Termination and tacit renewal: analysis of special cases

Article 4 of the law of May 3, 1982 no. 203 provides that “in the absence of termination by either party, the lease shall be deemed tacitly renewed for the minimum period of fifteen years for ordinary lease and six years for particle lease, respectively, and so on. Notice of termination must be given at least one year before the expiration of the contract, by registered letter with return receipt“.

The rule seems crystal clear in specifying that the notice of termination must be sent by registered letter with return receipt, which must be received by the tenant at least one year before the expiration date. However, you often have contracts with clauses that say, “the duration of the contract is years …. and will expire on November 10 of the year …, this date is imperative and essential for which the tenant makes a solemn undertaking to release the land free and clear of people and things“.

In this particular case, the judges, who were interested in the issue, read the aforementioned passage of the contract both on the basis of its literal tenor and its connection with other clauses of the same contract, not least, the intervention of the trade association, and, again, on the basis of the requirement to interpret contracts according to the principle of good faith.

As a corollary to the above, the judges concluded that the parties with the above clause “ruled out the need for termination and thus the applicability of Article 4 of Law No. 203 of 1982 in the actual case“.

Very important appears to be the reference to the trade association’s intervention, which, according to the judges, has the function of alerting the parties to what is expressly deviated from in the contract and thus to what is different from the legal provision.

Incidentally, it should be noted that in similar cases, the stipulation of Article 45 of Law No. 45 of May 3, 1982 is always used. 203 which states that:“agreements, including those not in the nature of a settlement, entered into between the parties with the assistance of their respective agricultural professional organizations, shall be valid between the parties, even in derogation of the existing rules on agricultural contracts.”

It is clear, therefore, that the agreements in question are so much “valid” insofar as the agreements themselves have been concluded with the assistance of the said professional organizations, without requiring, likewise, that the “dissimilarity” of the individual clause, with respect to the legal model or, rather, the “derogation” of a particular clause from a precise legislative precept, be emphasized or in some way highlighted in the contract.

In light of what has been briefly stated, it is evident that it is irrelevant that the contract did not expressly point out that in fact the clause in question derogated from the precept contained in Article 4 of Law No. 4 of May 3, 1982. 203.

In other words, where a contract has been concluded with the assistance of the respective professional organizations in accordance with the aforementioned provision the same is also valid with regard to “clauses” derogating from the legal regulations, without any need to specify, next to each clause, whether or not it complies with the legislative provision.

Another provision, which might be relevant in particular cases such as the one mentioned above, is that provided in Article 1362 s.s. c.c.

According to the aforementioned rule, reference must be made to the “common intention of the parties,” as reflected in their overall behavior even after the conclusion of the contract, in order to ascertain whether the parties intended to waive the obligation of termination under Article 4 of Law No. 4 of May 3, 1982. 203.

According to the judges, the fair balancing of the interests of the parties, given also the special nature and formalism required by the Agricultural Law, requires a clear formulation of the exception to the legal regulation.

In the case dealt with, the judges clarified that the contractual clause, referred to above, regarding the expiration of the contract and the tenant’s obligation to return the fund without fail on the agreed date, has an unambiguous literal meaning is self-evident such that references to other circumstances become irrelevant.

Finally, the argument that the notice of termination contained in the lease itself is null and void due to the illegality of the relevant clause also deserves a mention.

Justified by the timely provision of Article 58, Law No. 58 of May 3, 1982. 203: “All regulations under this law are nonderogable. Agreements in conflict with them are null and void as of right, and their nullity may also be detected ex officio, subject to the provisions of Articles 45 and 51.”

It is clear, therefore, that the parties, with the forms stipulated in Article 45 paragraph 1 of Law May 3, 1982 no. 203 (i.e., through agreements entered into with the assistance of their respective most representative national agricultural professional organizations, and through their provincial organizations) may waive any provision contained in Law No. 203 of 1982, subject to the limits set by paragraph 2 of the same Article 45.

Nor yet can it be assumed that the prohibition, for the parties, where properly assisted, to introduce exceptions to the provision in Article 4 derives from unspecified general principles or from the unlawfulness of the clause, in fact the parties to an agricultural contract, where properly assisted, may, in the exercise of their sovereign autonomy, provide for exceptions, subject to the limits indicated above, to any provision contained in Law No. 3 of May 1982. 203. The logical conclusion of the foregoing is that it must be ruled out that the clause in question can be defined as null and void on the grounds of illegality, i.e., contrary to mandatory rules.

Attorney Chiara Roncarolo

Attorney Maurizio Randazzo