Abstract

DELLACASA, Matteo. The Arbitrary Withdrawal: Between Principles and Remedies. Rev. Derecho Privado [online]. 2012, n.22, pp.107-134. ISSN 0123-4366.

Abstract In italian case law is well established that judge has the power to control if termination "at will" in commercial contracts is exercised according to good faith. Moreover, italian judges are obliged to control if termination "at will" complies with good faith: a judgement which refused to examine if termination at will is consistent with good faith would be reversed by the Supreme Court. Italian scholars who annotate this case-law rule focus especially on relationships between freedom of contract and judicial power; they pay less attention to remedies enforceable by the aggrieved party. This paper, on the other hand, focus attention on remedies enforceable when termination is contrary to good faith. Firstly, judicial control on termination "at will" contrary to good faith is justified in relation to any kind of contract, and not only in relation to asymmetric contracts. Remedy enforceable by the aggrieved party is reliance damages. Secondly, the paper identifies the standards according to which judges can detect termination contrary to good faith. Then the author wonders if reliance damages are still the preferable remedy when the aggrieved party is economically dependent on the party whose termination is contrary to good faith. The author thinks in this situation reliance damages are not an adequate remedy. It is better to protect the expectation interest of the aggrieved party, because it would be quite difficult for her to prove profits she could gain in performance of other contracts, different from that which has been wrongfully terminated; expectation damages and specific performance are, then, a better remedy.

Keywords : contract; termination "at will"; compliance with good faith: judicial control; remedies enforceable by the aggrieved party.

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