Through its decision no. 898 of 16 January 2018, the Joint Chambers of the Italian Supreme Court overcame the case law contrast which had previously arisen on the validity of banking contracts signed only by the client (and not by the bank/investment company).
Both articles 23 of legislative decree no. 58 of 24 February 1998 (Financial Act - “TUF”) and 117 of legislative decree no. 385 of 1 September 1993 (Banking Act - “TUB”) require that banking contracts and contracts related to investment and ancillary services must be executed in written form (i.e. with ink signature of the parties) and that a copy of the relevant contract must be handed to the client; in case of breach of such provisions, the contracts are deemed as null and void.
The more recent decisions rendered by the Supreme Court stated that the banking contracts not signed by the bank do not satisfy the written form requirement. The possible deposit by the bank of the signed contract in the course of a legal proceeding would have given perfection to the contract, but only starting from the specific day of the deposit and not from its original intended date (reference is to the Supreme Court decision no. 36 of 3 January 2017) and as such would not be able to remedy its original nullity.
Also in the case decided by the Joint Chambers of the Supreme Court, the Court of Appeal had declared the nullity of certain investment transactions on the basis of the invalidity of the underlying contract for lack of signature by the bank; the contract was considered as a mere proposal in light of breach of the requested written form (requiring the signature of both parties).
The court of first instance, instead, adhering to an opposite stance, had maintained that the contract not signed by the bank was nevertheless valid, given that the written form is provided as protection of the sole client, with the consequence that a client who signed a contract would have no interest in challenging its validity.
The complaint filed by the bank before the Supreme Court was allocated to the Joint Chambers given the significant importance (as requested by Italian law) of the related matters on “if the written form requirement for the investment services contracts is satisfied by the signature of the sole client/investor or needs also the signature of the bank”.
The Supreme Court firstly clarified that the written form is not a requirement for the specific investment services, but is instead a requirement for the underlying contract, which might be compared to a mandate.
The Joint Chambers have then specified that the nullity for lack of written form under art. 23 TUF and 117 TUB and the obligation for the bank to provide the client with a copy of the contract are provisions set in the sole interest of the client, who must be in the condition to verify at any time, the fulfilment by the bank of the contractual rules.
Therefore, according to the Supreme Court it is not possible to maintain that the signature of the bank is necessary for the validity of the contract if the agreement of the party is in any case proved (on the basis of the signature by the client and the delivery of such contract to the client); the contractual consent by the bank can therefore result from the “acceptance by conduct”.
On the basis of such interpretation, the Supreme Court rendered the principle of law that “the requirement of written form (meaning two signatures) for the contracts related to investment services under art. 23 TUF (applicable also to art. 117 TUB for banking contracts) is deemed respected when is proved that the contract was drafted in written form and a copy of same was handed to the client; the sole signature of the client/investor is sufficient and the consent of the bank may be proved on the basis of the acceptance by conduct”.
The mentioned principle of law is grounded on the circumstance that only the client/investor could claim the nullity of the contract for lack of written form and that it is not possible to maintain that the written form is also finalised to protect the “good-functioning” of the bank, which would not be entitled to claim the nullity of the contract.