Dealing With the Unpredictable: The Impact of the Covid-19 Crisis on Lease Agreements in the Italian and Japanese Legal Systems

Abstract

Lease contracts have been among the most affected by the economic effects of the pandemic in many countries around the world. Measures aimed at containing the virus and the economic crisis following Covid-19 impacted the solvency of individuals and businesses and restricted or prevented access to business premises for some time. This has resulted in delays and defaults in rent payment and claims for rent reduction. The Japanese and Italian legal systems have both addressed these issues by adopting different approaches. This article aims at comparing both systems, by testing the adequacy of the legal provisions in dealing with the consequences of the Covid-19 crisis. An important role in this regard has been played by the respective doctrines of changed circumstances. The article shows how the rules of the Italian legal system have not proved adequate, have brought about considerable litigation, which in turn has led to conflicting judgments. On the other hand, the Japanese legal system seems to have responded better, as litigation has been more limited and court decisions have been based on uniform principles and rules. The comparison of the two legal systems suggests that the best rules to govern supervening circumstances are those which favour a case-by case please insert caseby- case assessment and encourage spontaneous renegotiation of the contract. The article also raises the question of whether predictability should always be regarded as a value in our legal systems and whether the law is moving toward a more contextual approach.