Termination of contract: replacement of tenant and division of fund (part two)

Unauthorized replacement of the tenant constitutes, outside the cases currently provided for, a breach of the obligation of faithful performance of the contract, consequently assessable as a cause for termination under Article 5 l. 203/82.

On this point, jurisprudence has specified – with a now established orientation – that in order to be considered “substitution,” the detachment from the fund of the original tenant must be “permanent,” that is, the cessation of his presence on the contracted funds must be “effective and habitual,” and the provision of his labor, even in the form of mere direction of the Company, must also have ceased(cf. Cass. April 11, 1995 no. 4151; Cass. December 13, 1982, no. 6846).

It would thus be confirmed that any relationship/connection of the original tenant with the land granted to him under tenancy would cease to exist, occurring, in fact, a radically different hypothesis from the succession of the heir to the contract stipulated by the de cuius, a hypothesis that, on the other hand, provides for the legitimate continuation of the contract.

Another case is that of one who decides to associate with another person to cultivate land, thereby supplementing his or her own labor and productive capacity through the cooperation of another person. Cooperation, in fact, does not result in an alteration of the land use, nor does it result in a breach of contract, as the same tenant remains in the availability of the land and continues its cultivation, albeit not with his own labor alone, without losing his connection to the land(cf. Cass. April 11, 1995 no. 4151).

On the cooperation for cultivation and management of leased land, it should be noted that there are cases where, although with a single contract several parties have leased land without, however, there being any allocation of specific portions to each tenant, the operational and material management of the land is to be understood as having been granted in common to all parties.

Therefore, should the parties independently decide to make and/or establish subdivisions or allocations to each of the stakeholders, the allocation of the aforementioned certain portions of the contracted compendium-always in the absence of the grantor’s consent-will constitute a breach of the obligation of unitary management of the property, i.e., a breach of contract per se capable of leading to termination of the contract.

Confirming the necessary unified management of the contracted funds is, likewise, the clarification regarding the liability of all tenants even if the default is put in place by only one of them.

In addition to this, not even the “material” subdivision of the single compendium is capable of preventing the defaults of only one of the tenants from adversely affecting the functionality of the entire contract, leading to its termination in the hands of all the contractors(see Cass. November 14, 1989, no. 4836).

In conclusion, it can be argued that the rationale behind the regulations in question can be found in the fact that the subdivision (material and actual) of the leased land in the hands of each individual tenant constitutes a serious breach of contract due to the inability of each tenant to adequately provide for the management and maintenance of the entire contracted compound. This is because there is a breach of the obligation of unitary management of the funds, on the other hand when there has been a simple division of cultivation tasks among the different tenants, maintaining the unitary management of the estate, there is no breach whatsoever and there is, therefore, no cause for termination of the contract(see Cass. April 11, 1995 no. 4151; Cass. November 14, 1989, no. 4836; App. Venice July 16, 1988).

Attorney Chiara Roncarolo

Attorney Maurizio Randazzo