Termination of contract due to loss of direct farmer status

An essential element for the purpose of entering into a valid and effective agrarian lease contract is the tenant’s qualification as a direct farmer, the definition of which is derived from the provisions of Article 31 of Law no. 590 of 1965.

Said article defines direct cultivators as“those who directly and habitually devote themselves to the cultivation of land and to the raising and management of livestock, provided that the total labor force of the household is not less than one-third of that required for the normal necessity of the cultivation of the land and the raising and management of livestock,” with the additional clarification that the actual demonstration of direct cultivator status will have to be made and evaluated on a case-by-case basis, obviously taking into account all the documentation provided.

Having said that, and given the existence of the necessary qualification, it is necessary to analyze what happens in cases where the tenant loses the qualification of direct cultivator during the pendency of the agrarian lease.

The Supreme Court, in a now well-established guideline, has had occasion to clarify that if during the term of the contract direct cultivation of the fund ceases-even if for causes that cannot be attributed to it and could not be foreseen-the contact of rent to direct cultivator ceases to function and the contract becomes, for that reason, terminable due to supervening impossibility of performance pursuant to Article 1463 of the Civil Code (Cass. March 20, 1997, no. 2487; Cass. October 17, 1994, no. 8456).

The loss of the required direct farmer status adversely affects the agrarian lease, which differs in cause and subject matter from a lease to a non-direct farmer-in which the protections provided by the Agrarian Law are lost-and is, moreover, a case of serious breach of contract by the tenant. It has in fact been pointed out that it is precisely the “special” nature of the direct farmer’s lease contract that underlies the consideration of the loss of qualification as a serious breach, which, together with the non-exhaustive listing made by paragraph 2 of Article 5, Law 230/82, ranks among the cases of serious breach to which the termination of the contract follows.

Article 5 merely provides for termination in cases where “the tenant has been guilty of serious breach of contract, particularly in relation to obligations concerning the payment of rent, normal and rational cultivation of the land, preservation and maintenance of the land itself and related equipment, and the establishment of subletting or subconcession relationships.” In view of the non-exhaustive nature of the aforementioned list, additional cases of termination for serious default of the tenant may be identified by the court on the basis of the contractual principles and causes of termination provided by the law, as occurred in the case at issue in this article (see ex pluris Cass, March 20, 1997, No. 2487).

Attorney Chiara Roncarolo

Attorney Maurizio Randazzo