Good Faith and Pre-Contractual Liability in Italy: Recent Developments in the Interpretation of Art 1337 of the Italian Civil Code 

by Tommaso Febbrajo 

In Italy, pre-contractual liability is governed by a statutory provision that requires parties to act in good faith during the negotiation and formation of the contract (Art 1337 Civil Code).
Nonetheless, since the entry into force in Italy of the current 1942 Civil Code, Art 1337 has been consistently given a narrow interpretation. From this narrow perspective, pre-contractual liability applies only in two cases: 1) when a party terminates negotiations without a valid reason or 2) when a party, aware of the existence of grounds for invalidity of the contract, fails to communicate these grounds to the other party. Over the last decade, however, courts seem to have phased out this narrow interpretation, and case law has broadened the boundaries of pre-contractual liability.
This paper retraces the key steps that led to the broader interpretation of pre-contractual liability currently adopted within Italian courts and outlines the new and innovative broad scope of pre-contractual liability, with the aim of indicating when the duty of good faith attaches and what this duty entails. The article then illustrates to what extent damage relating to pre-contractual liability is compensable and what role the traditional distinction between positive and negative interests actually plays

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