As will be more thoroughly addressed below, there are several and significant differences between the provisions of a contract of carriage and those of a procurement contract for the supply of carriage services.
In certain cases, the applicability of the provisions of the Italian Civil Code is unquestionable: the assignment of certain merchandise to a professional carrier for delivery to the final consignee is a typical case.
In many other cases, however, a single operation can involve more than one form of carriage (this is the case for example of e-commerce companies, which typically sell their goods on line and deliver them to the country of the customer). In such case, the mere application of the provisions on carriage might eventually adversely affect the parties’ interest.
In the light of above, Italian legal commentators and case law have increasingly recognised the autonomous existence of a procurement contract for the supply of carriage services. Generally speaking, pursuant to Article 1678 of the Italian Civil Code, a contract for carriage is a contract whereby a carrier undertakes to transport passengers or goods from one place to another for a fee.
By contrast, Articles 1655 et seq. of the Italian Civil Code regulate procurement contracts («contratto di appalto»). By such kind of contract, a party undertakes to perform a piece of work or render services, organising the necessary means and acting at his own risk, in return for compensation in money.
However, the above-mentioned types of contract cannot be easily distinguished from each other, as they show several common elements; in particular, both contracts involve (i) an obligation to achieve a guaranteed result in connection with the service provided («obbligazione di risultato») and (ii) a locatio operis, i.e. the activity of a person who undertakes to provide a specific performance or service for valuable consideration, through his/her own work and without having an employment relationship with the principal.
Case law uses the following criteria to assess whether a given work relationship falls within the scope of a contract for carriage or of a procurement contract for the supply of carriage services:
(a) the plurality of performances involving a series of carriages, all aimed at achieving an overall result, and not a set of sporadic and episodic carriage performances (SupremeCourt’s decision No. 2620 of 29 April 1981; Court of Genova’s decision No. 201/1991);
(b) the significant duration of the work relationship in place between supplier and principal, as well as its continuity, consistency and exclusivity (Supreme Court’s decision No. 2620 of 29 April, 1981; Central Tax Commission’s decision No. 771 of 25 March 1981);
(c) the terms of calculation and payment of the consideration (Supreme Court’s decision No. 2926 of 11 May, 1982), which in a supply contract are usually agreed upon according to standard criteria laid down in the Scope of Works or in a general and uniform manner for the whole performance or service concerned (Supreme Court’s decision No. 6160 of 13 March 2009);
(d) the allocation of risk onto the party who undertakes to perform the service (Supreme Court’s decision No. 2620 of 29 April 1981; Supreme Court’s decision No. 2926 of 11 May 1982);
(e) the implementation of additional services in such a way that the overall performance of a service prevails over the one relating to carriage, with the consequence that the transfer is no longer the key element of the agreed performance (Supreme Court’s decision No. 2926 of 11 May 1982).
In the light of the aforementioned preconditions and irrespective of the formal content of the contract (e.g. its name), a contract may therefore be considered one for the supply of carriage services rather than a plurality of carriage contracts (Supreme Court’s decision No. 14670 of 14 July 2015).
By Circular No. 17 of 11 July 2012 (to be regarded as an authoritative practice, despite not having binding force), the Italian Ministry of Labour gave its opinion on the subject to shed light on the matter and solve any difficulties in application.
More specifically, the Ministry stated that if the contract performance «involves a series of carriages aimed at achieving an overall result which both parties are required to achieve (i) in order to meet a number of needs of the principal, (ii) even beyond the time needed for carriage, and (iii) possibly through the preventive preparation of a suitable organization by the carrier, inspectors may deem applicable the provisions on procurement contracts».
In addition, the circumstance of a carrier not being responsible for providing further services other than carriage is not in itself sufficient to exclude that the agreement in question may be classified as a contract for the supply of carriage services, where there is systematic predetermination of carriage services, an agreed single consideration and organisation of the one’s own means aimed at achieving an overall result to meet the principal’s needs (Supreme Court’s decision No. 14670 of 14 July 2015).
With all this said and after having marked the boundaries between the two contracts, it is worth examining the differences between the respective provisions. Among the key applicable provisions, reference should be made to Article 29 of Italian Legislative Decree No. 276 of 10 September 2003, which provides that the principal and the supplier are jointly and severally liable, together with any subcontractors, within two years of termination of the contract, for due performance of their obligations relating to the payment of salaries, severance pay (so-called «TFR»), social security contributions and insurance premiums payable to employees concerned in relation to the period of performance of the contract.
Likewise, relevant are the requirements for workers’ health and safety prescribed, for most supply contracts, by Italian Legislative Decree No. 81/2008, such as, first and foremost, the obligation to specify workplace safety costs (under pain of nullity of the contract).
The statute of limitations for the rights arising from the contract changes as well, with the short term under Article 2951 of the Italian Civil Code applying to carriage contracts only. On the contrary, in case of supply contracts, the payment of the consideration may be requested within the standard ten-year term.
Finally, different provisions apply in relation to the right to withdraw from contract.
More precisely, pursuant to Article 1671 of Italian Civil Code, the principal is entitled to withdraw from the contract even if the performance of the work or service has already started, provided that the contractor is compensated for the expenses incurred, the work accomplished and loss of profit. Such withdrawal is irrespective of ascertaining the gravity and extent of non-performance of the supplier, if any, as in such case the different provisions on termination of contract under Article 1453 of Italian Civil Code (Court of Rome’s decision dated 18 September 2001; Supreme Court’s decision no. 5237/1983) would apply.
As far as the contract for carriage is concerned, Article 1685 of the Italian Civil Code provides for a number of rights in favour of the sender. Indeed, the sender is entitled to suspend transportation or ask for return of goods, ask for delivery to a consignee other than the original one or otherwise dispose of the goods, without prejudice to having to reimburse expenses and pay compensation for any damage arising from countermand. Such countermand entails a jus variandi amounting to a right to unilaterally withdraw from contract.
In conclusion, our advice to any principal who owns goods to be transported is to pay close attention when drafting a contract so as to regulate the relevant relationship in the most appropriate manner and therefore avoid unpleasant surprises.