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Published March 23, 2020

Force Majeure 3 (Italy)

The Italian Government has just issued a new decree increasing security measures meant to contain the spread of COVID-19. The measures include a nationwide shutdown of all business activities except for a list of about 180 essential services specified in an annex to the decree.

One of the most peculiar aspects of the decree, which may have relevant consequences also for foreign market players, is that it explicitly establishes that governmental restrictions imposed on businesses must be taken into account when assessing the debtor’s liability according to artt. 1218 and 1223 of the civil code (art. 91 of the decree).

Express recognition of a force majeure event

What this provision substantially does is that it grants debtors (or, more generally, obligors) that are unable to fulfil their obligation due the restrictions imposed by the government a solid and explicit legal basis to invoke a force majeure – event and be therefore exepted from liability for damages.

Practically speaking, if an Italian supplier is not able to deliver goods to a foreign purchaser because his business had to be suspended in compliance with the restrictions imposed by the Italian Government, it will be able to invoke a force majeure event and be exempted from paying damages to the foreign purchaser.

No general exemption

What this provision however does not say (quite understadably) is that any obligation that is not performed during the COVID-19 crisis automatically falls under a force majeure event: you always have to check carefully whether the obligation at stake can’t be performed because of an official governmental restriction directly and specifically affecting it.

After all, there are still services that may be performed as of the annex to the decree.

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Vittorio De Vecchi