Polish Contract Law

Is Polish law very different from English?

Until 1989 Poland had been a communist country with a legal system similar to USSR’s. Since then Polish law started to develop and eventually became as comprehensive as legal systems of countries of Western Europe. However, some differences remained. This website is intended to help you understand institutions of Polish contract law. You will also find here 7 most important things you should remember about when drafting or executing a contract under Polish law.

Sources of obligations: contract, tort and unjust enrichment

General rules of the contract law are set out in the Civil Code, in the part regulating obligations. There are three types of legal obligations in private law: contractual, torts and caused by unjust enrichment.

Contractual obligations – as its name would suggest – arise from contracts and – sometimes – from unilateral statements of will or actions. Unlike English law, Polish law provides for more ways than just offer and acceptance. There are two other ways: negotiations and auction (either oral or in writing). Sources of contractual obligations other than contracts include for example a public promise.

Offer and acceptance? Yes, but it is only one of a few methods of executing a contract

The rules of offer and acceptance provided for in the civil code are similar to those of the English law. However, they are not the same. For example, Polish law does not provide for the postal rule – the offer is considered made when it reaches the addressee in a way that enables him to read it. The Civil Code also provides for specific rules concerning executing contracts via electronic means of communication and offers made by business entities.

Consideration? Not necessary

Unlike English law, Polish law does not require any of the parties to give the other party any consideration. It only requires at least two statements of will to enter the contract and description of essential conditions. The essential conditions vary depending on the type of contract. For example, a contract of sale has to include the seller’s obligation to transfer the title and possession of the item, the buyer’s obligation to collect the item and indication of the price.

Governing law

Polish law contains a set of rules indicating which law governs a specific contract. However, the most important rule is that the parties are free to choose the governing law, as long as there is some connection between the contract and the country in which it applies. It is also worth to bear in mind that Poland is a party to the United Nations Convention on Contracts for the International Sale of Goods, which means that all contracts for international sale of goods executed with Polish companies will be subject to this convention, unless the other party has its 'place of business’ in a country that is not a party to the Convention or the contract provides otherwise. Also, one must remember that due to the fact that Poland is a member of the EU – the EU Regulation called „Rome I” applies in Poland.

Limitation periods

The Polish Civil Code provides for a very specific idea of time limitation of claims. Theoretically, they cannot expire due to the lapse of time. However, after a specified number of years they cannot be enforced in court. Although they theoretically exist, the creditor cannot sue the debtor. So in fact, it is almost the same as expiry. There is, however, one important difference – if the debtor pays his debt after the limitation period ended, he cannot claim it back. As a general rule, the limitation period is 6 years. 3 years if the creditor is a business entity. Limitation periods lapse on the last day of calendar year. Please note that there are special provisions concerning specific claims. Tort law claims have very different periods of limitation.

Termination and rescission

Just like English law, Polish law provides for two methods of ending a contract by one of the parties: termination and rescission. In both jurisdictions termination does not affect the implementation of the contract before the date of termination. Rescission results in the contract being nullified from the very beginning – from its execution. The Polish law provides for several situations when one of the parties may rescind the contract. Termination is usually provided for in contracts, but some provisions of the Civil Code provide for a right to terminate a contract that cannot one cannot waive.

There are also provisions allowing persons to rescind the contract in order to protect them from entering a complicated contract they do not fully understand. This applies i.a. to insurance contracts and contracts executed by consumers via telephone or the Internet. In the case of insurance contracts, the policyholder is entitled to rescind the contract within 30 days of its execution. If it is a business entity – just 7 days. In England this is called the ‘cooling-off period’.

Liquidated damages / penalty clauses

Unlike English law, Polish law does not provide for a distinction between liquidated damages clauses and penalty clauses. Under English law the former are valid and enforceable and the latter are null and void. Under Polish law even the severest penalty clauses are valid. However, if the penalty is too high, the court may lower it. Although there are no statutory indications how high the penalty should be for the court to intervene.

Please note that the above information is very general. Since Polish law introduces many exceptions to general rules, the above statements cannot be considered as a legal advice. In order to provide such advice, a lawyer would have to thoroughly examine each case.