According to Italian law, a preliminary sale contract is one in which a buyer and a seller enter into a final sale agreement with each other (for the purchase of a property, for example). The deed must be in writing under penalty of nullity as per art. 1351 c.c. and must contain the object and price of the sale.
It is possible that either party may default on the preliminary sale contract and decide not to move forward with the agreement.
In this case, Italian law allows 2 different situations, whether or not there is a deposit. A deposit is an amount of money that a part gives to the other at the end of the preliminary contract as a guarantee.
Breach of preliminary sale contract: with or without deposit
In case of a deposit, Italian law allows the right of withdrawal, as per art. 1385 c.c. The deposit serves as both confirmation and advance of the activity; in case of non-compliance, the deposit could be used as indemnification.
Without a deposit, Italian law allows 2 options:
1. Request of execution in specific form: the party that wants to proceed with the sale may appeal to a Judge for a court order to enforce the unfinished contract.
2. Termination of the contract and damages claim: the party that agrees to proceed with the deed may request the termination of the preliminary contract and damages claim, as per art. 1453 c.c.
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