two categories lies in the fact that non-contractual liability results from the violation of a primary duty not to unjustly harm the interests of others. This gives rise to the same obligation to pay compensation. In contrast, contractual liability presupposes the breach of a specific pre-existing legal obligation voluntarily assumed towards a specific person.

In the context of recoverable damages relating to contractual liability and tort, Article 1223 of the Civil Code recognises two categories of damage:

• actual damage (danno emergente) – the direct loss or costs incurred; and
• loss of profit (lucro cessante) – the profit that the aggrieved party would have earned if the breach had not occurred,

provided that they are the “direct and immediate consequence” of the breach or tort (causation).

In defining the damage amount (quantum), the so-called compensation lucri cum damno principle applies, according to which the payment cannot exceed the damage cost, resulting in this case as non-fair profit for the owner of the damaged juridical situation (exclusion of the punishing nature of the payment obligation).

Italian law does not expressly classify punitive damages as a category of recoverable damages.

Initially, case law established that the concepts of punishment and sanction were unrelated to compensation for damages. This affirmed the single-purpose nature of civil liability, which has the sole function of “restoring the financial situation” of the injured party (Civil Cassation No 1183 of 2007 and No 1781 of 2012).

The introduction of punitive damages into the Italian legal system is due to the ruling of the United Sections of the Court of Cassation. In judgment No 16601 of 2017, the court stated the following.

• International public policy consists of the fundamental principles which inspire the regulation of a certain matter in the domestic legal system at a given moment in history.
• In the current legal system, civil liability is not only assigned the task of restoring the financial situation of the injured party, but also has deterrent and punitive functions.
• The recognition of a foreign judgment ordering the payment of punitive damages is not incompatible with the Italian legal system, given the deterrent and punitive functions of civil liability. The Civil Cassation established this principle of law in its judgment dated 7 March 2023, No 6723.

However, recognition of a foreign judgment containing such a ruling must comply with the condition that it was handed down by a foreign legal system based on regulations that ensure the circumstances of the conviction are typical, predictable and have quantitative limits.

The judgment of the United Sections of the Court of Cassation then provides an overview of legislative interventions that consider civil liability from a punitive and sanctioning perspective, in addition to compensation. Consider Article 96(3) of the Code of Civil Procedure, for example, which permits the losing party to be ordered to pay an equitable sum as a sanction for abusing the process.

Italian law provides for liability without fault, commonly referred to as strict liability (responsabilità oggettiva). This applies to specific categories where the law imposes responsibility regardless of fault or negligence.

Consider, for example, the liability of the custodian under Article 2051 of the Civil Code. This is a form of strict liability that occurs outside of a contractual relationship, with the possibility of being released from liability if unforeseeable circumstances intervene, thereby eliminating the causation nexus that would otherwise exist between the res and the damage (Civil Cassation, No 9610/2022).

Some authors argue that a form of strict liability is that imposed by the European legislature on manufacturers for defective products (transposed into the Italian legal system pursuant to Article 114 of the Consumer Code).

The parties to a contract, for example a sale contract, may limit it by providing for a cap or by excluding liability, however, no disclaimer of liability can be made to the effect of excluding liability for gross negligence (colpa grave) or wilful misconduct (dolo) according to Article 1229(1) of the Civil Code. Any provisions to the contrary are null and void (although the overall agreement may remain valid). The nullity may also be declared ex officio by the judge, without the necessity of a specific request from the parties (Article 1421 of the Civil Code). In addition, according to Article 1229(2) of the Civil Code, any clause or previous agreement is also null and void if it excludes or limits liability when the facts imputable to the defaulting party violate an obligation deriving from statutory rules.

If the provision excluding or limiting liability is included in a standard term to which the party suffering the limitation of liability is the one adhering to the contract, the clause must be expressly approved in writing by the adhering party in order to be effective and therefore valid, according to Article 1341(2) of the Civil Code – please refer to 3.5 Ineffectiveness of Standard Terms due to Unreasonable Disadvantage.

The concept of force majeure is recognised within the Italian legal framework, although the Civil Code does not currently provide an explicit statutory definition.

Nonetheless, the general concept used to describe situations like those falling within force majeure is essentially reflected in the notion of supervening impossibility (impossibilità sopravvenuta) which provides, inter alia, that an obligation fades when the relevant performance becomes impossible due to a cause not attributable to the same debtor (Article 1256 of the Civil Code). Article 1218 of the Civil Code releases a party from its damage-related liabilities for non-performance of its obligations if it proves that such non-performance (or delay in performing) is due to an event not imputable to them.

A party released from an impossible obligation cannot demand performance from the other party. In a nutshell, the agreement would terminate with full release of the parties (Article 1463), however, if the performance becomes only partially impossible, the creditor has the right to either withdraw from the contract (if they do not have a notable interest in a partial performance) or to a corresponding reduction of its own counter-performance (Article 1464).

Italian case law states that, to successfully claim force majeure as a relief from performance, there must be a specific impediment to performing a particular action, which should:

• neutralise any efforts of the acting party aimed at overcoming such event; and
• not be attributable to the acting party in any way.

In other words, a force majeure event may be defined as an event or situation which is (i) extraordinary, (ii) unforeseeable (at the time of entering into the contract), and (iii) of such force as to make performance impossible, in whole or in part, and not simply more onerous.

As an additional condition to invoke force majeure, the debtor must of course prove all the above circumstances, including that the impossibility to perform occurred and that such impossibility is not attributable to them. Thus, the debtor must prove to have diligently endeavoured to perform, but failed with no fault, as an external event prevented the proper fulfilment of a given contractual obligation.

It is standard practice in Italy for commercial contracts to include a force majeure clause.

If the contract does not contain a clause listing force majeure events and regulating relevant consequences, the parties may invoke the general principles and remedies regarding “supervening impossibility” or “excessive economic burden” under Italian law, which may apply.

Although Italian law does not expressly regulate the theory of hardship (ie, the obligation to renegotiate the contract to restore the balance of the contract (sinallagma), it does recognise a similar concept: supervening excessive onerousness (eccesiva onerosità sopravvenuta).

Pursuant to Article 1467 of the Civil Code, in connection with agreements to be performed on a continuous or recurring basis, or otherwise providing for a deferred term, if a party’s performance becomes excessively burdensome due to extraordinary and unforeseeable events (unidentifiable at the time the contract was concluded), that party may claim termination of the agreement, unless the other party can avoid this by offering to revise the terms to re-achieve fairness.

Under Italian law and based on the principles of contract preservation and good faith, a party facing termination has the opportunity to prevent it by modifying the agreement terms to restore balance. However, unlike the Unidroit Principles, Italian law leaves any assessment of the economic balance of the parties’ obligations to their negotiating autonomy (Article 1322 of the Civil Code), which is unquestionable by the court.

The termination remedy is not available in case the hardship falls within the risk normally associated with the nature of the agreement. It does not apply to agreements that are inherently “aleatory contracts” or where the parties have accepted the risk.

In Italy, it is common practice to include a hardship clause in commercial contracts, particularly in international agreements. However, it is not mandatory for invoking statutory remedies.

This clause is generally included to provide mechanisms for renegotiating the price or other relevant elements of the agreement in good faith, in order to periodically update the price (in contracts on an ongoing basis) based on price indices (eg, published by the National Institute of Statistics (ISTAT)) or to restore balance following an unforeseeable situation.

Failure to include a hardship clause does not prevent a party from invoking remedies related to excessive onerousness arising subsequently.

Italian law provides remedies in the event of non-performance, such as termination with cause. In addition to judicial termination, the Civil Code also provides for termination by operation of law. Specifically, as follows.

• Notice to perform (Article 1454) – each party may terminate a commercial contract if the other party commits a serious breach of a material contractual obligation. The party in default must be granted a period to remedy the breach by written notice (not less than 15 days unless otherwise agreed by the parties). Should the breach remain unrectified within this timeframe, the contract will be terminated automatically.
• Express early termination clause (Article 1456) – the parties are free to predetermine the cases in which non-performance may lead to termination of the contract by means of an express termination clause. This clause must list, in a precise, clear and unambiguous manner, the material contractual breaches that would entitle one of the parties to terminate the contract immediately by sending a termination notice with no grace period. The early termination takes effect when the relevant notification is sent by the non-defaulting party to the defaulting party.
• Essential term (Article 1457) – should the contract designate a term within which a given essential obligation must be performed, and the obliged party fails to comply with such term, the non-breaching party may terminate the agreement by giving simple notice.

In a B2B contractual relationship, the Civil Code requires the seller to provide the buyer with certain statutory warranties. Pursuant to Article 1490, the seller must guarantee that the goods sold are free from defects that could render the goods unfit for their intended use or considerably diminish their value. In the case of defective goods, the buyer may seek the remedies of (i) the termination of the contract, or (ii) the reduction of the purchase price (Article 1492). To enforce these remedies, the buyer must file a complaint within eight days of discovering the defects, unless the law or the parties provide for a different time limit. In any case, these remedies are subject to a time limit of one year from the date of delivery of the goods (Article 1495).

Regarding delay or non-performance, the parties may include a penalty clause or liquidated damages – ie, a predetermined amount of compensation for the damage suffered by one party as a result of the other’s non-performance or delay. If the penalty amount is clearly excessive, the injured party may request that the ordinary civil court reduce the agreed penalty (Article 1384).

The parties may exclude liability for defective goods which are sold under a B2B contract. However, any agreement or contractual clause that excludes or limits the warranty for defects is invalid if the seller intentionally concealed the defects from the buyer.

In any case, pursuant to Article 1229 of the Civil Code, liability for gross negligence or wilful misconduct towards the other party cannot be excluded.

Excluding liability or limiting remedies may be also invalid if it breaches public policy or good faith. Any provision to the contrary is null and void.