Publication Date:
2017
abstract:
In order to promote a contract’s proper fulfillment and predetermine the remedies
which might be available in event of non-performance, at the time of conclusion of
the contract the parties may provide that one of them gives to the other an amount
of money or other fungible goods by way of earnest money deposit. In that case,
when the tradens fulfills his obligations, then the accipiens shall consider either
the received goods as benefits due, or return as many goods of the same kind as those
received. At the same time, in case of non-performance of one party, the non-breaching
party shall have three options: to withdraw and withhold the earnest money
(or ask for the double of the amount if the party who received the earnest money deposit is the breaching one); to request the performance; to request for the termination
of the contract – without prejudice, in the latter two cases, to the damages
which may be claimed. The choice must be assessed in relation to the demonstrable
suffered damages: the non-breaching party may discard the first option if considers
it would be able to demonstrate that the damage suffered is more considerable than
the earnest money’s amount, even at the risk of obtaining a compensation lower
than the earnest money, in which case the earnest money would not represent the
minimum level of guaranteed compensation. Notwithstanding the apparent clarity
of the applicable law, the business practice has revealed considerable difficulties in
applying the rules; and the solutions from Courts have not always been uniform.
On the contrary, according to the steadfast – at least so far – interpretation of the
Supreme Court of Cassation, the provisions of Art. 1384 of the Italian Civil Code
relating to the power of the judge to reduce the penalties’s amount are not analogically
applicable to the earnest money clause; a reduction could therefore be admitted
if the reached agreement – regardless of the nomen iuris given to it by the parties –
is qualified as a liquidated damages clause.
which might be available in event of non-performance, at the time of conclusion of
the contract the parties may provide that one of them gives to the other an amount
of money or other fungible goods by way of earnest money deposit. In that case,
when the tradens fulfills his obligations, then the accipiens shall consider either
the received goods as benefits due, or return as many goods of the same kind as those
received. At the same time, in case of non-performance of one party, the non-breaching
party shall have three options: to withdraw and withhold the earnest money
(or ask for the double of the amount if the party who received the earnest money deposit is the breaching one); to request the performance; to request for the termination
of the contract – without prejudice, in the latter two cases, to the damages
which may be claimed. The choice must be assessed in relation to the demonstrable
suffered damages: the non-breaching party may discard the first option if considers
it would be able to demonstrate that the damage suffered is more considerable than
the earnest money’s amount, even at the risk of obtaining a compensation lower
than the earnest money, in which case the earnest money would not represent the
minimum level of guaranteed compensation. Notwithstanding the apparent clarity
of the applicable law, the business practice has revealed considerable difficulties in
applying the rules; and the solutions from Courts have not always been uniform.
On the contrary, according to the steadfast – at least so far – interpretation of the
Supreme Court of Cassation, the provisions of Art. 1384 of the Italian Civil Code
relating to the power of the judge to reduce the penalties’s amount are not analogically
applicable to the earnest money clause; a reduction could therefore be admitted
if the reached agreement – regardless of the nomen iuris given to it by the parties –
is qualified as a liquidated damages clause.
Iris type:
2.1 Contributo in volume (Capitolo o Saggio)
List of contributors:
Proto, M
Book title:
Clausole negoziali. Profili teorici e applicativi
di clausole tipiche e atipiche
di clausole tipiche e atipiche