Contracts Law in Poland: Quick Guide

Contracts Law in Poland: Legal Framework

Contracts law in Poland is governed by the Civil Code, which lays out the foundational principles, specific regulations, and the legal framework for agreements. This guide provides an overview of the key elements, principles, and types of contracts under Polish law.

What is a Contract in Poland?

A contract in Poland is defined as a consensual agreement between two or more parties, intended to create, modify, or terminate a legal relationship. The Civil Code is the primary source of regulations on contracts, covering:

1. General Principles of Contracts: Rules governing the formation, validity, and performance of contracts.
2. Specific Types of Contracts: Detailed provisions for common agreements such as sales contracts and service agreements.
3. Supplementary Provisions for Entrepreneurs: Tailored regulations to address the unique needs of business transactions.

The Principle of Freedom of Contract

The cornerstone of Polish contract law is the principle of freedom of contract, enshrined in Article 3531 of the Civil Code. This principle allows parties to freely shape their legal relationships, provided the terms:

• Do not contradict the nature of the relationship.
• Comply with statutory regulations.
• Align with principles of social coexistence.

While this principle offers significant flexibility, it is subject to limitations.

Limitations to Freedom of Contract

1. Statutory Restrictions: Contracts cannot violate binding legal provisions (“ius cogens”). Provisions conflicting with optional laws (“ius dispositivum”) may be overridden by the contractual terms.
2. Nature of the Legal Relationship: Contracts must respect the inherent characteristics of their type. For instance, a donation contract cannot exclude the donor’s right to revoke the gift in cases of gross ingratitude.
3. Principles of Social Coexistence: These principles reflect societal values, such as fairness, good faith, and equality. Courts interpret these norms on a case-by-case basis to ensure justice.

Consequences of Breaching Freedom of Contract

A contract that violates statutory law, principles of social coexistence, or the nature of the legal relationship is deemed invalid under Article 58 of the Civil Code.

• If only part of the contract is invalid, the remaining provisions may remain enforceable, provided the contract’s overall purpose is unaffected.
• In some cases, specific legal norms may provide alternative remedies, ensuring the contract’s continued effect.

Forms of Contract in Poland

Contracts in Poland can take various forms, depending on legal requirements or the parties’ preferences:

1. Oral Contract
2. Written Contract: Signed with a handwritten signature.
3. Documentary Form: Recorded on any medium, such as email or instant messaging.
4. Electronic Form: Signed with a qualified electronic signature under the eIDAS regulation.
5. Contract with a Date Certain: Includes an official stamp or notarial confirmation of the exact date.
6. Contract with Notarized Signature: Includes a notarized clause confirming the signatory’s identity.
7. Notarial Deed: Drawn up by a notary public.

Nominate and Innominate Contracts

Contracts in Polish law are categorized as either nominate or innominate:

Nominate Contracts

These are explicitly defined by the Civil Code, with detailed regulations regarding their content, form, and legal consequences. Examples include:

• Sales contracts
• Rental agreements
• Contracts for work
• Lease agreements
• Contract of mandate (referred as to B2B contract)

Nominate contracts provide greater legal certainty and streamlined dispute resolution.

Innominate Contracts

These are not explicitly regulated by law and are tailored by the parties within the bounds of the freedom of contract principle. Innominate contracts often combine elements of nominate contracts, creating unique agreements suited to specific needs, such as complex business ventures.

Termination, Rescission, and Dissolution of Contracts

Understanding the distinctions between termination, rescission, and dissolution is essential, as these concepts differ in structure, applicability, and legal consequences.

1. Mutual Termination (Dissolution): Both parties agree to end the contract, determining the terms and effective date. Flexible and requires mutual consent.
2. Unilateral Termination: One party declares its intention to terminate, typically after a notice period. Common for continuous contracts (e.g., rental or service agreements). No obligation to return previously performed services or benefits.
3. Rescission (Withdrawal): Unilaterally ends the contract, treating it as if it never existed. Requires both parties to return any benefits exchanged. Often applies to one-time performance contracts (e.g., construction contracts). Can be limited to future obligations if agreed upon by the parties.

Contracts Between Entrepreneurs and Consumers

Contracts can be categorized based on whether they are entered into between entrepreneurs or with consumers. Consumer contracts receive heightened protections, including:

1. Right to Withdraw: Consumers can withdraw from contracts concluded at a distance (e.g., online) within 14 days without reason.
2. Prohibition of Abusive Clauses: Unfavorable or unfair terms are deemed invalid.
3. Transparency Requirements: Entrepreneurs must provide full information on terms, price, and rights.
4. Enhanced Warranty Provisions: Consumers benefit from favorable warranty rules, such as presumed seller fault for defects arising within a year.

Damages for Breach of Contract

Under Polish law, damages for breach of contract include:

1. Actual Losses (Damnum Emergens): Direct depletion of assets, such as repair costs.
2. Lost Profits (Lucrum Cessans): Benefits reasonably expected but not realized due to the breach.

Key Points:

• No Punitive Damages: Compensation is limited to actual and foreseeable harm.
• Burden of Proof: Claimants must substantiate their losses, though courts may use estimates when precise calculations are impractical.

Liquidated Damages and Contractual Penalties

Liquidated Damages

These pre-agreed sums compensate for breach-related harm. Courts may adjust liquidated damages if they are deemed disproportionate.

Contractual Penalties

Distinct from liquidated damages, contractual penalties do not require proof of harm. They apply to non-monetary obligations and serve as a deterrent. Courts can reduce penalties deemed excessive.