Very often, preliminary contracts of sale and purchase are subject to a condition precedent: that is, the obligation to conclude the final contract will arise only if a certain event, stipulated in that specific clause, occurs. The event deduced as a condition may depend on a third party, or on only one of the parties (the so-called potestative condition) or on one of the parties and a third party together (the so-called mixed potestative condition).
The latter case is the most complex because the fulfilment or non-fulfilment of the condition (and consequently the arising of the obligation to enter into the final contract) can be attributed to one of the parties to the contract, or to a third party, or even to both of them to varying degrees. This is the case examined by a very recent decision of the Supreme Court (Cass. 6.03.2024 No. 5976) in which:
– the parties had made the preliminary contract for the sale and purchase of land subject to the condition that a change of urban destination of the area be ordered, and
– the selling promisor company had instructed the purchasing promissory company to carry out the necessary activities to obtain such a change of urban destination.
The change of urban destination was then not obtained, resulting in the litigation.
In such cases, reference is generally made to Article 1359 of the Civil Code, under which “the condition shall be deemed to have been fulfilled if it has failed for reasons attributable to the party who had an interest contrary to its fulfilment.†That is, if one party has an interest that the event envisaged as a condition does not occur and causes that event not to occur, then the other party is protected, because that event is (fictitiously) deemed to have occurred anyway.
 Article 1358 of the Civil Code, under which the parties, in the pendency of the condition, must behave in good faith, also finds application in this regard.
In the case at hand, the Turin Court of Appeals had held that:
– the promissory purchaser company was the one interested in the non-fulfilment of the condition (pursuant to Article 1359 of the Civil Code);
– the promissory purchaser company had the burden of proving that it was not responsible for the failure to obtain the change of urban destination (according to the ordinary distribution of the burden of proof in the contractual sphere and precisely, in the case in point, of a mandate contract);
– the promissory purchaser company had failed to prove that the failure to obtain the administrative measure depended on a cause not attributable to it and, consequently, the condition had to be considered fictitiously fulfilled (again pursuant to Article 1359 of the Civil Code).
The Supreme Court confirmed the framing of the case as a “mixed potestative condition†but then reversed the reasoning of the lower court. And established two relevant principles of law in the case of failure to obtain a measure from the public administration (when this event is provided for as a condition precedent).
First, Article 1359 of the Civil Code “is inapplicable where the party conditionally bound to a given performance also has an interest in the fulfilment of the condition.â€
Second, “the omission of an activity insofar can be considered contrary to good faith and constitute a source of liability, as such activity represents the object of a legal obligation and the existence of such an obligation must be excluded for the activity of implementing the potestative element in a mixed condition, with the consequent exclusion of the obligation to consider the condition fulfilled.â€
In conclusion, Article 1359 of the Civil Code cannot find automatic application in cases of mixed potestative conditions, but it is necessary to examine concretely – on a case-by-case basis – whether all the elements provided for therein are met, also in light of the duty of good faith provided for in Article 1358 of the Civil Code.
Author
Andrea Gangemi
a.gangemi@macchi-gangemi.com
