Onofrio Troiano (Professor of Comparative Private Law at the University of Foggia. Italy)

Transcription

1 Italy) Onofrio Troiano (Professor of Comparative Private Law at the University of Foggia INTERPRETATION OF THE GENERAL STANDARD OF GOOD FAITH AND THE LIST OF UNFAIR TERMS. 1. The law on unfair contract terms and the general clause of good faith in Italian law. 2. The construction of the good faith: subjective good faith, general clause of (objective) good faith and translation mistakes. 3. Different interpretations of the objective good faith. 4. Analysis of the case law and path dependence. 5. The list of unfair terms. 6. General remarks about the opportunity to legislate through general clauses and the role of the EC-case law. 1. Italy was the first country to pass a to regulate unfair contract terms contained in standard form contracts (art. 1342, italian civil code). This regulation, adopted in 1942 and still in force, is based on a formal control. That is, the legislator allows the insertion of unfair terms in contract, that are valid and effective, if there is, besides the signature of the contract, a further signature, by which a party specifically approves those, allegedly unfair, terms. If (and only if) this second signature is missing, the (unfair) term will not apply, regardless any substantive control. 1 1 Art. 1341, second paragraph, italian civil code, contains a (short) list of terms which are considered unfair if not explicitly signed. The list is strictly binding and does not extend to cases not included, like penalty or liquidated damages clauses: Such traditional Italian regulation - which applies in both B2C and B2B contracts and also in contracts between a private party and the public administration - does not refer to a control on the content of the contract or to good faith. 2 The application of the general clause of good faith in Italian law is compliant with the general view shared in a historical and comparative perspective with regard to the 1942 Italian civil code: a code strongly influenced by the German experience (the Pandect movement) and built on a French framework (that of the previous Italian civil code dating back to 1865). This understanding is confirmed, as far as the general clause of good faith is concerned, since the Italian civil code contains numerous references to good faith in the general section on contract: see, for instance, the pre-contractual liability in negotiations (art. 1337), the performance of contract (art. 1375), the construction of contract (art. 1366). If we look at the legislation, we discover that such important reference could lead good faith to become one of the most important rules of our law of contract. With regard to the Italian legal scholars, also influenced by the German experience, they often insist on the role of good faith: many of the most celebrated civil law books used by law students considers good faith as an important part of the regulation of economic relations in general. cass. 26 ottobre 2004, n , Foro it., Rep. 2004, voce Contratto in genere, n. 174; Cass. (ord) 7 febbraio 2003, n. 1833, id., Rep. 2003, voce cit., n The rule about the necessity of a second signature doesn t apply in case of contract under the seal of a notary or other public officials: Cass. 21 settembre 2004, n , Foro it., Rep. 2004, voce cit., n. 154; 28 agosto 2004, n , voce cit., n No exception to the rule in case of internet contracts: Giudice di Pace di Partanna 1 febbraio 2002, Contratti, 2002, 869, note Cassano, Cimino.

2 The above-mentioned apology of good faith in the law in books does not correspond to that in case law. Italian courts do not feel any comfortable when they are called to give substantive meaning to the general clause of good faith, although such role is crucial to avoid this clause becoming a vague formula, with poor content. Italian judges are less able than their German colleagues to construe Fallgruppen providing a better definition to the general clause in the various contractual relationships. For this reason, case law does not resort often to the use of good faith and rather prefers to solve the problems in another way than through the reference to this general clause. In this regard, the Italian case law - alike the Italian doctrine - is closer to the French experience than to the German one. Also in France, the civil code rule of good faith in contractual performance (art. 1134) has not achieved great importance in case law (and by the doctrine also) The enactment of the good faith general clause in the regulation of unfair clauses in standard contracts - a rule which derived from EC-law - has caused some problems in Italian law. 2 Sometimes in case-law is invocated the rule about the interpretation of the contract in good faith to aid the consumer party: cass. 21 giugno 2004, n , Foro it., Rep. 2004, voce Assicurazione (contratto), n French law, which has brought in force the EC directive 93/13, doesn t contemplate any reference to good faith and speaks about terms qui ont pour object ou pour effet de dréer, au détriment du non-professionel ou du consommateur, un déséquilibre significatif entre les droits et obligations des parties au contrat : art. L , Code cons. From a first standpoint, the Italian law has faced a peculiar problem due to the awkward translation of the EC directive. Because of to this very remarkable translation mistake, the Italian version of art. 3.1 of the directive 93/13/EC reads as follow: A contractual term which has not been individually negotiated shall be regarded as unfair if, malgrado the requirement of good faith, it causes a significant imbalance in the parties rights and obligations arising under the contract, to the detriment of the consumer. The literal meaning of this text, and of the word malgrado (notwithstanding) clearly shows that there could be a significant imbalance in the parties rights and obligations arising under the contract (i.e.: an unfair term) also if there has been good faith. If we follow this interpretation, which is a literal one, the reference to the good faith standard in the directive has not regard to objective good faith (good faith as a general clause and a standard), but it concerns only subjective good faith. This subjective good faith means that the party which utilizes the standard contract (proponent) was not aware that a term was unfair. If we follow this interpretation in light of the Italian translation, the text of art. 3.1 of the directive 93/13/EC would mean that a term is unfair if it causes a significant imbalance, also if the proponent ignores this consequence. This interpretation derives from a translation mistake, which is highlighted if we compare the Italian version of the directive with other versions: French ( en dépit de l exigence de bonne foi ), English ( contrary to the requirement of good faith ), German ( entgegen dem Gebot von Treu und Glauben ). In other words, an Italian correct translation should have used the term contrariamente, instead of the term malgrado : only in this manner the reference to good faith reflects its original EC purpose, that is the meaning of an objective standard.

3 The vast majority of Italian legal scholars remarked the mistake in translation just when the directive was already published on the EC Official Bulletin. Italian doctrine has also stressed on the risk deriving from a text (the Italian one) of the directive different from the texts applied in other parts of the internal market territory and recommended to correct this text at the moment of the reception of the directive in Italian law. The Italian legislator though, at the moment of reception, simply ignored the question and adopted a text, which resembles that of the directive and doubled the original mistake. Art. 1469bis, italian civil code: si considerano vessatorie le clausole che, malgrado la buona fede, determinano a carico del consumatore un significativo squilibrio 4 This (double) mistake has induced a minority of Italian authors to interpret the reference to the good faith as it was to be a subjective one. Such an interpretation has the practical effect of nullifying the reference to the good faith in the battle against unfair terms. It means that a term is unfair if it causes a significant imbalance, without any regard to the existence of good faith on the side of the proponent. 5 Also a minority of the courts has followed this interpretation of good faith. 6 The large majority of Italian doctrine places attention on a comparative perspective and suggests interpreting the reference to good faith in the ECdirective (and in Italian law) in the same perspective. Someone, observing that 9 AGBG was the very relevant starting point and the principal source of inspiration of the EC legislator, suggests that the correct (- corrective) interpretation of the (Italian version of the) directive and of art. 1469bis, Italian civil code, must lead to intend good faith as general clause, i.e. in an objective sense. 7 This conclusion is adopted by the majority of doctrine and case-law. 3. The general understanding that the reference to the good faith must be intended as an objective test does not solve any problem. It poses the question of an unfairness test in standard contract based on two requirements: good faith and significant imbalance. A first problem regards the meaning of the test of significant imbalance. As to this aspect, the significant imbalance is sometimes intended like a standard whose parameter is the balance of interests in the legislation (dispositive rules, 4 The law 6 febbraio 1996, n. 52, art. 25 has introduced the EC regulation of unfair terms into the italian law, creating additional civil code articles, from art. 1469bis to 1469sexsies. 5 V. RIZZO, Commento all art. 1469bis, comma 1, in CESARO, Clausole vessatorie e contratto del consumatore, Padova, 2001, 35, which thinks that good faith as general standard plays a role into the significant imbalance rule. 6 App. Roma 24 settembre 2002, Foro it. 2003, I, 332 (note Palmieri): the elemento oggettivo del significativo squilibrio contrattuale resta l elemento decisivo della fattispecie (the significant imbalance constitutes the fundamental aspect of the norm). 7 R. PARDOLESI, Clausole abusive (nei contratti dei consumatori): una direttiva abusata? Foro it. 1994, V. 137; S. PATTI, L attuazione della direttiva CE concernente le clausole abusive nei contratti stipulati con i consumatori in Germania e in Italia, conference at the Dresda Congress of the Associazione per gli scambi culturali tra giuristi italiani e tedeschi, october 2004; G. ALPA, Uno sguardo alla disciplina delle clausole vessatorie in Italia e nel Regno Unito, NGCC 2004, 5, 8; G. DE NOVA, Le clausole vessatorie. Art. 25, legge 6 febbraio 1996, n. 52, Milano, 1996, 16; G. CIAN, Il nuovo capo XIV-bis (Titolo II, Libro IV) del codice civile sulla disciplina dei contratti con i consumatori, Studium iuris 1996, 415. As regards case-law see Trib. Palermo 7 aprile 1998, Foro it. 1998, I, 1624, note LENER.

4 which are contracted around by private autonomy, giving rise to the terms in question) 8 In other instances, case law seems to operate the judgement on the existence of a significant imbalance, paying attention on the role each contractual party plays in the contractual relationship and on the possibility that each party has to administer contractual risks in its organisation, thus operating a comparative analysis of the organisational sphere of the parties in order to allocate the risk on the party that can better bear it. 9 A second problem consists in the relationship between the requirement of the significant imbalance and that of good faith (in an objective sense). A first suggestion is that the test of significant imbalance specifies the meaning of good faith in standard contract terms: good faith means exactly absence of significant (normative and not economic) imbalance. This interpretation leads to a coincidence of our two requirements; more precisely, the significant imbalance eliminates any possible additional operative space to the general clause of good faith. 10 An alternative interpretation tries to give autonomy to both the mentioned requirements. The test of unfairness is not limited to the ascertainment of a significant (normative) imbalance, because it will be necessary to ascertain also that this imbalance is contrary to good faith. 11 Such an interpretation poses the problem of the meaning of the standard of good faith, which will have no relation to the significant imbalance. One way to solve the problem is to mirror that a term which produces a significant imbalance does not cause a breach of good faith if this imbalance is compensated by other contractual terms (in favour to the consumer). 12 But this solution resembles the content of art. 4.1 of the directive 93/13/EC (and of art. 1469ter, Italian civil code). For this reason it does not appear correct to interpret the requirement of good faith in reference to an explicit term, which does not a direct relation with this general clause. A different possibility to separate our two requirements could be the suggestion that a clause cannot be judged unfair just because it is contrary to good faith if it does not also cause a significant (normative) imbalance. Also this attempt leaves the significance of the good faith test without solution. These observations reveal the difficulties for the Italian legal scholars to give concrete sense to the good faith and confirm a long tradition of little confidence with this general clause. 8 V. ROPPO, La definizione di clausola vessatoria nei contratti dei consumatori, Contratti 2000, 84. For case-law see Trib. Milano-Legnano 29 marzo 2002; Trib. Firenze 19 febbraio 2003 (at least implicitly). 9 App. Roma 24 settembre 2002; Trib. Roma 4 febbraio 2002; Trib. Roma 31 agosto 1998, Foro it. 1998, I, PATTI, L attuazione, cit., 13; G. LENER, La nuova disciplina delle clausole vessatorie nei contratti dei consumatori, Foro it. 1996, V, 145, 160. PARDOLESI, Clausole abusive, cit., The analysis of case law confirms this conclusion. First of all, EC unfair contract terms law, which has introduced in Italian law a consistently better control than that of art Italian civil code has not caused 11 See ROPPO, La definizione, cit., 85; G. DE NOVA, Criteri generali di determinazione dell abusività di clausole ed elenco di clausole abusive, Riv. trim. dir. e proc. civ. 1994, 693.

5 the shut down of pre-existing law. Art and 1342 Italian civil code are still now often invoked before courts: in a recent work, in which the ten articles of the civil code (regulation on contract) more frequently applied by Italian courts are mentioned, our articles have reached a very good position,. 13 But also the new rules are increasingly applied and there are some decisions which deal with our problem: the meaning and the role played by the good faith general clause in the unfair contract terms. The analysis of case law reveals different trends and none of them gives great importance to our general clause. Trying to survey the case law about good faith in unfair contract terms - with the exception of those judgements which intend good faith as a subjective test: see par. 2 - we can find three different trends: a) A first group of decisions does not mention the general clause of good faith. They simply refer to, and apply the, test of significant imbalance. 14 b) A second group initially mentions the good faith and the significant imbalance, but when it begins to solve the case, the reasoning is concentrated on the significant imbalance and the initial reference to the good faith disappears. 15 c) A third group makes references to the (Italian) list of unfair terms (grey list) and judges unfair clauses which are contemplated in the list, invoking only the test of significant imbalance and not the good faith. 16 An important aspect of this classification is that it does not refer to decisions started from a collective action of a consumer association. In this case Italian case law excludes the application of the test of good faith. This exclusion is grounded on the argument that good faith refers to a concrete contractual relationship and is a test which measures the compliance of this general clause in the single contract. On the contrary, in case of a collective action concrete relationship is missing and the general clause cannot be actually applied EC legislator has provided a list of unfair terms, contained in an annex to the directive 93/13/CEE, with an indicative and not-exhaustive list of the terms which may be regarded as unfair. Therefore, the list is not binding as a member State could insert other terms or give the list value of absolute presumption in order to better protect consumers ROPPO, La definizione, cit., G. DE NOVA, Le top ten del titolo sui contratti in generale, Contratti 2004, See Cass. 1 giugno 2001, n. 7436, Foro it. 2002, I, 416; App. Roma 7 maggio 2002, cit. (almost in part); Giudice di Pace Parma 9 ottobre 1999, Dir. comunitario scambi internaz. 1999, 785, note VALCADA; Trib. Treviso 14 gennaio 2002, Giur. merito 2002, 1194, 1195, note M. PESCAROLLO, In tema di vendita di pacchetto turistico e di danno da vacanza rovinata. 15 Pret. Bologna 6 agosto 1998, Foro it. 1999, I, 384; Trib. Bologna 14 giugno 2000, Corriere giur. 2001, See Trib. Foggia 2 agosto 2001, Corr. Giur. 2003, 483, note R. CONTI, Il potere di recesso del consumatore tra normativa comunitaria e disciplina codicistica; Trib. Torino 27 novembre 2001, Giur. merito 2002, 649; Trib. Milano-Legnano 29 marzo 2002, Foro it. 2002, I, 2826; Trib. Bologna 3 ottobre 2000, Corr. Giur. 2001,525; Trib. Venezia-Dolo 11 luglio 2002, Danno e resp. 2003, 886, 888, commented from M. GAGLIARDI. 17 Trib. Roma 4 febbraio 2002, Foro it. 2002, I, 2829; Trib. Roma 5 ottobre 2000, Giur. it. 2001, 743; Trib. Torino 7 giugno 1999, Foto it. 2000, I, 297; Trib. Torino 11 novembre 1999, Danno e resp. 2000, 277; Trib. Torino 22 settembre 2000, Giur. it. 2000, ROPPO, La definizione, cit., 83.

6 In bringing into force the national law to comply with the directive, the Italian legislator has created two lists. The first one contains the so called black terms, i.e. terms always unfair and not binding also if they were explicitly negotiated: this (short) list is contained in art. 1469quinquies Italian civil code. The second list is very long and is compounded of twenty entries containing terms which are presumed unfair in absence of contrary evidence (grey list: art. 1469bis Italian civil code). These terms are suspected to be unfair on the basis of a rebuttable presumption: the seller or supplier must give evidence that in the actual relationship no unfairness exists. In assessing this evidence, courts apply a test of reasonableness, relating the nature of the single contract. 19 The existence of a long list of unfair terms enlightened the decision-making process: Italian judges, when faced with terms included in the grey list, just verify the correspondence in order to declare the term void and unenforceable, without any reference either to the significant imbalance or to good faith (if the seller or supplier does not try to rebut the unfairness presumption). This presumption is often stressed in the opinion of the court Trib. Bari 25 marzo 2002, Foro it. 2002, I, Cass. (ord.) 20 agosto 2004, n , Foro it., Rep. 2004, voce Competenza civile, n. 106, reaffirming the ratio decidendi of Cass. (ord.) sez. un. 1 ottobre 2003, Foro it. 2003, I, 3289, note Palmieri. Trib. Firenze 19 febbraio 2003, Disciplina comm. 2003, 571; App. Roma 7 maggio 2002, Foro it. 2002, I, 2823; Trib. Foggia 18 ottobre 2001, Foro it. 2002, I, Relying on the preceding analysis, we can try to express some general considerations about the Italian experience in the light of the more complex setting of which national legal systems are part, that is the EC law. First af all, the difficulties of an attempt to harmonise law, based on a legislative intervention, particularly when the EC intervention plays on a field already regulated in the national context. In this case, the EC intervention causes complication because it does not pre-empt national law; rather it adds a collateral role creating a double level of regulation, which does not necessarily benefit the scope of harmonisation. Our analysis on good faith reveals that a legislative intervention on the EC level, based on general clauses if, on the one hand, theoretically has the advantage of giving a more flexible rather than rigid regulation, on the other hand, due to the well-known path dependence effect, brings in the risk of scarce influence on the national level; the drawback of such effect is that the national system tends to repropose national law using the general clauses provided by the EC intervention. The bringing into force in Italian law of directive 93/13/CEE reveals other interesting aspects. What we have just pointed out that the general clause of good faith cannot be affirmed for the test of the significant imbalance. No matter the problem of them being two different requirements or not, it must be stressed that the test of significant imbalance seems more apt to favour the edification of an effective wide regulation, substantially common to all member States. Therefore the experience of the unfair terms directive and its application in national law - and this observation can be re-proposed for other EC directives, like the one on manufacturer liability or on guarantees in consumer sales contracts - can give us some helpful indications regarding the future development of EC private law, in the light of the proposal to build a common framework for a

7 European contract law, also through better and more detailed definitions of abstract legal words than those contained in the directives on consumer protection, grounded on the scope of the minimum level of harmonisation. 21 A different aspects remains to be considered, which has often played a decisive role for the growth of EC law: the courts. It is certain that the judgement of whether a term is unfair or not must be left to national judges; 22 but it is also certain that the communitarian judges can lose important questions in case of preliminary rulings, like the connection between good faith and significant imbalance. There are explicit signs of the will of the EC Court of Justice to give its contribution for the creation of a European contract law. 23 It seems to me very important that there will be a stronger interaction among courts (that is: between courts of different national experience and between them and the EC Court of Justice) and among scholars: it could represent the best flywheel for a more effective private law integration. 21 See Communication from the Commission to the European Parliament and the Council - A More Coherent European Contract law - An Action Plan, Brussels, , COM (2003) 68 final; Communication from the Commission to the European Parliament and the Council - European Contract Law and the Revision of the acquis; the Way Forward, Brussels, , COM (2004) 651 def. 22 European Court of Justice 1 st april 2004, case C 237/ European Court of Justice 27 june 2000, Joined Cases C-240/98 to C-244/98; 24 january 2002, Case C-372/99; 21 november 2002, Case C-473/00.