Italian law does not provide for a statutory definition of FM.

However, the general concept used to describe situations like those falling within the FM is essentially reflected in article 1256 of the Italian Civil Code (ICC) which provides, inter alia, that an obligation fades when the relevant performance becomes impossible due to a cause not attributable to the same debtor.

Italian court precedents has set forth that FM shall consist in a particular impediment in carrying out a specific action, that shall:

1. Neutralize any efforts of the acting party aimed at overcoming such event
2. Not be attributable to the acting party in any way. In other words, a FM event is deemed to be an objective event or situation which is:
   • Extraordinary
   • Unforeseeable (at the time of entering into the contract)
   • "Absolute" (i.e., impossible to overcome)

Causes which may be invoked for the purpose of the above-mentioned "impossibility to perform the contractual obligations" are inter alia the orders or prohibitions issued by the European and/or domestic authority so-called factum principis: specifically, they are legislative or administrative measures, arising from general interests, which make it impossible to fulfill obligations, irrespective of the conduct of the obligor. In brief, it is a circumstance which exempts the debtor from liability, irrespective of the contractual provisions in effect.

The parties to a contract are free to determine:

1. The events considered as FM under the contract
2. The consequences of the occurrence of such events

If a contract provides an FM clause, it should be assessed on a case by case whether:

1. Epidemics/pandemics or wars are included in the wording of the clause
2. The clause provides for a "catch-all" wording relating to events caused by nature similar to the one at hand; and/or
3. The situation meets the requirements defined in the clause to consider an event as FM

If the contract does not contain a clause listing such consequences, one might argue that the general principles regarding the "supervening impossibility" or "excessive economic burden" under Italian law may apply (please refer respectively to answers 5 and 6).

Italian law does not provide for any statutory formalities that should be complied with by the acting party in terminating the contract or suspending the relevant performance. In any case, however, the party must inform the other party of its intention to terminate/suspend the agreement and the underlying reasons. It is advisable that such notice be given in writing and via a traceable mode (certified e-mail, registered letter, fax etc.).

Obviously, the party should also comply with the formalities established under the contract, if any.

The general obligations of good faith in the execution of the contract and fair dealing (articles 1175 and 1375 ICC) could lead to a substantial obligation to mitigate loss where possible.

"In contracts for continuous or periodic performance or for deferred performance, if extraordinary and unforeseeable events make the performance of one of the parties excessively burdensome, the party who owes such performance can demand termination of the contract". (article 1467 ICC - please refer to answer 6 "excessive economic burden")

Article 1467, paragraph 3 of ICC, however, offers the party against whom the termination is required a chance to avoid it by offering to revise the terms of the agreement to re-achieve fairness.

Based on the combined provisions of articles 1256 and 1463 ICC, if a supervening impossibility to perform occurs:

1. the debtor is released from the relevant obligation;
2. the debtor shall return the consideration already received; and
3. the contract shall be automatically terminated.

Note:

If the performance becomes only partially impossible, the creditor has the right to either withdraw from the contract (if he/she does not have a notable interest in a partial performance) or to a corresponding reduction of its own counter-performance (article 1464 ICC)

If the impossibility is only temporary, the debtor is not deemed to be liable for the delay in the performance. In such a case, the contract remains suspended (article 1256 ICC).

1. Supervening excessive economic burden on one party (see also answer 4): pursuant to article 1467 ICC, which states that in contracts providing for continuous or periodic performance, if extraordinary and unforeseeable events make the performance of one of the parties excessively burdensome, the party who owes such performance can demand termination of the contract. The other party may prevent termination by offering to amend the terms of performance of the contract in such a way as to make them fair

   Burden of proof is on the party seeking to be released from its obligations.

   Please note that, although Italian law does not expressly recognize the concept of frustration of contracts leading to termination of the entire agreement/a right to renegotiate, the two remedies above are similar in effect.

2. Right to withhold (eccezione d'inadempimento): under 1460 ICC, the party which is not receiving the performance due under the contract (i.e., the aggrieved party) might be entitled to suspend his/her performance.
3. Actual purpose of the contract (causa in concreto, i.e. actual contractual cause) theory: created by certain Italian court precedents (see decisions no. 18047/2018, 26958/2007. 16315/2007 of the Italian Supreme Court). The rationale behind the application of the so-called "causa in concreto" doctrine lies in the supervening impossibility, not of the performance per se, but to achieve the intrinsic purpose of the contract (e.g. a party may be no longer interested in receiving the counterpart performance).