These clauses include (i) the force majeure clause, which is often included in certain trade agreements (distribution agreements, supply agreements, etc.), and (ii) the essential clauses relating to negative amendments (MAC) or significant adverse effects (MAE) that are often included in merger and acquisition and financing agreements. This paragraph contains a number of observations on the possible application of these clauses and related corrective measures, taking into account the fact that the actual scope would generally depend on the actual content of each clause, which should therefore be analysed on a case-by-case basis. If all these criteria are met, we can talk about a „FORCE MAJEURE“ event („causa di forza maggiore“) that compromised a party`s ability to fulfill its commitment. Force majeure can therefore be defined as an uncontrollable, unpredictable event that prevents a party from complying with a contractual agreement while it is legally excused. EXISTING CONTRACTS: REMEDIES AND OTHER IMPLICATIONS It can be expected that, because of the negative effects of COVID-19 on existing contractual relationships (i.e., where an agreement is already in place), the parties may review the corrective measures available to them by law or under the corresponding agreement in order to mitigate these effects. They may also have to review their existing agreements to assess whether additional obligations or burdens arising from these adverse effects result. Italian law does not provide for an explicit general concept of force majeure applicable to all contracts, but sets out safeguards (including notions of over-securization of impossibility and hardness) to protect a party from non-partisan facts and events that affect a party`s ability or appropriate interest in executing a contract. In addition, specific clauses in Italian legal constructs may concern issues of force majeure in certain areas where forms of agreements tend to be more sophisticated. On the other hand, if the impossibility caused by the force majeure event or the „factum principis“ is only temporary (Article 1256), the party is not responsible for the delay, but is expected to fulfill its commitment „as soon as possible“ in the execution of the original agreement. Therefore, the following paragraphs analyze some of the real or possible legal effects of the COVID 19 epidemic on existing Italian legal constructions: Article 1337 of the Italian Civil Code expressly requires the parties to „act in good faith during negotiations and in the finalization of an agreement“. A typical case of breach of duty to bargain in good faith has been found in a situation where one party withdraws from the negotiations for well-founded reasons, when the other party relies on a positive outcome of the negotiations.
However, „time“ is very often „essential“ in delivery contracts and even if the party is not held responsible for not meeting the deadline, the other party can no longer be interested in obtaining the service or products. In this case, the latter party may, pursuant to Article 1256, request the termination of the contract and legally refuse to receive the service or the delayed product. Covid-19 and its effects on ongoing trade agreements In all cases, it is important not to neglect advertising obligations and to communicate properly to the other party, in particular because undisclosed or misleading information cannot give rise to contractual liability in the event of default.