THE UNFAIR CLAUSES ACCORDING TO THE ITALIAN CIVIL CODE:

Italian legal system was one of the first in Europe to adopt rules designed to impose a direct control upon unfair contract terms. These rules, as provided in Articles 1341 and 1342 of the ICC, deal with “general conditions of contract” in particular, which, according to the definition given by Italian Courts, are clauses drawn up for general use (as opposed to clauses specifically designed to individual contracts).

Pursuant to Articles 1341-1342 of the Italian Civil Code:

“General Conditions, prepared by one of the Parties, are binding on the other party if known by the latter at the time when the contract was concluded or if the might have known thereof by using ordinary diligence. Nevertheless, the following conditions have no effect, unless specifically approved in writing:

• Conditions limiting the liability of the party who has prepared the general conditions, or giving said party a power to withdraw from the contract or to suspend the execution thereof.
• Conditions burdening the other party with time limits for the exercise of the right or limitations to such party’s power to raise defences, or with restrictions on freedom of contract with third parties, or with tacit extension or renewal of the contract;
• Clauses providing for arbitration or derogation from the normal venue or jurisdiction of the courts.” 

The list of clauses under Article 1341 can be extensively interpreted but Italian courts have held and authors have opined that interpretation by way of analogy is not permissible. Generally speaking, one sided clauses (a-b-c hereinabove), in order to be incorporated into the contract, must be specifically approved in writing by the burdened party.

Pursuant to Article 1341, subsection 2 of the ICC , a term qualified as unfair (vessatorio) will be ineffective even if individually negotiated, unless the term is accepted by a separate signature, since the provision above requires a formal control. According to the rule referred to in Article 1341, subsection 2, it makes no difference whether the unfair terms were individually negotiated or formulated in advance and incorporated into the contract, or formulated in advance and adopted per relationem. Whether the term is binding on the parties depends on whether there is a specific written signature to show specific approval.

Moreover, in relation to “specific approval”, the Court of Cassation (Supreme Court), which the lower courts followed, has adopted the strictest and most formalistic view – following the signature for the standard conditions or the form as a whole, a special provision must be inserted, which repeats the one sided clauses, or at least, refers to them by the provision numbers or other symbols in which the provisions appear in the text of the contract. These provisions must be signed separately by the burdened party, and may be printed or written in standard conditions or form, or it may be signed separately after the contract itself is signed.

The Court of Cassation (Cass. civ. N. 10942/2006) held that:

“With regard to the general terms and conditions of the contract, the need for a specific written approval of a derogatory clause (such as the derogation from territorial jurisdiction) postulates a separate and specific subscription, compared to the other contractual clauses. This requirement can be satisfied only with a specific and separate signature of such clause in accordance with articles 1341 and 1342 of the Civil Code”.

One signature at the end of the entire contract is not sufficient even though the one sided clauses are printed in capital letters or underlined. In cases of a printed provision merely listing the one sided clauses by numbers or symbols, the Court of Cassation further requires that the particular characteristics of the form in the specific case be listed so as to give a firm basis for the belief that the burdened party consciously accepted the one sided clauses.

For this reason, when the ICC speaks of “specific approval in writing”, it suggests a separate, specific approval as opposed to a general approval of the other clauses. This requirement applies even if the party burdened by the one-sided clauses has actual and full knowledge of them – if the requirement is not met, the one-sided clauses are not incorporated into the contract.

One might also think that this is one of the cases provided for in Articles 1418-1426 of the ICC. indeed, it has been held that a one-sided clause which is not validated by this formality can be declared void ex officio by the court: Article 1421 of the ICC. However, it can neither be declared void ex officio in favour of a party not burdened by the clause, nor be pleaded by that party.

In some court decisions, one may even find suggestions that this formal requirement involves the "ordre public" (public order) but failure to meet the requirement invalidates only the one-sided clauses, and not the entire contract.

The effect of an Exclusive Jurisdiction Clause under the Italian Law is clear: according to the Court of Cassation: “The derogation from territorial jurisdiction included in a contract drafted by one of the party, implicates the need for a specific written approval of the burdened party and such specific approval will not have the additional effect of rendering the derogation clause binding only for that party but will be binding for both contractual parties” (Cass, Civ. N. 3186/1987).

In other words, this clause is binding on both sides. None can commence any proceedings in any other Courts or any other jurisdiction: only the Court chosen in the agreement is competent for any dispute related or arisen from the contract.

Should one of the contractual parties commence legal proceeding in an incompetent court or jurisdiction, according to articles 167 and 183 of the Italian Civil Procedure Code, the Defendant can always object to the lack of jurisdiction of the seised Court. The Court must preliminary decide on such objection and, should the objection been valid must decline to hear this case. The only exceptions would be if giving effect to such a clause would contravene the European regulations. For example, in employment cases, Regulation (EU) No 1215/2012provides that an employee may only be sued in courts of their place of domicile. Assuming the formalities are satisfied, and the employer and employee agree to submit to the exclusive jurisdiction of Court in Place A. The employee’s place of domicile is Place B. The Court in Place A cannot give effect to this clause and hear a case brought by the employer against the employee in Place A. Similarly, if the case is brought by the employer in Place B, the employee cannot rely on this clause to say the Court in Place B is incompetent because parties agreed to submit to the exclusive jurisdiction of Court in Place A.

Save as to these exceptions, under Italian law, once there is an exclusive jurisdiction clause in favour of a venue, its effect is that any other court would not look at anything else to see whether the contractual claim should or should not be heard in such venue.

Avv. Alberto Andreello