Italian choice of law principles have been greatly modified by the Law of June 3, 1995, no. 218. Three areas of immediate relevance for most international businesses are the principles now applicable to contracts, product liability, and corporations.
The law governing contractual obligations in Italy will now be chosen pursuant to the 1980 Rome Convention on the Law Applicable to Contractual Obligations (Law 218/1995, Art. 57). As a result, any choice of law by the parties to a contract will be given great weight (Rome Convention Art. 3.1), and a test resembling a common law analysis of most significant contacts will replace the rigid form offered by previous Italian law (Rome Convention, Art. 4). Under the now-abrogated Article 25 of the "Preleggi" to the Italian Civil Code, the law governing a contract was either that of the country in which the parties were citizens, if common, or the place where the contract was concluded.
For product tort liability, paragraph 2 of "Preleggi" Article 25 previously required application of the law of the place where the accident occurred to any action for tort liability. This has also been changed by the same June 3 legislation. Plaintiffs in product liability actions in Italian courts will now be free to choose the law which they would like to govern a suit against a producer: that of either the state where the producer's headquarters are located or the State in which the plaintiff purchased the product (see Law 218/1995, Art. 63).
The law governing the internal affairs of corporations and other associative entities will now be chosen following a modified version of the American rule. The law of the State of incorporation or foundation will govern, unless the corporation or other entity has its headquarters or principal place of business in Italy. In the latter case, Italian law will be applied (see Law 218/1995, Art. 25).
Law 218/1995 entered into force on September 1, 1995.
The content of this article is intended to provide general information on the subject matter. It does not substitute the advice of legal counsel.
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