Private Law

Private law is the law that regulates the relationships between individuals.
It deals with such aspects of relationships between individuals that are of no
direct concern of the State. It includes the law of property and trust, family law,
the law of contract, mercantile law and the law of tort. The private law is
defined as the law of peers because based on self-determination, equality and
balancing of interests instead of on authority, disparity and punishment. Every
country has its own private law. Some rules are uniform in a larger area (e.g.
Uniform law on international sales of goods) and some principles are accepted
as the core of a common framework (e.g. PECL or Unidroit Principles). Private
law provides rules to establish economic relationship considered as elements of
business.
The source of Italian private law is the Italian Civil Code which is divided
into Books, Headings, Items, Sections, Sub-sections, Articles and paragraphs.
The Italian Civil Code is composed by 6 books: Natural persons, legal
entities, family (1), succession on death (2), property, ownership,
possession (3), obligations, contracts, torts (4), labour (5) and legal
remedies (6).
Article
The article is a statement that prescribes something, that sets a model of fact
and determines a judicial consequence/effect.
Civil Law and Common Law
The legal system of the Civil law originates in Europe and its core principles are
codified into a referable system which serves as the primary source of law.
On the other hand the legal system of Common law is characterized by case
law which is developed by judges through decisions of courts and tribunals. In
the civil law the role of the judges is that one of making rules (usually nonbinding to third parties) while in the common law judges not only make rulings
but also set precedents and referee between lawyers. Civil law is adopted by
Spain, China, Japan, Germany and most of Africans, European and South
American nations. On the other hand Common Law is adopted by USA,
England, Australia, Canada and India. The Constitution is always adopted in
civil law and precedent are considered as persuasive while, in common law, the
constitution is not always present and precedents are binding because used to
rule future and present cases.
Language and the Law
A law statement is expressed by words: a legal word is not only a meaning
medium but it is a synthesis of rules. Approaching Italian Private Law by using
English language means considering that an Italian word can be translated into
several English words that have different meaning. Therefore the awareness of
mistakes in translation must be taken into consideration. An example is given
by the word contratto which can be translated into contract, agreement and
settlement:
Contract: is the agreement of two or more parties to establish, regulate or
extinguish a patrimonial legal relationship among themselves.
Agreement refers to those agreements which can be considered as no
binding.
Settlement refers to a solution between disputing parties about a legal case,
disposition on property to be held in trust, marriage settlement.
In order to reduce errors that may arise from non correct translation, we will
use stipulative definitions: A stipulative definition is a type of definition in

which a new or currently-existing term assumes a specific meaning for the

purposes of argument or discussion in a given context. When the term already
exists, the meaning assumed may be in contrast with the dictionary definition.
Therefore a stipulative definition cannot be considered as correct or incorrect
but can only differ from other definitions.
The Rule
The rule represents the atomic unit of the legal system. A rule is a statement
that prescribes a human conduct defined as compulsory, prohibited or
lawful. Therefore a rule prescribes rather than describe.
The common law systems are case law systems. In common law system the
rule is the ratio decidendi, represents in fact the reason of certain settlement
of a given conflict of interests. The rule grows out from judicial precedents,
which means in applying the same solution to other similar cases. In private
law the rule settles a conflict of interest and its neither a synthesis of natural
phenomena nor a sequence of normally interrelated events. Our lives are
governed by many rules that can be physical or behavioural. Physical rules
describe a phenomenon that can be verified after an experiment of which we
can say whether is right or wrong. On the other hand behavioural rules
prescribe behaviour and are relative to a particular time and place in history.
Contrary to physical rules we cannot say if they are right or wrong. The rule is
generated from the deductive pattern: if Athen B: where A is the model of
fact, a hypothetical situation that can be universal (can be applied to anyone)
or abstract (can be applied to any case). On the other hand B is known as the
effect, the legal consequence that a rule attaches to a model situation. E.g. if
someone inflicts wrongful injury to another (A), then he is oblige to pay the
damages inflicted (B). There are different types of rules providing guidance:
- Personal used for specific persons.
- Factual used for specific situations.
- General used for any person.
- Abstract used for any case.
Legal scholars refer only to higher rules, prescribing in a general and abstract
fashion what conduct is lawful or required in any situation that repeats the
base situation envisioned therein. As a consequence, a distinction can be made
between legal rules formally identified by law and non-legal rules which are
unenforceable by law and usually refers to rules of courtesy, ethical and
religious rules. If there is not a formal identification of the law provided by
sources of law then there is no legal rule.
The application process
The application process of rules is regulated by the following steps:
1) Check the factual situation.
2) Check if the concrete situation is equivalent of the hypothesized model of
fact.
3) Define the set of consequences.
4) Apply to the concrete situation the prescribed effect.
Judges can find the rule through interpretation: seeking the meaning of a
word in a statute. In Italy interpretation is binding and judges and lawyer must
follow some criteria. In such matter is important to underline the differences
between literal and technological interpretation: while literal
interpretation focuses on the technical meaning that words represent on a

specific context, technological interpretation is directed to ascertain

whether words are consistent with the aim of the legal rule.
When a case cannot be attached to a model situation, the legal system
presents a gap. Judges cannot deny to solving cases, thus they have to look
for similar cases.
The effect
The effect can by divided into favourable and unfavourable situations (?).
Favourable situations include:
- Absolute subjective rights can be asserted against anyone and are
considered as non-medium. Goals can be in fact achieved without cooperation.
- Qualified subjective rights can be asserted only against a specific debtor
and are considered as medium. Goals have to be in fact achieved through the
cooperation with the creditor.
- Options rights have features of both the qualified rights and the absolute
rights. They can in fact be asserted only to a specific person but are considered
as non-medium.
Unfavourable situations include:
- Duty (absolute subjective right). The infringement of the duty causes the
tort liability: the person damaged can take an action in tort.
- Obligation (qualified subjective right). The infringement of the obligation
causes contractual liability: the person damaged can take an action in
contract.
- Subjection (option right) such as the burden of proof and burden of written
form.
Source of law
A legal rule is produced by a source of law. The source of law refers to any act
or fact aimed at producing legal rules in a legal system. There is a large variety
of source of law and it is possible to distinguish them between written
(expressed statement) and unwritten (rules extracted by precedents). In Italy
source of law are aligned by hierarchy and are listed as follow: Constitution,
statutes (act of parliament), domestic regulation and customs. Since there are
several sources of law enabled to originate rules, there may arise conflict
between such norms. In order to solve such conflict and to achieve a
systematic consistency in legal ruling (a fact is regulated only by one law)
different criteria have been established.
- For vertical antinomies among source of different rank the criterion of
hierarchy is applied: the legal rule originated by the higher source prevails
over the lower rule.
- For horizontal antinomies among sources of the same rank the criterion
of chronology is applied: the legal rule originated at latter time prevails on
the old law.
- For lateral antinomies among different sources having different areas of
competences the criterion of competences is applied: the legal rule
originated by the source having competences over a specific matter prevails
over the rule of other sources.
When such criteria are used, legal rules may be repealed. The repeal is known
as express when a statement of a lawmaker declares the termination of a
certain law while implied when there is incompatibility between new
provisions and previous ones.
Legal acts and facts

A legal fact is any fact to which a legal rule applies, ascribing a certain effect to
it. Legal facts are divided into mere facts (occurrences) and acts (humans
undertakings). Moreover acts are divided into human acts and legal acts:
- Human acts: the law does not take into consideration about whether it was
committed voluntarily or not. The legal effect therefore occurs regardless the
intent of the person adopting certain behaviours. Human acts are divided into
lawful acts that refer to a situation when a legal rule provides for legal effects
of a certain permitted conduct and unlawful acts that refer to the situation
when it is in breach of a legal rule of the legal system and falls subject to
sanctions. (WTF?!). Unlawful acts are divided into:
- Unlawful acts in strict sense: an action which comes under law as it is in
breach of a specific rule and so grievous to interest protected by that specific
rule.
- Civil wrongs: is an action which is directly grievous to a particular interest
protected by law causes wrongful damages to the aggrieved party. Civil
wrongs are divided into contractual wrongs and non-contractual wrongs:
contractual wrongs refer to the failure to perform an obligation, harms the
interest of the creditor and causes liability for damages while non-contractual
wrongs refer to any deliberate act that causes damage to others and obliges
the wrongdoer to compensate for damage.
Invalidity of legal acts
An act is invalid when it does meet all the requirements asked by law. There
are two types of invalidity: voidability and nullity. The act is said as
voidable when it contains a flow that is not relevant as to make it valid. It is
legally binding and enforceable until it is annulled while it is said null if the act
lacks at least of one of the cardinal requirements: it is said unlawful and
therefore has no legal effect.
The word act is used with different meanings depending on the context:
- Behaviour, action or practice.
- Legal acts founded on the ability of the person concluding them to understand
their legal implications.
- Written document.
Persons
Persons are the subjects of law, as bearers of rights and duties. A distinction
has to be done between natural persons, whose judicial personality is the
result of their behaviour and legal persons considered as collective entities
which are distinct and separated from the natural person who compose such
entities. Both natural and legal persons are:
- vested with rights and duties , insofar as their existence as whole,
originates relationship and situation falling under legal rules.
- acting within the legal system, insofar as their acts and facts may
generate legal effects within the legal system.
Natural persons
Natural persons acquire legal capacity at birth and maintain it up to their
death. Thus as persons born consequently they acquire rights and duties.
Reached the age of 18, natural persons acquire the capacity to act, thus the
capacity to exercise rights and duties in their own name and interests. The
legal capacity is a prerogative by the Constitution according to which under the
art. 2 The inviolability of the rights of the persons. In the case of minors,

parents and guardians replace them in exercising rights and duties. Legal acts
performed by persons lacking capacity to act, such minors, are legally binding
and produce effects until they are annulled by the court, upon request if the
interested party. Persons who are habitually impaired in their mental ability
to make decisions may be fully or partially deprived of their capacity to act
whereby a judicial decision. Minors, mentally disordered and person sentenced
to a long prison terms are legally incapable. There are different judicial
decisions regarding habitually impaired which involve interdiction, disability,
and management support provided by the Art 428 c.c. (De facto natural
incapacity):
- Interdiction arises in case of severe mental illness. In such cases the
guardian replaces the ill-person.
- Disability arises in case of less severe mental illness. In such cases the
guardian interacts with the adult (inabilitation)
- Management support arises in case of need oh help in specific types of
acts. In such cases the supporter takes part to certain acts, selected by courts.
With the term natural incapacity we refer to the lack, even transient, of the
capacity to understand and intend. Natural incapacity is a cause for
annulment of any legal act performed. In order to be declared, natural
incapacity has to be proved at the time the act was performed. In cases of
unilateral act, the act is seriously prejudicial to the person who did not
have the capacity to understand and intend. Nevertheless a person causing
injury to another, in a state of incapacity to understand and intend cause by his
own fault (drunk, stoned lol, junkies) is liable to compensate for damages.
Legal persons
Legal persons have the right and privilege of limited liability. The legal capacity
of legal persons such as corporation and associations is consecutive to their
establishment. With the recognition, associations, foundations and other
private institutes acquire the legal person status which leads to complete
financial autonomy.
Registered associations, Foundations and non registered
The Art. 18 of Italian Constitution guarantee all the citizens the right to freely
associate in order to pursue any purpose (with legal limits) recognizing the
inviolable rights of man, not only as an individual but also as a member of a
group.
Registered associations
Registered associations are composed by a group of people, with a common
purpose and a common fund and structured as an organization.
Foundations
A foundation is a private non-profit and autonomous organization whose assets
are dedicated to achieve a purpose established by the founder that can be
found in the written declaration. It is important to underline that the founder
cannot receive neither benefits form the foundation nor the initial assets. The
statutes of foundation must contain its name, purpose, assets, domicile,
administrative organs and how the grants will be distribute. Its important to
underline that the legal capacity is acquired through the registration in the
legal register of the local authority.
Non-registered associations
They are structured and organized as the registered associations, but, unlike
the latter, they are non-legal because the common assets are not sufficient in

order to pay debts; It is important to underline that who has acted in the name
and interest of the association is personally liable with his own private assets.
The Protection of rights
The sixth book of the Civil Code is titled The protection of rights and refers to
a vast range of instruments aimed at protecting and enforcing legal rights and
interests.
Publicity
The legal events affect not only the parties to a legal relationship, but also the
third parties, which might be interested to know the juridical dynamics to guide
their behaviour. Publicity is the technical instrument to give certainty. The
juridical situation is only the one resulting from public record. In such matter
publication is necessary to:
- Make public a certain act or fact; for example make public that a certain
person has been deprived of his capacity to act, whose decision is registered in
the margin of the birth certificate
- Inform third persons that a transaction has been concluded; for example
transfer of right of ownership of an immobile that has to be registered in the
Land Register.
- For the validity of certain acts; for example a mortgage exists from the
moment the deed is registered in the Land Register.
Publicity can be a mere information, a Declarative publicity or a
Constitutive Publicity and its areas regard status of natural persons,
legal entities and event relating immovable properties which cannot be
compared to common law system.
Publicity in the immovable properties is made by means of transcription in
the Land Register. The record process can be based on personal basis,
typicality or principle of continuity. In relationship with thirds is relevant
only what results from public records: the sellers is able to transfer ownership
by a valid title that is first recorder and then sold while the buyer becomes
owner by means of transcription. In case of breach of contract by the seller,
the seller itself will pay damages to the buyer. In such matter is important to
underline that there is no publicity system for movable goods because all
depends on possession. If someone, by successive contracts, conveys movable
property to several persons, the one among them who acquired possession in
good faith is preferred over the others, even if his acquisition is on a later date.
The Prescription or the limitation of actions
Almost all the rights can be extinguished by prescription. The prescription
happens whenever the person holding the right fails to exercise it within the
time fixed by law. The prescription aims at removing the uncertainty deriving
from inactivity, taking into consideration reasons of such incapacity: the longlasting inactivity means that the holder has no interest to the legal protection.
Some rights are not subject to prescription such as non-disposable rights
(personal rights related to marital and family status and certain rights vested in
the individual as honour, name etc.) and other rights specified by law.
Prescription begins to run from the day on which the right can be enforced. In
some cases the law provides the temporary supervision of the prescription,
either due to the relationship between parties or due to the conditions of
certain persons. When a right is exercised, prescription is interrupted. The
interruption sets the clock back to the start of the running of prescription. The
interruption of prescription can be made by:
1) by service of the paper by which judicial proceedings are commenced;

2) by a request of arbitration;
3) by any other act capable of placing the debtor in default;
4) by the acknowledgment of the right by the person against whom such right
can be enforced.
The statutes of time limitations are mandatory and depict the length of
time after which the right can be prescribed. There are two kinds of time limit
of prescription:
- Ordinary prescription according to which rights are extinguished after the
lapse of 10 years.
- Brief prescription according to which the law provided shorter time period for
a series of cases. For example the right to compensation for damages arising
from the circulation of vehicles of any kind is prescribed in 2 years.
The renunciation of prescription can arise only with the following
-A person who cannot validly dispose of a right cannot renounce the
prescription of said right.
-Prescription can be renounced only when its time has completely run.
- Renunciation can be shown by an act incompatible with the intention to take
advantage of prescription.
The prescription must be pleaded (dichiarato) in court by the interested party
while the termination of a right due to the passage of time may not be raised
ex officio by the court. The person who spontaneously paid in fulfilment of a
prescribed debt may not recover what has been paid (mh?).
The presumptive prescription
The presumptive prescription is applied on day-to-day or occasional
transactions where parties are bound orally rather that in writing (area of
application). The time limit of the presumptive prescription can be between 6
months and 3 years (periods). It is based on the assumption that the debt has
either been paid or is extinct, by way of another cause (feature).
If a party who raises a presumptive prescription as a defence has in any way
admitted, in the course of the judicial proceedings, that the obligation has not
been extinguished, the defence is rejected. In the cases of presumptive
prescription, the party against whom prescription has been asserted can
charge the other party with an oath (giuramento) to ascertain whether
extinguishment of the debt has occurred.
Forfeiture
Forfeiture is the lapse of a right caused by failure to observe the time limit
within which the law (or a contractual provision) lays down that it must be
exercised. It does not take into consideration reasons of inactivity because is
solely concerned with absolute certainty. The sources of forfeiture are the law
and an agreement among parties. Parties can establish agreed forfeiture
provided that: forfeiture is related to disposable rights and the expiration of
time limit has not to make the exercise of rights too difficult for one or more
parties. Forfeiture can be avoided by the acknowledgment by the person
against whom the right subject to forfeiture can be enforced and parties can
alter its legal regulation. Moreover forfeiture can be avoided by a contract,
provisions related to disposable rights and acknowledgment of rights. Parties
cannot alter its legal regulation if it is concerned with matters which cannot be
disposed by parties.
Burden of proof
Parties involved in a dispute must move for the enforcement of their own right.
Consequently judges have to base their decisions on evidence submitted by

the parties. Generally the plaintiff (querelante) has to prove the facts upon
which their rights are based, while the defendant (imputato) has to prove the
facts that extinguish or limit rights asserted by the plaintiff. Every plaintiff
assumes the risk of proof: if a party does not prove the facts upon which his
right is based, he is consequently unable to enforce such right. In some cases,
the burden of proof is inverted in to make easier the enforcement of certain
rights. Agreements whereby burden of proof is inverted are said void when the
issue concerns rights that cannot be disposed or when the modification has the
effect of making the exercise of a right too difficult for one of the parties
involved.
The elements of proof used for the establishment of a fact in truth are called
evidence. Evidence is evaluated by the court endorsed of the discretionary
power unless, in cases of legal evidence, evaluation is made directly according
to law. A first category of evidence is the documentary evidence:
-A public act is an instrument drawn with the required formalities by a notary
or by another public official authorized, in the place where it is drawn, to clothe
such an instrument with public reliability. A public act constitutes a full
proof:
- that is dawn by the public official who represents as having drawn it.
- of the declarations of parties
- of other facts which the public official attests to have taken place in his
presence or to have been performed by himself.
- Private writing constitutes full proof of the origin of the declarations set
forth therein in the person who signed such writing only if the person against
whom it is asserted recognizes the signature of if a signature is legally
authenticated by a notary or another public official authorized through a
certification that the signature was written in his presence. If the signature has
not been authenticated, the date if the private writing cannot be asserted
against third persons.
- In proof of witness, witness can be a person who has direct knowledge of
facts at issue or a third person regarding the situation involved in the law and
the parties of the trial.
1) Proof by witness is admissible when there is prima facie (first sight) written
evidence, which makes the fact appear likely and originates from the person
whom the action is directed. Therefore proof of witness is admissible when it
has been morally or materially impossible for the contracting party to secure
any written evidence or when the contracting party has lost without fault the
document which provided him with evidence.
2) Proof of contracts by witness is not admissible when the value of the subject
matter exceeds 2,58. Moreover proof by witness is not admissible to establish
stipulations that have been added or are contrary to the content of the of the
document and that are claimed to have been made prior or at the same time of
the document.
- A presumption is an inference made by the law or by the court from a
known fact, in order to arrive to a fact that is not known. Presumption can be as
mere or legal.
1) Mere presumptions are not established by the law but left to the
prudence of the judge who shall only admit them when they are material,
precise and consistent. Presumptions are not admissible when law bars proof
by witnesses.

2) Legal presumptions are established by the law and link some basic facts
by a relationship of normal implication. The legal presumptions is known as
absolute when the proof of certain facts makes the existence of the assumed
facts beyond dispute (presumption cannot be contradicted) while is know as
relative when the presumption can be disproved by evidence to the contrary
and the burden of proof shifts: as the law presumes that a certain fact
occurred, it is for the person at issues to prove the contrary.
- The confession is a declaration made by one party, stating a truth of facts
unfavourable to himself and favourable to other parties. Confession cannot be
revoked unless it is proved that it was introduced mistake or duress. Confession
is not effective unless it is originated form the person who has the capacity to
dispose of the right to which the confessed facts relate.
A confession is said judicial when made in the course of judicial proceedings
and it has full evidentiary value against the person who made it. If it is
accompanied by other declarations of facts tending to invalidate, modify or
extinguish its effects, such declarations acquire full evidentiary value if the
party fails to contest them. A confession is said extra-judicial when made out
of the course of judicial proceedings. If is made by the opposing party, the
confession has the same evidentiary value as a judicial confession. If it made
by a third party, the confession shall be appraised by the judge. The confession
cannot be proved by witnesses if it concerns matters for which proof by witness
is not admitted.
- The oath is the asseveration of fact as truthful. Oaths can be either decisory
or supplemental. Through a decisory oath one party charges the other for the
purpose of causing the case to be adjudged on the basis of the oath (ta fuck).
Through a supplemental oath the judge charges one of the parties to confirm
under oath the claim, in situation when the claim have not been fully proved or
to ascertain the value of its subject matter.
If one party has taken an oath, the other party is allowed to prove the contrary
or to demand the revocation of the judgment, if perjury has been established.
However, such party can demand for compensation for damages deriving from
perjury.
The law of the obligations
The obligation is a relationship between a debtor and a creditor. The debtor has
the duty to carry out a certain performance towards the creditor. Sources of
obligations, according to the Art. 1173 CC are contracts, unlawful acts and
any other act or fact capable for producing obligations under law. Therefore
the theoretical structure of the obligation includes the active subject (creditor),
the passive subject (debtor) and the performance which is capable of economic
evaluation. There are 2 kind of obligations: natural and implied.
The recovery of an obligation that was spontaneously given in performance of
moral or social duties is not permissible, unless the performance was made by
a person lacking capacity (natural obligations). Examples are a gambling
debts and a payment of undue interests. On the other hand implied
obligation are divided into obligation to safeguard and obligation to
furnish security. Obligation to safeguard refers to the obligation to deliver a
specified thing implying the obligation to safeguard such thing until delivered
while obligations to furnish security refer to the bound to furnish an adequate
real or personal security.
Obligation is a constraint; the debtor is liable with all his present and future
properties for the performance of its obligations (Art. 2740 CC). Therefore we

can state that obligation includes two elements: duty and liability. In order to
obtain its claim, the creditor can cause the exportation of the property of
the debtor or of a third person when encumbered as security for the claim.
Specific enforcement are:
- Enforcement by delivery or release
- Enforcement of obligation to do something
- Specific enforcement of obligations to make contract
- Enforcement of obligations not to do something.
The Performance
An obligation is a legal duty of the debtor to either give something, do
something or refrain from doing something. With the term performance we
refer to the debtors conduct, capable to satisfy creditors interests with the
duty to extinguish the obligation (effect). The creditor can reject a partial
performance even if the performance is divisible, unless is provided by law.
The debtor and creditor should behave according to good faith. In performing
the obligation, the debtor shall observe the diligence of a good pater
familias while, in obligations inherent to the exercise of a professional
activities, diligence shall be evaluated with respect to the nature of the activity
(Art. 1176 CC). If the creditor has no interests in having the debtor personally
performing the obligation, the obligation itself can be performed by a third
person. Moreover is important to underline that the creditor can refuse the
performance offered by a third person if the debtor has notified him with its
directions.
If the place in which performance has to be carried out is not specified, the
following rules apply:
- Obligation to deliver specified thing shall be performed in the place where the
things was situated when the obligation did arise.
- Obligations having as subject a sum of money shall be performed at the
domicile of the creditor at the time the obligation matures.
- In all other cases, obligation shall be performed at the domicile of the debtor
at the time the obligation matures.
If the time of performance is not specified, the creditor can demand it
immediately. If a specified time is needed it will be fixed by the court. If time is
left to the discretion of the debtor, it is also duty of the court to establish the
length according to circumstances. If time is left to the discretion of the
creditor, it can be fixed by the court after a request of the debtor.
Even if time limit has been established in favour of the debtor, the creditor can
immediately ask for performance if the debtor has become insolvent or has
reduced the security furnished or promised. The payment must be made to the
creditor or its representatives or to a person authorized by law or by the court.
If the payment is made to a person not entitled to receive it such person must
restore it to the true creditor. The creditor who receives payment shall issue a
release and make a notation of it, permitting the release of the property given
as a guarantee for the debt. A debtor cannot free himself from the obligation
by a performance different from that which is due, unless the creditor agrees.
Payment with subrogation
Subrogation is the substitution of one person or a group by another, in
respect of a debt, accompanied with the transfer of the associated rights and
duties. Subrogation can be effected by the creditor or by the debtor. For what
concern the subrogation effected by creditor, the creditor receiving

payment form a third person can subrogate him to his rights. Subrogation shall
be express and be contemporary to the payment. On the other hand for what
concern the subrogation effected by debtor, the debtor who borrows a sum of
money or other fungible things in order to pay a debt, can subrogate the lender
to the rights of the creditor, even without the consent of the latter. Subrogation
is effective when:
- The loan and the release are evinced by an instrument having a certain date
- The instrument of the loan makes an express reference to the destination of
the borrowed sum.
- The release provides the declaration of the debtor regarding the origin of the
sum used in the payment.

Legal subrogation
Legal subrogation takes place:
- In favour of an un-preferred creditor who pays another creditor that has the
right to be preferred because of his privileges, pledges or mortgages.
- In favour of the transferee of an immovable, who pays one or more creditors
in favour of whom the immovable is mortgaged.
- In favour of one, being bound with/for others for the payment of a debt, have
an interest in satisfying it.
- In favour of heir who pays the hereditary debts with its own wealth.
Types of obligations
1) Obligations between solely determinable subjects include propter
rem obligations which are obligations related to a property interest or
to the right of ownership and ambulatory obligation related to the
relationship of one person to another.
2) Multisubjective obligations regard situations in which each party may be
composed by a plurality of persons. Multisubjective obligations include
obligations in solido that regard situations in which several debtors are
bound for the same performance, such that the performance by one
discharges the others (passive). On the other hand each of the several
creditors have the right to ask the entire obligation; the performance
obtained by one of the debtors discharges the creditor (active).
Multisubjective obligations include also separate obligations according
to which each debtor is bound to pay only its share of the debt as each
creditor may claim only such share.
We can observe that among debtors and creditors there is an internal and an
external relationship. In fact one debtor in solido cannot set up personal
defences to other debtors against the creditor (External Relationship). On the
other hand the internal relationship is given by the fact that the obligation is
divided among the various debtors and creditors. A debtor in solido who has
already covered the whole debt can only claim the co-debtor for the portion of
each (recourse). If one of the debtors is insolvent, the loss is equally shared.
3) Obligation having specific objectives are divided into pecuniary
obligations, alternative obligations and elective obligations.
- Pecuniary debts are paid with money at their nominal value. The
technique used in order to maintain the purchase power after inflation is
known as indexation. Such technique is used to adjust income

payments by means of price index. With the Italian term debito di

valuta we refer to debt which is expressed as a fixed sum of money
while with the term debito di valore we refer to a debt that derives
from an obligation having an object different from a sum money. The
process to transform debito di valore into debito di valuta is called
liquidation.
Interest is a sum paid or charged for the use of money or for borrowing of
money and it is expressed as the percentage of money to be paid over a given
period. The legal rate of interest is usually 5% per annum, unless a different
rate is fixed by parties in a writing. With the term compensative interest we
refer to the liquidated claim of sum of money bear interest by operation of law.
On the other hand late payment interest is the legal interest, in obligation
having as object a sum of money, due from the day of the default.
- Alternative obligations refer to those single obligations having as subject
matters two
or more performance that the debtor is obliged to
perform either one of them.
- Elective obligations arise when parties have agreed that, in the sole
interest of the debtor, they may discharge their obligation by electing other
performance.

The circulation
Circulation can be divided into active side (Assignment of claims) and
passive side (delegation, expromission and assumption of debt)
Assignment of claims
A creditor can assign his claim, even without the consent of the debtor,
provided that such claim does not have strictly personal character or that law
does not forbid the transfer. The parties can exclude the assignability of the
claim but the agreement is not effective against the assignee, unless it is
proved that the assignee itself knew of it at the time of the assignment.
Moreover judges, public prosecutors of the Judiciary, clerks of the court and of
the public prosecutor offices, advocates, counsellors, attorneys, pleaders and
notaries cannot, subject to nullity and liability for damages, become assignees.
The claim is transferred to the assignee with privileges, real or personal
guarantees (fuck?). Nevertheless, the assignor cannot give to the assignee
possession of things received in pledge without the consent of the pledger.
With respect to the assigned debtor, the assignment is effective when the
debtor has accepted it or when he has been notified of it. When the same claim
has been the subject of more than one assignment to different persons, the
first assignment of which the debtor has been notified or has accepted prevails
even if it of a later date. When the assignment is a non-gratuitous
transaction, the assignor is bound to guarantee the existence of the claim at
the time of the assignment. When the assignment is gratuitous, the
guarantee is due only in cases in which the law puts the burden of guarantee
against eviction on the donor. The assignment does not answer for the
solvency of the debtor, unless the debtor itself has undertaken to guarantee it.
In such cases, the assignor is liable within the limits of what he has received.
When the assignor has guaranteed the solvency of the debtor, the guarantee
ceases if the non-satisfaction of the claim through insolvency of the debtor is

due to negligence of the assignor in initiating and prosecuting his actions

against the debtor.
Delegation
For what concern the process of delegation is important to point out the roles
of the parties involved. The creditor is known as the delegated, the debtor as
the delegor while the third party as delegee. There are different kinds of
delegation:
- In the delegation promittendi the debtor assign to the creditor a new
debtor, who binds himself to the creditor.
- In the delegation solvendi the debtor delegates to a third person to make
the payment.
- In the cumulative delegation the debtor , who has assigned to the creditor a
new original debtor, is not discharged but the creditor has to first ask for
performance .
- In discharging delegation the debtor is discharged thanks to an express
declaration of the creditor.
It is important to underline that the third person delegated to make the
payment, is not bound to accept the obligation. Moreover the delegor can
revoke the delegation until the time when the delegee has assumed the
obligation or has made the payment. The delegee can assume the obligation or
make the payment even after the death of the delegor. The delegee can
interpose against the creditor defences connected with his relationship with
him, but he cannot interpose defences connected with his relationship with the
delegor.
Expromission
Expromission refers to the situation in which a third person who, without
declaration of the debtor, assumes the obligation of the debtor to the creditor.
Such person is bound in solido the original debtor, unless the creditor expressly
releases the latter. The third person can interpose defences which the original
debtor has set up against the original creditor, unless such defences are
personal to the original debtor.
Assumption of the debt
Assumption of the debt refer to a situation in which the debtor and a third
person agree that the latter shall assume the debt of the former and the
creditor can adhere the agreement which becomes irrevocable. The original
debtor is released only if it is expressed in the conditions of the agreement or if
the creditor expressly releases him. If not, he is bound in solido with the third.
The third can interpose defences against the creditor founded on the contract.
Assumption can be either cumulative or discharging.
There are other ways, besides performance, to extinguish obligations:
- Novation
With the term novation we refer to those situation in which the obligation is
extinguished when the parties substitute it with a new obligation having
different object or source. Of course the novation has no effect if the original
obligation did not exist. When the original obligation arose form a voidable
transaction, the novation is valid only if the debtor assumed the new obligation
knowing the defect in the original one.
- Remission of the debt: The remission of the debt arises when the
declaration of the creditor remitting the debt extinguishes the obligation. The

obligation is extinguished once is communicated to the debtor unless the

debtor declares within a reasonable time that he does not want to avail himself
to it. A remission of debt granted to the principal debtor discharges the sureties
(garanti). Moreover a remission granted to one of the sureties does not
discharge the other sureties; they remain in fact liable for the full amount even
if they consent to the release. Compensation
Compensation arises when two persons are obliged to each other. Both debts
are extinguished to the extend of their corresponding amounts, in accordance
with the following rules:
- Both debts are extinguished form the day they co-exist
- The court cannot apply it ex-officio
- Compensation is not barred by prescription, unless such prescription was
completed on the same day the debts began to co-exist.
- Compensation takes place only between two debts whose object is a sum of
money or a quantity of fungible things of the same kind that are equally
liquidated and collectable in operation of law and equally susceptible of easy
and prompt liquidation and collectable for judicial declarations.
- Compensation does not take place in cases of:
1) Claims for the restitution of things of which the owner has been unjustly
deprived.
2) Claims for the restitution of things which have been deposited or loaned for
use.
3) Claims which have been declared exempt from attachment
4) Renunciation of compensation, in advance, by the debtor.
5) Prohibition established by law
Compensation can be claimed by third party sureties as well. A surety can
claim in compensation a debt which the creditor owes to the principal debtor.
Merger (fusion): Merger arises in situation in which the qualities of debtor and
creditor are united in the same person. It follows that the obligation is
extinguished.
Supervening impossibility of performance not imputable to the debtor
An obligation is extinguished when its performance becomes impossible for a
cause not imputable to the debtor. If such impossibility is temporary, the
debtor is not liable for the delay in performance. The obligation is extinguished
if the impossibility continues until the debtor cant no longer bound to perform
such obligation. A performance that has, as its subject matter, a specified thing
is considered to be impossible when such thing is lost without the possibility to
prove its destruction. If the performance has become impossible only in part,
the debtor can extinguish the part he is able to extinguish.
The Law of Contract
A contract is the agreement of two or more parties to establish, regulate or
extinguish a patrimonial legal relationship among themselves. The contract as
the force of law between parties and is a binding agreement. The aim of
contract is to freely regulating conduct of the parties involved. The requisites of
the contract, besides its economic content are:
agreement of the parties, cause (social and economic function), subject
matter (possible, lawful, determined or determinable) and form when
prescribed by law under penalty of nullity. The form of a contract can be:
- Simple written form with signature
- Written form with authenticated signature (Land register)

- Written form with authenticated content which refers the will of the parties
(Public Act)
Parties can freely determine the contents of a contract within the limits
imposed by law and make contracts that are not particularly regulated.
Moreover parties must provide that the contract aim is to realizing interests
worthy of protection according to the legal order. The doctrine of privity of
contract provides that a contract cannot confer rights or impose obligations on
any person different from the parties involved. Such principle is excepted for
contracts that provide benefits to the third party. All the contracts are subject
to the general rules provided in the second title of the 4th book of the General
provisions of the Civil Code. The nominative contracts include general rules on
contract and specified rules about nominate contracts while innominate
contract include only general rules on contracts.
The unilateral acts are the acts, generating legal effect, that originate from
the will of a single part. Formation of contract
Since the aims of contract is to enforce the will of parties the first step in the
formation of a contract is the agreement. The expression and convergence of
parties will that lead to the formation of contracts can be either explicit or
tacit. Explicit when the will is communicated by words while tacit when no
express sign has been used to communicate the will, but the objective conduct
implies the parties will to enter into contract. The formation of contract is
Is modelled by an exchange of offer and acceptance. The offer is the
manifestation of will by which the offeror offers to the other party to enter into
contract while acceptance is the manifestation of will by which the offeree
communicates his consent to the terms of the offer receied. The contract is
formed when the offeror has knowledge of the acceptance of the offere. Such
acceptance must reach the offeror within the time set by the latter or within
the ordinary time according to the nature of the transaction. Moreover the
offeror can treat the late acceptance as effective, provided that he immediately
informs the other party. When the offeror requires a specific form of acceptance
the acceptance given in a different form is ineffective. An offer can be revoked
until the contract is concluded while the acceptance can be revoked only if the
revocation comes to the knowledge of the offeror before the acceptance itself.
An offer, acceptance or their revocation directed to a give person, are deemed
to be known at the moment they reach such person (presumption of
knowledge). When performance takes place before reply by the acceptor, the
contract is concluded at the time and place at which performance begins. The
acceptor must give notice of the beginning of performance, if he does not so he
is liable for damages. If the offeror has bound himself to keep the offer open for
a certain time, revocation has no effect. If the offeror did not fix a time limit for
the acceptance the court can establish it.
Call option
The buyer of the call option has the right to buy an agreed quantity of a good,
a particular commodity or financial instrument from the seller at a certain time
(expiration date) and price (strike price). The seller or writer is obliged to sell if
the buyer decides to buy them (the buyer pays a fee/premium for such right).
Put option is a contract that gives to the owner of the put the right to seel an
asset (called underlying) at a specified price by a predetermined date to a
given party.
If other parties can adhere to a contract and no manner of adherence has been
established, the question can be directed by the original contracting parties.

An offer to the public is effective when it contains the essential terms of the
contract. Its revocation on the other hand is effective even if one of the public
has no notice of it.
Parties in negotiation and formation of contract should behave according to
good faith, A party who knows a reason for invalidity of the contract and does
not give notice to the other party is bound to compensate for damages suffered
by the latter related on the validity of the contract. Pre-contractual liability
is subject to two limits: (1) in case of conclusion of a valid contract there is no
liability and (2) compensation only for costs and earning lost (negative interest)
during negotiations. Pre-contractual liability is effective when a party, aware f a
reason of invalidity of contract, fails to communicate it to the other party.
Nullity of contract
A contract that is contrary to mandatory rules and lacks of at least one
of the requisites of the contract is void, unless the law provided otherwise.
Partial nullity of the contract or nullity of single clauses brings to the
nullity of the entire contract. It is important to underline that the nullity of a
single clauses does not import the nullity of the entire contract when the void
clauses are substituted by mandatory rules. Nullity can be claimed by anyone
who has an interest and can be found ex officio by the court. The action for a
declaration of nullity is not subject to prescription except for the effects of
usucaption and of prescription of actions for restitution. A void
contract can produce the effects of a different contract, of which it has the
requisites and form. The nullity of a contract works retrospectively between
the parties and in relation to a third party as well, even if they are in good faith
or they have acquired their right by onerous title. Nevertheless annulment that
is not based on legal incapacity does not prejudice rights acquired by third
person by a non-gratuitous transaction.
Action for annulment
-There are several situations having effects for the annulment of a contract. For
example the contract is voidable if one of the parties was legally incapable of
contracting (e.g. minor) or if the person was incapable of understanding or
intending (Incapacity).
-Another cause for annulment of a contract is the presence of a mistake which
is essential and recognizable by the other contracting party. A mistake is
recognizable when it would be detected by a person of normal diligence. On
the other hand a mistake is essential when: (1) it concerns the nature or the
object of the contract, (2) it concerns the identity of the object of performance
or a quality of such object which should be considered determinative of
consent, (3) it concerns the identify or personal qualities of the other
contracting part or regards the only or principal reason for entering into
contract.
- Duress is another cause for annulment of a contract even if it exerted by a
third person. To annul a contract duress has to impress a reasonable person by
causing him fear that he himself or his property will be exposed to an unjust
injury.
- Fraud arises in situation in which the deception by one of the party was
such that, without it, the other party would not have entered into contract.
The action for annulment is prescribed in 5 years. When voidalibility depends
on defects in consent or legal incapacity, time runs form the day on which
they are discovered while in other cases, time runs from the day the contract is
made. The contracting party entitled to sue for annulment can validate the

voidable contract by a declaration which contains a reference to the

contract, the cause of its voidalibility and his intention to validate it.
Non-essential elements
Non-essential elements to validity of the contract are used by the
contracting parties to enforce the effects of their contract.
Condition is a non-essential element and refers to a future and uncertain even
upon the happening of which depends the beginning of effectiveness of a
contractual obligation or its termination. In common law a condition may be
express or implied, precedent or subsequent:
- An express condition is clearly stated in specific terms in a contract.
- An implied condition is presumed by law upon the nature of a particular
transaction.
- A precedent condition must occur before a right matures
- A subsequent condition means that a right may be taken away from
someone by basing on the occurrence of a specified event
The parties can influence the effectiveness (suspensive) or the dissolution
(resolutive) of the contract or of a single clause upon a future and uncertain
event. The condition, whether suspensive or risolutive, does not have to be
contrary to mandatory rules, public policy or morals. Impossible conditions
make the contract void if it is suspensive or treat the contract as nonexistent if it is risolutive. During the pendency of a suspensive, the
transferee of a right can take precautionary measures while during the
pendency of a risolutive condition, the transferee of a right can exercise his
right but the other party can take precautionary measures. In general, one who
has a right subject to a suspensive or risolutive condition, can dispose of it
during the pendency of the condition, but the effect of each act of disposition
are subject to the same condition (Miao?). Moreover a condition is considered
as fulfilled when it fails for a cause imputable to the party who had an interest
contrary to its fulfilment. The effects of fulfilment of condition retroact to the
time the contract was made, unless otherwise provided by the intention of the
parties. Time is a future and certain event upon the happening of which
depends the beginning of effectiveness of a contractual obligation or its
termination. Interpretation of the contract
When interpreting a contract, it shall be sought the common intent of the
parties, by taking into account the general course of their behaviour. Every
clause of a contract is interpreted with reference to all the others, attributing to
each of them the meaning of the act as whole. It is important to underline that
the contract shall be interpreted according to good faith. With the term
preservation of contract we refer to interpretation of the contract and of the
individual clauses and their effect, especially in case of doubt. Ambiguous
clauses are interpreted according to the general interpretative practices in
the place in which the contract was concluded. In case doubt arose from the
presence of expression with several meanings, such expression shall be
understood in the sense most suitable to nature and object of the contract.
Provisions contained un the standard conditions of a contract or in form of
formularies prepared by one of the contracting parties, are interpreted, in case
of doubt, in favour of the other (Interpretation against author of
provision). If the contract remains obscure, it shall be interpreted in the least
burdensome sense for the debtor when the contract is gratuitous or with
equal recognition of the interest for the parties when the contract is nongratuitous). Effect of contract

A contract has the force of law between the parties. It cannot be dissolved
except by mutual consent or for causes permitted by law. Anyhow, a contract
does not produce effects with respect to third parties except in cases provided
by law. A contract in favour of a third party is valid only if the stipulator has an
interest in it. The contract can be revoked until the third person declares that
he wants to avail himself of it; in case of revocation, the obligation of
performance of stipulator remains, unless otherwise provided by parties or
nature of contract. If performance to the third person has to be made after the
death of the stipulator, the latter can revoke the benefit by a testamentary
provision. While in the case the third person dies before the stipulation, if
there is no revocation, performance shall be made in favour of heirs of the third
person. The stipulator can raise against third person just defenses based on the
contract they stipulated. Contracts having as object the transfer of ownership
of a specified thing or a property interest, are considered as contracts
transforming the right of effetti reali acquired thanks to the agreement of
parties regulated by law. When the objective of the contract is a specific
mass, it must be counted and weighted while, when it is a thing specified
only as to kind, its identification by parties is required. Prohibition against
alienation is effective between parties only if it is limited to a period of time
and if it responds to an interest to one of the parties.
By preliminary contract, parties stipulate that a definite contract will be
signed within a prescribed time (no more than 3 years). Preliminary contracts
for sale of immovable or transfer of ownership may be registered in the Land
Register.
The framework agreement is an agreement with suppliers to establish terms
of making specific purchase that may be awarded during the life of the
agreement. Such agreement is not binding to a specific contract; contrary in
preliminary contract, parties are legally bound by it.
Representation
The representative/agent is the subject who acts on behalf of another (the
represented/ principal). The power of representation is conferred by law or by
the principal and is related to a specific position in the legal entities. In a direct
representation the agent acts in name and on behalf of the principal. The
contract made by the agent produces effects directly as to the principal. On the
other hand in a indirect representation the agent acts in his own name but on
behalf of the principal. The agent acquires rights and assumes duties arising
from transactions with third persons.
Direct representation
The power of attorney (POA) is a written authorization to represent or act on
anothers behalf in private affairs, business or some other legal matter. The
power of attorney may be limited to a specified act or type of act (special),
allows the agent to make all personal decisions (general) and temporarily
limited. The power of attorney is effective only if is conferred with the
formalities prescribed for the contract that is to be made by the representative.
A contract made by a representative in the name and interest of the principal,
within the limits of power conferred to the representative, produces effects
directly as to the principal. The modification and revocation of power of
attorney must be notified to third persons in order to be effective. The
representative is bound to return the document evidencing his powers. When a
power of representation is conferred by a principal, it is sufficient for the
validity of the contract made by the representative that the former has the

capacity to understood and intend, provided always that the principal has
legal capacity. A contract is voidable if the consent of the representative is
defective. A contract made by the representative in conflict with the interests
of the principal can be annulled at the request of the principal, if the conflict
was known by the third person. A person, who has contracting as a
representative without having the power to do so or in excess of authority
conferred, is liable for damages suffered by the third person who relied on the
validity of the contract. In case of representation without powers, contract can
be ratified by the principal; such ratification has a retroactive effect. Third
person and the principal can dissolve the contract by agreement prior to
ratification.
Indirect representation
The indirect representation is regulated by the presence of the mandatory. A
mandate is a contract whereby one party binds himself to accomplish
one or more legal transaction for the account of another. The mandate
covers not only the acts for which it was granted, but also those necessary to
perform such acts. Indirect representation is supposed to be non-gratuitous:
if parties have not established an amount, it is determined in the basis of the
trade rates or by the court. If the power to act in the name of the principal
has been given to the mandatory the provisions of direct representation also
apply. A mandatory acting in his own name acquires rights and assumes duties
arising form transaction with thirds persons. It is important to underline that
third persons have no relationship with the principal. The principal can claim
movables acquired for his account by the mandatory who has acted in his own
name, without prejudice to the rights of third persons as a result of good faith
possession. If the things acquired by the mandatory consist of immovables or
movables registered in public registers, the mandatory is under an obligation to
transfer such things to the principal. Therefore creditors of a mandatory cannot
enforce their rights on property acquired by the mandatory itself. The
mandatory is not liable for obligations of third persons who have contracted
with him, unless at the time the contract was made the former knew about the
clients insolvency. The mandate is extinguished by: expiration of time limit or
accomplishment if transaction, revocation by the principal, renunciation by
mandatory or death or incapacity to supervise of either the principal or the
mandatory. If it was agreed that the mandate was irrevocable, if the principal
revoke such mandate is liable for damages. A mandate given in the interest of
the mandatory or of a third person, cannot be revoked by the principal, unless
otherwise is agreed. Appointment of a new mandatory or accomplishment by
the principal implies a revocation of the mandate. The revocation of a nongratuitous mandated makes the principal liable for damages if the revocation
was made before the expiration of time limit agreed. On the other hand a
mandatory which renounces the mandate without a Just cause, must
compensate the principal for damages.
Nomination of contract
When a contract is made, a party can reserve the power to subsequently
name the person who will acquire right and obligations arising from the said
contract. Nomination must be communicated to the other party within 3 days
form the making of the contract, unless different time has been established by
the parties. It is important to underline that nomination is not effective unless
accompanied by the acceptance of the person named or if it exist already a
power of attorney. The nomination and the power of attorney or acceptance, do

not have effects unless they are made in the same form of the contract. If the
contract requires a form of publication to produce certain effects, the
nomination, in order to have such effect, must also be published. The effect of
the nomination start from the date the contract is made. If nomination is not
made within the time set by law, the contract produces effects only between
the original contracting parties.
Assignment of contract
In a relationship arising from a contract for mutual counter performances
each party can substitute for himself a third person, provided that the other
party consent to it. Substitution is valid from the time the other party has
been notified an consequently has accepted it. The assignor is release from his
obligation to the other contracting party from the moment the substitution
becomes effective. The other contracting party can sue the assignor whenever
the assignee fails to perform the obligation assumed. The original contracting
party can raise against the assignee all defenses only arising from the contract,
but not those based on other relationship with the assignor. The assignor in fact
is only bound to guarantee the validity of the contract since he is liable as
surety for the obligations of the original contracting party.
The sham contract
The shame contract is form a simulation. A contract is a simulation when, by
mutual agreement, it does not express the true intent of the parties. There are
2 types of simulation, absolute when parties want the contract to produce no
effect between them and relative when parties want the contract to produce
effects between them, but different from those recited in the contract. If the
true intent is expressed in a separate writing, such writing is known as counterletter. E.g. of counter letter: Mario has a lot of creditors. To avoid the
confiscation of his assets, he goes through a sham sale of his house to Mike.
Mario and Mike agree that they do not actually want any transfer of ownership
of the house, but mike will be formally registered as the owner of the house.
Third persons or creditors can plead simulation against the contracting parties,
when it is prejudicial to their rights while contracting parties cannot use
simulation as a defense against third parties or creditors, who have acquired
rights in good faith from the apparent owner of the right. Evidence of
simulation is admissible in the form of testimony without limitation, if the
action is brought by third persons or creditors or when it is direct toward proof
even by the parties of the unlawfulness of the underlying contract.
Rescission of the contract
In Italian law, rescission is a remedy related to the unfairness of a contract
related to certain situations such as contract concluded in state of danger
or general action of rescission for legion: the former refers to a contract
by which a party assumes obligations under unfair conditions because of
necessity for saving himself of others from a danger of serious
personal injury which was known by the other party. Such contract can be
rescinded on demand of the party who assumed such obligation. On the other
hand the latter refers to a situation in which there is disproportion between
the performance of one party and that one of another. Such
disproportion was the result of a state of need of one party, of which the other
has availed himself for a proper performance. The injured party can demand
rescission of contract. The action of rescission is prescribed in 1 year form the
formation of the contract. The contracting party against whom the rescission is
demanded can avoid it by offering a modification of the contract sufficient to

restore it to an equal basis. Rescission does not prejudice rights acquired by

third persons, except for the effects deriving form the transcription of the
petition for rescission.
The Law of specific Contract
Sale is a contract having as its object the transfer of the ownership of a thing
or other rights in exchange for a price. There are 2 effects deriving from a sale
contract: obligations and the transfer of ownership (or property interest). A
contract having as its objective the transfer of ownership is considered as a
contract transferring the right of effetti reali, which is acquired thanks to the
lawfully express agreement of the parties. vendita ad effetti reali transfers
the ownership while vendita ad effetti obligatori produces the obligation to
transfer the ownership. Moreover the seller has several obligations:
- The seller must deliver the thing to the buyer. The thing shall be delivered in
the condition in which it was at the time of the sale, together with the
accessories and deeds related to the ownership and use of the thing sold.
- cause the buyer to acquire ownership or other right in the thing, if such
acquisition is not an immediate consequence of the contract (Vendite
obbligatorie)
- to warrant the buyer against eviction and defects in the thing sold.
Vendite obbligatorie
Examples of vendite obbligatorie may be:
1) Sale of things specified only as to kind, requires the identification by the
parties.
2) Sale of future things; the acquisition of ownership occurs as soon as the
thing comes into existence
3) Sale of anothers thing (mh)
If at the time of the contract the thing sold was not owned by the seller, the
seller is obliged to cause the buyer to become the owner at the moment he
acquires the thing from the former owner. A buyer can request the dissolution
of the contract if, at time it was concluded, he did not know that the thing was
not owned by the seller. In such cases the seller is bound to restore to the
buyer the price paid, even if the thing has diminished in value or has been
damaged, and reimburse for expenses made under the contract. If the thing
the buyer considered property of the seller was owned only in part by others,
the buyer can demand dissolution of the contract and compensation for
damages according to the preceding rules.
Usually eviction consist of ousting a tenant from a real property when the
buyer has breached the terms of the lease, or when he has stayed after the
term of the lease has expired. If the buyer suffers total eviction of the thing,
the seller is bound to compensate him for damages. A buyer who is sued by a
third person claiming rights in the thing sold, shall join the seller as defendant;
if the final judgment is rendered against him, he loses his right to the warranty.
Warranty can be excluded or modified by agreement: parties for example can
agree that the seller is not subject to any warranty. Nevertheless, despite of
exclusion, the seller is always liable for eviction caused by his own acts
allowing the buyer to demand the restitution of price paid and the
reimbursement for expenses. A seller is bound to warrant that the thing sold is
free of defects: An agreement excluding or limiting such warranty has no effect
if the seller has, in bad faith, omitted to mention such defects to the buyer.
Warranty is not applicable if the buyer knew of the defects at the time the
contract was made. The buyer can demand the dissolution of the contract (if

the thing is destroyed as a result of defects) or reduction of the price (if the
thing is destroyed as a result of a fortuitous event). Buyer can ask for
dissolution when the thing acquired lacks the qualities promised or those
essential for the use. In case of dissolution, the seller returns the price paid and
reimburses expenses to the buyer, while the latter returns the thing unless it
has been destroyed. The buyers loses the right of warranty if he fails to notify
the seller of the defects within 8 days, unless a different time limit is
established by parties or by law. In all cases the action is prescribed in one year
from the delivery. The buyer is bound to pay the price within the time and in
the place fixed by contract or, in the absence of agreement, at the time and
place where delivery is made.
Redemption Agreement (riscatto)
The seller can reserve the right to reacquire ownership of the thing by
restitution of the price and reimbursement established by the following
provisions:
- An agreement to return a price higher than that stipulated is void
- Time limit for redemption cannot be greater than 2 years in sale of movables
and 5 years in sales of immovable
-The seller loses his right of redemption, if he fails to notify his intention to
redeem and restore price paid and reimbursement of the expenses within the
time stipulated. If the buyer refuses the reimbursement, the seller loses his
right of redemption, unless he makes a tender of payment within 8 days after
the expiration of the time limit.
Sales with reserved ownership
Reservation of ownership by the seller can be set up against creditors of the
buyers, if it appears form a written document evidenced by a date prior to the
date of the attachment. Reservation can also be set up against a third person,
if sales concern machinery and price exceeds thirty thousand lire, provided that
the agreement was registered where the machinery was located and that the
acquisition took place in the same place where such registration was made.
In instalments sales in which ownership is retained by the seller, the buyer
acquires ownership of the thing upon payment of the last instalment of price
assuming the risks form the time of delivery. If the contract is dissolved due to
the non-performance, the seller must return the instalments he has received,
subject to his duty of fair compensation for use of the thing and possible
damages.
Possession
Possession is the power over a thing, expressed in the exercise of the right of
ownership or property interest. Possession and ownership usually coincided:
the owner is in fact a possessor. One can posses directly or through another
person who has custody of the thing. In such matter is important to underline
that the custodian recognizes that someone else is the owner. The person to
whom movable good are transferred by someone who is not the owner,
acquires ownership through possession, provided that he is in good faith at the
time of the transfer and an appropriate title is present for the transfer of
ownership. If someone has been violently or secretly deprived of possession, he
can, within one year from the loss, sue the taker for recovery of possession.
Restoration of possession is ordered by the court, based on common
knowledge of the fact. The ownership of immovable goods is acquired through
continued and uninterrupted possession for 20 years.
Non-performance

When the debtor does not render due performance is liable for damages,
unless he proves that the non-performance or delay was due to impossibility
of performance for a cause not imputable to him. The debtor is first
placed in default by means of a notice or a request made in writing. In such
cases, he is not discharged by impossibility of performance for a cause not
imputable to him, unless he proves it. Measures of damages include the loss
sustained by the creditor and the lost profits related. In pecuniary obligations,
legal interest is due from the date of default. The creditor who proves to have
suffered greater damages is entitled to additional compensation from the party
in delay.
Non-negotiated contracts
In non-negotiated contracts one contractual party drafts the standard terms
of the contract (aimed at uniformity), which become effective if, at the time
of entering the contract, the other party knew of such terms. Non negotiated
contract stipulated between a business (professional purposes) and a
consumer (outside profession) are drafted by the business through standard
trade terms or for individual use. A contractual term is unfair if it causes a
significant imbalance between rights and duties. The right of withdrawal may
be granted by law or established by contract. If a right to withdrawn is
stipulated has the penalty functions to compensate for the withdrawn.
Right of ownership and property interest
The owner has the right to enjoy and dispose of things fully and exclusively,
within limits and duties established by law. Such limits include: spiteful
exercise of a legal right (the owner cannot do acts aimed to troubling others
and general emission (emission of smoke, noises, vibrations that exceed the
tolerable level for the give site). Acquisition of ownership can be distinguished
in original acquisition, established through possession and derivate
acquisition, established through sale and purchase or succession.
The property interests include usufruct, predial servitude, mortgage and
pledge.
- Usufruct: the usufructuary has the right to enjoy the thing he owns, by
respecting its use.
- Predial Servitude: the owner has the burden of giving the right access to
another person.
- Mortgage: security on immovable goods that requires registration (publicity)
- Pledge: security on movable googs that requires possession.
Pledge and mortgage give a right of priority to other creditors from the sale of
a specific thing.
Termination of contract can derive:
-By non-performance; for example in contracts providing the mutual counter
performances, when one party fails to perform his obligations, the other can
demand either performance or termination. Contracts cannot be dissolved if
the non-performance has a minimal negative effect on the interest of the other
party. Contrary in court the contract can be dissolved by a judgment. On the
other hand out of court, contract can be dissolved by a notice to perform, if
the performance has not been rendered within the time promised and by an
explicit termination clause. Moreover the contract can be dissolved if
parties do not want to demand performance after the expiration of time.
- By supervising impossibility: impossibility of performance leads to the
termination of contract without a declaration of the party or of the judgment

- By exercising onerousness: if the performance became excessively

onerous for one of the party, the party who owes it can demand for termination
of contract.
Tort Liability
Any intentional negligent fact that causes unfair injury to another, obliges
those who committed to pay damages (tort liability). Damages can be
economic loss, physical loss, pain and suffering. Unlike the liability of the
debtor for non-performance, tort liability does not arise form a relationship
between parties. However, a person who is incapable of understanding an
intending committed the act is not liable for damages, unless its incapacity was
caused by his own fault.
Security
Sometimes debtors assets are creditors securities. Creditor can expropriate
the debtors asset through the enforcement proceedings (generic security).
On the other hand unlimited security refers to the fact that limitations upon
liability are not allowed, except otherwise provided by law.
It is important to underline that each creditor is equally entitled to be satisfied
on the debtors assets (par-condicio creditorum) , except the ground got
priorities.
Remedies to protect rights of creditors are: derivate action in order to ensure
satisfaction or preservation of rights and action pauliana.