Contracts and Covid-19: The Court of Cassation (Judgment no. 16113 of 2025) and the Issue of Performance Reduction

The Covid-19 health emergency presented an unprecedented challenge for the legal system, particularly for contract law. Many commercial and personal agreements were overwhelmed by the imposed restrictions, raising crucial questions about the performance of obligations and the possibility of modifying or terminating contracts. In this complex scenario, the Court of Cassation intervened with a fundamental ruling, Judgment no. 16113 of June 16, 2025, which clarifies the interpretation of Article 91, paragraph 1, of Law Decree no. 18 of 2020 (the so-called "Cura Italia Decree"), converted with amendments by Law no. 27 of 2020. This decision, rendered by President F. R. G. A. and Rapporteur S. P., rejecting an appeal against the Court of Turin, provides essential guidance for understanding the limits and opportunities offered by emergency legislation in contractual matters.

Article 91 of the "Cura Italia" Decree: A Shield Against Non-Performance

The core of the issue analyzed by the Supreme Court lies in the effectiveness of Article 91 of the "Cura Italia" Decree. This provision, enacted to mitigate the economic effects of the pandemic, establishes that compliance with Covid-19 containment measures must be considered for the purpose of excluding the debtor's liability. In other words, if a party could not perform a contractual obligation due to restrictions imposed to combat the spread of the virus, such non-performance is not attributable to them.

The Court of Cassation clarifies that the impediment arising from compliance with anti-Covid measures is to be classified as unforeseeable or insurmountable with the diligence required of the debtor. This has two direct and highly significant consequences:

• The debtor is released from the obligation to compensate for damages arising from non-performance.
• The counterparty is not entitled to seek termination of the contract due to non-performance.

This means that, in the presence of such exceptional circumstances, the contract cannot be terminated due to the debtor's fault, and damages for non-compliance with obligations cannot be claimed. This is a principle of fundamental importance that offered a lifeline to many economic operators during the most acute phase of the emergency.

The Ruling of the Court of Cassation: A Crucial Clarification on Contractual Remedies

However, the judgment does not merely reiterate the exculpatory effect of Article 91. The most delicate and innovative point of the ruling concerns the possibility of obtaining a judicial reduction of the performance. The Court, in fact, excludes that Article 91 establishes a potestative judicial right to obtain a reduction of the performance due as a result of the impact of restrictive measures on such contractual relationships.

In matters of contracts with continuous, periodic, or deferred performance, Article 91, paragraph 1, of Law Decree no. 18 of 2020, converted with amendments by Law no. 27 of 2020 (the so-called "Cura Italia" decree), is relevant for assessing the imputability of non-performance in cases of contractual liability – classifying the impediment arising from compliance with anti-Covid measures as unforeseeable or insurmountable with the diligence required of the debtor (who is released from the obligation to compensate for damages) and excluding the counterparty's entitlement to seek termination of the contract due to non-performance – but it does not establish a potestative judicial right to obtain a reduction of the performance due as a result of the impact of the aforementioned restrictive measures on such contractual relationships, because, given the principle of the specificity of potestative judicial remedies aimed at issuing constitutive judgments, a conservative power to reduce the performance to equity is recognized to the excessively burdened party only in the case of a gratuitous contract, whereas, outside of this hypothesis, the party remains entitled to seek termination of the contract due to excessive supervening onerousness, in response to which, however, the counterparty wishing to avoid the dissolution of the contractual relationship has a potestative right of rectification aimed at restoring to equity not the individual performance but, more generally, the content of the contract.

This ruling is of extreme importance. The Court of Cassation emphasizes that, given the principle of the specificity of potestative judicial remedies (as provided for by Article 2908 of the Civil Code), a conservative power to reduce the performance to equity is recognized to the excessively burdened party only in the case of a gratuitous contract. This means that, for example, in a loan for use agreement (gratuitous), if the supervening onerousness is excessive, one could ask the judge for a reduction of the performance.

But what happens in onerous contracts, such as most commercial contracts (leases, works contracts, supplies, etc.)? In these cases, the Court of Cassation is clear: the party does not have an automatic potestative right to judicial reduction of performance. The primary remedy remains the action for termination due to excessive supervening onerousness, pursuant to Article 1467 of the Civil Code. This article allows a party to seek the dissolution of the contract when extraordinary and unforeseeable events make their performance excessively onerous.

However, faced with such a request for termination, the counterparty has an important option: the potestative right of rectification, as provided for by Article 1450 of the Civil Code. This allows them to avoid the dissolution of the contractual relationship by offering to equitably modify the contract terms. It is important to note that the rectification must concern not only the individual performance but, more generally, the entire content of the contract, in order to re-establish the original economic balance.

Conclusions: Orientations for the Future

Judgment no. 16113 of 2025 by the Court of Cassation provides a clear and essential framework for interpreting the effects of the pandemic on contracts. On the one hand, it confirms Article 91 of the "Cura Italia" Decree as a valid tool for excluding liability for non-performance and damages in cases of impediments due to anti-Covid measures. On the other hand, it delimits the scope of judicial remedies, clarifying that judicial reduction of performance is not an automatic right for onerous contracts, for which the mechanism of termination due to excessive supervening onerousness prevails, with the possibility of rectification by the counterparty.

This ruling serves as a warning to businesses and individuals to carefully assess their contractual positions and to seek negotiated solutions or, if necessary, to avail themselves of the most appropriate legal instruments. The complexity of the matter requires careful analysis of each individual case, making recourse to qualified legal advice essential for navigating the challenges posed by extraordinary and unforeseeable events, ensuring the protection of one's interests and the stability of contractual relationships.