A contract does not end just because one of the parties no longer wants to enforce it. Before sending a notice or stopping payments, check the legal basis, the contract clauses, and the effects of termination. A wrong choice can lead to penalties, compensation, or litigation.

1. Termination by agreement

If both parties agree, they can conclude a termination agreement. Specify the date when the contract ends, the remaining amounts to be paid, the surrender of the goods or documents, and whether there are any unresolved claims. Check whether the law requires a specific form for that contract or for its termination.

2. Unilateral denunciation

Denunciation allows the termination of the contract without invoking the non-performance of the other party, but only if the right is recognized by law or by contract. Check who can exercise it, when, by what notification and with what notice period. In contracts with successive or continuous execution, denunciation can have effects even after the execution has begun, with respect to the notice period; it does not cancel the already performed or ongoing benefits.

An indefinite-term contract can be terminated unilaterally with a reasonable notice period, according to Article 1277 of the Civil Code. For fixed-term contracts, the possibility and consequences of termination depend on the contractual clauses and the special rules applicable. A notification sent too early or without compliance with form or deadline may not produce the desired effect. Consult The consolidated form of the Civil Code, art. 1276–1277.

3. Resolution and termination for non-execution

If the other party fails to fulfill its obligations, the creditor may request enforcement, reduction of the benefit under the law, resolution or termination, and, if the requirements are met, damages and interest. Resolution generally concerns contracts with immediate enforcement and terminates the contract under legal rules; termination ceases its effects for subsequent enforcement contracts. Non-performance must have the severity required by the Civil Code; a minor deviation does not automatically justify termination.

The resolution or termination can be ordered by the court or can be effected by the unilateral declaration of the entitled party, if the legal and contractual conditions are met. A commission pact must expressly indicate the obligations whose non-execution leads to termination. Check whether delay is required, whether a period of execution must be granted and how the rescission or termination declaration must be communicated. The main rules can be found in Articles 1549–1554 of the Civil Code.

4. Delaying does not by itself terminate the contract

Delaying the payment notifies the debtor that the obligation has not been fulfilled in time and may be necessary before requesting certain remedies. It is usually done by written notification sent to the debtor or by the request for court summons. The notification must identify the obligation and request its enforcement; in the situations provided by law or by contract, there may be exceptions to notification or granting an additional period.

The sending of the notification does not automatically suspend one’s own obligations nor does it terminate the contract itself. Keep a record of the communication and check whether the notice of default must be separated from the declaration of termination.

5. Unforeseen circumstances: a solution for exceptional situations

In principle, the parties must execute the contract even if it has become more costly. If an exceptional, unforeseeable and unassumed risk change makes execution excessively onerous, the affected party must try, within a reasonable time, to renegotiate in good faith. If all the conditions of Article 1271 of the Civil Code are met, the court may adapt the contract or may order its termination. The mere fact that execution has become more expensive is not sufficient.

What to check before sending the notification

  • the duration of the contract and the termination clauses, notice period, penalties and commission pacts;
  • the obligation violated, the evidence and the seriousness of the failure to perform;
  • the recipient, the address and the method of communication provided for in the contract;
  • the amounts, assets, services and obligations that remain after the termination.

Consult Civil Code in the consolidated form published on the Legislative Portal. If significant sums are at stake, short deadlines or an unclear clause, request an analysis before stopping the execution. For contracts and commercial disputes, see the page commercial lawyer.