The discipline of the warranty for material (and not legal) defects is regulated in arts. 1490 et seq. of the Civil Code. Specifically, it is subdivided as follows: arts. 1490-1496 regulate the warranty for defects of the thing, while art. 1497 of the Civil Code regulates the warranty for lack of quality.

Italian jurisprudence has developed, alongside these guarantees, a further one known as 'aliud pro alio", which occurs whenever the material defect of the thing sold is so serious as to render the good completely incapable of performing the function for which it was purchased.

As far as possible, given the complexity and articulation of the issue, an attempt is made below to distinguish the various disciplines of guarantees known to the Italian legal system.

      (a) Warranty for defects (Arts. 1490-1496 Civil Code)

This warranty is owed by the seller only if at the time of the conclusion of the contract the buyer was unaware of the existence of the defects, or if such ignorance is not culpable, since the defects were not readily recognisable (Art. 1491 of the Civil Code).[1]

As to its content, it confers on the buyer the possibility of acting to request, at his discretion, the termination of the contract or the reduction of the price (Art. 1492 Civil Code), in addition in any event to compensation (Art. 1494 Civil Code). Excluded from this guarantee is, on the other hand, an action for exact performance, i.e. an action whereby the seller is requested to eliminate defects by repairing the goods sold.[2]

It is important to emphasise that the choice between an action for reduction of price and an action for termination of the contract is irrevocable once it has been made by a court application (Art. 1492(2) of the Civil Code), since a party may not even bring an action requesting the reduction of the price as a subordinate claim to the application for termination of the contract, or vice versa.[3]

Finally, the parties are entitled to exclude this warranty for defects, with the only limitation being the case where the defects are concealed in bad faith by the seller. Particular attention must be given to warranty disclaimers (the discussion of which alone would require a much more extensive study), which fall under the special rules of Art. 1341 of the Civil Code,[4] which regulates so-called 'unfair terms' and provides for the obligation to expressly sign the clause with a double signature, failing which the clause is null and void.[5]

      (b) Guarantees for lack of quality pursuant to Article 1497 of the Civil Code.

Whereas defect consists in an imperfection/defect of the good, lack of quality occurs whenever the thing (even though it has no manufacturing/forming/preservation defects) is ascribable to one species rather than another, even within the same genus.[6]

The discipline of this warranty is particular, since on the one hand Art. 1497 para. 1 of the Civil Code makes it subject to the terms of complaint and prescription provided for in Art. 1495 of the Civil Code (and which will be dealt with in section X below), but on the other hand it differs from them, since Art. 1497 para. 2 of the Civil Code provides that termination of the contract is allowed ".according to the general provisions on termination for non-performance".

Although case law over time has always been oscillating as to whether the presence of defects and the lack of quality should be subject to the same discipline or not,[7] the most recent judgments, seem to hold that the action under Art. 1497 of the Civil Code differs from the action under warranty for defects in that in the former:

  • the buyer may exercise an action for exact performance (pursuant to Art. 1453 of the Civil Code);
  • the buyer could not claim a reduction of the price, as this is not provided for by the general rules on non-performance.[8]
     (c) Aliud pro alio

One has aliud pro aliowhen the thing sold belongs to a kind entirely different from that of the thing delivered, or has defects that prevent it from performing its natural function or the concrete function assumed by the parties to be essential.[9] Take, for example, the transfer of a work of art falsely attributed to an artist. This hypothesis entitles the buyer to request termination of the contract for non-performance by the seller, pursuant to Art. 1453;[10] or to the sale of houses that are uninhabitable or otherwise lack the habitability requirements (C. 8880/2000) or of cars with forged chassis numbers (C. 7561/2006).

In case of aliud pro alio, the buyer is not subject to any duty to give notice, but has the option of either demanding performance or bringing an action for termination, and under Art. 1453 the seller will be liable only if at fault, in accordance with the general principles governing non-performance and, therefore, subject to the ordinary limitation period of ten years.[11]

      (d) Damages

In the case of material defects of the thing, the buyer is entitled not only to claim termination of the contract or reduction of the price, but also compensation for damages. Art. 1494 of the Civil Code also provides for a presumption of fault on the part of the seller, who is required to prove that he was blamelessly unaware of the existence of the defects of the thing.

Consistent case law holds that the buyer must be placed in the economic situation equivalent to that in which he would have found himself if the thing had been free from defects, but not that in which he would have found himself if he had not concluded the contract or if he had concluded it at a lower price.[12] Moreover, the purchaser may also claim compensation for the expenses incurred in remedying the defects, irrespective of the actual elimination of the defects.[13]

      e) Application of the Vienna Convention and the Consumer Code

It should be noted that the distinction between defects, lack of quality, defective functioning, aliud pro alio and ordinary liability has been superseded by the Vienna Convention, which provides, in Articles 35-41, homogeneous means of protection of the buyer for all hypotheses of non-conformity of the thing delivered with respect to the thing agreed upon.

Art. 35 lays down two criteria for assessing whether the goods delivered are free from defects, firstly that of conformity with what was agreed upon between the parties and, in the event that such an agreement is lacking, a series of subsidiary criteria.[14]

As to the remedies offered by the Convention, they are: the request for fulfilment (Art. 46)[15]termination of the contract (Art. 47),[16] price reduction (Art. 50)[17] and damages (Art. 45).[18]

Directive No. 1999/44/EC of 25.5.1999, implemented by Legislative Decree No. 24 of 2.2.2002 (which introduced Articles 1519 bis-1519 novies into the Civil Code) and relating to the sale of consumer goods, moved in the same direction. The new discipline provides, at the professional seller's expense, a unitary guarantee for all hypotheses of 'lack of conformity' of the goods with the contract, legitimising the consumer to request, at his choice, the repair of the goods or the termination of the contract.

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[1] Recognition of the defect is excluded if the sale was concluded at a distance, i.e. if the goods were packaged or packaged

[2] This exemption applies, of course, to sales between professionals, since the new consumer code, which was introduced in Italy with the transposition of Directive 25.5.1999, no. 1999/44/EC, implemented by Legislative Decree 2.2.2002, no. 24.

[3] Cass. Civ. 2015, no. 17138; Cass. Civ. 2004, no. 1434.

[4] Article 1341. "General terms and conditions prepared by one of the parties are effective vis-à-vis the other, if at the time of the conclusion of the contract the latter knew or ought to have known of them using ordinary diligence (1370, 2211).

In any event, conditions which establish, in favour of the one who has prepared them, limitations of liability, (1229), the right to withdraw from the contract (1373) or to suspend its performance, or which establish in favour of the other contracting party forfeitures (2964 et seq, or sanction forfeitures (2964 et seq.), limitations on the ability to raise objections (1462), restrictions on freedom of contract in relations with third parties (1379, 2557, 2596), tacit extension or renewal of the contract, arbitration clauses (Code of Civil Procedure 808) or arbitration clauses (Cod. Civil Procedure Code 808) or exceptions (Civil Procedure Code 6) to the jurisdiction of the courts'.

[5] According to authoritative doctrine (Bortolotti F. ''Manuale di diritto commerciale internazionale'' vol. II L.E.G.O. Spa, 2010; Ferrari F. ''General Conditions of Contract in Contracts for the International Sale of Goods'' in Obb. e Contr., 2007, 4, 308; Bonell M.J. ''Le condizioni generali in uso nel commercio internazionale e la loro valutazione sul piano transnazionale'' in ''Le condizioni generali di contratto'' edited by Bianca M., Milan, 1981) and jurisprudence (Civil Cassation 2007, no. 1126) maintain that the double signature requirement of Art. 1341 of the Civil Code cannot be invoked and is therefore derogated from in the event of the application of the Vienna Convention. Contra minority doctrine (Pischedda P. "The evolution of export credit insurance" IPSOA, 2007).

[6] With reference to the qualities that the goods bought and sold must have, this is determined in the Italian guidelines, by the criterion of 'average quality', which operates (exclusively) in the sale of general goods. This criterion requires that the individual qualities exist to that ordinary extent which gives the goods an average value (Art. 1178 of the Civil Code).

[7] Cass. Civ. 1978 nr. 5361; Cass. Civ. 1978 nr. 206.

[8] Cass. Civ. 2000, no. 639.

[9] On the subject of the distinction between vice and aluid pro alio, the Supreme Court of Cassation recently intervened stating that there is a redhibitory vice or lack of essential qualities of the thing delivered if it presents imperfections that make it unsuitable for the use for which it should be intended or significantly diminish its value, or if it belongs to a different type or species other than that agreed upon; on the other hand, there is a delivery of aliud pro alio, which gives rise to the contractual action for termination or performance pursuant to Art. 1453, freed from the terms of forfeiture and prescription, where the goods delivered are completely different from those agreed upon, inasmuch as belonging to a different kind, they prove to be functionally wholly incapable of fulfilling the economic-social purpose of the res promised and, therefore, of providing the required utility. C. 5202/2007; C. 686/2006; C. 14586/2004; C. 18757/2004; C. 13925/2002; C. 5153/2002; C. 2659/2001; C. 10188/2000; C. 2712/1999; C. 4899/1998; C. 1038/1998; C. 844/1997; C. 244/1997; C. 5963/1996; C. 593/1995; C. 8537/1994; C. 1866/1992; C. 13268/1991; A. Rome 29.5.2008.

[10] Cass. Civ. 2008 nr. 17995.

[11] Cass. Civ. 2016, no. 2313.

[12] Cass. Civ. 2000, no. 7718; Cass. Civ. 1995, no. 1153.

[13] Cass. Civ. 1990, no. 8336.

[14] Art. 35 second paragraph 'Unless the parties agree otherwise, goods are in conformity with the contract only if: (a) they are fit for the purposes for which goods of the same kind would ordinarily be used; (b) they are fit for any special purpose expressly or impliedly brought to the knowledge of the seller at the time of the conclusion of the contract, unless it appears from the circumstances that the buyer did not rely on the seller's skill or judgement or that it was unreasonable for the seller to do so (c) possess the qualities of goods which the seller has presented to the buyer as a sample or model; (d) are packaged or packaged in accordance with the usual criteria for goods of the same kind, or, in the absence of a usual criterion, in a manner suitable to preserve and protect them."

[15] Action available, provided that it has not resorted to an incompatible remedy. It may also require replacement of the goods if there is a fundamental non-performance under Art. 25. Reparation may be claimed instead where it does not appear unreasonable having regard to all the circumstances. See on this point Bortolotti, Il contratto di vendita internazionale, CEDAM, 2012, p. 260.

[16] Termination of the contract and consequent return of the services rendered may only be required in the event of essential non-performance or in the event of non-delivery of the goods within a reasonable additional period set by the purchaser pursuant to Art. 47.

[17] Such a claim may not be advanced if the seller remedies the defect or if the buyer rejects the seller's performance.

[18] The harm consists of the loss sustained by reason of the non-performance and the loss of profit. In any event, the recoverable harm cannot exceed the loss which the seller had foreseen or ought to have foreseen at the time of the conclusion of the contract (Art. 74), the buyer having in any event to take reasonable steps to limit the harm, the non-performing party being entitled to reduce the amount of damages by the amount of the loss which it could have avoided (Art. 77).