Radkiewicz Lawyers Poland provides advice on issues related to commercial contracts, in particular loan agreements, licensing agreements and services agreements. We draw up civil law contracts that protect the interests of our clients in the most optimised way. We support our clients in contract negotiations. We also offer advice on project financing, in particular with regard to the establishment of collateral. Our clients include businesses operating in various parts of Poland.
Contract formation and the freedom of contract principle
In general, Polish law provides for the freedom of contract principle, meaning that parties to an agreement may shape their legal relationship at their own discretion. However, this does not mean that their freedom to structure the agreement is unlimited. The content and purpose of a legal relationship must not be contrary to its nature, the law or the so-called principles of social coexistence. Therefore, when drawing up agreements, the nature of a legal relationship must be considered. For example, it would be contradictory to the nature of a legal relationship if only one of the contracting parties was granted the right to amend the agreement.
Types of contracts
The Polish Civil Code identifies such types of contracts as: sales contract; supply contract; contract for a specific work (umowa o dzieło); construction works contract; tenancy contract (umowa najmu); tenancy contract with right to profits (umowa dzierżawy); lease contract (umowa leasingu); loan contract; mandate contract (umowa zlecenia); agency contract; transport contract; freight forwarding contract; insurance contract; storage contract and partnership agreement.
Civil law contracts – essential terms
The provisions of each of the contracts specified in the Civil Code can be divided into two groups. The first group includes the essential terms (essentialia negotii) which must be included in the agreement for it to be effectively executed. The second group includes optional terms (accidentalia negotii), i.e. provisions that may be included in the agreement but the lack of which does not render the agreement invalid.
The essential terms of a sales contract are as follows:
- the seller’s obligation to transfer the ownership of the goods and to hand over the goods to the buyer; and
- the buyer’s obligation to collect the goods and pay the price.
These elements must be included for the valid conclusion of the contract. Negotiating a sales contract may of course concern additional elements, such as the date of delivery of the goods or the date of payment of the price.
Performance of contracts
A contract should be performed in accordance with its provisions, in a manner consistent with its social and economic purpose, the principles of social coexistence and the established customs. Moreover, a contract shall be performed with due diligence. If a party performs the contract within the scope of their business activity, due diligence is determined taking into account the professional nature of such activity.
Parties must perform the contract in person only if such obligation results from its provisions, the applicable Polish laws or the nature of the performance. Where the debtor is obliged to render performance of things specified as to their kind only, and the quality of the things has not been determined by relevant legal provisions, the agreement, nor does it not result from the circumstances, the debtor should render the performance of things of average quality.
Commercial contracts and an extraordinary change of circumstances
According to one of the fundamental principles of civil law, agreements must be kept (pacta sunt servanda). However, Polish law provides for a number of derogations from this principle, including the rebus sic stantibus clause (contained in the Civil Code). Under this clause, if an extraordinary change of circumstances – that the parties did not foresee when concluding the agreement – would render performance of the agreement excessively difficult or it would create a risk of serious loss for one of the parties, the court, having considered the interests of the parties may, in accordance with the principles of social coexistence, determine the manner of performance of the agreement, the amount to be provided, or decide to terminate the agreement. Additionally, when terminating the agreement, the court may, where necessary, rule on the settlements between the parties.
Improper performance of contracts
In principle, both parties to a reciprocal contract (e.g. a contract for a specific work) should perform at the same time. The parties may agree that one of them would perform the agreement earlier. However, if – due to the other party’s financial standing – it is doubtful that such party is going to perform the agreement, the party obliged to perform earlier may refrain from doing so. However, such right is not applicable if the parties were aware of each other’s financial standing at the time of conclusion of the agreement.
In the event of a delay in the performance of a reciprocal agreement by one of the parties, the other party may set a reasonable time limit for the performance, following the lapse of which it is entitled to withdraw from the agreement.
Contract lawyer – Warsaw, Poland
In conclusion, it is important that parties wishing to enter into a legal relationship execute a valid contract, precisely specifying its subject matter and any possible circumstances that may affect the performance of the contract upon its conclusion. Proper contract drafting reduces the risk of its improper performance by the parties. Radkiewicz Lawyers Poland supports clients operating across Poland in the process of contract formation, from the negotiations stage to the drawing up of the agreement.
We draft both consumer contracts and contracts between businesses. Our services include drawing up of such agreements as sales contract, tenancy contract, loan contract or contract for services. If necessary, we also actively participate in negotiations of disputed contractual provisions. Our office is located in Warsaw at 59 Złota Street. To contact us by phone, please call: +48 22 489 52 65.
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