Renegotiation according to good faith
The pandemic phenomenon due to the spread of the Sars-Cov-2 virus, first, and the war in Ukraine, then, affected, respectively, the healthcare and humanitarian aspects, having, as the lowest common denominator, the ability to change the legal and economic context at a global level.
If, during the pandemic period, an economic crisis ensued as a result of the suspension of numerous production and commercial activities in order to stem the spread and resurgence of the virus, with the outbreak of the war conflict came, among other things, the followings:
- Difficulties in the procurement of raw materials;
- Absolutely extraordinary price increases, particularly in gas and electricity;
- Significant changes in trade routes with a consequent increase in freight costs.
These events and the direct and indirect consequences resulting from them may not only lead to delays in fulfilment, but are also likely to make it difficult and extremely burdensome for economic operators to comply with previously made agreements.
Hence, the need emerged to identify legal remedies that enshrine a duty to renegotiate the contract in the face of a changed socio-economic and legal context.
Although our legal system lacks specific rules aimed at revising the contractual relationship, of no small importance must be considered:
- the conservative approach that embanded the entire codified system and is aimed at the preservation of contracts;
- the role of jurisprudence.
The latter, in particular, has focused its attention on the remedy of the so-called renegotiation according to good faith, observing that:
- when a contingency causes a change in the socio-economic and legal environment, the aggrieved party must be able to renegotiate;
- the refusal of the non-injured party to renegotiate the original agreement may amount to a breach of the principles of good faith, contractual fairness and solidarity;
- it is necessary to protect the party from the risk of an exceptional economic aggravation due to the disturbance of socio-economic relations by limiting the risk of the economic burden of performance.
A real obligation to renegotiate according to good faith may be inferred from such determinations.
Finally, If one of the parties were to evade its obligation to renegotiate the contractual terms, it seems unlikely that the solution would be termination of the contract accompanied by compensation for damages. This, in fact, would go in the opposite direction to the maintenance spirit of the agreements promoted by the law.
On the contrary, the intervention of the judge must be considered plausible, who could be in fact attributed the power to substitute himself for the parties, pronouncing a remodulative ruling on the now unbalanced contract.