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Italian Law Quickguides: Formal Notice of Default

The notice of default provided for in article 1454 of the Italian Civil Code represents one of the methods used, under Italian law, to terminate an obligation due to non-performance, together with the express termination clause (article 1456) and the essential term (article 1457).

 

The content

The notice consists of a request directed to the non-performing party with which it is ordered to perform the obligation within a certain deadline. It must therefore contain a warning that if the counterparty does not fulfill its obligation, the contract will be deemed terminated. If the notice contains only a generic request to fulfill the obligation, it will not be considered valid to terminate the contract.

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The deadline

According to article 1454, para. 2, of the Italian Civil Code, the non-defaulting party should provide to its counterparty a deadline of not less than 15 days to fulfill its obligation. This deadline is considered to be appropriate by the law to fulfill the obligation, but parties are able to decide a different and shorter deadline. Additionally, if the nature of the contract (i.e. the performance) or custom allows it, the term may be shorter. If the deadline is shorter to that provided for in article 1454 or agreed between the parties, the termination will not occur. The evaluation of the appropriateness of the shorter deadline could only be made by a judge.

Once the deadline has expired without the obligation being fulfilled, para. 3 of the provision states that the contract is terminated by law.

 

The form

The provision states that the notice of default should be in writing. To this regard, the case law of the Italian courts states that the creditor is able to choose the form it deems more appropriate to achieve the objective. Therefore, an e-mail directed to the debtor can suffice. The creditor though, must be able to prove that a notice was given. For this reason, in practice it is preferred to send a tracked letter to the debtor.

The notice must come from the creditor. If it is sent by someone authorised by the creditor (e.g. a lawyer), the power of attorney must also be in writing.

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2022-06-08T17:32:48+00:00
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