What are the three most common errors you see in commercial contracts drawn up in your jurisdiction?

Lorenzo BacciardiPartner, Bacciardi and Partners

Tommaso Mancini (TM) One of the most common mistakes in international contracts involving Italian persons or entities is ignoring that the Italian legal system includes ‘internationally mandatory rules’ protecting certain categories (e.g. rules on consumers or commercial agents) or certain public interests (e.g. antitrust or tax laws).

By way of example, foreign companies wishing to sell products or services to Italian consumers must be aware of the provisions of the Consumer Code, which encompasses specific consumer protection provisions.

Foreign companies – and particularly non-EU ones – wishing to appoint a commercial agent in Italy should be aware that the Italian agent, irrespective of any provision of the agency contract, may bring a claim before Italian Courts and seek payment of a goodwill indemnity upon termination of the relationship.

Italian subsidiaries of foreign multinational group of companies often use the same contract templates used by the other companies of the group. Contract templates drafted by foreign attorneys or consultants are seldom suitable to ensure such compliance with all applicable Italian laws, and therefore it is strongly advisable to have them reviewed and amended by a local law firm which specialises in national and international contract, custom and tax law.

Another common pitfall is to have a contract translated into Italian by an Italian speaker who is not also an Italian qualified attorney. Italian is a language with a very rich legal terminology and legal terms are often misused by people who do not have a solid legal background. This often leads the parties to rely on contractual provisions which are later discovered to be invalid and/or ineffective, or which trigger litigation when interpreted in different ways.

Tommaso Mancini (Partner, Bacciardi and Partners) was a contributor Commercial Working Group Virtual Series. You can view the full virtual series here