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Digital and online contracts get a major support by Italian courts

online contracts

Digital and online contracts get a major support by Italian courts

Digital and online contracts might become much easier in Italy following the decision of the Court of Appeal of Naples in a case involving eBay. 

The Italian scenario for digital and online contracts

The Italian civil code provides that in case of standard contracts such as terms and conditions that have not been negotiated between the parties, the one-sided clauses of the agreement (e.g. forum selection, limitation of liability, termination) are not enforceable against the counterparty (usually the buyer), unless they “have been expressly approved in writing“.

According to Italian consolidated case law, such requirement can be met through the so called “double execution” which means that all the one sided of the agreement have to be listed at the bottom of the agreement after the signature space and the party that did not draft the agreement has to place a second signature after the list of one-sided clauses in sign of acceptance and acknowledgement of them.

But the issue with the above approach applies in case of digital and online contracts since a written double execution cannot be given. Indeed, Italian law priovides that only a digital signature meeting the requirements provided by the eIDAS Regulation can be considered equal to a written signature under all circumstances. This is a strong restriction since the usage of a digital signature device is not considerably common in the market, especially by consumers. Therefore, the situation as of today is that companies are taking the risk of having such clauses challenged.

The position of the Court of Appeal of Naples

The Court of Appeal of Naples held that

  1. the requirement of the double execution cannot apply to online contracts such as the Ts&Cs of eBay that because of their nature cannot meet this requirement; and
  2. the requirement of making available the Ts&Cs at the time of their acceptance could be satisfied by merely providing a link to them at the time of the registration.

This is a quite surprising position since no similar precedents have occurred in Italy.

What is my view?

I believe that up until the position of the Court of Appeal of Naples is confirmed by higher courts, it might be risky to follow the approach indicated therein. Also, even if the decision does not expressly mention it, eBay had actually listed the one-sided clauses at the bottom of its Ts&Cs according to the formalties provided by Italian case law, but had not requested a second acceptance, not even by means of a tick box.

A possible safer approach would be to

  1. list the one-sided clauses at the bottom of the agreement and
  2. ask users to provide a second acceptance by clicking a tick box close to the list of one-sided clauses, after having collected their details.

The approach indicated above has the advantage of enabling the seller/provider to argue that (a) the attention of its counterparties had been brought on the one-sided clauses of the agreement which was the rationale of the obligation and (b) the second acceptance by means of a tick box can be considered equal to a written acceptance, considering that i) the provision of the Italian civil code introducing the second execution in writing was introduced when digital and online contracts did not exist and ii) a tick-box can be considered equal to a written acceptance, if occurred after an identification process.

What about in case of consumers’ digital and online contracts?

The recommendations above are likely to be a weak defence in case of digital and online contracts with consumers. Indeed, in such case, unfair clauses thatunder consumer protection laws are null and void under consumers’ laws are likely to almost entirely overlap with one-sided clause for which the double execution is required.

In such case, there would not be much to do since it is not a matter of modality of acceptance, but of validity of such clauses themselves in relation to contracts for which the European legislator meant to grant stronger protections to consumers. And actually unfair clauses in consumer contracts can lead even to fines as outlined in this blog post.

In any case I recommend to adopt the methodology above for the acceptance of one-sided clauses to limit the risk of challenges at least by business customers and within limited circumstances by consumer customers.

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Giulio Coraggio
giulio.coraggio@gmail.com

I am the head of the Italian Technology sector and the global head of the IoT and Gaming and Gambling groups at the world leading law firm DLA Piper. Top global IoT influencer and FinTech lover, finding solutions to what's next for our clients' success.