Contract Law in Poland PDF

Contract Law in Poland

FOURTH EDITION
PIOTR MACHNIKOWSKI, JUSTYNA BALCARCZYK & MONIKA DRELA
Derived from the renowned multi-volume International Encyclopaedia of Laws, this

practical analysis of the law of contracts in Poland covers every aspect of the subject
– definition and classification of contracts, contractual liability, relation to the law
CONTRACT LAW
of property, good faith, burden of proof, defects, penalty clauses, arbitration clauses,
remedies in case of non-performance, damages, power of attorney, and much more.
Lawyers who handle transnational contracts will appreciate the explanation of
IN POLAND
fundamental differences in terminology, application, and procedure from one legal
system to another, as well as the international aspects of contract law. Throughout
the book, the treatment emphasizes drafting considerations. FOURTH EDITION
An introduction in which contracts are defined and contrasted to torts,
quasi-contracts, and property is followed by a discussion of the concepts of PIOTR MACHNIKOWSKI

‘consideration’ or ‘cause’ and other underlying principles of the formation of
contract. Subsequent chapters cover the doctrines of ‘relative effect’, termination of JUSTYNA BALCARCZYK
contract, and remedies for non-performance. The second part of the book, MONIKA DRELA
recognizing the need to categorize an agreement as a specific contract in order to
determine the rules which apply to it, describes the nature of agency, sale, lease,
building contracts, and other types of contract. Facts are presented in such a way
that readers who are unfamiliar with specific terms and concepts in varying contexts
will fully grasp their meaning and significance.
Its succinct yet scholarly nature, as well as the practical quality of the information it
provides, make this book a valuable time-saving tool for business and legal
professionals alike. Lawyers representing parties with interests in Poland will
welcome this very useful guide, and academics and researchers will appreciate its
value in the study of comparative contract law.
Fourth Edition
Piotr Machnikowski
Justyna Balcarczyk
Monika Drela
This book was originally published as a monograph in the International

Encyclopaedia of Laws/Contracts.
Founding Editor: Roger Blanpain

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Volume Editor: Jacques Herbots
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The Authors
Prof. Dr Piotr Machnikowski obtained his master’s in Law

(1997) and doctorate (2001) and habilitation (2006) in Civil
Law from the University of Wrocław, Poland. In 2011, he
became professor of jurisprudence and from 2013 to 2015
was a member of Polish Codification Commission for Civil
Law. From 1997 onwards, he has taught at the University
of Wrocław, Faculty of Law, Administration and Econom-
ics. Presently, he is the head of the Department of Civil Law
and International Private Law. Professor Machnikowski is
an associate member of the International Academy of Com-
parative Law and member of European Law Institute. He is
also member of European Research Group on Existing EC
Private Law (Acquis Group) and European Group on Tort Law. He is co-editor and
co-author of the Commentary to the Polish Civil Code, co-author of a fundamental
academic work System Prawa Prywatnego (‘System of Private Law’) and author of
numerous publications in the field of civil law. He is also a member of the Board of
Editors of the scientific quarterly Studia Prawa Prywatnego (‘Studies of Private
Law’).
Dr hab. Justyna Balcarczyk studied law at the University of

Wrocław (1996–2001), University of Bari, Italy
(1998–1999) and University of Padua, Italy (1999–2001).
She obtained her doctorate and habilitation in Civil Law
from the University of Wrocław as well as an LLM from
International and American Law (Columbus School of
Law, Washington DC). She is a qualified Polish attorney
and US barrister and has worked for international law firms
in civil law. Dr Balcarczyk worked as Lecturer of Civil
Law, Conflict of Law and Intellectual Property Law at the
University of Wrocław. She is an author of numerous pub-
lications in the field of civil law.
3
The Authors
Dr Monika Drela studied Law at the University of Wrocław

where she obtained a degree in Law with a thesis on agency
contract. She also studied at L’Ecole Nationale Superieure
des Mines de Saint-Étienne branch (2000–2002) and
obtained a title, Mastere Spécialisé en Management des
Grands Projets et Programmes. In 2004, she obtained a doc-
toral degree in Civil Law from the University of Wrocław.
She teaches Civil Law at the University of Wrocław and
practises as a barrister. She is the author of numerous pub-
lications in the field of civil law and culture goods protec-
tion law.
4
Table of Contents
The Authors 3
List of Abbreviations 13
Preface 15
General Introduction 17
§1. THE GENERAL BACKGROUND OF THE COUNTRY 17

I. History 17
II. Geography, Population Statistics and Cultural Composition 22
III. Political System 24
§2. POLISH LAW AND LEGAL FAMILIES 25
§3. POLISH LAW AS A STATUTORY LAW 25
§4. THE POSITION OF THE JUDICIARY 26
§5. DISTINCTION BETWEEN PUBLIC LAW AND PRIVATE LAW 26
§6. DISTINCTION BETWEEN CIVIL LAW AND COMMERCIAL LAW 27
Introduction to the Law of Contracts 29
§1. DEFINITION OF CONTRACT 29
§2. HISTORICAL BACKGROUND OF THE LAW OF CONTRACTS 30
§3. CLASSIFICATION OF CONTRACTS 32

I. Obliging Contracts and Disposing Contracts 32
II. Consensual and Real Contract 32
III. Onerous and Gratuitous Contracts 33
IV. Reciprocal (Synallagmatic, Mutual) Contracts 34
V. Nominate and Innominate Contracts 34
VI. Preliminary Agreement 35
VII. Other Types of Contracts 36
A. Framework Contracts 36
B. Fiduciary Agreements 36
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Table of Contents
C. Random Contracts 37
§4. CONTRACT AND TORTS 37

I. General Conditions of Liability in Damages 37
II. Non-performance of an Obligation and Tort as Two Regimes of
Liability 37
III. Interference with Contractual Rights 38
§5. CONTRACT AND QUASI-CONTRACT 40
§6. CONTRACT AND THE LAW OF PROPERTY 40
§7. CONTRACT AND TRUST 41
§8. GOOD FAITH AND FAIR DEALING 42
§9. STYLE OF DRAFTING 42
§10. SOURCES OF THE LAW OF CONTRACTS 43
Part I. General Principles of the Law of Contract 47
Chapter 1. Formation 47
§1. AGREEMENT AND QUID PRO QUO (RECIPROCITY) 47

I. Offer and Acceptance, Negotiations, Tender 47
A. General Remarks 47
B. Offer and Acceptance 48
C. Negotiations 51
D. Auction and Tender 52
II. Intention to Create Legal Relations 53
III. Consideration 55
A. No Requirement of Consideration in Polish Legal System 55
B. Gratuitous Promises 55
C. ‘Natural Obligations’ 56
IV. Modifications of the Contract 57
§2. FORMAL AND EVIDENTIAL REQUIREMENTS 57

I. Formal Requirements 57
A. Contracts under Seal 57
B. ‘Solemn’ Contracts 57
II. Evidential Requirement: Proof 59
A. The Parol Evidence Rule 59
B. Function of the Notary 61
III. Burden of Proof 61
A. Distinction Between ‘Obligation of Means’ and ‘Obligation
of Result’ 63
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Table of Contents
§3. LIABILITY AND NEGOTIATIONS 64

I. Pre-contractual Liability 64
II. Breakdown of Negotiations 66
Chapter 2. Conditions of Substantive Validity 68
§1. CAPACITY OF THE PARTIES 68
§2. DEFECTS OF CONSENT 70

I. General Remarks 70
II. Defects That Cause Invalidity 71
III. Mistake and Fraud 73
A. General Remark 73
B. Mistake 74
C. Fraud 75
IV. Improper Pressure 75
V. Gross Disparity 77
§3. OTHER CONDITIONS OF VALIDITY 80

I. Existing and Licit Cause 80
II. Determinable Object 80
III. Initial Impossibility 81
IV. Illegality and Public Policy 82
§4. THE CONSEQUENCES OF A DEFECT OF CONSENT OR A LACK OF

SUBSTANTIVE VALIDITY 85
I. Nullity (Invalidity) 85
II. Avoidance of the Contract 87
III. Damages 88
Chapter 3. The Contents of a Contract 89
§1. THE DIFFERENT CLAUSES 89

I. Ascertaining of Express Terms; Implied Terms 89
II. Standard Terms and Exemption Clauses 91
A. Standard Terms 91
B. Exemption Clauses 95
III. Penalty Clauses 96
A. Contractual Penalty 96
B. Deposit Payment 99
IV. Arbitration Clauses 100
§2. INTERPRETATION 100
§3. CONDITIONAL CONTRACTS 106
7
Table of Contents
Chapter 4. Privity of Contract 108
§1. THE RULE OF PRIVITY OF CONTRACT 108

I. Introduction 108
II. Third Parties and the Contract 108
III. Contract for the Benefit of a Third Party 109
§2. TRANSFER OF CONTRACTUAL RIGHTS AND OBLIGATIONS 110

II. Transfer of Rights: Assignment Contract (Cession of Right) 111
A. Assignment of Claim 111
B. Subrogation of Creditor (Cessio Legis) 115
III. Transfer of Obligations 116
§3. THE SPECIAL CASE OF A ‘SUB-CONTRACT’ IN BUILDING CONTRACTS 118
§4. ACTIO PAULIANA 119
Chapter 5. Termination of the Contract 123
§1. PERFORMANCE AND BREACH 123

I. Performance 123
II. Breach of Contract 132
§2. IMPOSSIBILITY, FRUSTRATION AND HARDSHIP: ‘THE UNFORESEEN’ 133

I. Impossibility of Performance 133
A. Notion of Impossibility 133
B. Initial Impossibility of Performance 134
C. Subsequent Impossibility of Performance 134
II. Frustration and Hardship 136
§3. DISCHARGE BY AGREEMENT 138

I. The Agreement to Discharge Contract 138
II. Discharge by Operating the Competence by Unilateral Act of
One Party 140
Chapter 6. Remedies 142
§1. GENERAL PROVISIONS 142
§2. SPECIFIC PERFORMANCE 142
§3. TERMINATION 143

II. Difference Between Rescission and Termination 144
III. Form of Termination Notice 145
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Table of Contents
IV. Rescission of Contract and the Property Transfer 145

V. Rescission under the Competence Clause 146
§4. EXCEPTIO NON-ADIMPLETI CONTRACTUS (THE DEFENCE OF NON-

PERFORMANCE BY THE OTHER PARTY) 146
§5. FAULTY BEHAVIOUR OF THE DEBTOR 147
§6. LIMITATION OF ACTIONS 151
§7. DAMAGES AND EXEMPTION CLAUSES 154
§8. RESTITUTION 156
Part II. Specific Contracts 159
Chapter 1. Agency 159
§1. GENERAL REMARKS 159
§2. OBLIGATIONS OF THE PARTIES 160
§3. TERMINATION OF THE AGREEMENT 162
Chapter 2. Bailment 165
§1. INTRODUCTORY REMARKS 165
§2. SAFE-KEEPING 165
§3. CONTRACT OF STORAGE 166
§4. CAUTION 167
§5. LIABILITY OF PERSONS RUNNING HOTELS AND SIMILAR

ESTABLISHMENTS AND LIMITATION OF CLAIMS 167
Chapter 3. Gaming and Wagering 169
§1. GENERAL OVERVIEW 169
§2. GAMING AND WAGERING CONDUCTED ON THE BASIS OF THE

RELEVANT ADMINISTRATIVE PERMIT 169
§3. GAMING AND WAGERING CONDUCTED WITHOUT THE PERMIT BUT

BEING ALLOWED AND HONEST 169
9
Table of Contents
Chapter 4. Sale of Goods 171
§2. PROPERTY TRANSFER 172
§3. SUBJECT MATTER OF SALE CONTRACT 173
§4. DELIVERY OF GOODS 173
§5. PRICE AND PAYMENT 174
§6. PRESCRIPTION 175
§7. WARRANTY IN LAW 176

I. General Overview 176
II. Physical and Legal Defects 176
III. Remedies 177
IV. Time Limits 178
§8. QUALITY GUARANTEE 178
§9. REMEDIES IN CONSUMER SALE 179
§10. PRE-EMPTION RIGHT 179
Chapter 5. Building Contracts, Hire of Work and Skills 181
§1. GENERAL OVERVIEW 181
§2. CONTRACT OF SPECIFIC WORKS 181

I. Introductory Remarks 181
II. Rights and Obligations of the Parties 181
III. Termination of the Contract of Specific Works 184
§3. BUILDING CONTRACTS 184
Chapter 6. Lease, Commercial and Agricultural Leases 187
§2. RIGHTS AND OBLIGATIONS OF THE PARTIES 187
§3. TERMINATION OF LEASE AND USUFRUCT LEASE 189
§4. SITUATION OF NEW LESSOR 191
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Table of Contents
§5. LEASE OF COMMERCIAL AND RESIDENTIAL PREMISES 192

I. Situation of the Lessee of the Premise 192
II. Termination of Rent 193
III. Special Regulation of the Act 193
Chapter 7. Compromise Settlement 196
Chapter 8. Suretyship 197
Chapter 9. Pledge 199
§2. THE PLEDGE CONTRACT AND ITS CONTENT 200
§3. SATISFACTION OF THE PLEDGEE AND EXPIRY OF THE PLEDGE 201
§4. PLEDGE ON RIGHTS 201
Chapter 10. Loans 203
§2. OBLIGATIONS OF THE PARTIES 203
§3. SPECIAL REGULATIONS 204
Chapter 11. Contracts with the Government and Other Public

Administrations 205
Chapter 12. Contract of Partnership 208
§2. THE PARTNERS’ DUTIES AND OBLIGATIONS 209
§3. TERMINATION OF THE PARTNERSHIP 210
Chapter 13. Quasi-Contracts 212
§1. NEGOTIORUM GESTIO 212
§2. UNJUSTIFIED ENRICHMENT 213
§3. MONEY PAID BUT NOT DUE 214
11
Table of Contents
Selected Bibliography 215
Index 221
12
List of Abbreviations
ABGB Allgemeines Bürgerliches Gesetzbuch

CC Civil Code
BGB Bürgerliches Gesetzbuch
CCP Code of Civil Procedure
CISG United Nations Convention on Contracts for the International Sale of
Goods
CRL Consumer Rights Law
CUC Act of 16 April 1993 on Combating Unfair Competition
OSN Orzecznictwo Sadu Najwyższego
13
List of Abbreviations
14
Preface
This work is aimed at giving foreign lawyers an overview and introduction to the
Polish contract law as well as references for a further search. It is hoped to offer a
broad view on the rules of general part of civil law and law of obligations.
Poland has a strong pre-war tradition of continental civil law and now is a mem-
ber of the European Union (EU). After the collapse of the communist system, Pol-
ish contract law has been readjusted to the standards of market economy. Therefore,
many rules of Polish contract law may be familiar to foreign readers with some
comparative background.
In order to show the historical and social foundations of the evolution of Polish
law and to indicate various sources of influence, the authors give a broad introduc-
tion as to the country’s history and its contemporary social structure.
Authors hope that the reader will not only get acquaintance with basic theoretical
aspects of Polish contract law but also be able to find relevant source of law, Polish
literature or court decision. As to the judgments, the most important court cases are
quoted with the references to the date when they were issued and their number. Fur-
thermore, the common court’s approach to certain other issues is also suggested.
The law is stated as of October 2019.
15
Preface
16
1–1
General Introduction
§1. THE GENERAL BACKGROUND OF THE COUNTRY
I. History
1. People have lived in the area that is now Poland for the last 7,500 years. The
Slavic tribes settled there more than 1,500 years ago, and Poland as a state emerged
in the tenth century. The first leader known from written sources was Mieszko I, a
ruler of the tribal union who converted to Christianity (in its Western Latin Rite) in
966. The conversion is regarded as the founding event of the Polish state. Mieszko
began the Piast dynasty that led the country for the first 400 years of its existence.
The country, however, has undergone a 200-year long period of fragmentation, dur-
ing which it consisted of several independent principalities. The Kingdom of Poland
was unified again at the beginning of the fourteenth century by the penultimate ruler
of the Piast dynasty, Wladyslaw. The state, however, was substantially different
from what it was before the fragmentation. The most highly developed and eco-
nomically strong of the ethnically Polish lands – Silesia and Pomerania – were left
outside the Kingdom’s borders and the lower Vistula was controlled by the Teu-
tonic Order. The fragmentation period had a lasting and harmful impact on the sta-
bility of the state because it weakened the central power and expanded the rights
and privileges of the landowners (who formed the nobility class) at the ruler’s
expense. Wladyslaw’s son Casimir the Great, last of the Piast dynasty, stabilized the
western and northern borders, regained few of the lost territories and conquered
some eastern regions that were ethnically non-Polish. He integrated the country,
established or strengthened statewide institutions and implemented important inter-
nal reforms, among them a great monetary reform. Among other achievements, he
established in 1364 the University of Kraków, the second oldest university in cen-
tral Europe. Kazimierz died heirless in 1370 and with his death, the period of
hereditary monarchy in Poland ended.
The landowners and nobles opted for a constitutional monarchy and such were
established between 1370 and 1493. Louis of Hungary of the Angevin Dynasty
received the nobility’s support in his attempt to the Polish throne in exchange for
far-reaching guarantees and privileges. As Louis had no sons, the Polish nobility
agreed to extend the Angevin succession to his daughters in return for unprec-
edented concessions such as tribute release, release of building and repairing castles
(with the exception of war), towns and bridges, and king’s duty to pay nobles for
fighting in the war. After Louis’ death in 1382, the Polish nobility decided that
Louis’ youngest daughter Jadwiga, who was 9 years old then, would become the
17
1–1 General Introduction
next ruler. Jadwiga, later known as Saint Hedwig of Poland, patron saint of United
Europe, was crowned ‘King of Poland’ in 1384.
Mostly for the military purposes (because of the threat from the Teutonic Order)
Jadwiga signed in 1385 the treaty with Jogaila (Jagiello), the Grand Duke of Lithua-
nia, establishing the Polish–Lithuanian Union. The treaty was intended to create one
state under King Jagiello, but it took more time for the idea to be accomplished.
Between 1386 and 1572, Poland and Lithuania were ruled by a succession of con-
stitutional monarchs of the Jagiellon dynasty. It has to be stressed that the Jagiel-
lons were not entitled to automatic hereditary succession, and each new king had to
be approved by nobility. During this period, the king’s role was constantly dimin-
ishing while the nobility’s influences were increasing. The nobility split into two
layers – the higher class of the magnates and the lower class of ordinary gentry
(szlachta). The former soon excused themselves from the duty of mandatory mili-
tary service in case of war and coerced the king to enact the Nihil Novi Constitu-
tion of 1505, which required the king to consult the parliament, made up of highest
level officials (the senate) and the regional deputies (lower chamber), before enact-
ing any changes. Nevertheless, the Jagiellon Era is a period of maximum political
power and great prosperity of Poland, often referred to as the Golden Age of Polish
state and culture. The economic prosperity was mostly based on the farming and
grain trade, and it lasted as long as the grain market was growing.
Grand Duke of Lithuania, Jogaila, was elected as King of Poland in 1386, after
he converted to Christianity and married Jadwiga. He ruled under the name Wla-
dyslaw II Jagiello. In a series of successful campaigns, Jagiello and his heirs
defeated the Teutonic Knights but never entirely conquered the Teutonic state,
which later transformed into the Prussian state and played a crucial role in Polish
and European history of eighteenth, nineteenth and twentieth centuries.
Turkish invasions and the growing of the Grand Duchy of Moscow drew Poland
and Lithuania closer together, which resulted first in the personal union in days of
the last Jagiellons and then in establishing the common state. This was done by the
Union of Lublin in 1569. The union established a federative state of two nations
with one person as a king and grand duke, common legislature and customs union
but with separate territories, armies, laws, treasuries and administrations. The state
called Rzeczpospolita (‘Respublica’, or ‘Commonwealth’) was one of the largest in
Europe, comprising about 650,000 square kilometres and some 11 million inhabit-
ants – Poles, Lithuanians, Ruthenians, Germans, Jews and small numbers of Tatars
and Armenians. The society was multi-faith, comprised of Roman Catholics, Prot-
estants, Eastern Orthodox, Jews and Muslims. It has to be stressed that since the
thirteenth century and especially during the reign of Jagiellons Poland was a coun-
try of religious freedom and tolerance. Beginning from 1264 royal edicts guaran-
teed safety and religious freedom to Jews, who were persecuted in Western Europe,
mostly after the Black Death of 1348–1349. Jewish immigration strongly supported
the state economy and influenced its culture. At the end of the Jagiellonian Era, 80%
of the world’s Jews lived in Poland.
Last of Jagiellons, Sigismund II died in 1572 without any heirs and with no rules
of election established. After debate, it was decided that the next king would be
elected by the entire nobility in a so-called free election. The first king elected in
18
General Introduction 1–1
direct vote was Henry of Valois, the brother of the king of France (he soon aban-
doned the throne to become king of his homeland). After the election, he accepted
a document called Henrician Articles that formed a sort of contract between the king
and the nobility. Henrician Articles, which were then presented to each king-elect,
stated the fundamental principles of constitutional order in the Commonwealth. The
Articles stipulated that a king could be elected only by ‘free election’ with no right
of inheritance. Every two years, he had to call a parliament and between the par-
liament meetings Council comprising sixteen senators would be at the king’s side
to advise and supervise him. The king had no right to create new taxes, call levy in
mass or declare war or peace without the approval of parliament. Incorporated into
the Articles was the Warsaw Confederation – a document of 1573 in which repre-
sentatives of all the major religions pledged each other mutual support and toler-
ance. The nobility reserved to itself the right to refuse obedience to the king and to
raise rebellion if the king broke the laws of the Commonwealth.
The state soon became dominated by the nobility. Despite the difference in wealth
and education, all members of the nobility were equal in political rights. The con-
stitutional system called nobility democracy, where almost 10% of the country’s
inhabitants were entitled to vote seemed far ahead of its time but soon turned out to
be disastrous since the absolute monarchies in neighbouring countries were gaining
power. Those elective kings who had strong personalities like Stefan Batory in the
sixteenth century or Jan III Sobieski in the seventeenth century were able to keep a
balance between conflicting internal powers – the king itself, the lesser nobility and
the magnates and to preserve the state’s integrity. Generally, however, the state was
becoming unstable and hard to control. Repeated Tatar invasions and Cossack upris-
ings and continuing wars against Sweden and Russia during the seventeenth cen-
tury weakened the Commonwealth and took the life of one-third of its citizens. The
productivity of agriculture and grain export diminished. Political authority was in
deep crisis. One of the reasons was the state’s financial weakness. With no income
from new taxes (opposed by the parliament), the state budget was more than thirty
times smaller than in France. The other reason was that democracy started to trans-
form into anarchy since the practice of liberum veto appeared in the late 1600s. Una-
nimity was essential for passing laws in order to protect the nobility’s freedom.
Hence, a single negative vote was sufficient not only to reject the proposed act but
also to block the parliament’s whole proceedings. In the eighteenth century the veto
was often used by the magnates and later by foreign powers who corrupted depu-
ties. At the same time, the Russian Tsars and the Hohenzollerns, electors of Bran-
denburg and dukes of Prussia, were getting more and more powerful.
The movement towards reforming the country in order to preserve its indepen-
dence started in the second half of the eighteenth century, certainly too late. It did
not prevent the First Partition of Poland, in which neighbouring states, that is, Prus-
sia, Russia and Austria, took large fragments of Commonwealth’s territory. The
movement for reform had its greatest achievement in gathering the Four-Year Sejm
(the Great Sejm, 1788–1792), which adopted the Constitution of 3 May (1791), the
first modern constitution in Europe.
The Constitution transformed the country into a democratic constitutional mon-
archy, based on the political equality between townspeople and nobility and sepa-
ration of powers. Unfortunately, war in defence of the constitution against Russian
19
military intervention and an anti-constitutional alliance of conservative magnates

was lost. So in the short run the Great Sejm resulted in Second Partition (1793, in
which only Russia and Prussia participated), and then, after the suppressed
Kościuszko Rising, Third Partition (1795) by which Russia, Prussia and Austria
divided among them the remains of Polish territory and wiped the names ‘Poland’
and ‘Lithuania’ off the map of Europe. The Constitution of 3 May seemed to remain
just ‘the last will and testament of the expiring Fatherland’, as its authors (Hugo
Kollåtaj and Ignacy Potocki) said later on. In the long run, however, the Constitu-
tion was a milestone in the history of democracy and a root of the modern Polish
state. The memory of the constitution helped keep alive Polish aspirations for inde-
pendence for the next two centuries.
Except for the short episode of the Duchy of Warsaw, established under Napo-
leon I’s patronage (1807–1815), no independent Polish state emerged until the end
of World War I. Two national uprisings (in 1830 and 1863) were bloodily extin-
guished by partitioners.
The opportunity to regain freedom appeared after World War I, when two of the
partitioners were defeated and the third one was destroyed by the revolution. Inde-
pendence was proclaimed on 3 November 1918. The Treaty of Versailles confirmed
the country’s independence and determined its western borders. The eastern borders
were determined by Polish victory in the war of 1920 against Soviet Russia. The
war itself is recognized as one of the decisive events in the course of modern Euro-
pean history because Polish resistance restrained Soviet leaders’ ambitions to spread
the revolution all over Europe.
The first years of the Second Republic constituted a period of turmoil and heated
political arguments, which ended in 1926 with the coup d’état carried out by Józef
Pilsudski, politically moderate former independence movement activist and war
leader of 1920. The government under his control restored political stability but was
not able to resolve all the political and economic problems the young state had to
face. The ruling camp did not manage the task of working out a compromise with
ethnic minorities (especially Ukrainians) and lack of a realistic idea of the country’s
ethnic policy resulted in constant disturbances. Also the Great Depression seriously
affected the Polish economy. After Pilsudski’s death in 1935, his supporters com-
pletely lacked concept and charisma and so the country stagnated.
In contrast, Nazi Germany developed great military potential and kept putting
forward territorial demands. When on 23 August 1939 Germany and the Soviet
Union signed the Ribbentrop-Molotov non-aggression pact, which secretly pro-
vided for the partition of Poland into German and Soviet zones, the Second Repub-
lic’s fate was sealed. A few months earlier Poland had entered into a military
alliance with Britain and France, but when on 1 September 1939 German troops
attacked Poland, western allies declared a war on Germany but remained inactive.
On 17 September, the Soviet troops moved in and occupied eastern Poland and by
the end of September 1939, the Second Republic ceased to exist.
The Polish government resided in exile and an underground resistance movement
(the Home Army) was formed immediately. By 1944, the Home Army had some
380,000 men. About 200,000 Poles fought on western fronts and after the German-
Soviet war broke out some 400,000 Poles fought under the Soviet command, which
20
altogether made the fourth-largest troop contribution to the Allied war effort (after
the Soviets, the British and the Americans).
In April 1943, the Soviet Union broke relations with the Polish government in
exile and soon afterwards instituted their own, Communist-controlled government.
Since the pre-war, Polish territory was liberated from Nazis by Soviet Army, the
legitimate government’s position was very weak and the western powers, not inter-
ested in provoking conflicts with the Soviet Union, showed no support. The desper-
ate attempt at preserving the country’s independence was the Warsaw Uprising of
1944. It was planned and conducted by the Home Army with the expectation that
the city would be liberated by the forces loyal to the government in exile at the same
time as the Soviets would cross the Vistula. However, the Soviet headquarters
stopped the offensive for two months at the Vistula and waited until the uprising was
suppressed (with 200,000 deaths, both military and civilian) and the city was sys-
tematically levelled at Hitler’s personal order.
The war irreversibly destroyed Poland’s social structure. Invaders, Nazis as well
as Soviets, aimed at annihilation of the best educated and influential social classes.
About 6 million Polish citizens were killed by the Germans; half of them were Pol-
ish Jews. Only 10% of the dead were fighting men, and the others were civilians
killed in prisons, death camps, executions and annihilation of ghettos or died of star-
vation, excessive work and ill treatment. Some 2.5 million were deported to exter-
mination camps or for forced labour. During 1939–1941, 1.45 million people
inhabiting Eastern Poland were deported by the Soviet regime, approximately one-
third of them died. After the Nazi invasion of the USSR more than 100,000 Poles
in the eastern regions were killed by Ukrainian nationalists. There were 1 million
war orphans and over half a million war disabled. The country was devastated – it
lost 38% of its national assets (for comparison, France lost 1.5%). Half the pre-war
territory was incorporated into the Soviet Union and compensated with parts of Sile-
sia, Pomerania and East Prussia, so by an unprecedented political decision, the
country was shifted west by hundreds of kilometres. Mass relocations of the popu-
lation followed.
After the Yalta Conference, a government was formed that consisted of Commu-
nists and few democrats. The government was soon recognized by Western powers
that withdrew their recognition of the London government’s in exile legitimacy. As
Poland was undoubtedly left in the Soviet’s sphere of influence, they felt free to
strive for complete power. The elections of 1947 were rigged by the Communist
party, their secret police and Soviet Ministry of State Security (former NKVD) and
their results allowed to establish a regime dominated entirely by Communists. The
state was renamed to People’s Republic of Poland. Periodic protests (1956, 1968,
1970, 1976) were put down although some of them caused temporary changes in
policy and tempered the harshness of the regime for a moment.
The centrally planned economy was structurally flawed and unable to develop in
a degree comparable to free-market economies of the West. The Communists tried
to exceed limitations of their own system in the first half of the 1970s by making
use of Western credit, which soon resulted in insupportable debt burden (over USD
20 billion at the end 1970s) and total economic collapse. Organized forms of politi-
cal opposition developed since 1976. Anti-socialist feeling ran high especially after
21
Archbishop of Kraków, Cardinal Karol Wojtyla became head of the Roman Catho-
lic Church (1978) and as Pope John Paul II visited Poland in 1979. This and the
Communist Party’s blundering attempts to combat the economic crisis led to a wave
of protests that allowed for creation of a national union movement ‘Solidarity’ under
the leadership of a charismatic worker of the Lenin Shipyard in Gdańsk, an elec-
trician named Lech Wałesa. Within one year, 10 million Poles joined Solidarity and
the Communist Party’s authority was diminishing rapidly. On 13 December 1981,
General Wojciech Jaruzelski, the newly appointed Prime Minister and First Secre-
tary of the Communist Party, acting with total support of the Soviet Union and, in
fact, under strong pressure thereof, declared martial law. Army and police crushed
Solidarity by arresting virtually all its leaders and many other prominent figures of
Polish society. Most of the prisoners were eventually released within the space of
the next eighteen months, and martial law was rescinded in July 1983, but Solidar-
ity remained proscribed and its leaders harassed until the late 1980s.
The Communist’s inability to resolve economic problems and the progressing
demise of the Soviet Union forced the government to negotiate with Solidarity. The
‘round-table’ talks began in February 1989 and ended up with the agreement for
partly open parliamentary elections. It turned out to be an ignominious defeat of the
Communists since virtually all of the seats that were not reserved for Communist
Party and its supporting organizations were won by Solidarity. According to the
round-table agreement, the parliament elected Gen. Jaruzelski as president, but
Communists failed to form a government. On 12 September 1989, Solidarity activ-
ist Tadeusz Mazowiecki became the first non-Communist Prime Minister since
World War II. His government, with Leszek Balcerowicz as Finance Minister,
adopted a ‘shock therapy’ programme of economic reform, which aimed at rapidly
converting the Communist economic model into a free-market system and reinte-
grating Poland into the global economy. Despite the high social cost, the plan
proved a success. The Communist Party dissolved at the beginning of 1990 and the
country’s proper name, Republic of Poland was restored. President Jaruzelski’s term
was curtailed in October 1990 and by the end of the year, Lech Wałesa became the
first popularly elected President of Poland. The first free parliamentary elections
took place in 1991. Subsequent governments achieved other successes: a formal rec-
ognition of the western border by the reunited Germany, the dissolution of the War-
saw Pact (1991), the membership of the Council of Europe (1991), the evacuation
of Soviet troops from the country (1992), the admission to the Organisation for Eco-
nomic Co-operation and Development (1996) and North Atlantic Treaty Organiza-
tion (1999) and, finally, the accession to the European Union (2004).1
II. Geography, Population Statistics and Cultural Composition
2. Poland lies at the physical centre of the European continent. The country con-
sists almost entirely of lowlands within the North European Plain, but its southern
regions are the northern parts of the Beskid, Carpathian and Sudeten mountains. The
1. See N. Davies, God’s Playground, 2nd edn (Oxford: Oxford University Press, 2005) and N. Davies,
Heart of Europe: The Past in Poland’s Present (Oxford: Oxford University Press, 2001).
22
mountains separate Poland from Slovakia and the Czech Republic. Poland borders
Germany to the west, Russia and Lithuania to the northeast, and Belarus and
Ukraine to the east. To the north, the country is bordered by the Baltic Sea. The area
of Poland is 312,685 square kilometres, making it the ninth largest country in
Europe.
3. Before World War II, Polish society was multi-cultural and consisted of a
variety of ethnic communities. The southwestern province of Silesia and northern
province of Pomerania were inhabited by a significant minority of Germans. In the
southeast, there were important Ukrainian settlements while in all the towns and cit-
ies there were large concentrations of Jews. On the other side, the Polish ethno-
graphic area stretched eastward. Beyond the border, Belarus, Lithuania and western
Ukraine had a mixed population with Poles predominating in many cities and even
in some of the rural districts.
The war killed millions of Polish citizens and resulted in massive migrations as
the Yalta and Potsdam Conferences radically altered the country’s borders. The post-
war Polish People’s Republic, a Communist satellite state of the Soviet Union,
occupied an area 20% smaller than pre-war Poland and its borders were moved
westwards. The Jewish population was almost wholly annihilated in the Holocaust.
Several million Germans were deported according to the decisions taken at the Pots-
dam Conference. There were also compulsory, mass population transfers with the
USSR and fighting against the remnants of the Ukrainian Liberation Army in the
eastern territory was followed by the mass relocation of the Ukrainians in 1947.
As a consequence, the population of Poland became one of the most ethnically
homogeneous in the world. More than 95% of Poland’s people claim Polish nation-
ality, with Polish as their native tongue. Most communities of non-Poles are dis-
persed. Ukrainians (0.08%) are scattered in various southwestern and northern
districts. Belarusians (0.13%) and Lithuanians (0.01%) live in areas adjoining
Belarus and Lithuania, respectively. In the southern region of Upper Silesia, a sig-
nificant segment of the population tends to declare itself as Silesian (0.45%) or Ger-
man (0.4%). There are small communities of Roma (Gypsy) and Jews, mostly in
the cities.
4. Poland, with ca. 38,500,000 inhabitants, has the eighth largest population in
Europe and the sixth largest in the EU. It has a population density of 123 inhabit-
ants per square kilometre. More than 61% of inhabitants live in cities. The largest
metropolitan areas in Poland are the Upper Silesian Coal Basin centred on Katow-
ice (3.5 million inhabitants); Warsaw, the state capital (3 million); Kraków and
Lódź (each 1.3 million); the Tricity of Gdañsk-Sopot-Gdynia (1.1 million); Poznañ
and Wrocław (each 900,000).
The biggest transformation of the population of Poland was due to World War II.
Nearly 35 million people lived in Poland in 1939 and only about 24 million in 1946.
The decrease was caused mainly by war losses (the exact figure is the subject of
some controversy, 6 million is most commonly accepted). It was also caused by
changes in frontiers, as a result of which millions of Germans, and Ukrainians and
Belarusians were transferred into, respectively, Germany and Soviet Union and, at
the same time, millions of Poles were transferred from former Polish homelands that
23
were incorporated into the Soviet Union. These facts introduced long-term distor-
tions into demographic structures and trends. The post-war generation had an
unprecedented birth rate and another baby boom took place in the 1970s. The popu-
lation grew rapidly and returned to its pre-war level in 1977. The birth rate fell
sharply in the late 1980s and by the early twenty-first century the natural increase
rate was below zero. Now it is still close to zero level; both birth and death rates in
2008 were 9.94/1,000 population. In recent years, Poland’s population has
decreased because of an increase in emigration. Emigration, for both political and
economic reasons, was a permanent feature of Polish life since the nineteenth cen-
tury but since Poland’s accession to the EU it took on large proportions. The esti-
mated number of Poles who have emigrated to Western European countries since
2004 vary from 500,000 to 2 million. Net migration rate in 2008 was – 0.46
migrants/1,000 population. Polish society, although ageing, is still relatively young
with an average age of 37.3 years (male: 35.4 years and female: 39.3 years).
III. Political System
5. Poland is a unitary state and is divided into sixteen provinces called voivode-
ships (województwo), which are largely based on the country’s historic regions. The
voivode-ships are subdivided into districts (powiat), and these are further divided
into communes (gmina). Poland currently has 379 powiats (sixty-five of them are
cities with powiat status) and about 2,500 gminas.
Under the Constitution of 1997, the Republic of Poland is a democracy with the
mixed presidential-parliamentary form of government. The President is the Head of
State and commander-in-chief of the armed forces. He or she can veto an act of the
Sejm (lower house of the parliament) which in turn can override that veto with a
three-fifths majority vote. The president is elected by popular vote to a five-year
term of office.
Voters elect a bicameral parliament consisting of a 460-member lower house
(Sejm) and a 100-member Senate (Senat). The parliament is elected for a four-year
term. The Sejm is elected under proportional representation (the d’Hondt method).
Poland is a multi-party state but, with the exception of ethnic minority parties, only
candidates of parties receiving at least 5% of the total national vote can enter the
Sejm. The Senate is elected under a plurality bloc voting method. Poland grants uni-
versal suffrage at age 18. Laws must be adopted by both houses. The Senate has the
right to amend or reject a law passed by the Sejm, but the Sejm may override the
Senate’s decision with a majority vote.
The central government is headed by the Council of Ministers, led by a prime
minister. The Council of Ministers exercises the main executive power and is
responsible to the Sejm. The president nominates the Prime Minister and, on his rec-
ommendation, the cabinet, subject to the Sejm’s approval. However, the president
cannot dismiss the government, and it can be terminated only by the Sejm and solely
by a constructive vote of no confidence.
At the voivode-ship level, central government and local government coexist.
Administrative authority is shared between a voivode (wojewoda), who is the head
24
of governmental administration in the province and is nominated by the prime min-

ister, and an elected regional assembly (sejmik) and marshal (marszałek), who is an
executive elected by the sejmik.
At the lower levels, the whole power is vested in local government. The com-
mune, which is the state’s fundamental territorial unit, is governed by a council and
a directly elected mayor. The district is also governed by a council and the council
in turn elects the executive (starosta).
The constitution guarantees the independence of the judiciary and states that the
judiciary is represented to the other authorities by the National Judiciary Council.
The major judicial institutions are the Supreme Court (Sad Najwyższy), the Supreme
Administrative Court (Naczelny Sad Administracyjny) and the Constitutional Tribu-
nal (Trybunał Konstytucyjny). General courts comprise appellate, provincial and dis-
trict courts and deal with criminal, civil, family, labour and commercial matters.
An important role in the field of protection of rights is played by the Commis-
sioner for Civil Rights Protection (Rzecznik Praw Obywatelskich). As an ombuds-
man, he is responsible for guarding the observance and implementation of the rights
and liberties of Polish citizens and residents, of the law and of principles of com-
munity life and social justice.
§2. POLISH LAW AND LEGAL FAMILIES
6. Polish civil law belongs to the civil law tradition. Although it is one of the
European Continental systems, it cannot be recognized as any of the legal families
distinguished by the comparative law, which means that it cannot be recognized
either as the Germanic family oras a Roman family. A major part of the Polish con-
tract law has been created in the 1920s and 1930s with a great use of comparative
method, which is why it is an example of a hybrid system. Process of formation of
Polish contract law and influences it was subjected to shall be discussed below.
A structure of a Polish private law corresponds to the Pandect system. Therefore,
the contract law is not formally distinguished. Contract is treated as a kind of an act
in law. Regulation, which in other legal systems is recognized as the contract law,
in the Polish legal system is included in general regulations concerning civil law as
well as regulations concerning law of obligations.
§3. POLISH LAW AS A STATUTORY LAW
7. Polish law is a statutory law, which is clearly stated in Article 87 of the Polish
Constitution. The said provision sets out an exhaustive list of sources of Polish law
and establishes the hierarchy of Polish legal norms where some types of norms pre-
vail over others. The sources of law and the hierarchy of legal norms will be dis-
cussed below.
8. Custom, that is, the way of behaving that has been established for a long time
and is regarded by the people as binding, does not have the force of law. The same
applies to morality understood as the set of social rules and standards of right and
25
honest behaviour. Yet the significance of those rules should not be underestimated.
Numerous statutory provisions, especially in the area of contract law, refer to the
established customs or to the rules of morality (called ‘morals’ or ‘principles of
community life’) in order to enable the judge to take those non-legal rules and stan-
dards into account while deciding the case. These so-called general clauses and
especially references to the rules of morality are of particular importance as the
statutory law is abstract, general and rigid in its nature. The legislator cannot fore-
see all the possible future events and in exceptional circumstances simple applica-
tion of a general rule may lead to an unjust solution. Thanks to a general clause such
as morals, unusual cases may be treated individually.
§4. THE POSITION OF THE JUDICIARY
9. Previous judicial decisions are not authoritative statements of the law and
cannot serve as legal reasons for subsequent decisions. Nonetheless judgments of
the Supreme Court, especially those made with a seven-judge panel or the entire
membership of the Civil Law Chamber, seriously affect decisions made by lower
courts. Because of the Supreme Court’s authority, the lower courts usually follow
the interpretation of the statute and the legal reasoning expressed in its judgments.
§5. DISTINCTION BETWEEN PUBLIC LAW AND PRIVATE LAW
10. Division into a public and a private law is regarded as a basic division for
the structure of legal system, although criteria applied to the above-mentioned divi-
sion are hard to define in a precise way. A prevailing opinion states that regulation
method, understood as a concept of legal relations formation, is a proper division
criterion.
A private law method is a way of formation of relations between entities (legal
relations), which is characterized by the entities’ equal position. Therefore, there are
autonomous entities that have an equal legal position (in a formal way); each of
them has the same scope of competence and his influence on the other’s sphere of
rights and duties are subject to the same rules. A necessary element providing equal-
ity is a lack of possibility to unilaterally, authoritatively influence the other’s entity
sphere of rights and obligations. This possibility (subordination relation) is regarded
as typical for public law. If an entity, having the powers that may be applied in a
public law, is a subject to the private law (especially in contractual relations), this
entity is equal in relation to other entities subject to the private law. Another char-
acteristic feature of the private law is an autonomy of entities’ wills – ability to
cause legal effects by their own actions to the extent prescribed by legislature. The
third feature is the entities’ freedom to use the state coercive means in order to pro-
tect its rights.
Based on the above-mentioned criteria, it is regarded that the public law regu-
lates legal relations that include the entity (usually either a state body or a local
authority body), which is entitled to authoritatively influence a legal situation of the
other entity. If the entity does not comply with duties imposed by the public law,
26
there is a direct, automatic sanction of some form of coercive means, whereas the
private law regulates legal relations between autonomous entities, where subordi-
nation relation does not occur (however, it is not always factual equality). Another
feature of the private law is lack of state’s direct interference in case of failure to
comply with duties imposed by law.
The above-mentioned criteria, used to distinguish the private law from the public
law, cause that in any case of concluding contracts between public authority and dif-
ferent type of entity concerning proprietary matters, the regulations of the private
law are to be applied, mostly the regulations stipulated in the Civil Code (CC). A
term of ‘administrative contract’, as put in contrast to a term of a ‘private contract’,
can only refer to agreements concluded between administrative bodies (e.g.,
between a state body or a local authority body) concerning performance of public
duties. The ‘administrative contracts’ in this sense are not governed by the civil law
regulations.
§6. DISTINCTION BETWEEN CIVIL LAW AND COMMERCIAL LAW
11. The Polish civil law is based on the principle of unity, universality. Hence
there is no formal distinction between the civil law and commercial law and sepa-
rate source of law referring to commercial contracts. In particular, there is no com-
mercial code, which would stipulate separate rules governing contracts between
entrepreneurs. Contracts that are concluded by entrepreneurs, including contracts to
which both parties are entrepreneurs, are regulated by provisions of the CC and
other normative acts that the civil law is comprised of. Nevertheless it does not
mean that a professional nature of parties’ activity is neutral to the legal regulation
of the contract. Distinction between universal contracts, consumer contracts and
commercial contracts is made within regulation of the CC and some special norma-
tive acts. A part of the civil law provisions refers only to relations in which one party
is a consumer or only to relations in which either an entrepreneur or a special type
of an entrepreneur is a party.
Among regulations concerning entrepreneurs, there can be distinguished provi-
sions modifying some general provisions of the CC concerning this type of the sub-
ject of a legal relation (e.g., concerning formation of contract or professional
diligence) as well as regulations concerning contracts where only an entrepreneur
may be a party to (e.g., leasing, bank account, commercial agency, insurance,
storage).
27
28
12–13
Introduction to the Law of Contracts
§1. DEFINITION OF CONTRACT
12. A basic term of the Polish private law is not ‘a contract’ but a broader term
of ‘a legal act’ (‘an act in law’), which consists of different actions, according to
which subjects of law may create, terminate or change legal relations, that is,
acquire rights and accept duties.
Completion of legal act requires a declaration of the subject’s intent. Article 60
CC defines a ‘declaration of intent’ as any action of a person who is performing a
legal act that sufficiently expresses his or her intent. Contemporary civil law
departed from the psychological approach, which emphasizes a person’s ‘will fac-
tor’. In a recent publication, the declaration of intent is described as conventional
action (declaration) that regulates legal situation of subjects it refers to. Therefore,
it is assumed that the declaration of intent expresses a particular, objective mean-
ing, not necessarily corresponding with the content of psychological experience of
the person declaring his intent.2
13. A contract constitutes one example of the legal acts and is distinguished by
the criterion of quantity of parties involved. Based on the above-mentioned criteria,
following types of legal acts can be distinguished:
(1) Unilateral acts, which are performed by a declaration of intent made by one
party (e.g., power of attorney, public promise, remittance and acceptance of
remittance, declaration of withdrawal, termination of a contract, evasion of
consequence of declaration of intent).
(2) Resolutions, which express a common intent of a group of people (especially
bodies of legal persons); however, in order to adopt it, usually there is no need
for unanimity, but instead a specific majority of common declarations of intent
is sufficient.
(3) Contracts are defined by two features – in order to conclude a contract there
has to be more than one party involved, and unanimous declarations of intent
are required. The contracts may be bilateral or multilateral. Bilateral contracts
create a relation between a party that is entitled to receive certain performance
and a party that is obliged to perform; therefore, its main purpose revolves
2. See Z. Radwański, in Prawo cywilne – cze ść ogólna, vol. 2 of System Prawa Prywatnego, ed. Z.
Radwański (Warsaw: C.H. Beck, 2008), 14 ff.; P. Machnikowski, in Kodeks cywilny: Komentarz, ed.
E. Gniewek (Warsaw: C.H. Beck, 2008), 131 ff.
29
14–14 Introduction to the Law of Contracts
around settling conflicting interests. Multilateral contracts, in principle, refer

to a cooperation of parties (e.g., partnership contracts); therefore, in this kind
of legal relation it is usually hard to distinguish parties, which have conflict-
ing interests. There are however exceptions to these rules.3
§2. HISTORICAL BACKGROUND OF THE LAW OF CONTRACTS
14. The decline of the Polish state at the end of the eighteenth century resulted
in the ousting of Polish law – mostly uncodified – by foreign systems of law, namely
by the German law applicable in the western areas of the former Polish state, Aus-
trian law in its southern areas, and Russian law in the eastern and French in the cen-
tral areas (the French law was introduced by Napoleon in 1809 within the area of
the Duchy of Warsaw). Moreover, in a small number of areas of the former Com-
monwealth, the Hungarian law was applicable.
After Poland regained independence in 1918, the state needed to regain its func-
tionality, despite such internally diversified law. Thus, one of its most important
tasks was the unification of the legal system. For this purpose the Codification Com-
mission was established in 1919.
One of the first tasks of the Commission in the field of private law was to draft
a code of obligations. It was necessary in order to facilitate internal trade. The Com-
mission’s work was simplified by the fact that all legal systems, which were then
applied in Poland, were somehow based on the Roman Law. This meant that there
were no fundamental differences that the Commission had to face during its works.
Draft of the Obligation Code, whose primary referent was Professor Roman Long-
champs de Berier, was completed in 1933 and entered into force in 1934. It was a
fully modern regulation of obligation law, made in a specific way. Due to the fact
that through 200 years the Polish state was wiped out from a map of Europe and
different foreign legal systems were applied in Polish territory, the Polish legisla-
tors, who worked on the Obligation Code, were forced to use foreign regulations.
Foreign codes that were applied on Polish territory – that is, Bürgerliches
Gesetzbuch (BGB), Allgemeines Bürgerliches Gesetzbuch (ABGB) and the French
Code Civil (to a much lesser extent the Russian Svod Zakonov) were a natural
source of inspiration. The Commission comprised of eminent experts of foreign
legal systems, who were educated at occupant’s universities. In addition, however,
a special attention was paid to Swiss Obligationenrecht (vice-president of the Com-
mission was I. Koschembar-Łyskowski, a former professor of Roman law at the
University of Fribourg), as well as to the French-Italian draft of the time. The Code
of Obligation was therefore based on a strong comparative background. Neverthe-
less, its authors often believed that solutions adopted by foreign systems were not
adequate and could not be applied in Poland. Thus, they decided to adopt a con-
siderable number of completely new legal norms.
The Code of Obligations applied to all obligation relations – contractual rela-
tions, as well as relations arising from other events. The Obligation Code consisted
Radwański (Warsaw: C.H. Beck, 2008), 173 ff.
30
Introduction to the Law of Contracts 14–14
of a general part – provisions common for all obligation relations (sources and types
of obligation, including torts and unjustified enrichment, expiration of obligation,
assignment of rights, delegation of duties, actio Pauliana) and a specific part –
referring to obligations arising from specific types of contracts.4
The works of the Codification Commission were not completed due to the out-
break of World War II. When the war was finished, the works were resumed, but
they were influenced by the socialistic legal doctrine and models borrowed from the
Soviet legal system. At first, some of the general regulations from Obligation Code
were replaced by an act of 1950 –‘General provisions of civil law’. However, it did
not vary much from regulations applied until that date. Subsequently – in 1964 –
the CC was adopted. Adoption of the CC voided all previous regulations included
in the Code of Obligations.
It has to be explicitly stated that the CC of 1964 did not part with the tradition of
continental civil law, whose main embodiment was the Code of Obligations. The
most important change consisted in the introduction to the provisions concerning
particular units of nationalized and centrally managed economy; diversification of
ownership forms depending on a person who was an owner and special regulation
of some issues referring to contracts concluded between units of socialist economy.
In contract law, however, a continuation of a pre-war legal thought prevailed. Most
of the regulations of general part and law of obligations were repeating or slightly
modifying provisions of the 1933 Code of Obligations. The main feature of the CC
was its editorial diligence and a skilful use of a synthetic method, as opposed to a
casuistic way of drafting.5
This, in fact not a socialist approach to codification of the civil law, was
extremely useful after the change of the social-economic system. In two basic
amendments to the CC – dated as of 1989 and 1990 – provisions typical for a cen-
trally managed economy were removed and some of the classical legal institutions
disregarded by the socialistic legislature (e.g., a ‘rebus sic stantibus’ clause) were
restored. As an outcome thereof, the 1964 CC could serve as a legal basis for busi-
ness transactions once a market economy was re-introduced. Nonetheless, the 1964
CC, based on the 1933 Code of Obligation, represented a state of European legis-
lature from the beginning of the twentieth century.
From the beginning of the second half of the 1990s, the CC has been substan-
tially amended. The amendments were aiming at adjusting the CC to dynamically
evolving economic conditions, as well as they were implementing the acquis com-
munautaire, which was required after concluding a European Union Association
Agreement by Poland. The amendments varied in quality; therefore, the CC has lost
its integrity and plainness, especially in the field of contract law. Furthermore, it is
held that more radical changes cannot be made within the framework of the CC at
4. See L. Górnicki, Prawo cywilne w pracach Komisji Kodyfikacyjnej Rzeczypospolitej Polskiej w

latach 1919–1939 (Wrocław: Wydawnictwo Uniwersytetu Wrocławskiego, 2000); S. Grodziski,
‘Prace nad kodyfikacja i unifikacja polskiego prawa prywatnego (1919–1947)’, Kwartalnik Prawa
Prywatnego 1–4 (1992).
5. See W. Czachórski, ‘Przebieg prac nad kodyfikacja prawa cywilnego PRL’, Studia Prawnicze 26–27
(1970); L. Górnicki, in Prawo cywilne – cze ść ogólna, vol. 1 of System Prawa Prywatnego, ed. M.
Safjan (Warsaw: C.H. Beck, 2007), 101 ff.
31
its present shape. That is the reason why works on a new draft of the CC have been
initiated in the 2000s, although they were stopped in 2015.6
§3. CLASSIFICATION OF CONTRACTS
I. Obliging Contracts and Disposing Contracts
15. In the Polish law, a term ‘contract’ is common for all areas of the private law,
and it is based on legal act’s features and not on a content of a legal act or its con-
sequences. This is the reason for distinguishing two types of contracts, depending
on how the contract influences the assets that are in the possession of a party to the
contract. Obliging contracts are deemed to be contracts, where at least one party to
the contract is obliged to perform. Disposing contracts, on the other hand, cause
changes in proprietary subjective rights of the party to the contract, that is, transfer,
limitation, encumbrance or repeal of the subjective right (e.g., transfer of owner-
ship, cession of receivables, establishing of a mortgage).
With regard to the contracts that oblige the party to the contract to dispose of the
subjective right, the Polish civil law adopted a concept of a ‘double effect’ (Articles
155§1, 510§1, 1052§1 CC). The concept of a ‘double effect’ means that a single
obliging contract (e.g., sale contract that obliges to transfer of ownership) causes
both ‘obliging effect’ and ‘disposing effect’, unless the statutory law or the parties
to the contract state otherwise.7
II. Consensual and Real Contract
16. Most of the contracts come into force in a moment of unanimous declara-
tions of intent made by parties to the contract, without meeting any additional
requirements. They are referred to as ‘consensual contracts’. It has to be empha-
sized that classification of the contract into category of ‘consensual contracts’ does
not depend on whether the law requires any special form in which the declaration
of intent had to be expressed. Declaration of intent is the only essential element that
is required for the contract to be effective. Among ‘consensual contracts’, there is a
special category of contracts, effectiveness of which depends on its entry into pub-
lic registry. The aforementioned contracts are typical for property law.
6. See L. Górnicki, in Prawo cywilne – cze ść ogólna, vol. 1 of System Prawa Prywatnego, ed. M. Saf-
jan (Warsaw: C.H. Beck, 2007), 101 ff.; Z. Radwański (ed.), Zielona Ksie ga: Optymalna wizja kode-
ksu cywilnego w Rzeczypospolitej Polskiej (Warsaw: Ministerstwo Sprawiedliwości, 2006).
Radwański (Warsaw: C.H. Beck, 2008), 186 ff.; A. Brzozowski, in Prawo zobowia zań– cza ść
ogólna, vol. 5 of System Prawa Prywatnego, ed. E. Łe towska (Warsaw: C.H. Beck, 2006), 405 ff.
32
Some, very few contracts, require for its effectiveness not only declaration of
unanimous intent by the parties to the contract but also a disposal of an object of
such contract to be made by one party to the other. This type of contract is called
‘real contract’.8
III. Onerous and Gratuitous Contracts
17. The contract is called onerous, if the party that donates in favour of the other
party in exchange receives some economic benefit. Whereas the gratuitous contract
is a contract where the party, which performs in favour of the other party, does not
receive any benefit. Such benefit needs to be of a real economic value.
It is not stated clearly whether mutual performances of both parties to the con-
tract have to be of equal value for the contract to be qualified as the ‘onerous con-
tract’. The question is answered differently under different rules that refer to onerous
or gratuitous contracts. In principle, there is no requirement for equivalence of per-
formances and contracts that are not strictly equivalent are still regarded as oner-
ous. However, on the grounds of regulations concerning, for example, actio
Pauliana, onerousness of the contract is regarded as objective equivalence of per-
formances.
Some nominate contracts by their definition are onerous (e.g., sale, exchange,
lease, contract to perform specific works), some are by their definition gratuitous
(e.g., donation, lending) and others may be either gratuitous or onerous, depending
on a specific situation (e.g., commission, loan, storage, guarantee).
Gratuitous legal acts are regarded as quite unusual for economic activity; there-
fore, they are regulated by the legislator with special approach. A special form of
conducting these kinds of legal acts is required especially with regard to declaration
of intent by the party that donates (e.g., a donor’s declaration of intent requires
either a form of a notarial deed or actual performance of what is promised, Article
890 CC, and lending for use is a ‘real contract’, Article 710 CC). In order to
acknowledge a contract as gratuitous, an explicit indication for its gratuitousness
has to be stated. In gratuitous contracts, the donating person bears less responsibili-
ties compared to a person who renders similar performance against payment (e.g.,
Articles 711, 891 CC). Lesser protection is applied in regard to the recipient who is
a party to the gratuitous contract (it is easier to revoke a gratuitous contract con-
cluded under the influence of a mistake – Article 84 CC; there is also a possibility
to recall donation – Articles 896, 898 CC). The recipient is also less protected from
the third parties’ claims – the prerequisites required to enforce a proceeding against
the gratuitous contract are less severe (both the prerequisites stipulated in Article 59
CC and the actio Pauliana under Articles 527 ff. CC) and some of the provisions
governing the bona fide acquisition of rights do not apply to gratuitous contracts.9
9. See A. Klein, Elementy zobowie zaniowego stosunku prawnego (Wrocław: Wydawnictwo Uniwer-
sytetu Wrocławskiego, 2005), 85 ff.; Z. Radwański, in Prawo cywilne – cze ść ogólna, vol. 2 of Sys-
tem Prawa Prywatnego, ed. Z. Radwański (Warsaw: C.H. Beck, 2008), 206 ff.; A. Brzozowski, in
33
IV. Reciprocal (Synallagmatic, Mutual) Contracts
18. Most of the onerous contracts are also categorized as reciprocal contracts.
The term ‘reciprocal contract’ is defined in Article 487 section 2 CC, which states
that it is the contract where the parties are obliged in such a manner that the per-
formance of one party corresponds with the performance of the other party. In lit-
erature and jurisprudence it is acknowledged that there is no need for direct,
economic equivalence of performances rendered by the parties. It is rather a matter
of subjective equivalence, which means that according to the parties’ subjective
appraisal, the value of the rendered performances is equal. The parties state what
kind of relation occurs between the performances – one party is obliged to render a
performance in exchange for the performance of the other.10
Linkage that occurs between the performances rendered on the basis of the recip-
rocal contracts causes that in case of invalidity of one party’s obligation to perform
the other party’s obligation to perform is invalid as well. There are specific regu-
lations referring to performance and effects of non-performance of obligations
resulting from reciprocal contracts; they will be discussed below.
V. Nominate and Innominate Contracts
19. The CC and other normative acts govern special types of contracts, which
are distinguished on the basis of a content of parties’ obligation as well as on the
basis of the characteristic features appertained to the parties to the contract (con-
sumers, entrepreneurs, special kind of entrepreneurs, for example, banks, insurance
companies). A normative regulation is established if the contract is either com-
monly concluded or causes a special threat for one of the parties that requires a spe-
cial protection. Types of contracts, which are regulated by the law are called
nominate contracts. Currently, the Polish CC regulates nearly thirty types of con-
tracts; other contracts are regulated in separate normative acts.
Polish law is based on the principle of contractual freedom. According to Article
3531 CC, the parties to the contract can arrange a legal relation at their own dis-
cretion, provided that the content and the purpose of the contract are not contrary to
the nature of the relation, a normative act and principle of social coexistence. A free-
dom to create the content of a legal relation is reflected chiefly in the ability to con-
clude contracts that are not stated in the normative acts (innominate contracts). No
special authorization is required for an innominate contract to be concluded. The
contractual freedom allows concluding contracts that are adapted to individual,
untypical needs or economic aims. Furthermore, once a new area of social life
emerges, automatically it is possible to conclude contracts that will govern peoples’
activities in this area.
Prawo zobowia zań– cze ść ogólna, vol. 5 of System Prawa Prywatnego, ed. E. Łe towska (Warsaw:
C.H. Beck, 2006), 411 ff.
10. See A. Klein, Elementy zobowia zaniowego stosunku prawnego (Wrocław: Wydawnictwo Uniwer-
sytetu Wrocławskiego, 2005), 85 ff.; A. Brzozowski, in Prawo zobowia zań– cze ść ogólna, vol. 5 of
System Prawa Prywatnego, ed. E. Łe towska (Warsaw: C.H. Beck, 2006), 409 ff.
34
Among innominate contracts, contracts that comprise of elements of different

kinds of nominate contracts (so-called mixed contracts) and contracts that have
nothing in common with ‘nominate contracts’ can be distinguished.
Moreover ‘contractual freedom’ is manifested in the fact that even in case of a
conclusion of a nominate contract, the parties are allowed to waive specific provi-
sions regulated by the normative act. Most of the provisions governing the content
of obligation relations are default (dispositive) rules.11
VI. Preliminary Agreement
20. Preliminary agreement (Articles 389, 390 CC) has a great practical appli-
ance. It is a contract whereby either one party or both parties are obliged to con-
clude in future a specified (definitive) contract. Validity of the preliminary contract
depends on its content, which has to state essential provisions of the future contract.
The preliminary agreement may contain a date, when the definitive contract is to be
concluded, however, if the date is not specified, each party, which can demand con-
clusion of the future contract, may set a proper date.
If the definitive contract is not concluded within the date set, the other party may
either seek damages or in some circumstances may demand from a court issuance
of a judgment that substitutes for the definitive contract.12
If the preliminary agreement does not state otherwise, the remedy consists only
in reliance damages, not expectation damages. The damages are therefore calcu-
lated by comparing the condition of creditor’s assets that would have existed in case
of not undertaking any actions in order to conclude the future contract and condi-
tion of creditor’s assets, which was caused by the fact that the creditor concluded
the preliminary agreement and hoped for conclusion of the specified contract.
In order to have the definitive contract executed by virtue of a court decision
based on the preliminary agreement, an additional prerequisite has to be fulfilled. If
the validity of the definitive contract depends on special requirements (in practice it
is a special form of contract), the law suite can be successfully brought only if the
preliminary agreement has satisfied these special requirements. Therefore, if the
future contract shall be concluded in a special form and the preliminary contract is
not concluded in that form, the injured party may only seek damages.
Claims that arise on the grounds of the preliminary agreement are barred by a
limitation of one year from the date on which the definitive contract was to be con-
cluded. However, if the creditor demands to issue judgment that substitutes for the
definitive contract, the limitation period for damages claims commences on the day
in which the decision concerning dismissal of claim becomes valid.13
11. See A. Brzozowski, in Prawo zobowia zań– cze ść ogólna, vol. 5 of System Prawa Prywatnego, ed.
E. Łe towska (Warsaw: C.H. Beck, 2006), 407 ff.; W.J. Katner, ‘Poje cie umowy nienazwanej’, Stu-
dia Prawa Prywatnego 1 (2009): 1 ff.
12. See resolution of the Supreme Court (seven judges panel) of 7 Jan. 1967, III CZP 32/66, OSN, 1968,
no. 12, item 199.
13. See M. Krajewski, Umowa przedwste pna (Warsaw: C.H. Beck 2000); M. Krajewski, in Prawo
zobowia zań– cze ść ogólna, vol. 5 of System Prawa Prywatnego, ed. E. Łe towska (Warsaw: C.H.
35
VII. Other Types of Contracts
21. A specific content of contracts allows distinguishing following special types

of contracts.
A. Framework Contracts
22. Although a framework contract is not regulated in any normative acts, it

occurs in practice. It is a contract that governs some general issues concerning
future contractual relations between the parties to the contract. It is a background
for conclusion of so-called executive contracts. The framework contract usually
states the procedure concerning conclusion of the executive contracts, required form
of these contracts, remedies, applicable law and the court having jurisdiction, etc.
In contrast to the preliminary agreement, the framework agreement does not con-
stitute a claim for the conclusion of the executive contract.14
B. Fiduciary Agreements
23. A fiduciary agreement is a specific type of a contract that comprises ele-

ments of a disposal and an obligation:
(1) one party (trustor) vests in the other party (trustee) a right, for example, own-
ership or receivable, and its result is that such trustee may exercise the right,
against the third parties, to the full extent prescribed by the content of that
right; and
(2) the trustee is obliged to use the vested right in a limited extent, which is indi-
cated in the fiduciary agreement, especially that in a specified situation the
right shall be vested back on the trustor.
Legal effects of disposal made are full in their extent – in the external relation
(between the trustee and the third parties) the trustee is a person, who is authorized
and his or her rights are unlimited. The trustee’s obligation to use the right in a lim-
ited manner is not effective against the third parties. If the trustee breaches his duty
to use the right in a limited manner, for example, transfers the right, his action is in
general effective (however, it may be undermined on the basis of Article 59 CC) but
he is liable for damage to the trustor on the basis of non-performance of the obli-
gation (Article 471 CC).
In practice, there are two types of fiduciary agreements:
Beck, 2006), 729 ff.; P. Machnikowski, in Kodeks cywilny: Komentarz, ed. E. Gniewek (Warsaw:
C.H. Beck, 2008), 635 ff.
14. M. Krajewski, in Prawo zobowia zań– cze ść ogólna, vol. 5 of System Prawa Prywatnego, ed. E. Łe
towska (Warsaw: C.H. Beck, 2006), 791 ff.
36
(1) agreements that aim at securing trustee’s claims – the trustee may exercise his
rights within the limits of his claims against the trustor (e.g., fiduciary transfer
of ownership, fiduciary assignment of receivables); and
(2) agreements that allow the trustee to manage the right (e.g., trusteeship of
stocks, assignment of receivables to encashment, commission of acquisition of
a thing).15
C. Random Contracts
24. The term ‘random contracts’ is used to describe agreements where one par-
ty’s obligation to perform or content of its performance depends on random circum-
stance. This category of agreements includes most of all insurance contracts as well
as gaming and wagering contracts.
§4. CONTRACT AND TORTS
I. General Conditions of Liability in Damages
25. For liability in damages to arise, the following basic tests must be met:
– there must be a loss;

– there must have occurred an event (a tort or a breach of an obligation) that the
law sees as one giving rise to an obligation to compensate for the loss;
– there must be a link between the event and the loss.
II. Non-performance of an Obligation and Tort as Two Regimes of Liability
26. The Polish law of obligations has two distinct regimes under which liability
in damages arises: liability for non-performance or undue performance of an obli-
gation, and liability in tort.16
The first of the two kinds of liability is triggered by non-performance or undue
performance of an obligation. The source of the obligation is irrelevant and it may
be a contract, a unilateral legal transaction, a factual transaction (where it gives rise
to an obligation, for example, negotiorum gestio), or some other event (such as
unjust enrichment). It is to be noted that liability under discussion here (commonly
but not entirely properly referred to as contractual liability) has to do not only with
obligations as per a strict definition of that term (i.e., legal relationships governed
by the provisions of CC Book III) but may also arise where non-performance as
between certain parties is in respect of obligations that are governed by other CC
titles (e.g., property law or family law). Under this liability regime, compensation is
16. See M. Kaliński, Szkoda na mieniu i jej naprawienie (Warsaw: C.H. Beck, 2008), 28 ff.
37
of substitutive or supplementary nature to the main performance arising from the

breached obligation. For liability to be properly classified as contractual liability, a
loss has to be occasioned through a breach of an obligation other than a general obli-
gation, where the breached obligation is incumbent on a certain person and requires
a certain conduct of such person towards some other person or persons. In other
words, liability in this case arises from undue performance in a relative legal rela-
tionship (one that obtains between certain persons or groups of such persons).
A tort under Polish law is a purely technical concept that denotes both human
unlawful acts and other events as specified by law that are not of human origin. The
essence of liability in tort is that compensation for loss is the debtor’s main perfor-
mance right from the time the duty comes into being. Liability in damages is there-
fore independent of whether or not there was any obligation as between the creditor
and the debtor before the loss was occasioned. As to the torts that consist of human
acts, the main (however not only) condition of liability is unlawfulness of such an
act. A non-performance of an obligation is not an unlawful conduct by and of
itself.17
Common to both liability regimes are regulations of Articles 361–363 CC,
addressing such matters as causal link; extent of loss to be redressed; contribution
of the harmed party to loss; the manner in which loss is to be redressed; and the
moment when the amount of monetary compensation is determined. However, both
regimes are subject to separate regulation regarding events giving rise to an obli-
gation to compensate; specific conditions of liability (such as fault); and certain
other issues. Tort law, for example, provides for mitigation of damages, joint and
several (solidary) liability, special rules for limitation of claims or compensation for
bodily harm; regulations on liability ex contractu, however, provide for contractual
limitation of such liability.
In principle, concurrence of liability in contract and tort is admissible if not ruled
out under contract (Article 443). This happens when a conduct reflected in non-
performance of an obligation (which caused a loss to creditor) also violates some
generally applicable provisions of law or rules of equity, where such violation
occurs irrespective of the obligation itself or its content.
III. Interference with Contractual Rights
27. It is a rule of Polish law that an obligation exists solely between its parties
and any rights arising therefrom may be invoked solely as against the other party to
the obligation. Accordingly, a creditor who has not received the performance may
claim that performance and/or compensation only from the debtor, and – as men-
tioned before – non-performance of an obligation does not in principle amount to a
tort.
No doctrine of tortious interference with somebody else’s obligation has been
developed in Polish study of law or court decisions. That this kind of liability may
17. See Supreme Court’s judgment of 14 Jan. 1983, I CR 484/82, LEX No. 8507; Supreme Court’s judg-
ment of 13 Feb. 2004, IV CK 40/03, LEX No. 151636; Supreme Court’s judgment of 10 Oct. 1997,
III CKN 202/97, OSN 1998, no. 3, item 42.
38
arise is accepted in literature, but there is little discussion about how it would
arise.18 While approaching this problem we have to bear in mind two rules, which
are generally accepted in Polish tort law: that damages claims are only available to
the one who actually suffered the loss and that the damages cannot exceed the loss.
Where a debtor is prevented from performing, the resulting property loss is mainly
suffered by him. No items used to render performance belong to the creditor because
it is in the essence of an obligation that the creditor has no direct right to any of the
debtor’s assets. Creditor’s benefit arises only in an indirect manner, through debt-
or’s performance. In the same way, creditor may suffer loss only indirectly as a con-
sequence of failure of performance. Being harmed indirectly, creditor has no
damages claims against the harm doer. In many cases, if it had such claims, the harm
doer would have a double burden of compensation: he would have to redress the
loss in both debtor’s assets (one harmed directly) and creditor’s assets (one harmed
indirectly).
For reasons set out above, the view that any infringement of a debt receivable
capable of producing tortious liability should be rejected. That being so, it is not the
case that such an infringement (interference with an obligation between others) will
never qualify as a tort. It is possible that third party’s conduct will infringe not only
the obligation itself (which is not binding on third parties) but also generally appli-
cable norms. The conduct meant is one aimed at causing loss to the creditor. The
unlawfulness lies not in infringement of debt (as the third party is not under a duty
not to interfere with it) but in infringement of rules of equity, the latter infringement
being typical for any conduct involving intent to harm another.19 The doctrine of tor-
tious interference with contractual rights may thus only be based on a negative
assessment of the tortfeasor’s conduct in light of the underlying purpose (deliber-
ately striving to harm another). Consequently, the first and foremost test for this
kind of liability is knowledge of the creditor’s right. Another test is that the main or
only purpose of the act was to prevent this right from being exercised, with harm to
the creditor. If the conduct directed against the debt has any other purpose (e.g.,
where it serves to protect one’s own interest or is part of acceptable competition),
then it is not tortious.20
28. A law that may be relevant in the context of liability in damages for breach
of obligation is Article 12.2 of the Act on Combating Unfair Competition of 16 April
1993. It is accepted that unfair competition practices are torts for civil law purposes
(civil wrongs) and are governed by CC provisions on torts.21 As far as damages
claims are concerned, Article 18.1.4 CUC makes an explicit reference to the CC
18. See above all A. Kubas, ‘Rozszerzona skuteczność wierzytelności’, Studia Cywilistyczne 13–14
(1969): 215 ff; S. Grzybowski, in Zobowia zania – cze ść ogólna, vol. III, part 1 of System prawa
cywilnego, ed. Z. Radwański (Wrocław: Ossolineum, 1981), 48; Z. Radwański & A. Olejniczak,
Zobowia zania – cze ść ogólna (Warsaw: C.H. Beck, 2004), 17.
19. See M. Safjan, in Kodeks cywilny. Komentarz, ed. K. Pietrzykowski, vol. II (Warsaw: C.H. Beck,
2003), 122; M. Kaliñski, Szkoda na mieniu i jej naprawienie (Warsaw: C.H. Beck, 2008), 257 ff.
20. See P. Machnikowski, in Prawo zobowia zań– cze ść ogólna, vol. 6 of System Prawa Prywatnego,
ed. A. Olejniczak (Warsaw: C.H. Beck, 2009), 382 ff.
21. See J. Szwaja, in Ustawa o zwalczaniu nieuczciwej konkurencji. Komentarz (Warsaw: C.H. Beck,
2000), 48 ff.
39
(‘general rules of law’). Under Article 12.2 CUC, it is an unfair competition prac-
tice where one induces any customers of an undertaking or other persons to termi-
nate, not perform or unduly perform a contract with the undertaking, in order to gain
a benefit for oneself or for others or to harm the undertaking.
§5. CONTRACT AND QUASI-CONTRACT
29. A term ‘quasi-contract’ is not used either in Polish legal writing or Polish
law. Apart from provisions concerning contractual obligations and torts the Polish
CC includes regulations concerning:
(1) obligations that arise from unilateral legal acts (public promise, acceptance of
remittance);
(2) benevolent intervention into another person’s affairs (negotiorum gestio);
(3) unjustified enrichment, which also exists in a form of rendering undue perfor-
mance.
Negotiorum gestio as well as unjustified enrichment are similar to quasi-contracts

distinguished in Roman legal system; however, this category of contracts is not for-
mally distinguished.
§6. CONTRACT AND THE LAW OF PROPERTY
30. The term ‘property law’ in Polish legal system means legal rules governing
real property, that is, absolute rights to things (rights in rem). As ‘thing’ means only
corporeal (tangible) object, rules governing absolute rights to incorporeal objects
from another branch of private law – intellectual property law.
31. Notion of an absolute right may require a short explanation. Subjective right
can be described as certain situation (position) of one person in relation to the other.
This situation is brought about and determined by the law and/or a legal act done in
accordance with the relevant legal rules. It consists in freedom of action and author-
ity to perform a specified act or to demand other person’s specified behaviour. This
freedom and authority are usually protected by the law in a sense that the law pre-
vents other persons from interfering with the permitted activity of the entitled one
or it provides appropriate means of forcing the other persons to act the way they are
obliged to. One person’s subjective right corresponds with other person or persons’
duties. The subjective right very rarely consists of one single freedom or authority.
Usually it is a group of entitlements that jointly serve one social or economic pur-
pose. For example, the right of ownership is a group of entitlements allowing the
owner to possess, use, gain profits and dispose of the thing. The majority of sub-
jective rights consist in authority to perform a specified act or to demand other per-
son’s specified behaviour. They can be classified according to whom the right can
be enforced against. On this ground absolute and relative rights are distinguished.
40
An absolute subjective right is the one that enables its holder exclusively to per-
form a specified activity (especially with regard to a certain object) and obliges all
other persons to refrain from interfering. Property rights are of this kind. The list of
absolute rights is closed, which means that parties are not allowed to create a right
that does not fall into some category of rights that law provides for.
A relative subjective right, called ‘claim’, is the one that enables its holder to
demand the specified behaviour from the specified person. The duty that is the cor-
relative of the right in question is imposed on one or more specified persons and not
on everyone (which is the case of absolute rights). The behaviour the obliged per-
son owes may consist in act or omission while the duties corresponding to absolute
rights consist only in omission. In contrast with the absolute rights, the number of
types of claims is indefinite. Under the freedom of contract and within its bound-
aries, parties are allowed to create every kind of claim that meets their needs.
32. Property rights in Polish law are the following rights: ownership, perpetual
usufruct and limited property rights: usufruct, pledge, mortgage, cooperative own-
ership right to a residential property.
There is a very close link between contracts and property right as the contract is
a basic way of acquisition of a property right. First, contracts form a basis for con-
ducting a transfer of transferable rights, especially an ownership. Second, mainly
through contracts the property rights on somebody else’s thing (perpetual usufruct,
limited property rights) are created.
With respect to the contracts, which aim to transfer of the right, it is necessary to
decide whether the contract obliging to transfer a right (e.g., sale contract or dona-
tion) simultaneously transfers the right to the acquirer, or in order to transfer the
right another contract must be concluded. Article 155 section 1 CC establishes a
‘dual effect’ rule under which obliging contracts cause transfer of the property right
also in a situation when the parties to the contract did not express it. Exceptions
from this rule may be made by either a normative act or a content of a contract.
Therefore, next to the ‘dual effect contracts’, there also may exist the contracts that
result in solely obliging effect and separate property transfer contracts. The same
provision sets out a rule stating that an ownership of a thing, which is designated as
to its identity is transferred on the basis of a contract without necessity to hand over
the thing to an acquirer. A principle of a consensual nature of an ownership transfer
does not extend to a thing, which is identified as to its kind or future things.
In order to acquire an ownership of an estate, a conclusion of a contract is suf-
ficient to transfer the right, entry in the land registry has only a declaratory nature.
However, in case of perpetual usufruct, acquisition of this right depends on an entry
of an acquirer into the land register.
§7. CONTRACT AND TRUST
33. A ‘trust’ term is not used in Polish law. Some similarity to ‘trusts’ are
revealed in the above-mentioned fiduciary contracts; however, they belong to a cat-
egory of contracts that transfer rights and oblige to render a performance.
41
§8. GOOD FAITH AND FAIR DEALING
34. Polish law of contracts does not use a ‘good faith’ concept in a meaning
given in other legal systems (as objective demand of compliance to honest behav-
iour). The ‘good faith’ term in Polish law refers to subjective state of a person’s
mind (it shall be discussed below). A role of ‘good faith’ and ‘fair dealing’ concepts
in the Polish legal system is taken over by general clauses, which refer to moral
standards and assessments. They consist in terms of ‘morals’ (bonos mores), ‘prin-
ciples of fairness’ and also quite often ‘principles of community life’. The last
clause is characteristic for a socialistic law; however, it still remains in the regula-
tion of CC. Nowadays, the above-mentioned principle is interpreted in a way, which
does not relate to its Communistic origin.
There is no general provision that would impose compliance to morals; however,
the obligation to comply with the above-mentioned principle is imposed by many
specific provisions, most of all:
– Article 5 CC, prohibition of abuse of subjective rights, which means that subjec-
tive rights cannot be used in a manner contrary to the principles of community
life.
– Article 56 CC, which states that a legal act also causes ‘effects which arise from
the principles of community life’.
– Article 354 CC, which imposes on the parties the obligation relation duty to per-
form ‘in accordance to principles of community life’.
– Article 58 §2 and Article 3531 CC, consider legal acts that are contrary to prin-
ciples of community life as invalid.
– Article 65 CC states that a declaration of will shall be interpreted in accordance
to ‘principles of community life’.22
§9. STYLE OF DRAFTING
35. Polish law belongs to those legal systems, in which the contract law is
treated as a coherent and complete set of rules, which constitute an exhaustive regu-
lation of the effects of the contract. The regulation consists of provisions referring
to particular types of the contracts, provisions forming general part of law of obli-
gations as well as provisions consisted in the general part of the civil law. There is
a significant number of nominate contracts, and the number of default rules is large
too. Most of the provisions governing contractual relations are properly formulated,
they usually do not raise doubts about the content and purpose of the regulation, and
usually they divide the burdens and risks associated with the transaction between
the parties evenly. Moreover, the concept of ‘general principles of law’ and the
widely accepted technique of purposive interpretation of the statute allows to for-
mulate assertions as to the existence of rules governing a specific issue even if the
provisions do not refer to that issue expressly. The reasoning by analogy is also
22. See P. Machnikowski, Swoboda umów według art. 3531. KC. Konstrukcja prawna (Warsaw: C.H.
Beck, 2005), 251 ff.
42
allowed, which means that the provisions regulating specific factual circumstances
can also be applied to facts that are outside their scope of application but are similar
to those that are specified in the provision. This is why most of the issues that arise
in contractual practice may be solved on the basis of normative acts or, if needed,
with the help of interpretation rules or legal reasoning.
Such a shape of the legal system influences the practice of drafting contracts. A
prevailing method is a method of concise contract drafting. The parties usually limit
themselves to specifying their identity and essential features of the contract
(description of each party’s performance), including the provisions that they find
relevant or provisions that differ from default rules. With respect to other issues
most of the contracting parties seem to depend on statutory provisions, assuming
(usually correctly) that the normative act, which regulates the specific contract, suits
their needs and intents well. A model of contractual liability adopted by Polish law
also influences style of contract drafting. The contractual liability under Polish CC
is based on objective criteria, debtor’s due diligence and causal link between the
breach of the contract and the damage being the most important ones. The foresee-
ability of the damage is unimportant with regard to existence and scope of liability.
Therefore, there is no need to contain in the contract extensive information about
reasons for which each party concludes the contract. Awareness of the reason and
of related possibility of damage is not important in regard to the scope of the liabil-
ity.
Simultaneously, however, the practice of formulating extensive, comprehensive
contracts, based on the models used in the common law practice, is noticeable. The
mere fact of concluding an extensive contract, which includes regulations concern-
ing consequences of various future events, may not be found wrong. The problems
arise due to the fact that contracts in question are more or less literally translated
from American or English originals, and they include phrasing and entire legal
instruments that are hard to translate, classify and apply under the Polish legal sys-
tem. As a result, a source of additional doubts and uncertainty may arise instead of
greater legal stability desired by the parties.
§10. SOURCES OF THE LAW OF CONTRACTS
36. Article 87 of the Polish Constitution sets out an exhaustive list of sources of
Polish law and establishes the hierarchy of Polish legal norms where some types of
norms prevail over others. The sources of law and the hierarchy of legal norms are
as follows:
(1) Constitution: The Constitution of the Republic of Poland23 not only deter-
mines the basic principles and underlying values of the whole legal system but
also establishes a broad catalogue of rights and freedoms that seriously influ-
ences legislation in the field of private law. Many of the contract law rules pro-
vide protection for constitutional rights and freedoms. Apart from that, Article
23. Konstytucja Rzeczypospolitej Polskiej z dnia 2 Apr. 1997 r. (Dz. U. Nr 78, poz. 483).
43
8 paragraph (2) of the Constitution says that the provisions of the Constitution
shall apply directly unless the Constitution provides otherwise.
(2) Ratified international agreements and EU law: The place that a ratified inter-
national agreement holds in the hierarchy of the sources of the law depends
on its subject matter. Some of the agreements may be ratified only by prior
consent granted by the statute. It is the case if such an agreement concerns:
– peace, alliances, political or military treaties;
– freedoms, rights or obligations of citizens, as specified in the Constitution;
– the Republic of Poland’s membership in an international organization;
– considerable financial responsibilities imposed on the state;
– matters regulated by statute or those in respect of which the Constitution
requires the form of a statute.
According to Article 90 paragraph (2) of the Constitution, ‘an international
agreement ratified upon prior consent granted by statute shall have precedence
over statutes if such an agreement cannot be reconciled with the provisions of
such statutes’. Such an agreement prevails over the statutes but not over the
Constitution. Other ratified international agreements are binding as well as the
ones described above but do not prevail over the statutes.
Poland has been a member of the EU since 2004. Therefore, EU law is a part
of Polish law, and it takes priority over national legislation. However, the exact
place of the EU law within the hierarchy of norms is disputable. Article 90 para-
graph (1) of the Constitution states that ‘The Republic of Poland may, by virtue
of international agreements, delegate to an international organization or inter-
national institution the competence of organs of State authority in relation to
certain matters.’ According to Article 91 paragraph (3) of the Constitution, ‘If
an agreement, ratified by the Republic of Poland, establishing an international
organization so provides, the laws established by it shall be applied directly and
have precedence over statutes in the event of a conflict of laws.’ The European
Court of Justice in a decision of 1964, Costa v. ENEL,24 established the prin-
ciple of priority of the EU law ruling that ‘Member States have limited their
sovereign rights and have thus created a body of law which binds both their
nationals and themselves.’ This principle is not fully accepted by Polish judi-
ciary and jurisprudence. Polish Constitutional Tribunal ruled in the judgment of
11 May 2005 that in Polish state territory norms of the Constitution have in any
event priority and they cannot be changed nor derogated by the mere fact that
they conflict with EU law.25 A more restrained position was taken by the Con-
stitutional Tribunal in its judgment of 16 November 2011, where the Tribunal
stated that EU law is subject to constitutional control with respect to possible
(although unlikely) infringement of constitutional rights and freedoms.26
(3) Statutes: Statutes (acts of Parliament) are the most substantial part of Polish
private law, especially contract law. The most comprehensive statutes that play
24. Case 6/64, [1964] ECR 585.

25. Judgment of the Constitutional Tribunal of 11 May 2005, K 18/04, OTK-A No. 5 (2005), item 49.
See also Judgment of the Constitutional Tribunal of 27 Apr. 2005, P 1/05, OTK-A No. 4 (2005), item
42.
26. Judgment of the Constitutional Tribunal of 16 Nov. 2011, SK 45/09, OTK-A 2011, No. 9, item 97.
44
a key role in certain field of social activity are called codes. One of them is
the CC, which is a major source of law in the field discussed here. Formally
codes have the same binding force and hold the same place in the hierarchy of
laws as ordinary statutes, but the difference is sometimes noticeable in the
rules of interpretation. While interpreting an ordinary statute the court should,
where there is doubt, adopt an interpretation that is in accordance with the
rules of the CC, which are more general or are applied to similar situations.
A CC is divided into four books, which are separated with use of different cri-
teria.
Book one (‘General provisions’, Articles 1–125) contains provisions that
stipulate general rules of applying the CC (Articles 1–7) as well as universal
legal institutions that may be applied to entire sphere of the private law (legal
entities, objects of legal relations, acts in law, limitation of legal claims).
Book two (‘Ownership and other property rights’, Articles 140–352) mostly
refers to different forms of use of a thing, which are absolute subjective propri-
etary rights and various kind of factual dominion over a thing (possession and
hold). It is not a complete regulation. Some property rights and its institutions
(especially mortgage, land and mortgage register) are regulated in other norma-
tive acts than the CC.
Book three (‘Obligations’, Articles 353–92116) relates to different social phe-
nomena, for example, exchange of goods, rendering services, use of somebody
else’s things, credit, provision of means to another person, damages, coopera-
tion of men in order to reach a common aim, etc., which are created in the form
of relative legal relations (i.e., relations between specified persons), that is, obli-
gation relations. In book three, next to regulations concerning different types of
legal relations, general provisions concerning issues that are common for all
types of obligations can be distinguished.
Book four (‘Inheritance’, Articles 922–1087) regulates assignment of rights
and delegation of duties that belonged to a deceased person. The CC, as it was
previously mentioned, is not the only source of contract law and is not a com-
prehensive regulation of civil relations. Apart from the CC, there are many other
normative acts that stipulate civil law norms, including norms that concern con-
tracts.
(4) Regulations: Regulation may be issued by the executive power specified in the
Constitution on the basis of specific authorization contained in the statute and
solely for the purpose of implementation of that statute. The authorization
specifies the organ appropriate to issue a regulation and the scope of matters
to be regulated as well as guidelines concerning the provisions of such act.
(5) Local legal enactments: Enactments of local law may be enacted by organs of
local government and territorial organs of government administration. They
are issued on the basis of and within limits specified by statute and are appli-
cable to territorially defined areas of operation of an organ. As a source of con-
tract law they are of virtually no significance.
45
46
37–37
Part I. General Principles of the Law of

Contract
Chapter 1. Formation
§1. AGREEMENT AND QUID PRO QUO (RECIPROCITY)
I. Offer and Acceptance, Negotiations, Tender
A. General Remarks
37. As it was stated above (see paragraphs 12 ff), a contract is a legal act that is
concluded between at least two parties who submit unanimous declarations of will.
Therefore conclusion of the contract is a declaration of will, which is common for
at least two or more parties to the contract.
The above-mentioned declarations have to be submitted to each of the parties.
Article 61 CC is a basic regulation that governs formation of the contract referring
to a way of submitting the declaration of will. According to paragraph 1 of the
above-mentioned article, the declaration of will is made when it reached the other
party in a way that the party, who it is submitted to, had possibility to acknowledge
its content. A revocation of the declaration of will is valid when it has reached the
other party either before or simultaneously with the declaration of will. In conse-
quence of the above regulation, the declaration of will made to another person
causes legal effects after reaching the addressee in a manner specified in Article 61
CC. This moment and not the moment of sending the declaration of will has to be
taken into account when, for example, calculating the period of time or examining
whether the time limit for the legal act has not lapsed. The declaration of will is
regarded as non-existing if it does not reach the addressee in a way that the
addressee has the possibility to acknowledge its content. Such a way of stating dec-
laration of will means that a person submitting the declaration of will has to create
a situation in which the addressee is able to acknowledge its content in a normal
course of action. The real acknowledgement of the content of the declaration of will
is not essential.
A separate rule concerning a declaration of will expressed electronically, espe-
cially via the Internet, is stated in Article 61 section 2 CC. The said article stipu-
lates that the declaration of will expressed electronically is submitted in a moment
of its introducing to a means of electronic communication in a way that enables an
47
38–39 Part I, Ch. 1, Formation
addressee to acknowledge its content. The means of electronic communication are

regarded as a tool that is accessible (in a direct or with use of other tools) to the
addressee.
Common declarations of will as a prerequisite of the contract’s validity mean that
the declarations of will have the same meaning (determined by interpretation; see
Article 65 CC) to all the parties, who express an intent to cause the same legal
effects. The contract is not concluded if an interpretation of the declarations of will,
made in accordance to rules provided by Article 65 CC, does not allow to deter-
mine a clear, common to the parties, meaning of the submitted declarations of will.
However, if the interpretation of the declarations of will, made in accordance with
the objective method, shows a clear, common to the parties meaning, the contract is
concluded even when the parties understood the submitted declarations differently.
In such a case only fulfilment of the prerequisites stated in Article 84 CC (which
pertains to mistake) can allow to avoid legal effects of the declaration of will.
The CC provides three ways of reaching a consensus: offer and acceptance, nego-
tiation and tender (which includes two kinds of tender – auction and tender in a
strict sense) and regulations, which are very detailed in contrast to other legal sys-
tems. These are the most common ways of concluding contracts; however, it does
not exclude parties’ ability to reach an agreement in a different way.
It is a general rule that the parties are allowed to choose the way of concluding
the contract. Their freedom is limited by provisions of public law that impose duty
to use a specific way of concluding contracts in order to make the contract valid.
Provisions concerning a public procurement are the most important example.
B. Offer and Acceptance
38. Offer and acceptance is a way of concluding the contract in which the most
distinctive feature is a fact that actions of the parties who are willing to conclude
the contract are distinctly separated – it is possible to distinguish the declarations of
will, and each of them consists of an independent action of the parties. A procedure
of concluding the contract consists of two components: proposition to conclude the
contract (an offer) that comes from one party and positive answer to the proposition
(acceptance) of the other party.
39. In light of Article 66 CC, the offer may be defined as the declaration of will
submitted to one person or to the public, which expresses firm, definitive decision
to conclude the contract and specifies at least the essential stipulations of the con-
tract. If the declaration of will does not express definitive will to cause prescribed
legal effects or the legal effects are not specified enough (do not contain the essen-
tial content of the contract), the declaration of will is not the offer and does not cause
legal effects that are characteristic for the offer.
In practice, there may be doubts concerning classification of some declarations of
will that commence the procedure of the contract conclusion, express same inten-
tion to conclude the contract and state essential stipulations of the contract but they
do not express clearly firm intention to conclude the contract so they raise doubt
48
Part I, Ch. 1, Formation 39–39
whether the declaration is binding for a person who submits it. In the two most com-
mon cases, the normative act resolves the problem and stipulates interpretation
rules. According to Article 71 CC announcements, advertisements, price lists and
other information addressed to the public or to particular persons shall be consid-
ered, in case of doubt, not an offer but an invitation to conclude a contract. Whereas
Article 543 CC states that displaying a thing to the public at the place of sale with
the indication of the price shall be deemed to be an offer of sale.
The offer has two roles to fulfil: it starts (sometimes it also governs) the proce-
dure of the contract conclusion and it stipulates the content of the contract that shall
be concluded in case of positive completion of the procedure. A procedural mean-
ing of the offer is above all manifested in situation of the offeror who is bound by
the submitted offer. Moreover, the offer may also create rules concerning further
parties’ conduct because the offeror may define how long he is bound by the offer,
set out the form and the way of acceptance of the offer by the offeree and decide on
the possibility of revocation of the offer.
Requirement of including in the offer the essential stipulation of the contract
means that the offer has to include a minimum of the contract’s content – provisions
that are necessary for the contract to be effective. However, it is possible to allow
the offeree to supplement or specify stipulations of the contract. Apart from the
essential (necessary) stipulations of the contract the offeror may include in the offer
other stipulations. They are regarded as subjectively essential (subjectively neces-
sary) because the offeror, who includes the above-mentioned stipulations in the con-
tract, requires the offeree, in order to conclude the contract, to accept it.
Submitting of the offer binds the offeror. Binding force of the offer means that
the offeree merely by acceptance of the offer may conclude the contract stipulated
in the offer. During the time when the offeror is bound by the offer, the conclusion
of the contract depends only on the offeree’s decision. The offeror has no influence
on conclusion of the contract, even if his intent has changed after the offer was sub-
mitted (in some cases the effect of being bound by one’s own offer may be ended
by revocation of the offer – Article 662 CC).
When the offeree rejects the offer or makes the counteroffer, the offeror is no
longer bound.
The time during which the offeror is bound by the offer may be stipulated in the
content of the offer. A stipulation explicitly stating that there are no timeframes (‘a
perpetually binding offer’) is a subject to discussion. A prevailing view is that such
a stipulation is not effective and the statutory time of binding by the offer has to be
applied.27 If the offer does not stipulate the time of binding by the offer, the time
periods provided in Article 66 section 2 CC have to be applied. The above-
mentioned provision distinguishes two situations of communication between the
offeror and offeree. The first situation is when the offer is submitted in the presence
of the other person (the offeror and the offeree are both present in the same place
27. See, e.g., B. Gawlik, Procedura zawierania umowy na tle ogólnych przepisów prawa cywilnego (art.
66–72) (Kraków: Wydawnictwo Uniwersytetu Jagiellońskiego, 1977), 53; Z. Radwański, in Prawo
cywilne – cze ść ogólna, vol. 2 of System Prawa Prywatnego, ed. Z. Radwański (Warsaw: C.H. Beck,
2008), 334; P. Machnikowski, in Kodeks cywilny: Komentarz, ed. E. Gniewek (Warsaw: C.H. Beck,
2008), 168.
49
and they are communicating without any tools) or when the offeror submits the offer
with use of a means of direct communication (e.g., telephone, radio, some Internet
tools). In these situations, the offer ceases to bind if it is not accepted without undue
delay. A second situation is when the offeror submits his declaration of will with a
use of means of communications that do not pass the declaration of will instantly
(‘traditional’ post, fax, e-mail, SMS, etc.). In this situation, the offer ceases to bind
the offeror with a flow of time period that is required for the offeror to receive the
answer sent without undue delay.
As a rule, offeror cannot revoke the offer submitted to the specified person, which
means that the offeror cannot curtail the time in which he is bound by his offer.
Article 661 CC makes an exception to this rule. If the offeror and the offeree are
entrepreneurs, the offer does not state a binding period and does not exclude the
right to revoke it, the offeror is allowed to revoke the offer by way of his own state-
ment. The declaration of revocation of the offer has to reach the offeree before the
conclusion of the contract and before the offeree sends his statement concerning
acceptance of the offer.
40. The acceptance of the offer means that the offeree has to submit a declara-
tion of will stating a firm, definitive decision concerning conclusion of the contract
with a content specified in the offer. The first prerequisite of conclusion of the con-
tract by acceptance of the offer is unanimity of the offeree’s and the offeror’s dec-
larations of will. The declarations of will do not have to be identical but their
meaning concerning parties’ legal situation, determined in course of interpretation,
has to be the same. Therefore the offer must be accepted within its scope and fully.
If the offeree’s declaration of will includes supplements or adjustments to the offer
submitted by the offeror, the contract is not concluded. Such a declaration of will
has to be interpreted as new offer made by offeree. There is an exception in rela-
tions between entrepreneurs. According to Article 681 CC, a reply to the offer made
with a stipulation of changing or supplementing the offer in a way that does not
change its contents substantially shall be deemed its acceptance. In this case, the
parties shall be bound by the contract with the contents determined in the offer, tak-
ing into account the stipulations made in the reply thereto. The contract is not con-
cluded; however, if the contents of an offer state that it may be accepted only
without change, or if the offeror has immediately objected to the changes intro-
duced by the offeree.
The second prerequisite for which fulfilment is required to conclude the contract
by acceptance of the offer is that the offeree’s acceptance must reach the offeror
within the time in which the offer is binding. The statement concerning acceptance
of the offer delivered after the time limits has to be deemed as a new offer, submit-
ted by the person who previously was the offeree. Exceptionally the prerequisite
concerning observation of the time limit may be lifted in situation stipulated in
Article 67 CC. According to this provision, if the declaration of acceptance arrived
with a delay, but it follows from its contents or the circumstances that it was sent in
due time, the contract shall be effective unless the offeror immediately notifies the
offeree that because of a delay of the reply he considers the contract as not con-
cluded.
50
A simplified procedure of conclusion of the contract is provided by Article 69 CC,

which states that if in accordance with the custom established within given relations
or in accordance with the contents of the offer (in particular if the offeror demands
immediate performance of the contract) the delivery of the declaration of accep-
tance to the offeror is not required, the contract is effective if the offeree in due time
proceeds to carry it out; otherwise the offer ceases to be binding. In this case, accep-
tance of the offer is not made by way of the offeree’s statement addressed to the off-
eror, but it is made by commencement of the contract execution without any
statement being submitted to the offeror.
The CC in Article 682 provides a rule of tacit acceptance. In cases when the
offeree is an entrepreneur and remains in a permanent business relationship with the
offeror and the offer concerns the offeree’s economic activity, a passive behaviour
of the offeree is regarded as acceptance of the offer. In this case, the entrepreneur
who is not willing to conclude the contract has to make a statement immediately
after the receipt of the offer; otherwise the contract is concluded.
41. Special rules refer to the offers, which are submitted in an electronic way.
The lawmaker imposed specific obligation concerning information on the entrepre-
neurs who are willing to conclude the contract in such a way and modified the pro-
cedure of contract conclusion itself. According to Article 661 section 1 CC, an offer
made electronically is binding for the offeror if the other party confirms its receipt
without undue delay. This additional requirement, however, does not apply to con-
tracts concluded through electronic mail or similar means of individual communi-
cation over distance. It also does not apply to the relations between entrepreneurs if
the parties so agreed.28
C. Negotiations
42. The Polish CC not only contains a rule concerning liability for conducting
negotiations in a bad faith (which shall be discussed below) but also provides regu-
lations concerning conclusion of the contract as a result of negotiations. Article 72
section 1 CC sets out an interpretative rule, which, in case of any doubts, allows to
establish whether the contract was concluded. According to this provision, the con-
tract is concluded when the parties reach an agreement concerning all the contract’s
stipulations that were subject to negotiations. The rule may be applied only in situ-
ations when interpretation of the parties’ actions does not allow finding whether the
contract was concluded or not. The above-mentioned regulation should be read
against the background of the rule that parties conducting negotiations are not
bound by statements submitted during the negotiations and are not obliged to con-
clude the contract that is a subject to negotiations. Both parties in the negotiations
retain their freedom to decide whether they want to conclude the contract. Only if
28. See P. Machnikowski, in Kodeks cywilny: Komentarz, ed. E. Gniewek (Warsaw: C.H. Beck, 2008),
164 ff.
51
the parties’ stance is not clearly expressed, it is regarded that the contract is con-
cluded in a moment of agreeing to the whole content of the contract that was sub-
ject to the negotiations.29
D. Auction and Tender
43. The Polish CC in Article 701–705 regulates auction and tender, which are
two kinds of one procedure concerning conclusion of the contract. The procedure is
characterized by the fact that it aims both to agree to the content of the declarations
of will and to choose a party to the contract from a group of interested persons who
are in the same legal position (it is a multilateral and eliminative procedure). The
procedure consists of three stages: announcement, submission of tenders and accep-
tance.
44. The announcement concerning the auction or the tender is an organizer’s

declaration of will, which commences and governs a procedure of the contract con-
clusion. It may be directed either to a general public or to a specified group of enti-
ties or to two or more addressees. In accordance with Article 701 section 2 CC, the
announcement of the auction or the tender has to stipulate time, place, subject and
conditions of the auction or the tender. The organizer and participants are bound by
the stipulations of the announcement and conditions concerning the auction or the
tender, which means that they have to comply with provisions of the announcement
and conditions.
45. The auction is a type of bidding procedure in which the price is the only term
that is subject to agreement. The amount of price is the only element that is taken
into account when comparing the bids. The bids made by the particular participants
are submitted sequentially and publicly. Each subsequent bid should be more ben-
eficial for the organizer, and each participant may submit any number of bids. The
bid submitted by the participant is a definitive proposal to conclude the contract of
a content specified in the announcement. It binds the participant in the same way as
the offer submitted in the ‘offer and acceptance’ procedure, and it is binding until a
more beneficial bid is submitted. During this period, the organizer may make his
declaration of will concerning acceptance of the offer and the contract is concluded.
46. The tender is a type of proceeding, in which more than one feature of the
contract may be subject to agreement. Various elements of the offer are taken into
account when comparing the bids, and the choice of the offer is the crucial point in
the procedure. Each of the participants submits one offer (mostly in a written or
electronic form) within a time specified in the announcement. All participants simul-
taneously are bound with their offers. The organizer either chooses one offer or
196 ff.
52
states that the auction is closed without any offer being chosen. The contract is con-
cluded when the organizer submits to the participant a statement concerning accep-
tance of his offer.
47. An outcome of the auction or tender is not regarded as a conclusion of the

contract if the contract’s validity depends on observance of a special form and the
declarations of will submitted in the auction procedure do not meet the requirement
of this form. In such a case, both parties are obliged to conclude the contract for
which content was agreed in the course of the auction or tender procedure. Claims
for fulfilment of this obligation may be raised in court on the basis of Article 64 CC,
which states that the ruling of the court replaces the declaration of will of a person
who refuses to enter into the contract he or she is obliged to conclude.
A proper conduct of parties in the tender procedure and realization of the obli-
gation to conclude the contract may be secured by a deposit (Article 704 CC).
48. If one party’s action, made against the law or morals, influenced the auc-
tion’s outcome, the contract may be annulled by the court on the basis of a motion
submitted by any of the participants within a month since the day he learned about
the reason for annulment but not later than one year after conclusion of the con-
tract.30
II. Intention to Create Legal Relations
49. As it was discussed above, the contracts consist of the declarations of will
and a defining feature of the declaration of will is expression of intent to cause a
legal effect – to create, modify or terminate a legal relation or to cause other effects
that refers to existence and content of legal rights and obligations. Therefore the
intent to cause a legal effect is an essential element of the contract. It has to be
emphasized that the term ‘declaration of will’ is not understood in a psychological
sense but relates to a conventional act that serves a purpose of communication (a
sign). Understanding the declaration of will as a statement has such a consequence
that the meaning of the declaration of will may be different from what was the psy-
chological experience of the person who expressed it. This leads to conclusion that
submission of the declaration of will and intent to cause a legal effect may be attrib-
uted to someone not only when he or she realized the legal effects of his or her
actions but also – under certain conditions – when that person was not aware of a
conventional meaning of his or her actions and, what is more important, had no
intention to create legal effects. This objective attribution of the declaration of will
is possible mostly when the subject’s behaviour causes other person’s belief that the
one who submits the declaration of will has intention to bring on a legal effect. The
186 ff.
53
concept of the declaration of will discussed here aims, inter alia, to protect objec-
tively justified trust of other persons, their belief that in the future a specific action
of the person submitting the declaration of will, will be undertaken.31
Criteria, which enable to attribute the declaration of will, are stipulated in Article
65 CC. This provision says that the declaration of will is to be interpreted according
to the circumstances in which it was submitted, the principles of community life and
the established custom. With regard to contracts, the interpretation should focus on
common intention of the parties and the aim of the contract rather than its wording.
This provision seems to contain only rules of construal. Its importance, however, is
much broader than it might be assumed on the basis of its literal meaning. Since we
treat the declaration of will as a statement (sign), it has to be assumed that inter-
pretation of the statement (as a set of actions that lead to revealing its meaning)
should first aim at finding whether this statement is supposed to play a normative
role – is it a declaration of will. To determine its meaning relevant from the legal
point of view, the content of regulation, it is a secondary issue.32
The object of the interpretation is an action of a person together with accompa-
nying circumstances (context). In contemporary literature and recent Polish juris-
prudence,33 Article 65 CC is construed under so-called combined approach, which
aims to take into account both a real intent of the subject who submits the decla-
ration of will and the reliance of other persons, which is a result of the submitted
declaration of will. When the addressee is aware of the real intention of the person
who submits the declaration of will, then the real intention is taken into account
when interpreting the declaration of will. In the above-mentioned situation, the
interpretation aims to formulate a meaning of the declaration of will, which is meant
by the person who submits the declaration of will and which was recognized by the
addressee. If one of the parties is convinced that the other party submitted the dec-
laration of will, when the other party did not intend to cause any legal effects, the
collision is resolved in favour of the addressee of the declaration of will whose
understanding of behaviour of the person submitting the declaration was justified.
The addressee’s reasoning is justified if any other person in the same circumstances
31. See Z. Radwański, Teoria umów (Warsaw: PWN, 1977), 52 ff.; Z. Radwański, Wykładnia oświad-
czeń woli składanych indywidualnym adresatom (Wrocław: Ossolineum, 1992), 60 ff.; A. Je
drzejewska, Koncepcja oświadczenia woli w prawie cywilnym (Warsaw: Scholar, 1992), 182 ff.; P.
Machnikowski, Prawne instrumenty ochrony zaufania przy zawieraniu umowy (Wrocław:
Wydawnictwo Uniwersytetu Wrocławskiego, 2010), 108 ff.
32. See. Z. Radwański, Wykładnia oświadczeń woli składanych indywidualnym adresatom (Wrocław:
Ossolineum, 1992), 25 ff.; Z. Radwański, in Prawo cywilne – cze ść ogólna, vol. 2 of System Prawa
Prywatnego, ed. Z. Radwański (Warsaw: C.H. Beck, 2008), 40 ff. This is also the position of recent
judicature, cf. Supreme Court’s judgments of 22 Jun. 2006, V CSK 70/06, OSN No. 4 (2007), item
59; of 14 Nov. 2008, V CSK 174/08, LEX No. 477605 and of 14 May 2009, I CSK 401/08, LEX
No. 515726.
33. See above all Z. Radwański, Wykładnia oświadczeń woli składanych indywidualnym adresatom
(Wrocław: Ossolineum, 1992) and resolution of the Supreme Court (seven judges panel) of 29 Jun.
1995, III CZP 66/95, OSN No. 12 (1995), item 168 (which was followed by numerous other deci-
sions).
54
and with the same knowledge concerning elements of communication process

(behaviour and its context) would assume the same meaning of the submitted dec-
laration.34
Discrepant opinions are expressed with regard to whether each behaviour caus-
ing particular expectations of the addressee may be understood as a declaration of
will or it is possible only if the person submitting the declaration did not show
proper diligence. The latter opinion, according to which the attribution of intention
to cause a legal effect depends on negligence, seems to have better grounds.35 If the
person whose behaviour is a subject to interpretation, exercised due diligence and
could not prevent erroneous interpretation of his or her behaviour, this behaviour
should not be deemed as the declaration of will.
Regulations concerning defects of the declaration of will to some extent prevent
from erroneous assumption that the person intended to cause a legal effect. Accord-
ing to these regulations, two examples of behaviour, which could be regarded as the
declarations of will do not cause any legal effects. These are actions that are under-
taken by a person who is in a state precluding a conscious or free making of a deci-
sion and expression of will (Article 82 CC) as well as actions, which appear to be
declarations of will but the person who acts and the addressee agrees that it will not
cause any legal effect (simulation, Article 83 CC). Moreover, in some cases, the per-
son who did not intend to cause particular legal effects may evade consequences of
attribution of the declaration of will referring to the action in mistake or under
undue influence (Articles 84–88 CC).
III. Consideration
A. No Requirement of Consideration in Polish Legal System
50. Under the Polish law, conclusion of contract depends only on reaching con-
sensus by the parties and not on fulfilment of consideration or reciprocity require-
ment.
B. Gratuitous Promises
51. Gratuitous contracts are allowed and effective. As it was explained above,
the gratuitous contracts are governed by particular regulations. The law usually
34. See Z. Radwański, Wykładnia oświadczeń woli składanych indywidualnym adresatom (Wrocław:
Ossolineum, 1992), 85 ff.; Z. Radwański, in Prawo cywilne – cze ść ogólna, vol. 2 of System Prawa
Prywatnego, ed. Z. Radwański (Warsaw: C.H. Beck, 2008), 66 ff.; P. Machnikowski, Prawne instru-
menty ochrony zaufania przy zawieraniu umowy (Wrocław: Wydawnictwo Uniwersytetu Wrocław-
skiego, 2010), 110.
Radwański (Warsaw: C.H. Beck, 2008), 23 ff.; P. Machnikowski, Prawne instrumenty ochrony zau-
fania przy zawieraniu umowy (Wrocław: Wydawnictwo Uniwersytetu Wrocławskiego, 2010), 110
ff.
55
requires a particular way of expressing an intent to provide gratuitous benefit (spe-

cific form of the declaration of will or ‘real contract’). While interpreting the mean-
ing of the contract, it is generally assumed that contracts are onerous, so the
gratuitousness has to be expressed in an explicit way. Obligations and liability of
the party who is obliged to render the gratuitous performance are not as strict as in
case of similar onerous contracts. The benefit gained in a gratuitous way is less pro-
tected by law than a benefit that was gained for relevant remuneration; it is reflected
in the provisions concerning mistake and third parties rights to challenge the con-
tract, for example, actio Pauliana.
C. ‘Natural Obligations’
52. Approach of the Polish legislator and jurisprudence to the issue of ‘natural
obligations’, understood as moral obligations causing specific legal effects, is a
complex matter. The most common use of the term ‘natural obligations’ refers not
to the moral obligations, but to the obligations in a legal meaning (arising from valid
contracts or other legal acts), which differ from regular obligations by the fact that
the creditor is not allowed to implement his rights in a coercive manner – he is not
allowed to pursue his claims in a court and enforcement proceedings. Due to the
fact, that the natural obligations in that sense are legal relations and the debtor has
a legal duty to perform, the performance voluntarily rendered (even if the debtor is
unaware of the obligation being natural) is not undue. The benefit gained by the
creditor is legally justified and the creditor is under no duty to return it.36
In a current state of law, there are two unquestionable cases of natural (i.e., unen-
forceable) obligations. The first one is when the creditor’s claim for performance is
time-barred (Article 117 CC). The second case is when the obligation arises from
gaming or wagering contract that was fair but concluded without a permit issued by
the relevant authority (Article 413 CC). These two instances are considerably dif-
ferent. The most significant difference lies in the fact that the defence of prescrip-
tion is not taken into account by the court unless it is raised by the debtor, whereas
claims that arise from gaming or betting are not taken into account by the court ex
officio.
53. A separate category is various moral and social obligations that exist in the
society. Moral obligations are obligations imposed by moral rules and standards and
not by the law. So-called social obligations are agreements entered into by the par-
ties and which content or circumstances indicate that there is no intention to cause
legal effects. Social obligations do not cause any legal effects at all. In contrast,
there is one provision relating to moral obligations that are not obligations in the
legal sense of the word. Article 411 section 2 CC, which refers to undue perfor-
mance, stipulates that the person who acquires the performance that is undue has no
ed. E. Łe towska (Warsaw: C.H. Beck, 2006), 158 ff.
56
obligation to return it if the performance ‘complies with the principles of commu-

nity life’. In this case, the moral obligation does not acquire the status of legal obli-
gation, but if it is performed, the person who performs cannot claim return of an
undue performance.37
IV. Modifications of the Contract
54. Modification of the concluded contract is possible if all the parties agree to
alter it. According to Article 77 CC, amending of a contract requires the form either
provided for by statutory law or agreed by the parties for conclusion of the contract.
55. Connected with this subject are letters of confirmation. Under Article 771
CC, if a contract concluded between entrepreneurs without observing the written
form is immediately confirmed by one of the parties in a letter addressed to another
party and such letter contains amendments or supplements to the contract that do
not significantly amend its contents, the parties are bound by the contract rendered
in the wording determined in the confirming letter, unless the other party immedi-
ately objects to it in writing. From 8 September 2016, the same applies to the con-
tract concluded without observing the document form and subsequently confirmed
by one party in a document sent to the other.
§2. FORMAL AND EVIDENTIAL REQUIREMENTS
I. Formal Requirements
A. Contracts under Seal
56. Contracts under seal do not exist in Polish law.
B. ‘Solemn’ Contracts
57. Formal requirements established by the Polish law in regard to contracts are
complex issue. Among them there are cases when observance of a specific form is
a requirement of the contract’s validity, which corresponds with the notion of ‘sol-
emn contract’.
The basic principle is the freedom of form, expressed in Article 60 CC. This pro-
vision states that the declaration of will may be expressed in any form of sign or
means of communication. However, there are some exceptions to this rule. Certain
37. See W. Dubis, in Kodeks cywilny: Komentarz, ed. E. Gniewek (Warsaw: C.H. Beck, 2008), 683 ff.;
P. Machnikowski, in Prawo zobowie zań– cze ść ogólna, vol. 5 of System Prawa Prywatnego, ed. E.
Łe towska (Warsaw: C.H. Beck, 2006), 164 ff.
57
formal requirements apply to certain contracts by virtue of statutory provisions and

the specific form for concluding a contract may also be stipulated by the parties
(Article 76 CC).
58. Until 7 September 2016, the CC and other statutes defined the five most
important types of specific forms, which were:
(1) An ordinary written form, which was observed if the parties append their sig-
natures to the document containing the declaration of will or they exchange
the undersigned documents, which contain their respective declarations of will
(Article 78 CC).
(2) Qualified written forms that require additional features apart from the signa-
ture on the document containing declarations of will:
(a) Written form with an authenticated date – which may occur in two ways:
– as a form of contract, that is, official (made by the notary) authenti-
cation of a date when the contract was concluded (Article 81 §1 CC);
– as a confirmation of the date, on which the document covering the
legal act existed, so that it may be implied that the contract was con-
cluded at the latest at this date (notarial confirmation of the date of
document’s presentation and other actions listed in Article 81 §2 and
§3 CC).
(b) Written form with authenticated signature – which means that the notary
stipulates on the document a clause that states that the signature included
in the document is made by a person whose identity is confirmed by the
notary.
(c) Form of the notarial deed – the document that consists of the declaration
of will, made by the notary on the basis of oral statement of the person
who is conducting the legal act.
Each of the subsequent, above-mentioned written forms contains features that are
characteristic for any previous form and can replace them.
59. Apart from the forms listed above, the electronic form was also regulated. It
is allowed under the general principle of freedom of form and the lawmaker has
regulated specifically only electronic signature, thus creating so-called secured elec-
tronic signature that is verified with a use of adequate certificate. This secured elec-
tronic signature is equal to the ordinary written form and may be applied every time
when the law requires written form of the declaration of will. Documents signed
with the electronic signature may also be labelled with time when they are submit-
ted, which has the same consequences as the written form with an authenticated
date.
If the parties want to stipulate a specific form for the contract to be valid (Article
76 CC), they may either use one of the forms prescribed by the law or create any
form that is not known to the legal system.
The law on forms of legal acts has changed on 8 September 2016, and new rules
apply to contracts concluded from this date on. Currently, there are following types
of specific forms distinguished by the statute: document form, electronic form and
58
written form together with modifications of the latter (qualified written forms – writ-
ten form with an authenticated date, written form with an authenticated signature
and notarial deed). The change in law consists mostly in addition to a new type of
form of an act in law – document form. Document form is observed when the dec-
laration of intent is made in the document and in a manner enabling identification
of the person making such declaration. The document is defined broadly, as any car-
rier of information enabling to learn its content.
60. Failure in compliance with a requirement of form may cause three kinds of
legal effects: nullity of contract, proof restriction and lack of some of the intended
effects of the contract.
If the form is reserved under pain of nullity, in case of failure to comply with the
prescribed form the legal act is absolutely invalid. The ordinary written form, the
document form and the electronic form are reserved under the pain of nullity only
when the law stipulates so (Article 73 §1 CC) or the parties so decided. In other
cases, non-observance of the ordinary written form causes only restrictions on evi-
dence (see below). Other specific forms are reserved under the pain of nullity, unless
the law states otherwise. The most important example of specific form reserved for
the validity of the contract is a form of the notarial deed prescribed for the contracts
that oblige to transfer or actually transfer the ownership of the immovable.
In some instances, the provisions require the contract to be concluded in certain
specific form; however, non-observance of this form does not result in nullity of the
contract but only causes some other legal consequences, for example, lack of effec-
tiveness of the contract in regard to the third parties.38
II. Evidential Requirement: Proof
A. The Parol Evidence Rule
61. The Polish law contains quite complicated regulation on proof that corre-
sponds to the ‘parol evidence’ rule present in some other legal systems. Issues con-
cerning an evidence in regard to the written contracts are partially regulated in the
CC and partially in the Code of Civil Procedure (CCP).
The CCP is based on the assumption rule that the documentary evidence is of
more importance than hearing of witnesses and parties. The code deals with two
issues:
(1) admissibility of the evidence that aims at proving that the real content of the
contract differs from the content of the document; and
(2) admissibility of the evidence of the conclusion of contract, if the parties did
not observe the written form requirement.
59
62. The first of the issues is regulated by Article 247 CCP. It stipulates, that the
evidence of hearing the witnesses or the parties, used against the content of the
document referring to the legal act, may be allowed between the parties to this legal
act, provided that it does not lead to circumvention of the rules on form reserved
under the pain of nullity and that due to the special circumstances the court finds it
essential. Therefore, if the contract is in a written form, it has to be assumed that it
includes exactly what the parties agreed upon and all that they agreed upon. Oral
evidence to the contrary – that the document’s content is wrong or incomplete – is
allowed under two conditions, which have to be satisfied simultaneously:
(1) the proof cannot result in finding some stipulations valid if for their validity
the written form was required;
(2) there are particular circumstances because of which the court finds the proof
essential to the case.
Limitations provided by Article 247 CCP do not concern the proof that aims to
undermine authenticity of the document, to reveal the circumstances of drawing the
document up, defects of the declaration of will and facts that are relevant for the
interpretation of the contract.
63. Consequences of non-observance of the written form are stipulated in Article

246 CCP and Article 74 CC. According to Article 246 CCP, if the law or the con-
tract requires a written form of the legal act, the admissibility of proof of hearing
the witnesses or the parties that is aimed at establishing that the legal act was con-
ducted is limited. The limitation applies only to a litigation between the parties to
that act. Such an evidence is accepted when the document that contained the legal
act is lost, damaged or taken by the third party, when the written form was reserved
only for the purposes of evidence, and in instances prescribed by the CC. In order
to prove that the document was lost, the party must first prove that it was created.
If the document was taken by the third party, the oral evidence may be accepted only
if this third person cannot be forced to produce the document by use of penalties
prescribed by the code.
The provision of the CC, which Article 246 CCP refers to, is Article 74 CC con-
cerning the ordinary written, document form or electronic form required for eviden-
tiary purposes. It has to be made clear at the outset that this provision does not apply
to contracts between entrepreneurs. The written, document or electronic forms
required for evidentiary purposes is prescribed by the law in order to induce con-
tracting parties to create durable evidence of their contract. Therefore, the conse-
quences of non-observance of that form arise only in procedural sphere. These
consequences consist of limited admissibility of the evidence of hearing witnesses
or the parties, which may be used to prove the contract. The court, however, may
admit the oral evidence despite the failure to comply with the requirement of the
form:
– when both parties agree to this;

– when the evidence is produced by the consumer in a dispute with the entrepre-
neur;
60
– when the allegation that the contract was concluded may be substantiated with a
document (i.e., any document content of which indicates that the contract in ques-
tion was probably concluded).39
B. Function of the Notary
64. Notaries play a very distinctive role in the Polish legal system. Their duties
mainly consist of drawing up the notarial deeds – the most advanced form of the
legal act. Moreover, the notaries issue certificates of inheritance, authorize docu-
ments (authenticity of signature, date of the document, a conformity of the docu-
ment’s copy with the original), draw up minutes of the meetings of legal persons’
bodies, receive documents, money and securities for safe-keeping, etc.
Of utmost importance is the participation of the notary in drawing up the contract
when the law or the parties require the form of the notarial deed. This form serves
to ensure that the contract is properly formulated, and that the parties make use of
a legal advice. The notary law levies on the notary an obligation to protect rights
and interests of the parties and provide sufficient explanation concerning legal act
that is conducted. The notarial deed has to be drawn up in Polish language; on the
party’s demand, it can be drawn up also in a foreign language version. It should be
formulated in a comprehensible and transparent manner. The notary writes down the
content of parties’ statements and edits it together with the parties, reads it out and
undersigns the document together with the parties. The original of the notarial deed
is kept in the notary chamber and the parties receive the copies, which are of exact
content, undersigned and stamped by the notary. The copy has the same value as
the original deed. According to Article 244 section 1 CCP, they are official docu-
ments, and as such, they are evidence of the facts that are testified therein.40
III. Burden of Proof
65. Contract law is applied by the courts and the courts of arbitration. Applica-
tion of the law is a process consisting of legal reasoning and other activities leading
to issuing a binding decision related to an individual case. Most of the private law
disputes are solved in the course of litigious proceedings where one party (plaintiff)
demands a certain judgment to be issued by the court and the other party (defen-
dant) requests the plaintiff’s demand to be dismissed. Important part of the proceed-
ing is the ascertainment of facts – an activity by which the court examines the
evidence submitted by the litigating parties and tries to get to know the facts that
are essential for the dispute to be resolved. The most important rule with this respect
is the one governing the allocation of the burden of proof. The concept of burden of
proof allows the court to decide the case if some of the legally relevant facts are not
39. See E. Drozd, in Prawo cywilne – cze ść ogólna, vol. 2 of System Prawa Prywatnego, ed. Z. Rad-
wański (Warsaw: C.H. Beck, 2008), 117 ff.
40. See E. Drozd, in Prawo cywilne – cze ść ogólna, vol. 2 of System Prawa Prywatnego, ed. Z. Rad-
wański (Warsaw: C.H. Beck, 2008), 155 ff.
61
proved. The allocation of the burden of proof indicates how the failure to prove a
certain fact affects the result of the trial. In other words, the rule on burden of proof
indicates which party will lose the case if the important fact cannot be proved.
According to Article 6 CC, the burden of proof relating to a fact rests on the person
who attributes legal effect to that fact. The said provision orders the court to decide
the case to disadvantage of the party which bases its action or its defence on the
certain legally relevant fact when this fact has not been proved. As a rule, the plain-
tiff bears the burden of proving the facts that constitute his claim such as conclusion
of the contract and the non-performance of the contractual obligation by the defen-
dant or the damage suffered by the plaintiff and its cause attributable to the defen-
dant. The defendant has to prove the facts that justify his defences such as grounds
for the invalidity of the contract or mental incompetence at the time of conduct
causing damage.
Not every legally relevant fact has to be proved. Some of them are ascertained by
means of presumption. Factual presumption is the indirect proof – the method of
reasoning by which the judge infers the yet uncertain fact (fact B) from the fact that
is already proved (fact A) on the ground that fact B normally results from fact A or
coexists with it. It may be used by the judge whenever he or she finds it reasonable.
The legal presumption is the rule of law that obliges the judge to ascertain fact B
every time the fact A is proved (or even to ascertain fact B every time at all, which
is the case of presumption of good faith, Article 7 CC, see below). All of the legal
presumptions known to Polish law are rebuttable, which means that the party inter-
ested in the presumed fact not being proved may submit evidence showing that in
reality the presumed fact did not exist. Some of these presumptions may, however,
be rebutted only in the course of specific procedure or by use of specific means of
evidence.41
66. Besides the material (physical) facts, legally relevant is sometimes also the
state of somebody’s consciousness as the law in many cases refers to notions such
as good or bad faith, knowledge, mistake. The most noteworthy, because generally
used, are terms ‘good faith’ and ‘bad faith’. Unlike many other legal systems, Pol-
ish civil law uses the term ‘good faith’ not as a description of some kind of rules of
social behaviour (good faith in its objective meaning) but only in its subjective
meaning, as a state of somebody’s mind. This state of mind sometimes, by virtue of
specific provisions, influences the legal consequences of pure, material facts. Some
facts would have different legal consequences or would not have any legal conse-
quences unless somebody acted in good faith. The most important instances are the
rules allowing to acquire property from the non-proprietor or to acquire the subjec-
tive right from the person who was not entitled to transfer it (see Article 83 §2,
Article 169 CC, Article 6 of the Land Register and Mortgage Act, Articles 10 and
16 of the Law on Bills of Exchange and Promissory Notes) and the rules on acqui-
sition of the ownership by prescription (see Articles 172 and 174 CC).
22 ff.
62
According to the widely accepted definition, good faith is the excused ignorance
of the reality, the actual state of affairs (it usually regards to the existence or non-
existence of somebody’s subjective right). Three elements constitute the good faith:
the person is convinced of certain fact (e.g., of existence or non-existence of the
subjective right); he is wrong; his mistake can be justified under the circumstances.
Correspondingly bad faith is knowledge or unexcused ignorance of the actual state
of affairs. One acts in bad faith when he knows the actual facts or should know
them, which means that he would have known them if he observed due diligence
(see Article 355 CC). Good faith does not have to be proved. Article 7 CC states
that if the law makes legal effects dependent upon good or bad faith, good faith shall
be presumed. As any legal presumption, the presumption of good faith is rebuttable
– bad faith may be proved.42
A. Distinction Between ‘Obligation of Means’ and ‘Obligation of Result’
67. Distinction between ‘obligation of means’ and ‘obligation of result’ is not

explicit in the CC and is not generally acknowledged by jurisprudence. These terms
are used mostly in order to emphasize the difference between certain types of con-
tracts, especially a contract of specific works and a freelance contract. A freelancer
is not obliged to reach a specified goal, but only to pursue efforts in order to reach
that goal; the economic risk linked with the outcome of his actions is borne by the
employer. It is a distinctive feature of performance owed by the debtor; however, in
general opinion, it does not influence rules on contractual liability nor rules on bur-
den of proof. Regardless of the nature of performance, the debtor is liable when he
or she does not comply with the content of the obligation or requirements of due
diligence. Both prerequisites of liability and the burden of proof are governed by
Article 471 CC (which is discussed below).43
The difference between both types of obligations may occur only in the practical
aspect of proving non-performance. If the debtor was obliged to reach a specific
goal, which was fully dependant on his actions, and he failed to reach it, the proof
of failure to achieve a result is the proof of non-performance of the obligation. If
the debtor was obliged to conduct actions aiming at a certain goal but the goal itself
was outside the scope of debtor’s duties, the proof that the goal was not reached
does not mean that there was a non-performance. In this case, the creditor has to
prove that the debtor did not undertake the necessary actions or performed them
wrongly.
26 ff.
43. See T. Pajor, Odpowiedzialność dłużnika za niewykonanie zobowia zania (Warsaw: PWN, 1983), 70
ff.; M. Krajewski, ‘Zobowia zania rezultatu i starannego dzialania (próba alternatywnego uje cia)’,
Państwo i Prawo 8 (2000): 45 ff.; A. Brzozowski, in Prawo zobowia zań– cze ść ogólna, vol. 5 of
System Prawa Prywatnego, ed. E. Łe towska (Warsaw: C.H. Beck, 2006), 416 ff.
63
§3. LIABILITY AND NEGOTIATIONS
I. Pre-contractual Liability
68. The provisions of the CC regulate some particular cases of liability for dam-
age caused in a course of contract’s conclusion. These are:
(1) Article 39 i 103 section 3 CC – establishing liability of a person who acts as

the legal person’s body or who acts as a power of attorney holder without rel-
evant authorization or exceeding scope of authorization.
(2) Article 387 section 2 CC, which concerns the liability of a person who con-
sciously concludes the contract for an impossible performance.
(3) Article 72 section 2 CC, which concerns liability of a person who commences
or conducts negotiations breaching rules of bonos mores.
69. The latter provision is of most importance. It regards to conclusion of the

contract in the course of negotiations. Article 72 section 2 CC states that the party
who commenced or conducted the negotiations with a breach of good morals, par-
ticularly without an intention to conclude the contract, is liable for damage suffered
by the other party in result of relying on conclusion of the contract. Therefore, the
above-mentioned provision links liability with an action, which creates an appear-
ance of willingness to conclude the contract even though the person acts without
this intention, and thus the other person is exposed to a damage that is a result of
futile negotiations.
The ‘commencement of negotiations’ is a term that should be interpreted in a
wide sense, as any action that invites the other party to participate in negotiations,
including an invitation to negotiate. Not only commencement of the negotiations
with breach of the good morals principle but also conducting the negotiations that
way may give rise to liability. This happens in a situation when a person com-
menced the negotiations with intent to conclude the contract but then changed his
or her mind without informing the other party that further negotiations are point-
less.
The scope of application of the said provision is not limited to conducting nego-
tiations without intention to conclude the contract. The principle of good morals
includes many specific obligations that can be generally defined as loyal behaviour
towards the other party. Intentional delay of the negotiations, hindrance of the nego-
tiations by misleading the other party, intentionally submitting impossible proposi-
tions, groundless refusal of disclosure of information relevant to the negotiations are
deemed as contrary to good practice principle. Sometimes the withdrawal from
advanced negotiations may be seen as a breach of good morals; this problem will
be dealt with below.
Regulations discussed here are commonly regarded as instances of liability in
tort. The liability is limited to compensation for loss suffered by the other party ‘in
result of counting on conclusion of the contract’ or ‘because it wasn’t aware of lack
of authorization’ or ‘because it has concluded the contract without knowledge of
inability to perform’. Thus only the damage limited to so-called negative contrac-
tual interest is compensated, which means that damages include what party would
64
have had if he or she had not undertaken ineffective actions in order to conclude the
contract and not what the party would have gained after conclusion of the contract
(especially due to performance of the contract). Within these limits, however, the
damages should cover both an actual loss that the aggrieved party suffered as a
result of conducting inefficient negotiations and the benefits that the party would
have gained if he or she did not participate in the negotiations (Article 361 §2 CC).
In cases that are not governed by specific provisions concerning pre-contractual
liability, the general clause of Article 415 CC may apply. According to that Article,
whoever, by his fault, causes damage to another person is obliged to redress it.
The existence of specific provisions does not limit parties’ freedom to conclude
so-called pre-contractual agreements, which govern the negotiations. Pre-
contractual agreements may inter alia oblige the parties to undertake specific
actions that are essential for conducting further negotiations and contract’s conclu-
sion, forbid parties to conduct competitive negotiations, specify conditions and a
way of withdrawing from negotiations, oblige parties not to challenge provisions
already agreed. Agreements of that kind are obliging contracts and breach of them
causes contractual liability.44
70. A separate rule concerning liability associated with conducting negotiations

is stipulated in regard to breach of confidentiality.
Based on Article 721 section 1 CC, if in the course of negotiations, a party sup-
plied an information and reserved its confidentiality, the other party is obliged to
keep confidentiality and not disclose such information to other persons and not to
use it for one’s own purpose unless the parties stipulate otherwise. In case of non-
performance of the above-mentioned obligations, the entitled person may claim
damages or restitution of benefits obtained by the other party.
The CC does not specify the type of information subject to protection; it is
assumed that it applies to the same type of information as referred to in Article 11
CUC. The information has to be confidential. The second prerequisite of protection
is met when the information is made available to the second party in the course of
negotiations. It is connected with a distinction present in the Polish law and which
refers to three basic ways of concluding a contract – offer and acceptance, negotia-
tions and tender. The statutory confidentiality obligation stipulated in the above pro-
vision does not arise in any of the described processes but the negotiations. The
third prerequisite of protection is met when the party that gives the information
reserves its confidentiality. It means that the party giving information expresses its
intention to maintain the nature of information meaning that the information is not
commonly known and easily accessible.
Structure of protection provided by Article 721 CC is not quite clear; however,
the most prevailing opinion is that at the moment when information is made avail-
able and the above prerequisites are met, a party who is being granted the informa-
tion is under obligation to cease disclosing, communicating or using of such
information for its own purposes, meaning purposes that are not connected with
44. See P. Machnikowski, Prawne instrumenty ochrony zaufania przy zawieraniu umowy (Wrocław:
Wydawnictwo Uniwersytetu Wrocławskiego, 2010), 111 ff.
65
concluding and execution of a contract under negotiation. Bearing in mind the pur-
pose of the obligation, it has to be assumed that the duty not to disclose the infor-
mation does not restrain the party from transmitting it to persons who take part in
negotiations on the obliged party’s side. However, the obliged party is responsible
for breach of confidence done by these persons. The obligation of confidentiality is
a long-term relationship and unless the parties state otherwise, also unspecified in
time. The obligation cannot also be extinguished by means of termination. It expires
only when the information is made public through disclosure by someone else.
Liability for breach of confidentiality is a liability for the non-performance of the
obligation (so-called contractual liability). A debtor’s failure to act with due dili-
gence is its premise, and the debtor bears a burden of proof that he complied with
the requirement of due diligence (Articles 471 and 472 CC). However, Article 721
CC provides for a departure from the provisions regarding contractual liability,
which consists in granting the creditor claim for restitution of benefits obtained by
an obliged person as a result of the breach, in addition to the ‘regular’ claim for
damages. The aggrieved party may raise one of the above-mentioned claims at its
own choice. Provisions of the CC on liability for damage (in particular Article
361–363 CC), are applicable to discuss claim for damages. The liability covers both
actual loss (decrease of assets), and loss of future income. A causal link between
non-fulfilment of the obligation and damage is its prerequisite.
In case of restitution of benefits, provisions on unjustified enrichment that impose
restrictions of liability (most of all limitations up to the value of the entitled per-
son’s expense) do not apply. However, provisions concerning contractual liability
issues are applicable in such cases.
Disclosing or usage of confidential information is often an unlawful act and may
be an instance of tort and contractual liability concurrence (Article 443 CC).
According to the principle of freedom of contracts, the confidentiality contracts
may be concluded. Such contracts may change the regulations stipulated in Article
721 CC or exclude the application of this article at all and specify confidentiality
obligation and results of its breach in other way.45
II. Breakdown of Negotiations
71. As it was explained above, the principle of freedom of negotiations is

applied. The negotiations may be terminated at any moment until the contract is
concluded. Liability for termination of negotiations is an exception. The liability
may arise on the basis of Article 72 section 2 CC, which concerns conducting nego-
tiations in breach of good morals. It is assumed on the basis of this provision that
liability may be caused by inter alia termination of negotiations in situations when
a party has a reason to believe that the negotiations will be continued. This case of
breaching the bonos mores has to be examined very carefully. Termination of the
200 ff.
66
negotiations is generally permitted, since there is no obligation to conclude the con-

tract nor to negotiate. The liability may arise only when somebody by his own
behaviour gives rise to other party’s expectations that the contract will be con-
cluded yet then does not conclude it. These are rather exceptional cases.
67
72–75
Chapter 2. Conditions of Substantive Validity

§1. CAPACITY OF THE PARTIES
72. According to Polish law, the subjects to the civil relationships may be either
human individuals (natural persons) or entities that are created by society (legal per-
sons and some other organizations). They have the ability to be subjects to the civil
law relations, to acquire rights and be subjected to responsibilities, which is called
‘legal capacity’. Legal capacity is a normative feature – legal norms decide whether
a human individual or an organization obtains the legal capacity. Any human being
has this capacity from the moment of birth to the moment of death.
73. Legal persons in terms of Polish law are the entities that are social creatures
(organizations) and are given the legal capacity by the provision of law. The law-
maker qualifies some of the organizations that people may create as the legal per-
sons. This qualification may be done by means of the normative act of general
character, whereby the status of legal person is granted to every entity that meets
particular requirements (e.g., capital companies, cooperatives). An individual legal
person may be then created by fulfilment of all requirements prescribed. Usually
registration in the public registry is the last of those requirements. The legal capac-
ity may also be granted by an individual normative act, which creates a specified
entity (e.g., local government unit, state-owned university). A special kind of legal
person is the State Treasury, which is the state when acting not as a political orga-
nization but in civil law relations.
74. Also some entities that are not legal persons may be parties to contractual
relationships. These are organizations that are not qualified by the normative act into
legal person’s category but are granted legal capacity. These are: legal partnerships
that are regulated in commercial companies code (registered partnership, profes-
sional partnership, limited partnership and limited joint-stock partnership), capital
companies in organization (which means companies that are incorporated but not
registered yet), housing communities operating on the basis of Act on Property of
Premises, and main branches of foreign insurance companies (Article 106 section 1
of Act on Insurance Activity). Lack of independent (sole) responsibility for obliga-
tions is the main feature that distinguishes those entities from legal persons. The
participants of these entities bear subsidiary, secondary liability for the entities’
debts.
75. In order to conclude an effective contract, apart from the legal capacity, the
capacity to perform legal acts (capacity for acts in law) is required. The capacity to
perform legal acts means personal features that are required by the law in order to
perform a valid and effective legal act in one’s own name. All legal persons and
other entities, which are granted legal capacity have full capacity to perform legal
acts. This capacity is made use of mostly by way of acting through legal person’s
body – natural person or persons who are entitled to act on behalf of the legal per-
son according to organization rules that the entity is governed by.
68
Part I, Ch. 2, Conditions of Substantive Validity 76–77
76. In order to attribute actions of the natural person to the legal person, three
conditions have to be met:
(1) the natural person has to be appointed as the body of the legal person;
(2) the natural person has to conclude the contract acting in the capacity of the
legal person’s body; and
(3) the natural person cannot exceed his or her authority.
If a person concludes the contract as a legal person’s organ but does have the
authority or acts beyond its scope, the validity of the contract depends on its con-
firmation by the legal person on whose behalf the contract was concluded. The other
party may set an appropriate time limit for confirmation and becomes free when this
time limit elapses. In the case of lack of confirmation, the person who concluded
the contract as an organ of the legal person without authority or outside its scope is
obliged to return what it had received from the other party in performance of the
contract and to compensate for the damage the other party incurred by concluding
the contract without knowing the lack of authority. A unilateral legal act performed
by a person acting as an organ of a legal person without authority or exceeding its
scope is invalid. However, when the person to whom the declaration of intent on
behalf of the legal person had been made, agreed to an action without authority, the
provisions on conclusion of a contract without authority apply accordingly (Article
39 CC).
77. Natural persons’ capacity to perform legal acts is a much more complex
issue. It is governed by provisions of Articles 11–22 CC. The natural person in a
particular moment of his or her life may be in one of three possible states as to the
ability to conclude contracts, depending on age, possible incapacitation or mar-
riage.
The first possible state is no capacity for acts in law. This concerns persons who
are under 13 years of age or are completely incapacitated (Article 12 CC). These
persons are not allowed to perform legal acts personally (their contracts are invalid);
the legal acts are performed on behalf of them by their legal representatives (par-
ents or guardians). The only exceptions are contracts commonly concluded in petty
current matters of everyday life. Such a contract becomes valid at the moment of its
performance unless it is glaringly detrimental to the person incapable of performing
acts in law.
The second state is limited capacity for acts in law. This applies to minors who
attained 13 years of age (and maturity is reached by completion of 18 years of age
or by marriage), as well as persons who are partially incapacitated. Persons limited
in their capacity for acts in law may enter into contracts in a very limited scope.
They may conclude obliging contracts and disposing contracts only with their rep-
resentative’s consent. The consent may also be granted after the contract is con-
cluded. The contract also may be ratified by the person who has concluded it, but
only after that person gained full capacity for acts in law. The consent, which is
granted after the conclusion of contract (ratification), has retroactive effect; there-
fore, the contract is effective as of the date of its conclusion. During the time
between the conclusion of contract and its ratification, the parties are bound by the
69
78–78 Part I, Ch. 2, Conditions of Substantive Validity
contract (they cannot withdraw from it) but the contract is not effective yet. The lack
of representative’s consent may be raised only by the person with limited capacity
for acts in law and cannot be invoked by the other party. In order to limit the period
of uncertainty, the other party may set an appropriate date by which the represen-
tative has to ratify the contract. If that date passes without ratification, the contract
is definitively invalid.
There are exceptions to the rule discussed above. Persons limited in their capac-
ity for acts in law may conclude some contracts by themselves. It is about contracts
that are not obliging nor disposing (e.g., acceptance of donation); contracts that are
commonly concluded in petty, current matters of everyday life; contracts by which
the person disposes of his or her own earnings (unless the court decides otherwise
for important reasons); contracts that pertain to objects given to the person in ques-
tion by his or her representative for free use.
The third state is full capacity for acts in law, which is a feature of mature per-
sons who are not incapacitated. They may conclude effectively any contract.46
§2. DEFECTS OF CONSENT
I. General Remarks
78. Construction of the legal act, which also includes the contract, is based on
the declaration of will principle. The above-mentioned principle states that deci-
sions that are to be legally effective, should be made freely and consciously; thus
they are results of psychological process properly conducted by the subject. Since
the principle does not always apply to the practice, the law stipulates the legal
effects of irregularities in the process of making and expressing the decision by the
person who performs the legal act. The legal act, however, is of social character –
which means that it refers to other people, it influences their interests and serves as
a basis for their own decisions. Therefore, the legal regulation concerning conse-
quences of defects of the decision-making process cannot be solely based on the
principle stating that the declaration of will that does not reflect free and conscious
decision is ineffective. Therefore compromising solutions, which take into consid-
eration interests of people other than one submitting the declaration of will and
sometimes even allow effectiveness of defective decision, are necessary.
The CC includes provisions concerning defects of declaration of will, which pro-
vide a closed catalogue of specific circumstances that concern a psychological
sphere of the subject and cause consequences in a form of limitation or deprivation
of effectiveness of the declaration of will. Therefore, we can state that defects of the
declaration of will are a normative category, and not a psychological one, because
not any defect of the declaration of will is legally relevant but only those that cor-
respond to the normative definition. The basic assumption of the legislator was to
keep balance in the legal transactions. The legal significance was granted to par-
ticular defects depending on following features:
46. See M. Pazdan, in Prawo cywilne – cze ść ogólna, vol. 1 of System Prawa Prywatnego, ed. M. Saf-
jan (Warsaw: C.H. Beck, 2007), 973 ff.
70
– nature and extent of defects in the psychological process;

– type of the act in law in question (unilateral or bilateral, onerous or gratuitous);
– negative assessment of behaviour of the person who caused defect in other par-
ty’s declaration of will.
The CC distinguishes five defects of the declaration of will. Each of them is a

separate construction, with its own prerequisites and effects: lack of consciousness
or freedom, simulation, mistake, fraud and threat. Separately, outside the provisions
concerning defects of the declaration of will, effects of gross disparity are regulated
in the form of unfair exploitation.47
II. Defects That Cause Invalidity
79. The first two of the defects listed above refer to the basic features of the dec-
laration of will – ability to undertake decisions and intention to cause legal effects.
Occurrence of defects in those areas causes absolute invalidity of the legal act (the
term of absolute invalidity shall be discussed below, see paragraph 93).
80. Article 82 CC stipulates that the declaration of will made by a person who
for any reason was in a state precluding a conscious or free making of a decision
and declaration of will shall be null and void. This shall apply in particular to a men-
tal disease, mental retardation, or other, be it even transient, disturbance of mental
functions. The cited provision is understood in a way that, on the one hand, a full
understanding of content and effects of the contract is not necessary in order to
make it effective, and on the other hand, the contract that was concluded in a state
precluding a conscious or free making of decision is invalid.
Lack of consciousness does not mean that the person who makes the decision is
completely unaware of what he or she is doing. It means rather that this person lacks
comprehension, is unable to understand actions performed by himself or other
people, is unaware of the meaning of his own conduct.
Lack of freedom exists when a psychological state of the person allows him to
understand the situation and the meaning of his own acts but does not allow to con-
trol his conduct and to make choice. The reason, which excludes freedom of
decision-making and expression of will, has to originate from the subject who con-
cludes the contract, from the area of his psyche and intellect, and not from the exter-
nal causes.
The conclusion of contract in a state precluding the conscious or free decision-
making and expression of will causes an absolute nullity of the contract, regardless
of the fact whether the other party was aware of this state.48
48. See B. Lewaszkiewicz-Petrykowska, in Kodeks cywilny: Cze ść ogólna, ed. M. Pyziak-Szafnicka
(Warsaw: Wolters Kluwer, 2009), 859 ff.; Z. Radwański, in Prawo cywilne – cze ść ogólna, vol. 2 of
System Prawa Prywatnego, ed. Z. Radwański (Warsaw: C.H. Beck, 2008), 382 ff.; J. Strzebinczyk,
in Kodeks cywilny: Komentarz, ed. E. Gniewek (Warsaw: C.H. Beck, 2008), 224 ff.
71
81. According to Article 83 section 1 CC, the declaration of will made to another
party with his or her approval for the sake of appearance is invalid. If such decla-
ration was made in order to conceal another legal act, the validity of the declaration
shall be assessed according to the character of that legal act. The essential feature
of the above defect is lack of intent to cause legal effects. The contract is concluded
solely for appearance, which means that it serves only to make an impression that
the intent to cause legal effect exists. The other essential feature of this kind of
defect is that the other party agrees to the contract’s apparent nature. There is agree-
ment between the parties that the contract shall not cause any legal effect. In this
case, the declaration of will, which is meant to express apparent intent, does not
cause legal effect; it is absolutely invalid.
A particular form of simulation takes place when the parties aim to cause legal
effects that are different to those expressed in the content of the submitted decla-
rations of will (Article 83 §1 sentence 2 CC), that is, in reality the parties conclude
a contract that is different from the one disclosed to the third parties. In this case,
the act truly intended by them is assessed separately in regard to its validity, and the
sole fact that it was hidden does not cause its ineffectiveness. Validity of the hidden
act is assessed in accordance to the provisions concerning that act; it particularly
regards to the normative requirements as to its content and form.49 A disputable
issue in courts decisions and in jurisprudence is whether in order to observe a spe-
cific form (especially a form of notarial deed) of a hidden act it is sufficient to do
the apparent act in that form; thus, whether the parties to the hidden act, for which
validity the specific form is required, may raise an argument that they have per-
formed the hidden act in this specific form. For a long time it was assumed in judi-
cature that ‘the specific form of the apparent act applies to the hidden act (serves
the hidden act)’;50 thus, it is sufficient to perform the apparent act in a specified form
in order to claim that the hidden act was performed in a required form. The above-
mentioned stance was a subject to criticism, and recently the Supreme Court rightly
departed from it stating that when the content of a hidden contract is not concluded
in the form required for its validity, the contract is invalid regardless of the form in
which the content of the apparent contract was expressed.51 The above-mentioned
ruling has significantly limited a practical meaning of the hidden contracts.
As a matter of fact, the legal system could function well without Article 83 sec-
tion 1 CC, because nullity of the declaration of will submitted without intent to
cause legal effect and with the other party’s consent results from the very definition
of the declaration of will. However, the regulation of this issue is indispensable due
to the fact that third parties who did not take part in conclusion of the hidden con-
tract and relied on its content, need protection. Therefore, Article 83 section 2 CC
50. See, e.g., judgment of the Supreme Court of 18 Mar. 1966, II CR 123/66, OSN No. 2 (1967), item
22; judgment of the Supreme Court of 26 May 1983, II CR 32/83, Gazeta Prawnicza 24 (1983): 8.
51. See judgment of the Supreme Court of 12 Oct. 2001, V CKN 631/00, OSN Nos 7–8 (2002), item 91.
This opinion was then repeated by the Supreme Court.
72
stipulates that this defect of the declaration of will has no influence upon the effec-
tiveness of the onerous legal act performed on the strength of the defective decla-
ration if due to that act a third party acquires a right or is released from the duty,
unless he or she acted in bad faith. The protection of the third party is therefore
dependant on meeting four requirements:
(1) the third party acquired the right or was released from the duty;
(2) it was based on the legal act performed on the basis of apparent act, which
means that possibility to increment made in favour of the third party was con-
ditioned on apparent acquisition of the right made by the party to the apparent
act;
(3) the legal act causing acquisition of the right or release of the duty was onerous
(this solution departs from those applied in most of the European legal sys-
tem, but it may be justified by the fact that the third party, which did not bear
significant costs linked to the right’s acquisition does not deserve specific pro-
tection, the general provisions concerning contractual liability are sufficient);
(4) the third party acted in good faith, which means that he or she believed that
the expressed legal act is effective.52
Most authors think that the bad faith, in regard to the provision discussed here,
merely means that the third party was aware about defect of the act, which was a
basis for acquisition, whereas the third party, who is not aware due to negligence is
acting in good faith.53 This opinion, however, is open to doubt.54
III. Mistake and Fraud
A. General Remark
82. The Polish law does not distinguish two kinds of erroneous knowledge of
the person concluding the contract depending on the fact whether the mistake or
misrepresentation occurred. However, there are distinguished and differently regu-
lated effects of the ordinary mistake (caused by various circumstances, Articles 84
and 85 CC) and mistake deliberately caused by another party or with that party’s
knowledge (fraud, Article 86 CC). In both cases, the mistake is either a wrong con-
ception of reality or lack of any conception at all. The difference is only in what
caused the mistake.
System Prawa Prywatnego, ed. Z. Radwański (Warsaw: C.H. Beck, 2008), 390 ff.
53. See, e.g., B. Lewaszkiewicz-Petrykowska, in Kodeks cywilny: Cze ść ogólna, ed. M. Pyziak-
Szafnicka (Warsaw: Wolters Kluwer, 2009), 882; Z. Radwański, in Prawo cywilne – cze ść ogólna,
vol. 2 of System Prawa Prywatnego, ed. Z. Radwański (Warsaw: C.H. Beck, 2008), 391.
54. See K. Zawada, Umowa przelewu wierzytelności (Kraków: Wydawnictwo Uniwersytetu Jagiel-
lońskiego, 1990), 110 ff; P. Machnikowski, Prawne instrumenty ochrony zaufania przy zawieraniu
umowy (Wrocław: Wydawnictwo Uniwersytetu Wrocławskiego, 2010), 179 ff.
73
B. Mistake
83. According to Article 84 CC in the case of mistake as to the contents of the

legal act, one may evade the legal effects of one’s declaration of will. However, if
the declaration of will was made to another person, the avoidance of its legal effects
shall be admissible only if the mistake was caused by that person, even if he was
not at fault, or if he was aware of the mistake or could have easily noticed it; this
restriction shall not apply to a gratuitous act in law. In any case, one may refer to
the mistake only if it justifies the supposition that if the person making the decla-
ration of will did not act under the influence of the mistake and had judged the case
reasonably, he would not have made such declaration of will (essential mistake).
With regard to contracts, the cited provision states that the mistake is legally sig-
nificant only when it concerns the content of the legal act and is essential. The rep-
rehensible conduct of the other party is also significant.
The mistake refers to the content of the legal act, if the party had erroneous con-
ception regarding what the content of the contract is. It may be based on the wrong
conception of the subject of the contract or its features, wrong indication of type of
the contract or of identity of the other party (but not of that party’s characteristics).
The content of the legal act is understood broadly. It covers all the features that
influence the contract’s effects (stipulated in Article 56 CC). Therefore, the mistake
as to those effects of the act that are provided by the law may be legally relevant.
Mistake concerning those factual circumstances that merely form basis for the deci-
sion (e.g., the other party’s insolvency, usefulness of the thing to the particular pur-
pose) is of no legal significance.
The mistake is essential, when it allows assuming that if the party submitting the
declaration of will had not acted under the influence of the mistake and reasonably
judged the circumstances, he or she would not have submitted the declaration of
will. Traditionally it was assumed that the mistake must be subjectively essential (if
the person who was acting under the influence of the mistake had known the reality,
he would not have submitted the declaration of will in its actual content). Currently
it is emphasized that the objective essentiality, which is based on the criterion of
‘reasonable judgment’, suffices for the mistake to be legally significant.
In case of the contract (and other acts that include the declaration of will submit-
ted to another person), the defence of mistake is admissible only when the mistake
was caused by the other party (even if it was without that party’s fault, in good faith)
or the other party either knew about the mistake or could have easily noticed it. This
additional condition, however, does not apply to gratuitous contracts.
Equally with the mistake, the law treats a distortion of the declaration of will
caused by the person who communicates it, that is, who passes somebody else’s
declaration of will (Article 85 CC). The persons who communicate the declaration
of will in the meaning of this article are also the post office and entities that provide
means of electronic communication at a distance.
84. The effect of the mistake is so-called relative invalidity of the contract,
which means possibility to evade its consequences by the person who acted under
the influence of the mistake. In order to use this possibility, the mistaken party has
to submit to the other party the declaration of will in a written form (required only
74
for evidentiary purposes) concerning annulment of the contract. The contract may
be only fully annulled, not partially and it cannot be altered unilaterally by the mis-
taken party in a way, which would give it a meaning assumed by that party. The
right to annul the contract is limited with one-year limitation period counted as of
the date of detection of the mistake.55
C. Fraud
85. Separately, in Article 86 CC, the mistake that was deliberately caused by
another person is regulated. The contract is defective, if one of the parties deliber-
ately and intentionally aims to cause, strengthen or support erroneous conception of
another party. It may consist not only in providing false information, but also in
deliberate concealment of the information, which was to be revealed. If the fraud
caused other party’s erroneous imagination and this was the reason why that party
concluded the contract, the contract is defective. In contrast to the mistake regu-
lated in Article 84 CC, the mistake caused by fraudulent behaviour does not have to
be essential nor refer to the content of the legal act. It may also be loosely linked to
the legal act, concern its motive, irrelevant provisions, secondary legal effects, etc.
The law treats the third party’s fraud equally with the fraud made by the party to
the contract. The third party in this case is a person who is neither the party to the
contract nor that party’s representative, the legal person’s body, the person who con-
ducts negotiations on behalf of the party, etc. Additional condition on which the per-
son acting under the influence of fraud may refer to the third party’s fraud is that
the other party to the contract knew about the third party’s fraud and did not inform
about it. This condition, however, does not apply to the gratuitous legal acts.
86. In case of fraud, just like in case of mistake, the relative invalidity is pre-
scribed. The person who acts under the influence of fraud may evade the legal
effects of the declaration of will within a year since the date of detecting the
fraud.56
IV. Improper Pressure
87. Under Article 87 CC, anyone who made a declaration of will under the influ-
ence of an illegal threat posed by the other party or a third party may evade the legal
75
effects of his declaration if it follows from the circumstances that he had reason to
fear that he or another person was in serious danger with respect to their persons or
property.
This kind of defect of the declaration of will, which is called ‘threat’, means that
the subject who concluded the contract acted under a psychological pressure caused
by the other person. The improper pressure takes place when the threats of using
measures that would cause negative effects for the person who is to submit the dec-
laration are made in order to force this person to make a particular declaration of
will. The essence of the improper pressure is that somebody causes a state of fear
and thus creates a compulsory situation for the other party – a situation in which
that other party has to choose between two wrong options. The improper pressure
exists not only in case of threat of doing something wrong but also in case of threat
of refusing help in a state of emergency, if the person who refuses help has a legal
(some authors also include moral) obligation to provide it. The wrongdoing, which
is an element of the threat, does not have to refer to the person who is to make the
declaration of will but may also concern another person.
Defectiveness of the contract is caused only by the threat that is illegal and seri-
ous (grave). Illegality is understood in a broad sense; it includes both conflict with
law and with moral principles. Illegality of the threat may consist in so-called ille-
gality of measure and illegality of aim. The first one is the announcement of using
measures that are illegal per se (e.g., use of force). The latter takes place when the
person who is threatening has a right to act in a specific way, but this right was
granted for other purposes than forcing another party to conclude the contract (e.g.,
the threat to commence enforcement proceeding in order to force the debtor to con-
clude the contract in a different matter).
The improper pressure is serious when, on the basis of comprehensive consider-
ation of the situation, it can be assumed that the person who acted under the pres-
sure could have believed that the threat will be carried out. Therefore, it depends
not only on the content of the threat (seriousness of the danger) and the possibility
of realizing it but also on the traits of the person who is subjected to threat (age,
sex, state of health, physical and psychical features, situation).
The causal link between the threat and the conclusion of contract is also a con-
dition for the contract to be defective. The improper pressure has to cause a state of
fear, which in turn is a reason for undertaking a particular decision and conclusion
of the contract.
88. The consequence of the threat is relative invalidity of the contract, just like
in a case of mistake. The one-year limitation period is counted as of the date when
the state of fear ceased.57
(Warsaw: Wolters Kluwer, 2009), 908 ff.; Z. Radwański, in Prawo cywilne – cze ść ogólna. vol. 2 of
76
V. Gross Disparity
89. In the Polish law, the problem of the disproportion of the parties’ obligations
is solved by the rules on ‘unfair exploitation’ contained in Article 388 CC. It is
assumed mainly that the unfair exploitation is not the defect of the declaration of
will but a different type of the contract’s defectiveness, consisting rather in the fact
that the contract was given an improper content than in defectiveness of the party’s
decision-making process.
According to Article 388 CC if one of the parties, taking advantage of the state
of necessity, inefficiency or inexperience of the other party, in exchange for its own
performance accepts or reserves for itself or for a third party a performance, whose
value at the moment of the conclusion of the contract glaringly exceeds the value of
its own performance, the other party may demand a reduction of its performance or
an increase of the performance due to it, and if both are excessively difficult it may
demand that the contract be declared void. These rights expire after two years from
the day of the conclusion of the contract.
The provision cited above limits the effectiveness of the contracts that aims at
unfair (not equivalent) exchanging of goods but only if such a content of the con-
tract results from taking advantage of particular personality traits or situation of the
other party, which make rational decision-making difficult for that other party.
The scope of application of this rule is not entirely clear. Some authors think that
the institution of unfair exploitation refers only to mutual (reciprocal) contracts
(defined in Article 487 §2 CC), others state that it refers to any bilaterally binding
contract. In our opinion, the latter view is more legitimate – Article 388 CC may be
applied to all bilaterally binding contracts that aim to exchange the goods. And the
good that is a subject to exchange has to be understood in a broad meaning, which
includes inter alia a possibility to use the money (in the loan contract) or bearing a
risk (in insurance contract or guarantee).58
As it was discussed above, the limitation of the effectiveness of the contract con-
cluded due to the unfair exploitation is a consequence of improper construction of
the obligation’s content. The defect consists of a disproportion of the value of per-
formances. It has to be a disproportion in an objective meaning, which means that
it may be established by use of external evaluation criteria (usually the market
prices). Therefore, higher value of performance that results only from particular use-
fulness of a thing or from purely emotional reasons is irrelevant. The unfair exploi-
tation occurs not in any case of disproportion of the performances’ value but only
when this disproportion is glaring, conspicuous. The law does not impose any quan-
titative criteria and especially does not refer to the Roman laesio enormis. It merely
refers to the difference that due to its extent is obvious and glaring. The evaluation
of performances is to be conducted according to their value as of the date of the con-
tract’s conclusion.
Another condition that is to be fulfilled in order to apply the provision concern-
ing the unfair exploitation is a state of necessity of the person who is obliged to per-
form or the existence of one of two particular traits of this person: inefficiency or
77
inexperience. Therefore, the causal link between the state or the particular trait and
the conclusion of the contract of the particular content is necessary – this particular
situation or trait must influence the decision about the conclusion of the contract.
The state of necessity means that the harmed person is in a position that forces
him or her to conclude the contract regardless of the value of performances. There-
fore, the person in question has to choose between two or more wrong options –
concluding an unfavourable contract or not concluding it, which brings other nega-
tive consequences. The conclusion of the contract in this circumstance is still a free
action but an action conducted in improper motivational situation. The compulsory
position may be a result of the personal circumstances (e.g., poor health condition,
threat to life, risk of harm to other personal goods) but also of one’s family or pro-
prietary situation.
Inefficiency is a lack of ability to act in an efficient way, to properly manage one’s
life matters and helplessness in everyday business. It may result from different
causes (age, physical and psychological condition), and the nature of the cause is
irrelevant in respect to the unfair exploitation.
Inexperience is lack of ability to judge the value of the performance and to for-
mulate the content of the contract, which is a result of the fact that the harmed per-
son has never done it before. Recently in the literature a predominant opinion is that
the inexperience does not refer solely to the total lack of life experience but also to
lack of experience in the area to which the particular contract pertains.
The unfair exploitation under Article 388 CC takes place only when the state of
necessity, inefficiency or inexperience of the harmed person was exploited by the
other party to the contract. Therefore, there have to be grounds for a negative assess-
ment of the other party’s behaviour. Such grounds exist when the other party is
aware of the disproportion of value of performances and aware of the weakness of
the contractor and in spite of this wants to conclude the contract.
90. The consequence of the unfair exploitation is that the party who was harmed
may file a suit against the other party and claim a change of the content of the obli-
gation, if only there is a possibility to regain equality of the parties’ performances.
The harmed person may therefore claim an increase in the performance, which is to
be rendered to him, decrease the performance he is to render or both. If any alter-
ation of the performances’ value is impossible or excessively difficult, the harmed
person may demand that the court invalidates the contract. The claims are limited
with a two-year limitation period, which is counted as of the day of the contract’s
conclusion. Within this period of time, the harmed person has to file a suit.59
91. The ratio of the rules on unfair exploitation is negative assessment of the
behaviour of the party that is exploiting the state of necessity, inefficiency or inex-
perience of the other party. As this kind of immoral conduct is governed by Article
388 CC, the more broad rule of Article 58 section 2 CC (a legal act which is con-
trary to principles of community life is invalid) cannot be applied. Nevertheless in
jurisprudence and in case law it is assumed that if apart from the prerequisites set
78
out in Article 388 CC some additional elements indicate that the contract violates
rules of morality or the behaviour of the person who is exploiting the other party is
particularly reprehensible, the contract may be found invalid on the grounds of
Article 58 section 2 CC and the provision concerning the unfair exploitation does
not apply.60
The contractual justice, understood as a right balance between parties’ rights and
obligations or gains and burdens, chances and risks, may also be examined by the
court on legal basis other than Article 388 CC. According to Article 3531 CC, which
sets the boundaries of contractual freedom, the parties to the contract may arrange
their legal relationship as they deem proper on the condition that the contents or the
purpose of that contract are not contrary to the nature of the relationship, to the
statutory law, and to the principles of community life. The latter stipulation, which
refers to the moral principles, allows the court to control a fair distribution of the
contractual burdens. The above-mentioned control is applied by the jurisprudence
in a very careful way, and the courts make use of the possibility to enforce it in an
extremely moderate manner. The predominant opinion is that a breach of rules of
contractual justice may take place only when the imbalanced contract does not
reflect the party’s free and reasonable decision due to the fact that the content of the
contract was formulated without required knowledge or under the influence of the
economic pressure. Moreover, the reason for such a situation must be the other par-
ty’s wrongful conduct aimed at taking advantage of a privileged position and not
the mere negligence of the harmed person.61
Meeting the requirement of the contractual justice is examined on the basis of the
value of the performances rendered by the parties, which has been already dis-
cussed above. Moreover, the distribution of other duties and rights is subject to
examination. On this basis, the Supreme Court stated that the contractual provision
that grants to one party a unilateral right to alter the content of the legal relation is
invalid.62 On the basis of the same rule – before relevant provisions were intro-
duced to the CC – the Supreme Court controlled the interest rates set out in the con-
tract.63
60. See A. Stelmachowski, Zarys teorii prawa cywilnego (Warsaw: PWN, 1997), 129; Z. Radwański, in
Prawo cywilne – cze ść ogólna, vol. 2 of System Prawa Prywatnego, ed. Z. Radwański (Warsaw:
C.H. Beck, 2008), 247 ff.; R. Trzaskowski, Granice swobody kształtowania treści i celu umów obli-
gacyjnych. Art. 3531. k.c. (Kraków: Zakamycze, 2005), 372 ff.
61. See R. Trzaskowski, Granice swobody kształtowania treści i celu umów obligacyjnych. Art. 3531.
k.c. (Kraków: Zakamycze, 2005), 362; P. Machnikowski, in Prawo zobowia zań– cze ść ogólna, vol.
5 of System Prawa Prywatnego, ed. E. Łe towska (Warsaw: C.H. Beck, 2006), 495.
62. See resolution of the Supreme Court (seven judges panel) of 22 May 1991, III CZP 15/91, OSN No.
1 (1992), item 1; resolution of the Supreme Court of 6 Mar. 1992, III CZP 141/91, OSN No. 6
(1992), item 90.
63. See judgment of the Supreme Court of 8 Jan. 2003, II CKN 1097/00, Orzecznictwo Sa dów Polskich
no. 4 (2004), item 52; judgment of the Supreme Court of 27 Jul. 2000, IV CKN 85/00, Orzecznictwo
Sa dów Polskich no. 3 (2001), item 48.
79
§3. OTHER CONDITIONS OF VALIDITY
I. Existing and Licit Cause
92. Formerly an opinion was often expressed that the validity of the contract that
aims to give a benefit to any party depends on the existence of causae, which was
also called ‘a legal grounds for benefit’.64 This opinion has a clear and unquestion-
able legal basis only in case of disposing contracts (transfer of ownership, transfer
of receivables, disposal of inheritance), because the law explicitly requires then an
existence of valid obligation to dispose. With regard to obliging contracts, there is
less clarity. The requirement of causae in case of those contracts is not based on the
provisions of law and its justification by jurisprudence is usually very unclear. The
opinions currently present in legal writing are either that the causa is totally irrel-
evant concept for the law of obligations65 or that it is not an independent, external
factor but merely an element of the contract’s content.66 The latter concept is not
entirely clear too; however, the emphasis is put on the fact that causa is not an inde-
pendent condition of validity.
In the judicature, this issue has not been raised. The Supreme Court came near to
this subject while examining the nature of a bank guarantee with an ‘unconditional,
on first demand’ clause and considering whether the bank is obliged to perform if
the guaranteed duty does not exist. Applying the doctrine of causa to this case, the
bank could refuse the performance. The Supreme Court adopted the resolution of
seven judges qualified as a ‘principle of law’ (which is a resolution binding to other
panels of the Supreme Court’s) and stating that the bank cannot raise defences con-
cerning the secured claim. This opinion was later upheld by the resolution of the
full composition of the Supreme Court’s Chamber of Civil Law. What is essential
for the subject discussed here, stating grounds for those resolutions the Supreme
Court focused on the principle of contractual freedom (Article 3531 CC) and did not
consider any requirement of causa.67
II. Determinable Object
93. The CC does not require for the contract to be valid that the debtor’s per-
formance be determined. It does not mean, however, that a way of defining the sub-
ject of the contract is irrelevant. The contract is the legal act that obliges a party (or
64. See W. Czachórski, Czynności prawne przyczynowe i oderwane w polskim prawie cywilnym (War-
saw: PWN, 1952); S. Grzybowski, in Prawo cywilne – cze ść ogólna, vol. I of System prawa cywil-
nego (Wrocław: Ossolineum, 1985), 505 ff.
65. See E. Drozd, Przeniesienie własności nieruchomości (Warsaw-Kraków: PWN, 1974), 103; K.
Zawada, ‘Problematyka kauzalności przelewu’, Rejent 2 (1992); G. Tracz ‘Aktualnośç generalnej
reguły kauzalności czynności prawnych przysparzaja cych w prawie polskim’, Kwartalnik Prawa
Prywatnego 3 (1997).
67. See resolution of the Supreme Court (seven judges panel) of 16 Apr. 1993, III CZP 16/93, OSN No.
10 (1993), item 166 and resolution of Supreme Court (whole composition of the Civil Law Cham-
ber) of 28 Apr. 1995, III CZP 166/94, OSN No. 10 (1995), item 135.
80
both parties) to render a specified performance, which implementation may be

claimed in a court proceeding. This leads to the conclusion that neither the perfor-
mance nor the parties’ identities have to be specified in the contract but they have
to be, as it is called in academic literature, determinable. The contract, alongside
with the provisions of law, customs and principles of community life, has to stipu-
late at least the way according to which the content of the debtor’s performance may
be specified by the objective observer at the latest in the moment when the perfor-
mance is due. Such a rule is expressly contained in provisions governing some types
of the obligations (Article 536 §1 CC in regard to the sale contract and Article 628
§1 CC in regard to the contract for specified work), but it also applies to other obli-
gations.68 Only if the obligation’s elements are not defined even in such an indirect
way, referring to the future, the contract is invalid as its necessary content is lack-
ing.
III. Initial Impossibility
94. According to Article 387 section 1 CC, the contract for an impossible per-
formance is invalid. This provision refers to so-called initial impossibility, that is,
the impossibility existing in the moment of the contract’s conclusion. So for the con-
tract to be valid it has to impose on the parties’ obligations that are feasible to be
carried out. The impossible performance means an action that cannot be conducted
by anybody. When the performance cannot be rendered by the particular debtor but
can be rendered by another person, it is not impossible. This stems from the rule
stating that the debtor does not have to render the performance personally; obliga-
tion can also be performed by another person (Article 356 CC). However, when this
rule does not apply (when the contract, the law or the nature of the performance
requires performance by debtor in person), the debtor’s inability to perform amounts
to impossibility in the meaning of Article 387 CC.
The performance may be impossible due to legal or factual reasons. However, the
mere fact that a thing or subjective right that is an object of contract does not exist
or is not in the debtor’s disposal when it can be made or acquired by the debtor does
not cause impossibility of the performance.
The jurisprudence calls for wider application of the provision discussed here so
as to cover instances of so-called economic impossibility. Economic impossibility
means a situation when the performance is possible to render; however, it would
cause costs utterly disproportionate to its value. However, the pacta sunt servanda
principle cannot be neglected in such a reasoning. The fact that performing requires
far more costs or efforts than the debtor has anticipated is not sufficient to deem the
performance impossible. Only these kinds of hardship that make the performance
68. Zob. T. Dybowski, in Zobowia zania – cze ść ogólna, vol. III, part 1 of System prawa cywilnego, ed.
Z. Radwański (Wrocław: Ossolineum, 1981), 96 ff.; P. Machnikowski, in Prawo zobowia zań– cze ść
ogólna, vol. 5 of System Prawa Prywatnego, ed. E. Łe towska (Warsaw: C.H. Beck, 2006), 460. See
also judgment of the Supreme Court of 28 Apr. 1988, IV CR 96/88, Orzecznictwo Sa dów Polskich
no. 7 (1989), item 148.
81
only theoretically possible – an attempt to render the performance would be seen as

action going clearly beyond all reason – may equal the real impossibility to per-
form.
The performance is impossible in the meaning provided by Article 387 CC only
when this impossibility is of the permanent nature – the performance will not
become possible in the foreseeable future.
For the validity of the contract, it is irrelevant whether any of the parties were
aware of the impossibility. This is, however, relevant in respect to the liability stipu-
lated in Article 387 section 2 CC, which was described above.69
IV. Illegality and Public Policy
95. According to Article 3531 CC, the parties that conclude the contract may
shape the legal relationship as they deem proper on the condition that its aim and
content is not contrary to the nature of the relationship, the statutory law or prin-
ciples of community life. This rule indicates three limits of the contractual freedom.
While examining whether the contract is within these limits, both its purpose and
its content have to be taken under consideration. The consequence of exceeding the
limits of the contractual freedom is invalidity of the contract, unless the specific pro-
vision states otherwise.70 Similar rules are established by Article 58 CC.
‘Statutory law’, which indicates limits of the contractual freedom, means every
source of the generally binding law applied in Poland.
First, it refers to the provisions that prohibit (directly or indirectly) conclusion of
the contracts of specific content or stipulation of specific conditions. The above pro-
visions do not formulate the content of the obligation in a positive way but state
which provisions that may be included in the contract are prohibited and ineffec-
tive. The contractual freedom is also limited by provisions that introduce limita-
tions as to the subjects of a contract (entering into some types of contracts is allowed
only to subjects that have particular qualifications, for example, banks or insurance
companies). There are also objective limitations, consisting in prohibition of con-
tracts concerning particular goods (e.g., body tissues and internal organs; medical
products that are not allowed on the market or that do not meet quality require-
ments; drugs; weapons and ammunition). In many cases, provisions of the criminal
code may impose statutory limitation of freedom of contract. This happens when the
lawmaker’s aim is to prevent specified legal relation from being established and
measures of criminal law are not sufficiently effective.
The second type of the boundaries of the contractual freedom imposed by the
statutory law are provisions that shape the content of the obligation (parties’ rights
and duties) in a mandatory or semi-imperative way. In this case, the legislator stipu-
lates the content of the contractual obligation relation in a way that is not possible
k.c. (Kraków: Zakamycze, 2005); P. Machnikowski, Swoboda umów według art. 3531. KC. Kon-
strukcja prawna (Warsaw: C.H. Beck, 2005).
82
for the parties to alter or the possibility of alteration is limited. For all the provi-
sions concerning the obligation, relations may be divided into the three following
categories:
(1) default rules (relatively binding), which means that the parties can exclude the
application of the given provision, mostly by regulating the issue in the con-
tract in a way that departs from the statutory regulation;
(2) imperative rules, application of which cannot be excluded by the parties’
intent;
(3) semi-imperative rules, application of which can be excluded by the contract
only in a limited way – scope of the rights granted by the law cannot be altered
to the detriment of one party.
The binding force of the provision may be defined by its content or determined
by means of purposive interpretation. The provision is deemed imperative or semi-
imperative when it aims at protecting interests of one of the parties to the legal rela-
tion, third parties as well as bigger groups of people or entire society.71
We deal with the contradiction of the legal action with the act when the legal
action contains provisions that are against the act as well as when it does not con-
tain the content prescribed by the legal norm.
Article 58 section 1 CC treats acts in law aiming to evade the law (done in frau-
dem legis) in the same way as acts that are contrary to the law. The act in law done
in fraudem legis is understood as the act that is not explicitly forbidden but is under-
taken in order to achieve an effect that is forbidden by law. The aim, because of
which the legal act may be regarded as invalid, is such an effect that is not covered
by the content of the act but will be reached once the legal act is executed and the
parties are aware of that.
According to Article 58 section 1 CC in fine, the contradiction of the legal act
with the statutory law does not cause its invalidity if an appropriate article provides
another effect, especially the effect that, in the place of invalid provisions of the
legal act, appropriate articles of the statute are applied. Substitution of the statutory
provisions in place of invalid provisions of the contract is provided, for example,
by Article 359 section 22 CC,72 Articles 537–539 CC73 and Article 593 section 1
CC.74
96. Another limitation of contractual freedom is principles of community life

understood as moral rules and judgments. The parties cannot conclude binding con-
tract whose content or aim would be contrary to binding moral standards. This refers
k.c. (Kraków: Zakamycze, 2005), 231 ff.; P. Machnikowski, Swoboda umów według art. 3531. KC.
Konstrukcja prawna (Warsaw: C.H. Beck, 2005), 219 ff.
72. Stating that if the amount of interest resulting from an act in law exceeds the maximum interest, the
maximum interest shall be paid.
73. Referring to fixed, maximum and minimum price.
74. Stating that the right of repurchase may be reserved for a period not exceeding five years; a longer
period shall be shortened to five years.
83
mostly to moral standards that protect freedom and justice in contractual relations.
This issue has been already discussed (see paragraphs 89 ff).
Out of the trial matters of the issue under discussion, what should be indicated is
the fixed opinion of judicature stating that a party that claims the contract invalidity
due to the contradiction with the principles of community life cannot refer only to
unspecified principles but must indicate which particular moral rule has been vio-
lated.75
Despite the fact that Article 58 section 2 CC does not contain the reservation that
corresponds to the content of Article 58 section 1 CC in fine, it should be accepted
that the contradiction of the act in law with the principles of community life does
not result in absolute invalidity if a specific statutory provision provides different
legal consequences.
97. The third and most unclear limitation of the contractual freedom provided
by Article 3531 CC is ‘the nature of the relationship’. It is assumed mainly that this
clause refers to some basic features that are characteristic for the obligation as a par-
ticular model of relationship between subjects and are shaped by the law. Courts do
not often refer to ‘nature of the relationship’ and when they do, they usually invoke
it together with one of the other boundaries of contractual freedom stipulated in
Article 3531 CC.76
98. The Polish law in respect to the contracts does not use the term ‘public
policy’. It was used in the provisions of the Code of Obligations of 1933. Most of
the instances of contradiction to the public policy, which were discussed in that time
in the literature, currently are qualified as contracts contrary to the law (especially
criminal law). Moreover, it is assumed that ‘contradiction to the statutory law’
means discrepancy between the contract and any legal rule which is generally bind-
ing, inter alia, rules of constitutional law and that not only the content of the con-
tract but also its aim is subject to the examination. These two assumptions allow
treating contracts that infringe basic principles of political or economic system or
rules concerning functioning of the most important social institutions as contracts
contrary to the law.77
75. Judgment of the Supreme Court of 27 Apr. 2001, V CKN 1335/00, LEX No. 52392.
76. See, e.g., resolution of the Supreme Court (seven judges panel) of 22 May 1991, III CZP 15/91, OSN
No. 1 (1992), item 1; resolution of the Supreme Court of 15 Feb. 1996, III CZP 5/96, OSN No. 5
(1996), item 69; resolution of the Supreme Court of 3 Mar. 1997, III CZP 3/97, OSN Nos 6–7 (1997),
item 71; resolution of the Supreme Court of 27 Oct. 1997, III CZP 49/97, OSN No. 4 (1998), item
36; judgment of the Supreme Court of 22 Jan. 1998, III CKN 365/97, OSN No. 9 (1998), item 144.
77. This issue was discussed in the literature in regard to the contracts that were obliging the members
of parliament to obedience to the authority of the political party in cases related to members’ man-
dates.
84
§4. THE CONSEQUENCES OF A DEFECT OF CONSENT OR A LACK OF

SUBSTANTIVE VALIDITY
I. Nullity (Invalidity)
99. The nullity of the contract (usually referred to as ‘absolute’ or ‘definitive

invalidity’) occurs in the following cases:
(1) the contract was concluded by a person who did not have the capacity for acts
in law (Article 14 CC);
(2) the contract’s aim or content is contrary to the law, principles of community
life or the nature of the obligation relationship (Articles 58 CC and 3531 CC);
(3) the contract was concluded without observing the form required by the law or
by the parties to the contract under the pain of nullity (Articles 73 and 76
CC);
(4) defects of the declaration of will in the form of lack of consciousness or free-
dom (Article 82 CC) or simulation (Article 83 CC) occurred.
The invalidity means that the contract does not cause any of the legal effects con-
nected with this particular type of the contract. It does not cause effects:
– as of the day of the contract’s conclusion;

– by virtue of the law – without any actions undertaken by the parties or by the
court in order to annul the act (the court’s ruling in case of a dispute plays only
a declaratory role);
– irreversibly – subsequent removal of obstacles that caused invalidity does not
change the situation; it obviously does not exclude ability to conclude the same
contract.
While determining the facts in any proceeding for which the outcome depends on
whether the contract was concluded, the court, when the evidence produced by the
parties allows it, has a duty to examine the contract’s validity, even if the parties do
not file any motions nor make any statements as to the contract’s validity. It is pos-
sible, though not necessary, to conduct a separate proceeding concerning the inval-
idity of the contract. Any person who has a legal interest in determination of the
effectiveness of the contract may file to the court a relevant claim (Article 189
CCP).
The mere fact that the contract is invalid does not mean that the parties’ conduct
consisting in concluding and implementing the contract may not cause any legal
effects at all. This conduct may be element of a more complex factual state, for
example, undue performance (Article 410 §1 CC) or a tort (Article 415 CC).
85
In case of discrepancies between the contract’s content and the mandatory or

semi-mandatory provision of law, the contract is invalid unless the relevant provi-
sion states otherwise. Possible other consequences of illegality may be the possi-
bility to repeal the legal effects of the legal act by a party’s decision or court’s ruling
(so-called relative invalidity) or replacement of the invalid contractual clause with
relevant provisions of law.78
100. Article 58 section 3 CC stipulates so-called partial invalidity of the legal

act. In such a case, a part of the contract that is contrary to the statutory law or to
the principles of community life is null while the rest of the contract remains effec-
tive. The said article says that as a rule nullity of a part of the legal act does not
influence the validity of the other part. There are some exceptions to this rule:
(1) invalidity of some provisions of the legal act causes invalidity of entire act
when the remaining part would not constitute the minimum content of the act
or without the invalid part the identity of the legal act would be affected;
(2) nullity of only part of the provisions causes invalidity of the entire act in law
if it follows from the circumstances that without the provisions affected by
nullity the act would not have been performed (Article 58 §3 CC in fine).79
101. The courts and the jurisprudence allow ability to convert the invalid con-
tract, which means that it can be altered into another, valid contract. This stems from
two presumptions: that the main role of the civil law is to realize the parties’ intent
and that even the invalid legal act is not something that does not exist but consti-
tutes some factual state. Hence the conclusion that when the parties’ main aim can-
not be achieved due to the invalidity of the legal act, the factual state of that act has
to be examined in order to find out whether it can cause other legal effects that
would be in compliance with more general socio-economical goals of the parties.
There are two ways of explaining the nature of this phenomenon and its place in
the legal system. The older and more widely accepted view treats the conversion of
the invalid contract as a separate legal institution.80 The main defect of this stance
is the fact that the Polish law (in contrast to the German law) does not include any
provision that would allow for such an operation. The other opinion treats the con-
version as a special kind of the interpretation of contract. Currently, it is accepted
that what is subject to interpretation is certain human’s conduct in a situational con-
text and not the ‘valid declaration of will’ (which was previously qualified as such).
Radwański (Warsaw: C.H. Beck, 2008), 430 ff.; P. Machnikowski, in Kodeks cywilny: Komentarz,
ed. E. Gniewek (Warsaw: C.H. Beck, 2008), 135 ff.
80. See K. Gandor, ‘Konwersja nieważnych czynności prawnych’, Studia Cywilistyczne IV (1963); A.
Szpunar, ‘O konwersji nieważnej czynności prawnej’, in Ksie ga pamia tkowa ku czci profesora
Leopolda Steckiego (Toruń: TNOiK, 1997); B. Lewaszkiewicz-Petrykowska, in Prawo cywilne – cze
ść ogólna, vol. I of System prawa cywilnego (Wrocław: Ossolineum, 1985), 709 ff.; P. Ksie zak, in
Kodeks cywilny: Cze ść ogólna, ed. M. Pyziak-Szafnicka (Warsaw: Wolters Kluwer, 2009), 581 ff.
86
In consequence, the classification of the conduct as the declaration of will and estab-
lishing its compliance with law and morality are elements of interpretation. There-
fore, the contract’s factual state is subject to interpretation. If the content of the
contract stipulated by the parties cannot be maintained and achievement of desired
legal effects is impossible because this would be contrary to the law or principles of
community life, one has to take into consideration the possibility of construing the
contract differently and attaching to it different legal consequences. So the conver-
sion consists in determining to what extent the declaration of will may be upheld
and applied in order to accomplish parties’ goals and, subsequently, in determining
legal consequences of such a modified declaration.
Conversion cannot take place when the parties’ conduct is not a legal act (par-
ties’ statements cannot be categorized as declarations of will) due to lack of inten-
tion to cause any legal effects. Conversion is also not allowed in case of defects of
declaration of will stipulated in Articles 82 and 83 CC (lack of consciousness or
freedom and simulation). While conducting the conversion, the parties’ interests
have to be taken into consideration, in order to keep the distribution of risks, ben-
efits and duties as originally planned by the parties.81
II. Avoidance of the Contract
102. The possibility to annul the legal act is usually called in Polish jurispru-
dence ‘relative invalidity’. It means that the legal effects of the contract arise but
they are not permanent due to the fact that a person indicated by the law may annul
these effects retroactively either by his or her own declaration of will or by the
court’s ruling. The possibility to annul the defective legal act is usually limited with
a use of a short period of limitation; after this period lapses, the legal act ceases to
be defective.
The relative invalidity of the declaration of will is imposed by the CC in several
cases of defects of the declaration of will. Most important instances are mistake,
improper pressure and fraud. The party entitled to annul the contract must only
make a declaration of will stating that it does not wish to be bound by its defective
declaration. This declaration of annulment is made to the other party in a written
form (for evidentiary purposes). The possibility to annul expires: in case of mistake
and fraud – within one year since the moment of its detection and in case of
improper pressure – within one year since the state of anxiety ceased. Other
instances of invalidating the contract are stipulated in Article 388 CC (unfair exploi-
tation) and Article 705 CC (cancellation of the auction). In these cases, the annul-
ment takes place in a form of the court’s ruling issued on the entitled party’s
demand.
Ossolineum, 1992), 123 ff.; P. Machnikowski, in Kodeks cywilny: Komentarz, ed. E. Gniewek (War-
saw: C.H. Beck, 2008), 164.
87
In case of the annulment of the contract, its legal effects are removed retroac-
tively – it is treated as if it was invalid from the moment of its conclusion. The per-
formances already rendered should be returned.82
III. Damages
103. The Polish law does not contain rules that would generally impose liability
for damage caused by the contract’s invalidity or its annulment. There are some spe-
cific provisions that concern culpa in contrahendo, which were discussed above
(paragraphs 68 ff). Apart from that the general provisions of tort law may be
applied, especially Article 415 CC.
88
104–105
Chapter 3. The Contents of a Contract

§1. THE DIFFERENT CLAUSES
I. Ascertaining of Express Terms; Implied Terms
104. Once a contract is validly created, the question as to its content may arise.
The Polish law does not distinguish express terms as implied terms, existing in the
common law systems, but rather concentrates on the interpretation of the provisions
included therein and on the effects resulting from the particular act of law. Regard-
ing the first aspect Article 65 CC is the most crucial regulation. It will be analysed
in details in paragraph 2 of this chapter. Therefore, the examination below will be
concentrated on those provisions that refer to the latter. However, always the main
principle of the contractual freedom and its boundaries provided in Article 3531 CC
must be borne in mind.
105. An act in law has not only the effects expressed therein but also those that
follow from statutory law, the principles of community life, and the established cus-
toms.83 Therefore, even if the parties did not stipulate certain provisions in the con-
tent of the agreement, it is possible to supplement it with the elements listed in
Article 56 CC. However, except for the statutory provisions, it cannot take place if
the parties literally agreed otherwise. It means that not all the elements of the con-
tract must be either realized or intended by its parties. Moreover, they do not have
to be literally expressed. This is why in the doctrine of the civil law, the legal sys-
tem is considered as a basis for legally binding contracts and other acts of law and
not the autonomy of the parties. Some effects arise from the contract because the
legislators consider – within the borders defined by the legal order – the parties’
competence to create their legal status. Nevertheless, some other legal effects, con-
nected with the performance by the party of the certain legal act, are imposed on
the parties by virtue of law.84
The statutory law, referred to in Article 56 CC, shall be understood as all gen-
erally binding provisions of law defined in Article 87 of the Constitution. The prin-
ciples of community life are described as moral assessment based on the moral rules
referred to the conduct of the others. They should be understood as generally bind-
ing rules of conduct in relationships among people whose basis is axiological
(appraising) not thetic (legal) justification. They refer to the values and assessments
of correct, decent, diligent, loyal or honest behaviour accepted in the whole society
or in a given social group. These principles encompass not only the moral rules but
also the customary ones. In the judgment of 2 October 2003,85 the Supreme Court
explained that in the relationships between the entrepreneurs, the principles of social
coexistence should be understood as the principles of diligence and loyalty towards
the contract partner. Regarding the last element mentioned in Article 56 CC – the
83. Art. 56 CC.

84. See A. Wolter, J. Ignatowicz & K. Stefaniuk, Prawo cywilne: Zarys cze ści ogólnej (Warsaw: Lex-
isNexis, 2001), 253.
85. See judgment of the Supreme Court of 2 Oct. 2002, V CK 241/02, LEX No. 175961.
89
106–106 Part I, Ch. 3, The Contents of a Contract
established custom – it is considered as generally accepted by the particular social

group and with reference to the particular kind of the social relations manner of
behaviour that is repeated during certain period. It should be stressed that it is irrel-
evant if the parties entering into the contract were aware of the custom. However,
it is binding and it supplements the act in law only if it is not contrary to the gen-
erally binding provisions of law and the principles of community life.
106. The contract may also be supplemented by Article 354 CC, which refers to
the manner of performing the obligation if it was not precisely defined in the con-
tent. This provision regulates the principles of performing the obligations both by
the debtor as well as by the creditor. The performance of their obligations has the
aim of satisfying the creditor’s interests defined by the creditor’s subjective law
(liability). According to Article 354 section 1 CC, the debtor should perform his
obligation in accordance with its content and in a manner that matches his social
and economic purpose as well as the principles of social coexistence and if there
are some customs accepted in this respect, also in a manner suitable for these cus-
toms. In the same way, the creditor has the obligation to cooperate in obligation per-
formance.86 By referring to the social and economic purpose of the obligation, the
legislator enriches the basis of the assessment of parties’ conduct by the criterion of
functional nature. Thus, it refers to taking into account those consequences that are
not articulated in the content of the legal regulations, in the declaration of will or in
customs and which – when all those particular circumstances are taken into consid-
eration – should be regarded as typical and therefore expected by the parties.87
According to the Supreme Court’s opinion on the application of Article 354 CC,
the content of the obligation as understood by Article 354 CC is most of all rights
and obligations of the parties that are determined explicitly, in a manner not raising
any doubts within the frameworks of a legal relationship connecting the parties as
well as within the scope referring to the manner of obligation performance. The
necessity to refer to the criteria of Article 354 CC emerges when – as it is empha-
sized in the doctrine – from the content of the obligation understood in this way it
does not result in a sufficiently unambiguous way what the manner of obligation
performance is to be as well as when each party’s expectations are different in given
circumstances at the moment of obligation creation. In that case, when the manner
of obligation performance is not arguable between the parties, there is no need to
refer to the criteria indicated in Article 354 CC.88
86. Art. 354 §2 CC.

87. See Z. Radwański & A. Olejniczak, Zobowia zania – cze ść ogólna (Warsaw: C.H. Beck, 2006), 15.
88. Judgment of the Supreme Court of 18 Jan. 2001, V CKN 1840/00, OSN Nos 7–8 (2001), item 114.
90
Part I, Ch. 3, The Contents of a Contract 107–108
II. Standard Terms and Exemption Clauses
A. Standard Terms
107. The regulations of the Articles 384–3845 CC refer to the standard agree-
ment forms (standard terms), which – at present – are fixed elements of modern eco-
nomic activity. In this, they fulfil positive economic functions because they
accelerate the procedure of entering into contracts and facilitate the rationalization
of running big enterprises. They are widely used by entrepreneurs most of all in
adhesion contracts – that is – in such contracts whose content is, in principle,
formed by one of the parties to the contract. In various contracts, they have differ-
ent names such as, for example, general terms and conditions of the contract, regu-
lations, contract patterns, etc. Apart from the positive influence on the economic
activity, the existence of such templates may cause some risk for the other party who
is a weaker entity on the market and on whom the entrepreneur, just by means of
those standard agreement forms, may impose certain provisions that are unjust to
him. In order to protect the contracting parties from such situations, the institution
of standard agreement forms has been regulated by law.
108. Article 384 section 1 CC shows what in the light of law is regarded as a
standard agreement model. It enumerates the general terms and conditions of con-
tracts, agreement models and regulations. This enumeration is only of example char-
acter and therefore ‘the term standard agreement forms shall be referred to all ready
contract clauses prepared unilaterally before entering into a contract’.89 The stan-
dard agreement form has to be drafted by one of the parties to the contract and is
intended to be used many times by the party that has drafted it. This being so, it
should be acknowledged that it may contain provisions that are repeatable in the
contracts for which it has been intended. Thus, such a standard agreement form does
not contain provisions determining the other party to the contract and very rarely
describes the contract’s subject (the nature and amount of goods or services and
remuneration). It may be therefore said that the provisions included in such a form
supplement the content of the legal relationship that came into being from an indi-
vidual contract.90
The information about the form is a condition of its binding force. Pursuant to
Article 384 section 1 CC, the standard agreement form is binding for the party if it
was delivered to this party before entering into the contract. Delivery is the most
certain and – at the same time – most convenient means of informing the other party
about the form so it was recognized by the legislator as the basic means. On the
basis of Article 384 section 2 CC, in case the use of the form is commonly accepted
in relationships of a given type and the other party could have easily obtained the
information about its content, it is not necessary to deliver the form. It is the con-
cern of the party using the form to make such availability of information. This party
should adjust the manner of making the form available to the other party to the type
89. See E. Łe towska, Prawo umów konsumenckich (Warsaw: C.H. Beck, 2004), 292.
91
of contract relationship and size of the form.91 However, the application of the mode
of informing about the form, which is easier for the entrepreneur, has been limited.
In the case of a contract to which the consumer is the other party, this form can be
used only in the case of contracts that are commonly concluded in minor, current
affairs of everyday life. In the case of all the remaining consumer contracts, the
delivery of the form is a necessary condition of its effectiveness.
Another requirement as to the form refers to its transparency (clarity). Pursuant
to Article 385 section 2 CC, the form should be formulated unambiguously and in
an understandable manner and this pertains to both the forms of consumer contracts
as well as contracts between entrepreneurs. If the content of the form is not under-
standable from the point of view of an average addressee, then the form brings about
no legal consequences in relation to a given addressee, which makes him not bound
by this form (Article 385 §2 CC in relation to Article 58 CC). The consequence of
the ambiguity of standard terms is the explanation of its provision in favour of a
customer. However, in the doctrine, there are numerous opinions that narrowing the
application of this regulation only to consumer contract is erroneous. It should also
be used to ‘forms of non-consumer contracts but, unlike in the case of consumer
contracts, we would have to deal not with the rule expressed normatively but with
the standard of business practice’.92 It would be in accordance with the general prin-
ciple in dubio contra proferentem, which means that the risk of imprecise phrases
is taken by the entity that unilaterally – without the other party – formed such
phrases.
109. Article 384 section 4 CC pertains to the form in the electronic form.
According to this regulation, such a form should be made available to the other
party before entering into a contract in such a manner as the other party could store
and reproduce in an ordinary course of action. The fact that the act points to one of
the parties may suggest the limitation of the regulation objective scope to the bilat-
eral legal relationships (the last one due to the obligation to make it available to the
other party). Such limitation does not seem to be justified because it is not excluded
to impose a standard agreement form with the content corresponding to unilateral
legal action (e.g., granting powers of attorney), the assessment of which should be
performed according to the principles of standard agreement form assessment. This
is supported by identical rightness, which is excluding the possibility of the influ-
ence of a specified entity on the content of the legal action performed by this entity
and this content shapes this entity’s rights or obligations. In this article, there is also
a fragment pertaining to using the form by one party, which is to be understood as
a real circumstance of the intention of including the electronic form into the legal
relationship; this form should be distinguished and made independent from the man-
ner of proponent’s activity organization. The foregoing statement means that the
scope of the application of Article 384 section 4 CC should cover the case in which
a particular provision is a standard term because it has been drafted with a view to
using it many times although only once in the electronic form. Thus, ‘using’ in the
objective understanding means the willingness to incorporate the standard terms in
91. See ibid., 155.

92. See E. Łe towska, Prawo umów konsumenckich (Warsaw: C.H. Beck, 2004), 322.
92
the electronic form into a given legal relationship irrespective of the manner of its
transfer in the previous or intended legal relationships. Moreover, the article shall
be applied to the assessment of the incorporation of the terms in their electronic
forms used by both parties to a legal relationship, which, in fact, would be profes-
sionals in a typical situation, there is no rightness to use any other incorporation
conditions, that is, to return to using the principles of Article 384 sections 1 and 2
CC because the electronic form of the term is decisive for the coverage by the scope
of section 4 of Article 384 CC and not the subjective differentiation which is, as a
matter of fact, non-existent in the provision under discussion (see below).
In the case of using the electronic form by both (or more) of the parties, each of
them has the same incorporation obligations, the keeping of which is assessed sepa-
rately and independently. An effective incorporation – that is – the form’s becoming
of binding character – requires making it available to the other party in a manner
allowing to store and reproducing it in an ordinary course of action. The obligation
of making it available concerns every case of using the standard term in the elec-
tronic form, irrespective of the relationships between the parties – consumer, pro-
fessional or the so-called common – as well as of the contract type, that is, its trifling
(according to Article 384 §2 CC in fine – entered into commonly in minor, current
affairs of everyday life) or other characters. However, making it available is not –
in terms of content and function – a different condition to deliver it as understood
by Article 384 section 1 CC, and it is only a condition adjusted to the electronic
form of standard terms. The consequence of the above is the proponent’s obligation
to, in the first place, meet the requirement of creating the possibility of easy
acquaintance with the content of the form as a lighter condition with regard to
delivery/making it available, which means first of all informing the other party
about the existence of such a form, then making the form available and the intel-
lectual possibility of acquaintance with its content.93
110. Further, the form delivered within the duration of a contractual relationship
of a continuous nature shall be binding upon the other party if the conditions speci-
fied above have been met and the party concerned has not terminated the contract
by notice at the earliest possible date of dissolution.94 It takes place when the form
is issued by the party that is already bound by an obligation relationship of continu-
ous character so of such character that is fixed to last and its manner of conclusion
is termination.95 According to the judgment of the Supreme Court,96 the change of
the legal relationship of continuous character by biding the parties to the contract
with the form issued during the contract duration occurs only at the moment of inef-
fective termination period expiry unless the contract includes other regulations or
when the parties have decided otherwise after communicating the form.
93. See M. Olczyk & M. Pecyna, Komentarz do niektórych przepisów kodeksu cywilnego, zmienionych
ustawa z dnia 14 lutego 2003 r. o zmianie ustawy – Kodeks cywilny oraz niektórych innych ustaw
(LEX – electronic publication).
94. Art. 384(1) CC.
95. For example, bank account relationship, lease relationship or tenancy relationship; see Z. Rad-
wański & A. Olejniczak, Zobowia zania – cze ść ogólna (Warsaw: C.H. Beck, 2006), 157.
96. See judgment of the Supreme Court of 18 Dec. 2002, IV CKN 1616/00, OSNC No. 4 (2004), item
54.
93
The effect of binding with the form will exist only when the general require-
ments stipulated for the forms by Article 384 CC have been fulfilled, that is, the
party has been appropriately informed about this form. It should also be empha-
sized that in the doctrine and judicature, it is quite commonly accepted that the
change of the content of an existing obligation relationship by issuing a form is per-
missible only on the grounds of a modifying clause included in the contract or in
the form or on the grounds of a particular legal regulation. However, such contract
or form provision cannot be totally free: it cannot authorize to make any changes
that breach the essential elements of the contract as well as it cannot be of headed
writing paper character and should indicate the circumstance justifying the change
of the previous form or the issue of a new one.97
111. Subsequent Article 385 section 1 CC shows the primacy of the contract in
the situation in which it stands in contradiction to a form. In such a situation, the
parties shall be bound only by the contract. This preference is based on the assump-
tion that the unanimous will of the parties deserves the highest recognition in the
area of legal actions. It should be stressed that the contradiction between the form
and the contract content does not affect the assessment of contract validity. The con-
tract is valid and brings about legal consequences that result from the contract con-
tent. However, the form also keeps its legal significance, but in relation to the other
party to a particular contract, it is ineffective. This ineffectiveness pertains only to
such a scope, within which the form stands in contradiction to the contract.
112. In so-called conflict of terms, which takes place when entrepreneurs are
using different standard forms of contract, shall not be valid for the provisions of
the standard forms that are mutually contradictory; the parties who have entered into
a contract are bound only by those provisions that are not contradictory to each
other. However, the contract shall not be entered into if, immediately after obtain-
ing the offer, the party informs that it is not going to enter into the contract on terms
and conditions that have been determined by the conflict of forms.98
113. CC also provides for the regulation as to ‘prohibited contract provisions’

(unfair terms), which applies not only to the consumer contract entered into by
means of a standard agreement form but also those without it. Pursuant to the legal
definition, ‘prohibited contract provisions’ constitute the contractual provisions con-
cluded with a consumer that have not been individually agreed with him, if his
rights and duties have been stipulated in conflict with public decency and in fla-
grant violation of his interest.99 In general, such provisions are not binding to the
contracting party. An exception is the provisions determining the main benefits of
the parties to the contract, including price and remuneration provided they have
been formulated in an unambiguous manner. The legislator has also explained what
is to be understood by the term ‘individual agreement’ of contract provisions.
According to Article 3581 section 3 CC, the lack of consumer’s real influence on
98. Art. 385(4) CC.
99. Art. 385(1) §1 CC.
94
the contract content consists in the fact that the consumer has not individually
agreed on the provisions of the contract. The burden of proving that the provision
has been individually agreed on rests on the entity that cites this,100 which, as a rule,
is favourable to the consumer.
Article 3853 CC includes a catalogue of the most typical unfair terms, which were
determined by the Directive 93/13/EWG of 5 April 1993 on unfair terms in con-
sumer contracts. Its aim is to facilitate courts to qualify and unify the court practice
in this regard. This enumeration includes the clauses that are characterized by the
fact that they limit or exclude the entrepreneur’s responsibility, transfer the control
over the provision content and contract execution to the entrepreneur or shape and
allow the entrepreneur to shape contract duration that is unfavourable to the con-
sumer or in other way violate the contractual balance. What is very important is the
indication that it cannot be accepted that the placement of a clause with the content
shown in the discussed article in a particular contract decides automatically about
regarding it as unfair. The court may make such a ruling only when the assessment
of the clause in a particular case performed by it with the consideration of the situ-
ational context will not allow it to give an unambiguous assessment as regards
whether this assessment stands in contradiction with decency or violates the con-
sumer’s interests in an essential manner.101 The effect of regarding the clause as
unfair is non-binding the contracting party by it, which does not influence the valid-
ity of the contract in the remaining part.102
The unfair terms are subject to two kinds of the control – incidental and abstract.
The first takes place when a court is hearing the case raised by an individual deter-
mining the content of the contract. Once a particular provision is considered as
unfair, it is binding only upon the parties of this trial without having any wider
effect. The abstract control relates to the mere use of the standard term by a busi-
ness and not to its implementation in relation to a specific consumer. This control is
administrative in nature and is exercised by the President of the Office for Compe-
tition and Consumer Protection.
According to recent legislative changes, from 1 January 2021, the provisions on
unfair contract terms are to apply not only to contracts concluded with consumers
but also to contracts where the other party is a natural person who is self-employed,
if the subject of the contract does not fall within the scope of his or her professional
activity.
B. Exemption Clauses
114. Two particular exemption clauses of CC should be pointed out – Article 472
CC and Article 473 CC. Both refer to the liability of the debtor.
Pursuant to the first one if nothing else follows from a special provision of statu-
tory law or the act in law, the debtor shall be liable for the non-observance of due
100. Art. 385(1) §4 CC.

101. See Z. Radwański & A. Olejniczak, Zobowia zania – cze ść ogólna (Warsaw: C.H. Beck, 2006), 163
ff.
102. Art. 385(1) §2 CC.
95
diligence. This regulation is inseparably connected with Article 471 CC, which
enacts debtor’s contractual responsibility. It may be regarded that one of its condi-
tions is the circumstance of non-performance or inappropriate performance of an
obligation, for which the debtor is responsible and to which Article 472 CC per-
tains. These circumstances are changeable and may be different depending on a par-
ticular case.
It might be considered that Article 472 CC allows creating a basic model of cir-
cumstances, for which the debtor bears liability. It is the debtor’s acting without due
diligence – so committing negligence (which constitutes a form of unintentional
guilt). According to Article 355 section 1 CC, the model of due diligence should be
constructed in accordance with objective criteria and not based on the consideration
of debtor’s individual features. It should be created by means of determining the
social expectations of people who experience a situation of a given type. According
to the dominant view of science and judicatory, the phrase, used in this article, about
not keeping due diligence means, as a matter of fact, that the debtor is responsible
for his culpable behaviour.103
The presented model of liability shall be applied if nothing else emerges from a
particular article of the act or from the legal action. It is thus possible for a debtor
to assume a different scope of responsibility than it emerges from Article 472 CC;
however, it cannot be of implied character.
The basic model of debtor’s liability described above may be subject to certain
modifications, which come from a legal article or legal action. Article 473 CC per-
tains to such a change to the debtor’s scope of liability that results from the con-
cluded contract. According to the first paragraph of this article, in the contract the
debtor may assume responsibility for non-performance or inappropriate perfor-
mance of an obligation due to specific circumstances, for which he bears no respon-
sibility under the act. This regulation does not provide any limits of the possibility
of assuming by the debtor a wider scope of responsibility than emerges from the
act, so it should be recognized that he is also responsible for, for instance, an acci-
dent or force majeure, if he has expressed his consent to this in the contract. How-
ever, the act limits the possibility of the total contractual exclusion of debtor’s
responsibility. It is possible to exclude debtor’s responsibility for negligence but,
according to Article 473 section 2 CC, not for the intentional breach of contract.
III. Penalty Clauses
A. Contractual Penalty
115. What is most difficult to prove while claiming damages under contractual
liability is the existence and the specific amount of damage. That is why very often
contracting parties agree while concluding the contract, the way the calculation of
damages is made or just set out a lump sum as the presumed damage amount in a
contract clause called ‘penalty’. Sometimes the lump sum is entered into contract
irrelevant to expected damages. The penalty clause stipulated in the contract is often
103. See judgment of the Supreme Court of 27 Jan. 1972, I CR 458/71, OSN No. 9 (1972), item 160.
96
used to secure the performance of contractual obligations, and it is of accessory and

conditional character. However, the penalty payment claim may be due only when
it is preceded by non-performance of contract the debtor is liable for. Under Article
483 section 1 CC it may be stipulated in the contract, the redress of damage result-
ing from the lack of performance or undue (improper) performance of a non-
pecuniary obligation shall take place by the payment of specified sum (contractual
penalty). The contracting parties may define the amount of penalty at their own dis-
cretion, as a total amount (a lump sum), as percentage, for each day of delay, or in
some other ways. The parties are free to decide what requirements shall be met to
apply the penalty clause, but they must specify the performance (if there are more
than one in contract) which is being secured with the penalty clause.
When there are no requirements set out in the contract, Article 484 section 1 CC
provides the contractual penalty shall be due to the creditor in case of lack of per-
formance or improper performance, in the amount stipulated for that case regard-
less of the damage suffered. However, the creditor shall not have the right to
demand payment of a penalty unless the debtor bears liability for the failure to per-
form or the improper performance of the obligation, unless otherwise provided. The
demand for an indemnity exceeding the amount of the stipulated penalty shall not
be admissible unless the parties decided otherwise. However, the amount of dam-
age suffered does not influence the amount of penalty due.
Generally, entering the penalty clause in the contract does not influence the credi-
tor’s claims other than for damages, that may have arisen as a result of the lack of
due performance by the debtor. The creditor still may, for example, raise claims for
performance or for default interest. However, the Supreme Court in its resolution of
seven judges on 6 November 2003 decided that generally the lack of damage
incurred does not exclude the creditor’s claim for penalty payment.104 Thus, the
creditor is entitled to claim the penalty even when its amount exceeds the amount
of damage that he suffered, as well as when he did not suffer any damage. Hence,
there are three possible different approaches as to how the contractual penalty
relates to the damage compensation when entering the penalty clause into the con-
tract:
(1) when the parties do not agree otherwise, the penalty clause precludes the
creditor from claiming damages under contractual liability, so the penalty
excludes the other claims for damages resulting from non-performance of
improper performance;
(2) the parties may agree the penalty amount is to be paid in advance on damages;
in this case, the penalty payment diminishes the amount of compensation due,
which may be claimed by the creditor under the general contractual liability
rules;
(3) the parties may agree that the creditor may claim damages in total amount
additionally irrespective to the claim for the penalty payment.
104. III CZP 61/03, Orzecznictwo Sa dów Polskich no. 9 (2004), item 115.
97
According to Article 483 section 2 CC, the debtor cannot, without the creditor’s
consent, release himself from the obligation by the payment of the contractual pen-
alty sum. That is why when the penalty has been stipulated in case of non-
performance, the creditor may claim either fulfilling of obligation or invoke the
penalty clause. If the creditor chooses to claim the penalty payment, he loses the
right to claim performance, unless the parties agreed otherwise. When the penalty is
stipulated for the case of non-performance, the debtor under Article 483 section 2
CC does not have the right to disburse the penalty clause and to cancel the contract
without the creditor’s consent. The debtor thus is not entitled to release himself from
the obligation by payment of the penalty, unless the creditor consent has been
obtained.
When the penalty has been stipulated for the case of the debtor’s delay in per-
formance, the creditor is entitled to claim both fulfilling the obligation and penalty
clause. However, it needs to be stressed that the penalty clause may not be provided
to regulate the consequences of payment delayed, as the penalty clause for delayed
payment should be made in the form of an interest percentage amount clause.
According to Article 484 section 2 CC upon the debtor’s request, the court can
reduce the amount of the penalty clause if:
– it would be established that the penalty amount is glaringly exorbitant; it means,

usually, it is disproportionately high considering the value and the significance of
the object (subject matter) of performance; or
– the debtor’s obligation has been performed in a considerable part.
The Supreme Court in its two important decisions ruled that the penalty reduc-
tion according to Article 484 section 2 CC is possible when a debtor’s performance
did not conform to the due diligence rules set out by law and contract terms regu-
lating his obligation, because of his fault, that is why Article 484 section 2 CC
applies where the lack of performance or improper performance was caused by rea-
sons the debtor is liable for.105 In case where the lack of due performance was
equally caused by both parties fault or where the fault of creditor contributed to
breach of contract, the claim for reduction of contractual penalty may be justified
on the base of Article 362 CC applied adequately, however only within the limits
set out in Article 484 section 2 CC,106 no matter whether the performance or its part
has actually been fulfilled by the debtor.
Article 485 CC provides that when there is a separate legal provision that in case
of the non-performance or improper performance of non-pecuniary character, the
debtor, even without the contractual stipulation, is obliged to pay the creditor a lump
sum, the provisions of CC referring to contractual penalty are applied correspond-
ingly.
105. See judgment of the Supreme Court of 23 Jan. 1974, II CR 788/73, Orzecznictwo Sa dów Polskich
no. 2 (1975), item 36; judgment of the Supreme Court of 9 Nov. 2003, I CK 137/02 (unpublished).
106. See judgment of the Supreme Court of 8 Jul. 2004, IV CK 522/2003, Orzecznictwo Sa dów Pol-
skich nos 7–8 (2005), item 97.
98
B. Deposit Payment
116. The deposit payment is, besides the contractual penalty, another possible
institution of contract law used often to secure the performance or to presume and
ease the calculation of damage at the time the contract is being concluded. Accord-
ing to Article 394 section 1 CC in the absence of a stipulation to the contrary in the
contract or an adequate custom, the deposit (earnest payment) given at the time of
the contract’s conclusion means that in case one party does not fulfil the perfor-
mance in a manner due, the other party is entitled to retain the deposit and rescind
the contract without prior notice setting an additional reasonable period of time
required for performance. If the deposit has been given to the party in default, the
other victim party is entitled to rescind the contract and demand double amount of
deposit given.
The deposit has usually a form of money payment, though other tangible things
are also allowed to be the subject matter of it. The deposit has been primarily
deemed to be the evidence of the conclusion of a contract and its secondary (pre-
sumably more important) function is to secure performance. The party who gave the
deposit, when he is liable for the failure to perform the contract,107 loses the amount
of deposit paid in advance, which remains with the other party. If the party, which
received the deposit, is liable for the failure to perform the contract, he is obliged to
pay the other party twice the amount of the deposit. Under Article 394 section 2 CC
when the contract was fulfilled duly, the deposit shall be considered to be paid or
given as an advance part of performance, unless it is impossible – that is when the
deposit shall be returned.
When the performance has not been fulfilled because of reasons neither party is
liable for or because of reasons both parties are simultaneously liable for, the
deposit shall be returned to the party who gave it (Article 394 §3 CC). The same
shall be considered when the contract has been terminated by the virtue of both par-
ties’ consent.
The amount of the deposit is subject to the parties’ discretion. However, there are
opinions in jurisprudence and doctrine, that when the payment is similar to the total
performance value, it should be interpreted as an advance payment rather than as a
deposit. There is though an important difference that must be distinguished between
the deposit payment and the advance money payment. The deposit payment is the
earnest payment paid to demonstrate commitment and conclusion of contract. If the
contract is breached by one party’s failure, then it is kept by the recipient as pre-
determined or committed damage, though – objectively – there is no need of the
damage existence, nor should it be demonstrated.
The deposit payment function is to secure and guarantee the performance
whereas the advance payment is considered to be the part of a contractually due sum
that is paid in advance, while the balance will be paid later at the time agreed. When
the performance of the party who gave the advance is in default, the other party can
107. The Supreme Court in its decision made on 17 Jun. 2003 (III CKN 80/2001, Biuletyn Sa du Najw-
yższego no. 12 (2003, 14) decided that the performance failure, that enables the other party to
rescind the contract and keep the deposit payment, is considered also when the goods delivered
were of low quality.
99
rescind the contract in the way provided for mutual contracts in Article 491 CC only
when the delay is unjustifiable. After the rescission has been made, the advance pay-
ment should be returned to the party who gave it. In this situation, if the victim party
does not demonstrate nor prove the damage caused by the default party, he shall not
be given any compensation payment.
According to the new judgment of the Supreme Court, that overruled the previ-
ous interpretation,108 money payment made after the contract has been concluded
may be considered as the deposit payment.109 What decides about the legal char-
acter of the payment is the intention of the parties. In practice, very often in busi-
ness transactions, the deposit payment is made with the use of cashless modes of
payment (bank money transfer). The Supreme Court decided in a sentence dated 8
February 2008110 that the parties may agree to the cashless mode of the deposit pay-
ment; in this case, the deposit payment should be made within the adequate close
(not too long) time agreed by the parties, after the contract has been entered.
IV. Arbitration Clauses
117. Regulation of the arbitration clause or the arbitration agreement is included

in the Polish CCP. Pursuant to Article 1161 section 1 CCP, if the parties intend to
submit to arbitration any dispute, the arbitration clause defining the subject of the
dispute or the legal obligation from which the dispute arose or may arise is required.
However, any provision that violates equality of the parties, in particular by autho-
rizing only one party to commence the proceedings before a court of arbitration, is
ineffective.111 The parties may refer to arbitration any dispute which could be sub-
ject to a court settlement. The arbitration clause must be concluded in writing; oth-
erwise, it is null and void. However, this requirement is met if the clause was
included in the declarations exchanged between the parties made in writing or on
another durable medium.112
§2. INTERPRETATION
118. Interpretation of a declaration of intent is included in Article 65 CC pur-

suant to which it is to be interpreted as is required by the circumstances in which it
was made, the principles of community life, and the established custom and in case
of contracts, the congruent intention of the parties and the purpose of the contract
must be established, rather than relying on its literal wording.
The declarations of will require the interpretation in order to determine the proper
meaning as well as to recognize the legal effects that they bring about; moreover,
108. See judgment of the Supreme Court of 7 Oct. 1999, I CKN 262/98, OSN No. 4 (2000), item 71.
109. III CSK 115/11, LEX No. 1147760.
110. I CSK 328/07, unpublished.
111. Art. 1161 §2 CCP.
112. Art. 1162 CCP.
100
they require the interpretation in order to establish whether a given act was indeed
a declaration of will and whether the legal action took place.
The provision discussed here provides the general directives of the interpretation,
which are applied to all declarations of will. However, they are presented in a syn-
thetic way without formulating any complex set of detailed directives.
119. It should be highlighted, in line with the opinion of the Supreme Court, that
the principles of the interpretation from Article 65 CC do not pertain to the inter-
pretation of the legal articles.113 Moreover, it was also stated that in comparison to
the interpretation of the legal articles, in the case of contracts, we deal with a dif-
ferent attitude as regards the language interpretation in the process of establishing
the real content of the text under analysis. In the case of contracts, what should be
analysed is the parties’ mutual intention and purpose of the contract and the literal
wording is analysed later. The difference stems from the rational legislator doctrine
adopted by Polish legal theory for statutory construal purposes. The doctrine is built
on an unverifiable assumption that lawmaking is done by one rational legislator (fic-
titious, of course). This legislator is then specified by further more specific assump-
tions, such as that it has a coherent set of judgments, which is consistently adhered
to, that it has a nearly perfect knowledge of the language used by those to whom its
legal norms are addressed and that the norms it creates are laid out in a coherent
system, etc. These assumptions can lead us to a conclusion that normative acts are
enacted for the sole purpose of expressing legal norms (which conclusion becomes
debatable as there are more and more instructive or even didactic regulations) and
are formulated so that the legal norms are given the most effective and precise
expression. This is at the roots of the construal directive saying that there are no
irrelevant expressions in enacted law (assumption that the text is normative).114
These assumed characteristics of the fictitious legislator are evidently not appli-
cable to actual people forming their contracts. The rational conduct assumption is
much weaker here, as are the linguistic competences attributed to contracting indi-
viduals. Indeed, contracts do not come about as a result of a consistent and discre-
tionary conduct of any single person, but rather stem from a compromise between
parties often having divergent agendas and interests. Given all this, it is not accept-
able to formulate a construal guideline requiring that each contractual expression
have a normative sense. There are other expressions in contracts, too, such as infor-
mative expressions and expressions used to emphasize the importance of the par-
ties’ obligations. The reasonable (rational) party assumption and the common
purpose construal directive can at most justify a requirement that interpretation
efforts should strive to keep the contract valid to the maximum extent, but they are
not a basis for attributing normative sense to contractual provisions whose mean-
ing, determined through use of linguistic rules, will not permit such attribution. It
can be observed that statutory construal rules are based on a rational (nearly ideal)
maker model whereas contractual construal rules are based on a rational (reason-
able, careful) addressee model.
113. See judgment of the Supreme Court of 8 Jun. 1999, II CKN 379/98, LEX No. 37920.
114. See, e.g., Z. Radwański & M. Zieliński, in Prawo cywilne – cze ść ogólna, vol. 1 of System Prawa
Prywatnego, ed. M. Safjan (Warsaw: C.H. Beck, 2007), 453 ff.
101
120. Article 65 CC has a wide scope of application. Its first paragraph refers
basically to all declarations of will, irrespective of the type of legal actions created
by them, so to the declarations of will comprising unilateral as well as bilateral legal
actions, resolutions, etc. However, the following paragraph concerns literally only
contracts. Judicature and doctrine accept that the directives of interpretation
included in this article, in particular the rule that holds that while interpreting the
declaration of will one should not rest solely on the literal wording of such decla-
rations, but one should also take into consideration the parties’ intention and the pur-
pose of the legal action should be referred not only to contracts but also to all
declarations of will made to another person.115
121. The first indicator included in Article 65 section 1 CC, according to which
a given declaration of will should be interpreted, is the circumstances, in which a
given declaration of will was made. It pertains to such circumstances accompany-
ing the act of making the declaration of will, which constitute the so-called situ-
ational context for this act of making the declaration of will, that is, the background,
and which are connected with the meaning of language phrases used by the person
making the declaration of will. These circumstances have significance for the recon-
struction of the thought contents expressed in the declaration of will and allow to
establish a proper sense of this declaration that is sometimes different from its lit-
eral wording. During the performance of the interpretation of the declaration of will,
only the external, recognizable circumstances of making the declaration of will are
significant and not the subjective belief of the person making this declaration.
Among the most important extra-linguistic circumstances that are taken into con-
sideration during the interpretation of the declarations of will are in general: the
course of parties’ negotiations, the course of parties’ previous and current coopera-
tion, the previous and current practice as regards settlements, parties’ behaviour,
their experience, professionalism and the understanding of the text, the circum-
stances of making or receiving the written text, the common meaning given to reso-
lutions and expressions in a given sector, etc. Such interpretation was widely
accepted by the judicature.116 Moreover, the manner of obligation performance and
other behaviours disclosed by the parties ex post can point to the manner of under-
standing of a complex declaration of will.117
Additionally, the principles of social coexistence typical of the circumstances of
making the declaration of will should also be taken into consideration. The dictate
to take the principles of social coexistence into consideration does not serve, in this
case, to improve, supplement or ‘control’ the content of the legal action as regards
the principles of rightness or honesty (such a function is fulfilled by the principles
115. See judgment of the Supreme Court of 29 Jun. 1995, III CZP 66/95, LEX No. 9220; judgment of
the Supreme Court of 8 May 2000, V CKN 38/00, LEX No. 52432.
116. See, e.g., judgment of the Supreme Court of 8 May 2001, IV CKN 356/00, LEX No. 52540; judg-
ment of the Supreme Court of 15 Jul. 2004, V CK 2/04, LEX No. 269749; judgment of the Supreme
Court of 10 Mar. 2004, IV CK 125/03, LEX No. 137677.
117. See judgment of the Supreme Court of 11 Aug. 1978, III CRN 151/78, LEX No. 2339.
102
of social coexistence on the basis of Article 5 CC,118 Article 56 CC119 and Article
58 CC120). These serve solely to eliminate vagueness and doubts during the estab-
lishment of a proper sense of a complex declaration of will.
A similar interpretative function in the process of the interpretation of the dec-
larations of will is played by the established customs. Included in them are the rec-
ommendations referring to the typical behaviours of the parties performing specified
legal actions that may serve in the process of the interpretation of the declarations
of will as a means of establishing the real content of the declaration of will. The
articles obviously take into account such customs which – due to the place, time,
tradition, person, occupation and character of the activity in question – cannot be
omitted during the establishment of a meaning of the complex declaration of will.
In doctrine, attention is paid to the fact that at present in the context of very intense
economic relations, the customs can be created and changed in a very short period
of time.121 The interpretation of the declaration of will should obviously be per-
formed with the consideration of the customs existing at the moment of making the
declaration of will and not at the moment of making its interpretation.122
Subsequently Article 65 section 2 CC modifies slightly the manner of interpre-
tation, or – more precisely – the recommended hierarchy of its directives as regards
the declarations of will that are included in contracts. It provides that in contracts
one should examine what the mutual intention of the parties and the purpose of the
contract were rather than relying on its literal wording. Thus, the legislator clearly
accepts the primacy of the subjective method of interpretation, which is to allow
establishing the real mutual will (intention) of the parties. This is justified by the
character of contracts as legal actions, in order to perform which one needs to have
mutual will (consensus) of the parties. The existence of mutual intention of the par-
ties and the purpose of the contract should be established pursuant to the state as of
the moment of making the declaration of will and not as of the moment of making
the interpretation. What is fundamental in the examination of the parties’ intention
and the circumstances influencing the explanation (interpretation) of the declara-
tions of will is the facts (events, states) presented by the parties and disclosed
according to the distribution of evidence proof in the process.123 The requirement to
examine the mutual intention of the parties and the purpose of the contract provided
by Article 65 section 2 CC limits, to certain extent, the possibility of contract verbal
interpretation as well as excludes the assessment of the understanding of its content
in a way approved of only by one party.124 The language (grammar) arguments are,
118. Stating that one cannot exercise a right in a manner that would contradict its socio-economic pur-
pose or the principles of community life. Such act or omission on the part of the person entitled
shall not be considered the exercise of that right and shall not be protected.
119. Stating that an act in law shall have not only the effects expressed in it but also those that follow
from statutory law, the principles of community life and the established customs.
120. Referring to invalidation of an act of law.
121. See M.T. Knypl, ‘Znaczenie zwyczajów i dobrych obyczajów w prawie cywilnym’, Przegla d
Prawa Handlowego 8 (1997): 15 ff.
122. See M. Safjan, in Kodeks cywilny: Komentarz, ed. K. Pietrzykowski, vol. I (Warsaw: C.H. Beck,
2008), 360.
123. Judgment of the Supreme Court of 5 Apr. 2007, II CSK 546/06, LEX No. 253886.
124. Judgment of the Supreme Court of 8 Jun. 1999, II CKN 379/98, OSNC No. 10 (2000), item 1; judg-
ment of the Supreme Court of 18 Feb. 2005, V CK 469/04, LEX No. 149587.
103
in this case, in the second place and are less important than the arguments referring
to the parties’ will, their intention and purpose. Despite this, a correct, complete and
comprehensive interpretation of the contract cannot totally neglect the content ver-
balized in writing because the phrases and terms written down as well as the seman-
tics and structure of a speech act are one of the important indications of the parties’
will since they allow to familiarize with it and assess it. The interpretation of the
contract cannot thus lead to statements that are obviously contradictory to the writ-
ten content of the contract. However, Article 65 section 2 CC allows for a situation
in which the correct sense of the contract established by means of the application of
the directives included in it will deviate from its ‘clear’ meaning in the light of the
language principles.125
122. Current Polish legal authorities (both academic lawyers126 and courts127)
take a so-called hybrid or combined approach to Article 65 CC. This construal
method strives to do justice to both the actual will of the party concerned and to the
reliance the party’s declaration creates in others. To be properly applied to con-
tracts, the method should start with finding whether the parties had a common
understanding of their contract at the time of its formation and what that common
understanding is. This requirement is expressed in Article 65.2 CC by the words pre-
scribing efforts to discover ‘the common intention of the parties’. The precedence
of the parties’ common intention over the literal text of the contract goes so far that
a contract may even be interpreted to mean something different from what it would
be taken to mean on application of the universal rules of semantics, provided that
the different meaning was imparted to the contract by both parties.128
123. The process of discovering what the parties meant by their contract should
be based on its terms as at the time of execution. Any later changes in how a party
understands the contract are irrelevant. Finding the parties’ actual understanding of
their contract is a finding of fact and may be made by any evidentiary means. In
addition to such obvious evidence as testimonies of the individuals who actually
executed the contract (as parties or as representatives of the parties129), of great
importance will also be the declarations the parties make to each other or to other
125. Judgment of the Supreme Court of 15 Sep. 2005, II CK 69/05, LEX No. 311311; judgment of
Supreme Court of 28 Feb. 2006, III CSK 149/05, LEX No. 182956.
Ossolineum, 1992); M. Safjan, in Kodeks cywilny: Komentarz, ed. K. Pietrzykowski, vol. I (War-
saw: C.H. Beck, 2008), 360 ff.; E. Rott-Pietrzyk, ‘Wykladnia oświadczenia woli (studium praw-
noporównawcze)’, Studia Prawa Prywatnego 3–4 (2007): 31; P. Machnikowski, in Kodeks cywilny:
Komentarz, ed. E. Gniewek (Warsaw: C.H. Beck, 2008), 160 ff.
127. See especially Supreme Court resolution (seven judges panel) of 29 Jun. 1995, III CZP 66/95, OSN
No. 12 (1995), item 168.
Ossolineum, 1992), 74 ff.; P. Machnikowski, in Kodeks cywilny: Komentarz, ed. E. Gniewek (War-
saw: C.H. Beck, 2008), 160.
129. See judgment of the Supreme Court of 8 Jul. 2004, IV CK 582/03, LEX No. 188466 and Z. Rad-
wański, Wykładnia oświadczeń woli składanych indywidualnym adresatom (Wrocław: Ossolineum,
1992), 81 ff.
104
persons about how they understand the contract, as well as other conduct of the par-
ties subsequent to contract formation, including especially the way in which they
exercise their contractual rights and fulfil their contractual duties. It can be accepted
that the way a party performs a contract directly after its execution reflects the actual
understanding the party had at the time of execution.130
124. And when the parties’ common understanding of the contract at the time of
formation proves impossible to be discovered, but not until then, the rules of objec-
tive construal will come into play. The general principle of objective construal is
that the contract has the meaning that has been actually given to it by one of the
parties and ought to be reasonably recognizable by the other. Accordingly, the legiti-
mate meaning is that which is relied upon by one of the contractual parties and
which is the same as a meaning arrived at through use of the universal rules of
semantics. In other words, in the same external circumstances and with the same
knowledge of the contract and its context, anybody would arrive at the same sense
of the contract.
Where a contract is expressed in a written language, the fundamental tools of
objective construal include universal linguistic rules and rules of the specific par-
lance (technical, legal, etc.) used by the parties. If so, then one obvious guideline is
that the meaning of a contractual text should first of all reflect the meaning of the
words used, subject to their particular combination into expressions and sen-
tences.131 This meaning will naturally be affected by any definitions contained in the
law or in the contract itself.
Second, construal of a contractual expression should have regard to its linguistic
context, taking account of other parts of the contract or other declarations of inten-
tion with which the contract is connected.
Third, contractual interpretation should not forget about the situational context
(the ‘circumstances’ mentioned in Article 65 §1 CC): the different events accom-
panying formation, such as the place and time of formation and any practices exist-
ing between the parties.
Fourth, Article 65 §2 CC requires that contractual interpretation should take into
account the purpose of the contract, meaning here its intended effect that is not
stated expressly in it, or the state of affairs to be achieved by performing the con-
tract. The purpose meant is one agreed by the parties (even if it is set by one party
and merely accepted by the other) or, where there is none, one understood objec-
tively as the state of affairs typically arising when a contract of this type is per-
formed. Under this guideline, where there are several conflicting construal
outcomes, the one to be chosen is that which better serves the parties’ intended pur-
pose.
Fifth, the ‘favourable interpretation’ doctrine is considered to apply, of which the
favour contractus principle is a species applicable to contracts. However, it is to be
130. See judgment of the Supreme Court of 23 Jan. 2008, V CSK 474/07, LEX No. 466321 and Z. Rad-
wański, Wykładnia oświadczeń woli składanych indywidualnym adresatom (Wrocław: Ossolineum,
1992), 83 ff.; P. Machnikowski, in Kodeks cywilny: Komentarz, ed. E. Gniewek (Warsaw: C.H.
Beck, 2008), 161.
131. See, e.g., judgment of the Supreme Court of 21 Aug. 2008, IV CSK 159/08, LEX No. 466005.
105
understood solely as the requirement to prefer an interpretation on which the con-

tract is valid and to reject one on which it is invalid.
Sixth, writing-based construal methods should be used to take note of so-called
paralinguistic means of expression (including especially division of the text into
smaller portions, headings and titles, sequence of portions).132
§3. CONDITIONAL CONTRACTS
125. Polish law does not distinguish conditional contracts as such. However, it
provides for a regulation of the condition. What is understood by this is the reser-
vation included in the content of the legal action that makes the creation or termi-
nation of the legal relationship conditional upon a future or uncertain event. A future
event is uncertain when the parties have no influence on its fulfilment as well as
when its fulfilment depends on the decision of one or both parties. However, the res-
ervation that makes the effectiveness of the legal action conditional upon an event
that will certainly occur in the future or that was fulfilled before making the legal
action and the parties had no knowledge about it cannot be covered with condition.
There are two divisions of conditions. The first one is of doctrinal character and
distinguishes between positive and negative conditions. A condition is positive
when a future or uncertain event consists of reversing the existing state of affairs.
The negative condition assumes the non-existence of the event indicated in the con-
dition. However, from the normative point of view, the conditions can be divided
into suspending and dissolving.133 The suspending condition is a reservation mak-
ing the effects of the legal action conditional upon a future and uncertain event. If
it is impossible, against the act or against the principles of social coexistence, the
whole legal action is invalid.134 We deal with the dissolving conditions when the
effect of the legal action ceases after the occurrence of a future and uncertain event.
It is regarded as unreserved if it is impossible, against the act or against the prin-
ciples of social coexistence.
If in a contract, the condition is appropriately reserved, then there emerges a cer-
tain state of uncertainty as regards the legal effects provided by this action. In view
of this, the parties are obliged to mutual loyalty. According to Article 93 CC, if a
party who cares about condition non-fulfilment, interferes with this in a manner that
is against the principles of social coexistence, then there occur such effects as if the
condition were fulfilled. However, if a party who has an interest in condition ful-
filment will lead to this in a manner that is against the principles of social coexist-
ence, there occur such effects as if the condition was not fulfilled. Such
consequences constitute a kind of penalty for the party for unjust conduct. Addi-
tionally, the entity which is – in the case of condition fulfilment – to receive a given
right, may perform all activities that are intended to keep this entity’s right.135
133. Z. Radwański, Prawo cywilne – cze ść ogólna (Warsaw: C.H. Beck, 2005), 286.
134. Art. 94 CC.
135. Art. 91 CC.
106
Accordingly, the rights of the other party are limited – in particular this party can-
not make – through actual or legal actions – the entitled entity come into this enti-
ty’s rights in case of condition fulfilment. Pursuant to Article 92 section 1 CC, the
legal actions disposing in the scope in which they prevent or limit condition fulfil-
ment, with certain exceptions connected with coming into rights or exempting the
third person in good faith from the obligation, are also invalid (Article 92 §2 CC).
It is also worth adding that the fulfilment of the condition does not have a retro-
spective effect unless provided otherwise, which results from the norm of Article 90
CC. Thus, if the condition is fulfilled, from that moment the effects of legal actions
emerge (ex nunc).
107
126–127
Chapter 4. Privity of Contract

§1. THE RULE OF PRIVITY OF CONTRACT
I. Introduction
126. The rule of privity of contact is an integral part of the principles that gov-
ern the Polish private law and law of contract in particular. However, in Poland this
rule does not derive directly from statutory regulations but rather is recognized as a
part of the freedom of contract – the golden rule of contract law. Privacy is first the
concept that an individual shall be free of intrusion. In civil law, an individual can-
not be forced to acquire a right (e.g., property right) without his prior consent either.
The rule is also based on private law basic concept of the autonomy of individual,
who may not be forced, neither to be subjected to a burden nor to acquire rights
without his free consent. These rules derive from the theory attributing contractual
obligations and rights only to the will of the parties on their own terms agreed.
As a general rule, the privity of contract rule states the contract is effective only
between the parties, who voluntarily agreed to bind themselves with the legal
bound. Generally, the contract cannot impose obligations on a third person (not the
party to the contract) nor give a third person a right to sue upon the contract in order
to enforce the contractual obligations by the debtor. It is though possible to change
the personal identity of a party after the contract was made, so it must be noted first,
that the parties are these persons (legal or natural persons), who entered the contract
by the way of their own will and actions or were represented at that time by an agent
or statutory representative. Legal persons shall enter the contract acting through its
bodies, in the manner prescribed by statutory law or its articles based upon the law,
or also by an agent. The CC provisions allow changing the debtor or creditor unless
otherwise is provided in statutory law or derives from the contract nature. The party
of a contract may also be replaced by taking over all the rights and obligations under
the contracts while full succession is taking place. It happens when the heirs are
being given the succession of the patrimony of their bequeather or while a transfer
of an enterprise is being carried out.
The above-described rule of privity of contract is subject to a few exceptions.
First, the parties may introduce into the contract a clause granting a third person
claim referring to this contract performance. The claim may be used by the third
party on his own behalf to sue the debtor in order to perform obligations under the
contract. Second, if the contract is effecting with the transfer of property or transfer
of rights (e.g., the transfer of property is a central motive to enter the sale contract),
the contract can also effect the legal right of a third person when the right is aimed
onto the subject of the property transferred.
II. Third Parties and the Contract
127. Unless otherwise provided in the statutory law or stipulated in contract, a

third person may not raise claims under a contract, and this rule meets however a
few exceptions. There is also a stricter rule, that a third person may never be
108
Part I, Ch. 4, Privity of Contract 128–128
imposed with contractual obligation without his agreement and this rule meets no
exemption.136 It is also possible that contracts occasionally contain provisions by
which questions as to quality, the time or the way of the performance are to be sub-
mitted to the determination of a third person. The third person’s decisions are con-
clusive in this matter. In these cases, it always shall be determined in the contract
which party should substitute the third person action in case of the latter’s absence
of cooperation, as the general rule is that a third person being not the party of a con-
tract cannot be obliged to perform in any way. And the third person in the situation
above described does not become the party of these specific contracts.
III. Contract for the Benefit of a Third Party
128. There are usually only two parties to an ordinary contract. General rule is
that performance shall be rendered ‘to the hands’ of the creditor unless otherwise
follows from the nature of the obligation or from the contract provisions. Third-
party beneficiary contracts are made for the benefit of a person different from one
of the two contracting parties only when both parties of the contract have agreed on
that. The terms of a given contract may directly specify that the benefits arising from
rendering performance are to be conferred upon a third person, and the same may
result from the circumstances and nature of contract or legal provisions. This other
person is called a third-party beneficiary of the contract. The most popular example
of it is a life insurance contract made for the benefit of a person named in the con-
tract, but not being the contracting party. The third person must not be a debtor and
has no obligations arisen from the contract, yet he has rights provided under the con-
tract and can make claims on the insurance policy. The general legal model of this
category of contract is provided under Article 393 CC, but particular regulations
concerning specific contract types may provide differently. Note that there is not a
separate pure contract type of this kind; it is possible to enter the clause in question
of third-party benefit performance into almost each kind of contract, except when
the nature of contract demonstrates otherwise. Under Article 393 CC, parties of a
contract may assume the performance is to be fulfilled by the debtor for the benefit
of a third person, which – in the absence of a different provision in the contract –
may claim the performance directly from debtor even though he is not in the posi-
tion of the creditor. After the third person has made a statement to either of the par-
ties, that he accepts the benefit performance, the performance cannot be altered nor
withdrawn even if both parties’ agreement is reached as to the matter. The debtor
however may raise defence based on the contract also against the third party, for
example, he may question the validity of the contract or the time limit of perfor-
mance.
It is also important to note that the debtor shall make performance directly to the
third person; otherwise, even if the performance is made to the creditor, the obli-
gation is not recognized as performed and the debtor is not released from it. The
debtor in this case is not entitled to set-off his receivable debt from the receivable
136. The heir is allowed to reject the succession in the time prescribed by the law.
109
129–129 Part I, Ch. 4, Privity of Contract
debt of the creditor. If there is a lack or undue performance by the debtor, corre-
sponding remedies are available to the creditor and the third person both.
The creditor (as a claimant in the trial) is also entitled to claim the debtor to make
the performance to the third party.137 Only the parties of the contract may use the
right to influence the contract validity with a declaration to rescind or to terminate
it (with the consent of other party or by notice); they may also use the remedies
applicable in case of the declaration of intent defects. The third party is not entitled
to influence the validity of the contract with his own declaration of intent.
The effect of a stipulation that the debtor makes a performance to a third party
may be set differently in a particular contract; the parties can directly decide the
debtor is obliged to perform to a third party, but the latter is not entitled to claim
performance.
There are two possibilities to create the third-party beneficiary contract. First, it
is possible to enter the stipulation of the debtor’s duty to make performance to a
third party directly into the contract. The clause may be entered into different types
of contracts. Second, it is also possible to conclude a contract with the stipulation
that the debtor makes a performance to a third party after the legal relationship
between the parties has already been created, no matter what was the source of this
relationship.138
§2. TRANSFER OF CONTRACTUAL RIGHTS AND OBLIGATIONS
I. General Remarks
129. The general rule in contract law is that the rights and obligations arising
from a contract may be transferred to another person by the virtue of an agreement
of one party of a contract and the third person, resulting in the personal change of
the creditor or the debtor. The former party of a contract is no longer recognized as
a creditor or a debtor of the contract.
The transfer of rights requires a contract is concluded between a party to a con-
tract (assignor) and another person (assignee). In Polish doctrine, it is presump-
tively agreed the rights (claims) arising from one contract may be transferred
without transferring the obligations arising from the same contract for the party.
However, the law does not allow transferring all the rights and obligations arising
from one contract to one party of it to another person by virtue of one act in law
(one contract). It means that to have contractual position of one party transferred
two contracts shall be made. In mutual contracts, however, the legal bound between
the debt and the claim of performance is very close as the rights and obligations do
not exist separately and independently from each other, both are mutual and con-
current. That is why in doctrine of civil law it was considered whether at all it may
137. Judgment of the Supreme Court of 21 Jun. 2002, V CKN 1069/00, OSN No. 11 (2003), item 149.
138. See A. Kubas, Umowa na rzecz osoby trzeciej (Warsaw-Kraków: PWN, 1976); M. Bednarek, in
Prawo zobowia zań– cze ść ogólna, vol. 5 of System Prawa Prywatnego, ed. E. Łe towska (War-
saw: C.H. Beck, 2006), 867 ff.
110
be allowed in mutual contracts to transfer only the claims arisen to one party with-
out transferring his obligation as a debtor simultaneously. Definitively, the possibil-
ity of the separate transfer of rights, accrued from mutual contract to one party only,
has been accepted.139 Consequently, in order to change the whole legal position of
one party of mutual contract, it is required to conclude two contracts: a contract of
assignment transferring the claims (rights), and second one – a contract of taking
over the debt resulting in substitution of a new debtor.
It also should be noted that there is an example of transferring rights to receiv-
ables that have arisen from different contracts or events, in one act in law. Due to
Article 552 CC, an act in law, whose subject is an enterprise shall cover all that
belongs to that enterprise unless otherwise provided in the contract. In particular, if
not provided otherwise in the contract, the transfer of an enterprise covers all rights
under contracts of lease and tenancy, claims to receivable debts, rights attached to
securities, licenses, patents and other industrial property rights, author’s economic
rights and neighbouring economic rights. The transfer of contractual rights belong-
ing to an enterprise does not result in the transfer of all contractual duties or obli-
gations, but the acquirer of an enterprise becomes liable jointly and severally with
the transferor for the obligations of the latter connected with running the enterprise.
The liability of the acquirer is however limited to the value of the enterprise, but the
acquirer must not be exempted from the liability without the creditor’s prior con-
sent (Article 554 CC). This situation is not recognized as the change of debtor,
because the transferor is still obliged to perform his contractual duties. The legal
bound between the acquirer and the creditors of the transferor of the enterprise is
created by virtue of Article 554 CC ex lege, and it is defined as the accession to the
debt.
II. Transfer of Rights: Assignment Contract (Cession of Right)
A. Assignment of Claim
130. Generally, the creditor (assignor) may assign his rights to another person
(assignee), without the debtor’s consent, with an agreement being an act in law of
simple succession (assignment). Under the CC, the assignment (cession) is effected
by a mere agreement by the creditor and a third party. The assignor is able to trans-
fer the benefit of a performance he is to receive under a contract (or any other event
being a source of obligation) to the assignee, who is – in consequence of that trans-
fer – able to enforce performance in his own right and on his own behalf, without
the consent of the debtor.
The CC situates regulations of the assignment contract (Articles 509–518 CC), as
a general model of contract, that may be concluded when the assignor is in position
of a creditor in another legal relationship created previously from any event or act
of law (e.g., tort, contract or another source of civil obligation). Additionally, when
139. See E. Łe towska, in Zobowia zania – cze ść ogólna, vol. III, part 1 of System prawa cywilnego, ed.
Z. Radwański (Wrocław: Ossolineum, 1981), 899.
111
the rights transferred by the creditor are purchased by the other party and the con-
tract is of mutual nature, the provisions referring to the contract of sale shall be
applied respectively (Article 555 CC). Otherwise, when the transaction of assigning
the rights is concluded gratuitously it is recognized as the contract of donation
because the rights are assigned as gratuitous performance of assignor (the creditor)
without the mutual performance of the assignee; hence, in this case, the CC provi-
sions referring to the contract of donation (Articles 888–902 CC) shall be applied
directly.
A very common type of agreement based on the assignment contract is business-
factoring,140 that is also known as invoice discounting, debt factoring or receivables
factoring. It usually takes place when a business entity sells its receivable accounts
to a finance company known as a factor specialized in debts vindication. The receiv-
ables are sold at a discount rate and the factor has the responsibility to collect full
debt amount from the debtor. Very often the price for receivables is an agreed per-
centage paid under the condition the debt is fully or partially collected.
The rights arising from contracts may be of different nature:
– First contract benefit is the claim to perform: the creditor is entitled to demand
performance from the debtor. This right to claim performance may be transferred
to another person only if it is an alienable one. There is certain distinction
between alienable and inalienable rights. Inalienable rights of creditor in a legal
relationship are not capable of being transferred to another person, the perfor-
mance, because of its nature, may only be performed to the creditor. Hence, if the
creditor ceased to exist, the contract ceases to be binding for the debtor. The ali-
mony right is inalienable, but the claim to pay alimony rates due is transferable
as it is a right to performance of a monetary obligation. Generally, a right is not
assignable if it is related to performance that the debtor, by reason of nature of
the performance, could not reasonably be required to render to anyone except the
creditor.
– A right to performance may be assigned in part if the performance is divisible.
– A future right to performance (due under a suspensive condition or a term) may
be subject of an assignment contract, and after the condition occurred or the term
was met, the assignee acquires the right transferred without the need of addi-
tional agreement.
– A right to performance, which is by law accessory to another right is being trans-
ferred with the principal right unless otherwise agreed. However, the right to
default interests may be assigned separately if these interests are already due.
– After the contract is performed by the debtor, the creditor may transfer by assign-
ment contract the remaining rights he is entitled with the contract, for example,
right to use remedies under warranty in law. Otherwise, legal practice brought the
opinion to the front that the contractual rights are not running with the property
of the object that the contract was entered to transfer the property of. Due to the
140. The business-factoring contract is an example of innominate contract, as this contract’s essentials
have been established by common practice and customs; still, the provisions of general part of obli-
gation of Civil Code are binding in those contracts, moreover, the Civil Code provisions referring
to sale shall be applied respectively.
112
Highest Court resolution, the sale of property right to a product does not result
automatically in transferring to the buyer the claims the seller previously acquired
himself under the warranty in law in case the product defects occur. However, the
buyer may acquire those warranty rights after concluding the assignment contract
in order to have the claims under the statutory warranty transferred.
– The structure of an obligation on the creditor’s side consists not only of the per-
formance claim but the creditor may also be entitled to influence the validity and
content of the contract with unilateral statement (e.g., statement of termination of
contract), basing on the statutory or contractual provisions.
The civil law doctrine agreed the transfer of creditor’s rights contain all the ele-
ments constituting his legal situation in a given obligation. If a creditor is entitled
by the contract to choose the way of dispute settlement or other procedural issues,
the assignee acquiring the performance claim is also entitled to execute remaining
rights the creditor has been vested with the contract. However, the assignment con-
tract may not be used to transfer rights in rem, that is, the property rights already
acquired by a person, for example, on the base of sale contract, but if a buyer con-
cluded a sale contract and has not acquired the property right yet, the assignment
contract may be concluded to transfer the performance claim against the seller the
buyer is entitled with. The assignment contract may not be used to transfer the rights
arising from authorship or inventions (copyrights and patent rights), as they are
similar in construction to rights in rem and the specific statutory regulations141
stipulate a special type contract (total transfer of copyrights or license) for that kind
of rights transfer.
Sometimes statutory law provides prohibition or restriction to assignment of a
given debt, for example, due to Article 499 CC the personal damages claims speci-
fied in Articles 444–448 CC cannot be transferred unless they are already enforce-
able and were recognized in writing or awarded by a valid court decision.
Under Article 517 section 1 CC, the provisions of CC referring the assignment
shall not be applied to receivable debts derived from documents to the bearer or
documents transferable by endorsement. The endorsement (transfer superscription)
is a written statement resulting in transfer of securities rights derived from bill of
exchange or check. It must be distinguished though that it is possible to have secu-
rities rights transferred with the assignment contract when all preconditions set by
the law are met. The bill of exchange (or check) is transferred by assignment only
if it includes a restrictive clause about prohibition of endorsement usually found in
the wording ‘not to order’ before the name of the creditor. Rights resulting from the
bills of exchange (or checks) with such a clause of the drawer are transferable only
with the assignment contract, whereas – according to Article 571 section 2 CC – the
transfer of a receivable debt from a bearer document shall take place by the transfer
of the ownership of that document. The transfer of the ownership in such document
requires its possession transfer.
Summarizing the above, the freedom to enter the assignment contract is limited
by the inalienable nature of creditor’s rights, the statutory regulations or the con-
tract provision prohibiting cession. Neither notice to the debtor, nor the consent of
141. Arts 41–68 of Copyright Act of 4 Feb. 1994 (Dz. U. 2006, No. 90, item 631).
113
the debtor to the assignment is required. Under Article 509 CC, the creditor may,
without the debtor’s consent, transfer the receivable debt upon a third party (assign-
ment) unless that would be at variance with statutory law, a contractual stipulation
or the nature of the obligation. Together with the receivable debt, the rights con-
nected therewith shall pass to the acquirer, in particular, the claim for the interest in
arrears.
The rule embodied in Article 510 section 1 CC is that, in case of sale, exchange,
donation or other contract obliging the creditor (assignor) to transfer the right, the
right passes to the assignee at the time the contract is entered, unless the terms of
contract or specific statutory provisions provide otherwise. That is why the assign-
ment contract is generally of consensual nature. The moment of entering the con-
tract is conclusive, unless the parties’ intention of postponed transfer of right is
clearly expressed in the terms of contract. However, the assignor may be previously
obliged (as a result of legacy, from unjustified enrichment or from some other event)
to have the right transferred. In this situation, Article 510 section 2 CC implies, that
the validity of the contract of assignment shall depend on the existence and validity
of such obligation.
The assignment contract may be concluded in any form. However, under Article
511 CC, if the receivable debt is confirmed in writing, its assignment shall also be
confirmed in writing. This stipulation provides the necessity of written form to con-
tract of assignment, but if the prescribed form had not been observed, the contract
is still valid; in the case of a dispute, the evidence position of a party calling the
contract has actually been entered in different than written form is worsened unless
the contract has been concluded between entrepreneurs, where the evidence form
restrictions are not applied (see Article 74 CC). Supreme Court held in 2005 that a
receivable debt is confirmed in writing when the creditor has issued the invoice
related to the debt, which has been accepted by the debtor in writing.142
The transfer of creditor rights may not worsen the situation of the debtor, espe-
cially if the latter is not aware of the assignment. Until the assignor informs the
debtor about the assignment, the performance made to the previous creditor shall be
binding, unless the debtor knew about the transfer at the moment of the perfor-
mance. This rule applies correspondingly to other acts in law between the debtor
and the previous creditor (Article 512 CC).
Despite the general rule in Article 57 section 1 CC implying an act in law can
neither preclude nor limit the right to transfer, encumber, change or extinguish a
right if in accordance with statutory law that right is transferable, the parties of a
given contract, or obligation arisen from different than contract event, may decide
to prohibit or to restrict the assignment of rights (receivable debts). This exception
rule is stipulated in Article 509 section 1 CC, under which, contractual provision
may successfully eliminate the possibility and validity of future right transfer. This
contractual stipulation is affecting the validity of contract of assignment concluded
with a third person and affects the assignability of the right. Except the possibility
of eliminating the future rights assignment, the parties may agree to introduce some
restrictions, for example, referring to the time or to the person of assignee, limiting
142. See resolution of the Supreme Court of 6 Jul. 2005, III CZP 40/2005, Biuletyn Sa du Najwyższego
no. 7 (2005).
114
the freedom of concluding the assignment contract by the creditor. The assignment
prohibition or restriction clause is binding to the third persons (erga omnes) regard-
less of the form it has been agreed in, with one exception: under Article 514 CC, if
the receivable debt is confirmed in writing, the contractual stipulation that the
assignment may not take place without the consent of the debtor shall be effective
against the acquirer only if the said written statement includes a mention of that
stipulation, unless the acquirer knew about it at the time of the assignment.143
B. Subrogation of Creditor (Cessio Legis)
131. In contract law, the person generally obliged to render performance is the
debtor. It is thus allowed the debtor performs his obligation not alone, but with the
help of third persons, unless the nature of obligation, statutory provision or contrac-
tual stipulation provides otherwise. However, under Article 356 section 2 CC, if a
pecuniary receivable debt is due, the creditor cannot refuse to accept the perfor-
mance from a third party even if the latter acts without the debtor’s knowledge. This
regulation reflects the actual common conviction that the creditor may not suffer
when the pecuniary performance is rendered by a person other than the debtor.
Sometimes a person pays a debt, which could not be correctly called his own, but
which nevertheless was in his interest to pay, or which he might have been com-
pelled to pay for reasons laying outside of the obligation bound being the source of
the debt (e.g., as a guarantor). The statutory law subrogates the payer to all the rights
of the creditor if all preconditions set by the CC are met. It is recognized as a fair
rule, that after paying somebody else’s debt the law grants the rights and adequate
claims to a person, for whose expenses a debt has been paid. The substitution of a
new creditor for an old one with the ex lege succession to all his rights is called sub-
rogation (transfusio unius creditoris in alium). The subrogation implied by statu-
tory law refers to monetary performance obligation only, and the debtor’s debt shall
be due at the time of substitute performance. When the debt is monetary and due,
the creditor may not refuse performance, otherwise he shall be recognized as the
delayed creditor. When the creditor unduly refuses to accept performance by the
third person, the latter may set-off the debt or deposit the owed amount of money
at the court.144
In Polish CC, this institution is regulated in Article 518 CC. Under this article,
the third party who pays off the creditor shall acquire the paid-off receivable debt to
the amount of the payment made:
(1) if he pays another person’s debt for which he is liable personally or with some
material objects;
143. See K. Zawada, Umowa przelewu wierzytelności (Kraków: Wydawnictwo Uniwersytetu Jagiel-
lońskiego, 1990); K. Zawada, in Prawo zobowia zań– cze ść ogólna, vol. 6 of System Prawa Pry-
watnego, ed. A. Olejniczak (Warsaw: C.H. Beck, 2009), 1015 ff.
144. See K. Zawada, in Kodeks cywilny: Komentarz, ed. K. Pietrzykowski, vol. I (Warsaw: C.H. Beck,
2002), 1244.
115
(2) if he enjoys a right over which the receivable debt has had priority of pay-
ment;
(3) if he acts with the consent of the debtor in order to assume the rights of the
creditor; the consent of the debtor shall be expressed in writing under pain of
nullity;
(4) if that is provided for in special provisions.145
The example of the situation stipulated in the last point 4 of Article 518 section
1 CC is Article 828 section 1 CC, under which (unless agreed otherwise), the claim
of the insurance taker against the third party liable for the damage shall devolve by
operation of law upon the insurer to the amount of the indemnity paid, on the day
of the payment of the indemnity by the insurer. If the insurer has covered only a
part of the damage, the insurance taker shall have with respect to the remaining part
the priority of satisfaction before the claim of the insurer. This stipulation provides
a recourse claim for the insurance institution, but if the damage has been covered
only partially with the insurance, the insured person (as the original creditor) has
the priority while collecting the debt from the debtor. The recourse claims of the
insurer are subject of prescription defence of the debtor on the same conditions and
the same lapse of time is required, as if the claim was issued by the original credi-
tor.146
III. Transfer of Obligations
132. The second limb of the privity rule rests on the assumption that contractual
obligations are created by both parties’ consent, so a third party should not be sub-
ject to contractual duties that he has not consented to. There are, however, some
exceptions in which we may consider to place obligations on persons who were not
parties to the contract.
133. There are contracts resulting in transfer of property rights to immovables,

where statutory regulations provide that every property right holder must bear obli-
gations created by the original contract, for example: while concluding the contract
of perpetual usufruct, certain obligations as to the mode of using the land are
imposed to the perpetual usufructuary, and every person to whom the right is trans-
ferred (perpetual usufruct right holder) is subject to all those obligations listed in
contract creating the perpetual usufruct right, regardless of whether those obliga-
tions are entered into the mortgage register or not. In this kind of situations, the obli-
gation rights arisen for the creditor are transformed from actio in personam to actio
in rem. The acquirer of an immovable may also sometimes be placed under obli-
gations arisen from contract of which he was not a party, when the obligations have
been entered into mortgage register of the property. It must be noted, however, that
the third person is not imposed arbitrarily with those obligations as before acquiring
145. See A. Szpunar, Wsta pienie w prawa zaspokojonego wierzyciela (Kraków: Zakamycze, 2000).
146. See judgment of the Supreme Court of 31 May 1985, III CRN, 148/85, OSN No. 3 (1986), item 34.
116
the property rights he may and should check the mortgage register run for the prop-
erty. It is presumed in law, that the entries into that register are known to everybody
and this presumption is irrefutable – it may not be contested in the court.
Additionally, under Article 523 CC, if in a contract of transferring the ownership
of immovable property the acquirer assumes the obligation to release the transferor
from the debts connected with that immovable property, it shall be deemed (in case
of doubts) that the parties have concluded the contract of taking over those debts by
the acquirer. This debtor’s change is, however, not valid until the creditor’s consent
for debtor change is received in writing.
Also due to the regulation of Article 910 section 2 CC, the acquirer is subject to
contractual obligations resulting from the contract of which he was not a party. In
case of sale of immovable property encumbered with a right to annuity the acquirer
is personally liable for the performances covered by the right, unless they became
receivable at the time when the immovable in question has not been his property
yet. The personal liability of co-owners is joint and several.
134. CC provides a special type of contract entered in order to transfer the con-
tractual obligations to a third party, with the consent of the latter and all parties of
the contract the debt is arisen from. With successful contract conclusion, the third
person becomes the only debtor subject to all the duties and the hitherto prevailing
debtor is thereby released from the debt. The former debtor is no longer liable to
the creditor for rendering performance. The new debtor, however, may benefit from
pleas or rights the former debtor has already acquired under the contract. Due to
Article 524 section 1 CC, the person taking over the debt may raise against the
creditor all those defences that the previous debtor had, except the defence of set-
off from the receivable debts, the former debtor was entitled to raise against the
creditor. The person who takes over the debt may also raise the prescription or expi-
ration defence resulting from the lapse of time, may also benefit from the rights the
former debtor acquired under the contract for example, to terminate the obligation.
The contract resulting in the change of the debtor should be concluded in writ-
ing; otherwise, it is not valid and may be made in two different ways:
(1) By a contract between the creditor and a third party, with the debtor’s consent;
the debtor’s declaration may be to either party; when the debtor refuses his
consent, the contract is deemed not concluded and has made no effects. The
debtor’s consent may be made in any form of the declaration of his intent.
(2) By a contract between the debtor and the third party with the consent of the
creditor. The creditor consent declaration may be made to either party; it shall
be however ineffective if the creditor did not know that the person taking over
the debt was insolvent. The creditor’s consent should be given in written form
or otherwise it is not valid (Article 533 CC). When the creditor refuses his
consent, the contract is valid, but its effects are different from the results pre-
viously assumed by the parties – the party which under the contract was to take
over the debt is liable to the debtor for preventing the creditor’s claim to make
the performance. In this situation, the debtor is still liable for the creditor to
117
fulfil performance, but as very often is not required the debtor personally ren-
ders the performance, the third party is obliged to fulfil the debtor’s duty; oth-
erwise, he will be liable for damages suffered by the debtor. Hence, the lack of
creditor’s consent required for taking over the debt under the agreement of the
debtor and third person, results that different from originally intended contract
is concluded; to this contract Article 392 is directly applied.147 Under Article
392 CC if the third party assumed an obligation in a contract with debtor to
release him from the duty to make performance, he is liable with respect to
the debtor that the creditor does not claim from the latter fulfilling of the per-
formance.
Under Article 520 CC, either of the parties that concluded the contract of taking
over the debt may set the person whose consent is needed for the effectiveness of
the contract an appropriate date for the declaration of consent; the ineffective lapse
of time set means the consent is refused.
If the receivable debt being the subject of taking over debt contract was secured
by a suretyship or a limited proprietary right (mortgage, pledge) established for and
by a third party, that suretyship and limited proprietary rights expire on taking over
the debt unless the surety (the guarantor) or the said third party give consent to the
continuation of the security (Article 525 CC). However, if the mortgage or pledge
was established by the original debtor (encumbering his own property), then the
security exists continuously regardless of the debtor’s change. In this situation, even
though the former debtor ceased to be personally liable for performance after the
contract of taking over the debt was concluded, he is still liable when foreclosure
proceeding is considered.148
§3. THE SPECIAL CASE OF A ‘SUB-CONTRACT’ IN BUILDING CONTRACTS
135. Generally, the sub-contracting is allowed in Polish civil law, and the debtor
is free to entrust third persons with performance, unless due performance requires
personal features of the debtor. The right to sub-contract performance is limited
sometimes by statutory law or contractual provisions. CC provides that the debtor
is liable, as for his own act or omission, for acts and omissions of the persons with
the assistance of whom he performs the obligation, as well as the persons whom he
entrusts with the performance of the obligation. The third person performing con-
tract is, however, not bounded with legal relationship with the creditor and hence
may not demand payment for performance from him; equally, the main creditor is
not allowed to directly demand (or sue) the sub-contractor for specific performance
or damages.
The significant exception to the rule is stipulated in CC material regulations of
the building contract in Article 6471 CC. The sub-contractor in building contract is
(under certain conditions) vested with a direct claim for payment to the main credi-
tor (called Investor). First, the main parties of building contract shall specify the
147. See Z. Radwański, Zobowia zania: Cze ść ogólna (Warsaw: C.H. Beck, 2001), 313.
148. See P. Drapała, Zwalniaja ce przeje cie długu (Warsaw: C.H. Beck, 2002).
118
scope of works to be done by the sub-contractor himself. In order to allow the inves-
tor (main creditor) to maintain a control upon the entities performing the building
contract, conclusion of the construction works contract between a contractor and a
sub-contractor requires the consent of investor. Lack of consent does not result in
the contract being invalid though. If the investor, within thirty days of having been
presented by a contractor (main debtor) with a contract with a sub-contractor or its
draft, along with the part of documentation regarding the performance of the works
specified in the contract or its draft, does not notify in writing of any objections or
disapprobation, the conclusion of the contract shall be deemed consented to by the
investor. Second, apart from the requirement of the main creditor consent, Article
6471 CC introduces major modification of the general rules of sub-contracting
imposing joint and several liability to the main creditor for the payment of remu-
neration to the sub-contractor.149 What is most important is that the obligation of
main creditor to make payment to the sub-contractor is not ceased even when he
has already paid the total amount agreed in the main building contract to his direct
debtor.
§4. ACTIO PAULIANA
136. The creditor can exercise his rights by bringing an action at the court and
afterwards he may compulsorily execute the performance on the debtor’s estate that
is, all debtor’s personal and real property present at the time the execution is made.
If the debtor, after the contract is entered, made a fraudulent act in law resulting in
property or right transfer with the intent to isolate his own estate from the reach of
his creditors, the defrauded creditor may seek protection using the special remedy
at the court. Even though the creditor is not the party of the property transfer act in
law (most often it is a contract), he may influence its effect only in relation between
him and the debtor who affected the act in law. The provisions regulating the rem-
edy based on actio Pauliana rule shall be applied correspondingly when the debtor
acted intentionally to the detriment of future creditors (Article 530 CC). In this case,
the debtor first isolates his property assets and later concludes transactions knowing
at the time of the transaction that the debts arising out of it are irrecoverable.
According to Article 531 section 1 CC, the declaration of an act in law effected
by the debtor to the detriment of the creditors as ineffective shall take place as a
result of an action or defence against the third party, who gained a material benefit
following that act in law. In practice, the creditor uses this remedy when former
execution or vindication of his claim has been proved irrecoverable because of the
debtor’s factual insolvency. The actio Pauliana claim does not have the character
of an action for damages, nor an action for specific performance. Its character on
the ground of Polish civil law is unique. The creditor may only demand the judge’s
decision treats the act in law (contract) ineffective with respect to the creditor only.
The third person shall be the only defendant in the case and when the judge decides
149. Supreme Court decided the investor (main creditor) is jointly responsible only for the amount of
payment agreed with sub-contractor, not for default interest – see judgment of the Supreme Court
of 5 Sep. 2012, IV CSK91/12, available at www.sn.pl.
119
to accept the petition of the creditor, the creditor gains the legal title to vindicate his
claim (he had acquired to the debtor) on these elements of the third party’s prop-
erty, that have previously been transferred from the debtor’s estate. The court’s deci-
sion does not automatically effect the validity of the questioned act in law, the third
party is still the holder of rights (the owner of property assets) transferred by the
debtor. The creditor though is entitled to enforce his claim from the assets in formal
enforcement proceedings where there are two executive court orders: first, stating
the debtor’s debt is enforceable and the second, stating that certain property assets
of third person are subject to enforcement of the first order.
By the means of the court’s final decision recognizing the creditor’s actio Pauli-
ana claim, the assets transferred from the debtor’s estate are recognized in enforce-
ment proceedings as the debtor’s property assets, but only in respect to the creditor,
hence this enables the creditor’s claim enforcement. The creditor may demand the
act in law effected to the detriment of him shall be declared as ineffective for five
years from the date of that act in law (Article 534).
The CC law provides four kinds of requirements necessary to make the creditor’s
remedy based on actio Pauliana claim successful:
(1) The creditor’s must prove first, he is actually a creditor of the given debtor,
basing on the fact there is a legal valid obligation between him and the debtor,
his claim needs to be demandable and actionable. The debtor’s performance
under this claim should be of pecuniary character (the performance in
money).
(2) The act in law effected to the detriment of the creditor should be valid, the
remedy in question does not refer to other than acts in law events causing the
debtor’s insolvency (e.g., torts). Usually the remedy refers to contracts trans-
ferring the debtor’s property to the third person (the creditor may question also
other acts in law whereby the debtor disposes of a right to the third person,
but still, the remedy may not be applied to attack a contract creating only the
debtor’s obligation without the property or right being transferred).
(3) The detriment of the creditor needs to be shown, usually it is related with the
debtor’s insolvency; however, it is not needed to have the bankruptcy for-
mally declared. If the debtor failed to meet his payment obligations, the act in
law need to effect his solvency in one of two ways: as a result of the act in law
the debtor may become insolvent or may become insolvent in greater extent.
The insolvency is estimated with regard to the whole estate of the debtor that
may be subject to successful court execution. Hence, even if the debtor has
property assets, he may be recognized as insolvent if his property assets are
exempt from the execution, mortgaged or encumbered with a right by virtue
of which a third person may claim satisfaction from the property with priority
over the creditor claiming actio Pauliana. The claimant shall prove the insol-
vency has been caused or its extent has been increased by the act in law in
question. The debtor’s insolvency shall be proved to exist at the date of the
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end trial, not necessary at the date the act in law was taken, according to the
Supreme Court decision dated on 22 March 2001.150
(4) The creditor shall also prove the bad faith of the debtor. Whether a transaction
constitutes an act in fraud effecting to the detriment of the creditors, depends
upon the existence of the debtor’s intent to defraud at the time that the act in
law in question was made. It is also necessary to show the third person knew
the debtor’s fraud intent or should have known showing the due diligence. As
it is usually difficult for the creditor to determine and prove an individual’s
intent, presumption rules have been established to help in the process. Accord-
ing to Article 527 section 3 and section 4 CC if, as a result of an act in law
effected by the debtor to the detriment of the creditors, a material benefit was
gained by an entrepreneur who was in permanent business relationships with
the debtor, a person who was in a close relationship with him, it shall be pre-
sumed that the person knew that the debtor acted deliberately to the detriment
of the creditors. Additionally, if at the time of a donation the debtor was insol-
vent it shall be presumed the debtor acted deliberately to the detriment of the
creditors, this rule also applies when the debtor became insolvent by making
a donation (Article 529 CC). All these presumptions are rebuttable. The third
party’s intent is no longer important when a third party gained a benefit from
the debtor’s act in law gratuitously, that is, without mutual performance.
(5) Nonetheless, if, as a result of an act in law effected by the debtor to the det-
riment of the creditors, a third party gained a material benefit gratuitously,
each creditor may demand that the said act be declared ineffective even if that
third party did not know, and even with showing due diligence could not have
learned that the debtor acted deliberately to the detriment of the creditors
(Article 528 CC).
After the creditor succeeds in the court and receives the awarding judgment he
may, with priority over the third party’s creditors, vindicate his claims in the prop-
erty assets, which as a result of the act in law declared ineffective left the debtor’s
estate or did not enter it (Article 532 CC). The third party however, may release
himself from the claim compensation if he satisfies the creditor or indicates to him
the debtor’s property sufficient to satisfy the creditor (Article 533 CC).
The third party, who gained a property asset as a result of the debtor’s act in law
recognized as effected to the detriment of the creditors, may release himself from
the compensation of the claim raised by the creditor who demands that the said act
in law be declared ineffective, if he satisfies that creditor or indicates to him the
debtor’s property sufficient to satisfy the creditor (Article 533 CC).
Usually, the scope of application of actio Pauliana claim refers to the situation
where a person first became a debtor and later he acts in order to prejudice his credi-
tor’s situation. However, it is also possible to use remedy based on actio Pauliana
when the debtor acts with a view to prejudicing a future creditor. In this situation,
a person first has his property assets transferred to a third person’s estate and later
concludes transaction with his creditors. The provisions of the Articles 525–529
may be then applied correspondingly, where the debtor acted intentionally to the
150. V CKN 280/00, unpublished.
121
detriment of the future creditors. But if a third party gained a material benefit against
consideration, the creditor may demand that the relevant act in law be declared inef-
fective only if the third party knew the intention of the debtor. So even when the
creditor proves the third party could have learned that the debtor acted deliberately
to prejudice his creditors when showing due diligence, his claim will not be satis-
fied as it is required to prove the third party knew about the real debtor’s intent.
If the third party, who had acquired property assets from the debtor acting on the
detriment of his creditor, has disposed of the material benefit gained, the creditor’s
claim may not be effective. In this case, the creditor may directly sue the person for
whose benefit the disposition was made if that person knew the circumstances,
which justified the declaration of the debtor’s act as ineffective or if the disposition
was gratuitous (Article 531 §2 CC).151
151. See M. Pyziak-Szafnicka, in Prawo zobowia zań– cze ść ogólna, vol. 6 of System Prawa Prywat-
nego, ed. A. Olejniczak (Warsaw: C.H. Beck, 2009), 1221 ff.; P. Machnikowski, in Kodeks cywilny:
Komentarz, ed. E. Gniewek (Warsaw: C.H. Beck, 2008), 944 ff.
122
137–137
Chapter 5. Termination of the Contract

§1. PERFORMANCE AND BREACH
I. Performance
137. The aim parties want to achieve when entering a contract is to have it per-
formed. Since every contractual obligation is successfully performed, the contract
is brought to an end. The same result comes from compulsory enforcement of judg-
ments adjudicating the creditor’s claims in civil litigation. Performance consists of
doing something or abstaining from doing something and may result in right trans-
ferring or in creating the new right for the creditor.
Proper completion of performance may result in end of obligation under certain
conditions. First, this rule applies only to obligations with one time performance,
when the debtor after rendering performance is released from all his contractual
duties (e.g., sale contract). This kind of performance may be divided into instal-
ments (if the performance subject is divisible), but what is the essence of that kind
of contract: with one time performance contract both parties know – at the time the
agreement is reached – what is the exact value or amount to be transferred to the
creditor. The result or the value the debtor is due to perform is therefore invariable,
even though the debtor may be obliged to perform his duty for a certain period of
time (e.g., the building contract is considered a one time performance contract event
when it is to be performed for a certain time specified, but the final result the debtor
is to achieve and its value may be described at the time the agreement is reached).
Secondly, sometimes the fulfilment of one time performance does not result in the
debtor’s release from obligation bound – when the debtor deposited the owed
objects for the creditor at the court (Articles 463 CC, 486 §2 CC). Doing that, the
debtor must not be considered to be delayed debtor, but the legal relationship
between debtor and creditor is not ceased, because until the creditor demands the
court to deliver him the object of the performance placed in the deposit, the debtor
may recover the object thus deposited (Article 469 §1 CC). If the debtor recovers
the object of the performance from the court deposit, the depositing shall be deemed
null and void and the debtor will be delayed.
Finally, proper performance means performance rendered by the debtor or by the
persons with the assistance of whom he is to perform the obligation, as well as the
persons to whom he entrusts with the performance of the obligation in proper way.
When the performance is rendered by the third person not acting on behalf of the
debtor, the subrogation of creditor must be considered (Article 518 CC). When a
co-debtor (joint debtor) has performed the whole obligation, the obligation ceases,
but other co-debtors may not be released; the content of the legal relationship
among the co-debtors decides for whether and in what part the debtor who has per-
formed may demand the refund from the co-debtors. If nothing else follows from
the contents of that relationship, the debtor who has performed the obligation may
demand the refund in equal parts (Article 376 §1 CC).
Generally, the CC provides in Article 356 that the creditor may demand a per-
sonal performance of the debtor only if that follows from the contents of the act in
123
138–138 Part I, Ch. 5, Termination of the Contract
law, from statutory law, or from the nature of the performance; however, if a pecu-
niary receivable debt is due, the creditor cannot refuse to accept the performance
from a third party even if the latter acts without the debtor’s knowledge. The third
person may render payments on behalf of the debtor only under the latter’s consent
or within the limits of negotiorum gestio, still acting on somebody else’s account
without his knowledge is not recognized as acting on one’s behalf until the confir-
mation is made by the person whose affairs were managed. Only the final consent
of the debtor received at last even after the performance shall make that acting with-
out the mandate as effective as a proper mandate. The person managing another per-
son’s affairs without a mandate should give account of his acts and transfer all of
which he has obtained as a result of those acts to the person whose acts he man-
aged. If he has acted according to his duties, he may demand the reimbursement of
justified expenses and outlays including the statutory interest, and the release from
the obligations assumed when managing the case (Article 753 §2 CC).
138. Generally, it is the debtor who is liable to perform his contractual obliga-
tions. The creditor is entitled to demand the performance, but it is also possible
(even in unilateral contracts) that he has different kinds of duties imposed on him
by law or the contract, in order to enable the debtor to fulfil performance in a man-
ner due. According to Article 354 section 2 CC, the creditor is obliged to cooperate
in the discharge of obligation with the debtor in accordance with contents of con-
tract, in a manner complying with its socio-economic purpose and the principles of
community life, and also in manner complying with existing customs. It must then
be emphasized that the creditor also needs to meet required level of due diligence
during the contract performance, otherwise he may not benefit from certain rem-
edies and eventually he may be liable for damages the debtor has therefore incurred.
The creditor may not reject delivery of part of the performance when the subject
matter of performance is divisible, unless the acceptance of such performance
would infringe his justified interest (Article 450 CC).
The debtor, when making the performance, may demand a receipt from the credi-
tor and may not perform the contract when creditor refuses to issue the receipt. The
debtor may demand the receipt in a special form if that is in his interest, but in this
situation, the cost of the receipt needs to be borne by the debtor unless agreed oth-
erwise (Article 462 CC). If the creditor refuses to give a receipt, the debtor may
withhold the performance or deposit the object of the performance with the court.
If there is a document confirming the obligation, the debtor may, when making the
performance, demand the return of the document. However, if the creditor has an
interest in keeping the document, in particular if the performance was made only in
part, the debtor may demand that the appropriate mention notice be made on the
document (Article 465 §1 CC). If the document was lost, the debtor may, regardless
of a receipt, demand from the creditor a declaration in writing that the document
was lost. When the creditor refuses to return the document or to make on it the
appropriate mention or to make a declaration in writing on the loss of the docu-
ment, the debtor may withhold the performance or deposit its object with the court
(Article 465 §2 and §3 CC). The presumption of the payment of incidental dues
(interests for example) follows from the receipt of the sum due. The presumption of
124
Part I, Ch. 5, Termination of the Contract 139–139
the periodical performances enforceable earlier follows from the receipt of the peri-
odical performance (Article 466 CC). The presumptions may be rebutted, but the
receipt provides a prima facie evidence for the debtor’s benefit that apart from the
main performance directly stated in the clause on the receipt, all accessory perfor-
mances have also been performed, even though they are not expressed in this docu-
ment content.
139. When the performance is of pecuniary character, the debtor is obliged to

deliver certain amount of money to the creditor. If not provided otherwise in the
contract, the money should be generally rendered in cash.152 The parties may of
course agree to the cashless mode of payment, in this case the contract is deemed
to be performed at the time the transferred amount was entered into the creditor’s
bank account. Additionally, statutory requirements impose on business entities
(entrepreneurs) obligation to make payment on bank account compulsory when both
parties of transaction are entrepreneurs and the payment amounts over Euros (EUR)
15,000.153 The creditor is not bound by statutory law to accept payment in cheque.
In case the debtor is to perform to one creditor several performances of one kind
(e.g., several payments), and the parties have not agreed otherwise in contract, the
debtor while making the performance, is the one to indicate which debt he wants to
satisfy. However, the creditor is entitled to cover with this payment first due arrears
of interests before reducing the main debt due. If the debtor has not indicated which
of the several debts he wants to pay and accepted the receipt in which the creditor
counted the performance received towards one of those debts, the debtor cannot
demand later that it should be counted towards another debt. In the absence of a dec-
laration of the debtor or the creditor in this matter, the performance made is counted
first of all towards the debt due, and if there are several debts due, towards the one
that was primarily due and enforceable (Article 451 CC).
If the object of the obligation from its beginning is a sum of money, the perfor-
mance shall be made by the payment of the nominal sum unless special provisions
state otherwise (Article 3581§1 CC). The parties may introduce into the contract
terms clauses of gold, foreign currency and other factors being the base of calcu-
lating the actual amount of payment at the due date. The contract clause introducing
a mode of calculating the amount of payment due is called the indexation clause.
There are performances originally (ab initio) set as money debts and those that
were agreed in the other form and then after were changed into monetary perfor-
mance, though it must be stressed that generally when the debtor is not able to pay
money the creditor may not be forced to receive other things instead. When com-
pensating damage CC provides in Article 363, that the damage shall be redressed,
according to the choice of the injured person (creditor), either by the restitution of
the previous condition or by the payment of an appropriate sum of money. How-
ever, if the restoration of the previous condition were impossible or if it resulted for
152. Which results from the rule, that generally only the creditor himself is entitled to receive the debt-
or’s performance, and while non-cash transaction is made, the money is transferred into the bank
account. The bank then is deemed to be the actual owner of the money.
153. Due to Art. 22 §1 of The Freedom of Business Activity Act dated 2 Jul. 2004 (Dz. U. 2007 No.
155, item 1095 with changes).
125
the person obliged in excessive difficulties or costs, the claim of the injured person
shall be limited to a performance in money. If the redress of the damage is to be in
money, the amount of the indemnity shall be fixed in accordance with the prices on
the day on which the indemnity is fixed, unless extraordinary circumstances require
that prices existing at a different moment be taken as the basis.
The ‘złoty’ is the monetary unit of Polish currency.154 CC provides that when the
object of the obligation is a sum of money denominated in foreign currency,155 the
debtor may fulfil the performance in the Polish currency, unless the Act, court pro-
nouncement that forms the obligation or an act in law reserves directly the fulfil-
ment of the performance in foreign currency (Article 358 §1 CC). Whereas in the
opposite situation, when the object of performance is certain amount of Polish cur-
rency (zloty), the debtor needs to perform in this currency, otherwise the perfor-
mance is not effective, therefore the obligation is not discharged and the debtor must
pay twice. If the debtor pays the wrong currency, he does not actually make the per-
formance, unless he pays in Polish currency when Polish CC is applied. This statu-
tory stipulation introduces the most-favoured-currency clause for Polish zloty and
simultaneously gives the debtor the competence to change the currency of perfor-
mance. When performing in Polish currency, which was not the originally agreed
currency of payment, the value of the foreign currency shall be calculated accord-
ing to the average exchange rate announced by the National Bank of Poland as of
the day when the claim is payable, unless the Act, court pronouncement or an act in
law state otherwise. In the case of the debtor’s delay, the creditor however may
demand that the performance be fulfilled in the Polish currency according to the
average exchange rate announced by the National Bank of Poland as of the day on
which the payment is made, so as the delayed debtor may not benefit from his own
delay to the detriment of creditor. Polish court may pass judgment for a sum
expressed in foreign currency.
The proper performance of debtor resulting in discharge of the contractual obli-
gation shall be of adequate quality, rendered in due time, at the place of perfor-
mance and to the ‘hands of creditor’, all those prerequisites of proper performance
are to be presented separately as follows.
140. Under the CC provisions, the debtor is obliged to act with diligence gen-
erally required in the relationships of a given kind (due diligence). The due dili-
gence of the debtor within the scope of his economic activity shall be assessed with
the consideration of the professional nature of that activity. In other words, the more
professional knowledge is required under the terms of contract to proper perfor-
mance the higher level of due diligence is recognized as an adequate, and when the
debtor himself enters a contract referring his professional activity, a higher level of
diligence is required. When the required level of due diligence is not provided while
performing, the situation may be considered as a breach of contract.
154. The Zloty Denomination Act dated 7 Jul. 1994 (Dz. U. 1994 No. 84, item 386 with changes).
155. The freedom of transactions denominated in foreign currency is limited with rules of Foreign Cur-
rency Law dated 27 Jul. 2002 (Dz. U. 2019, item 160).
126
Due to CC, when the debtor is obliged to give things designated only as to their
kind, and the quality of the things is not defined by appropriate provisions of con-
tract or by an act in law nor follows from the circumstances, the debtor should give
things of average quality.
141. If the parties do not agree in contract the date the performance is due, the
date may be implied as a logically necessary consequence of the kind of perfor-
mance agreed. If the time limit for the performance is not specified and does not
follow from the nature of the obligation, the performance shall be made ‘immedi-
ately’ upon demand of the creditor. The creditor should give notice to the debtor
indicating the performance should be made as soon as in the normal way of activity
it might be reasonably required. Usually, depending on the kind of performance, the
debtor is obliged to perform in one week after receiving the notice. In this case, the
debtor is delayed when the performance is not rendered after few (several) days
since delivery of the creditor’s notice. However, the creditor may extend the time
limits for the debtor’s favour.
CC provides special regulations as to the time of performance when mutual con-
tracts are considered (with mutual performances), in this case both parties’ perfor-
mances shall be made simultaneously unless otherwise follows from the contract,
statutory law or a decision of the court or other competent authority that one of the
parties is obliged to an earlier performance. If the mutual performances are to be
made simultaneously, each party may withhold the performance until the other party
offers the mutual performance (Article 488 CC).
If the parties stipulated in the contract that the performance shall be delivered in
parts over certain period of time but did not specify the size of those partial per-
formances or the periods of time when each of them was to be made, the creditor
may, by a declaration made to the debtor at a proper time, specify both the size of
those partial performances and the periods of time for the making of each of them,
but he shall take into consideration the possibilities of the debtor and the mode of
performance.
If the debtor becomes insolvent or if, due to circumstances for which he is respon-
sible, the security of the receivable debt is considerably reduced, therefore the credi-
tor may demand performance regardless of the stipulated time limit in contract
(Article 458 CC). When mutual performances are considered and one of the parties
is obliged to make the mutual performance earlier, and the rendering of the perfor-
mance by the other party is doubtful in view of his financial standing, the party
obliged to make the earlier performance may withhold it until the other party offers
the mutual performance or gives a security (Article 490 §1 CC). Still, the party
which at the time of the conclusion of the contract was aware of the bad financial
standing of the other party is not vested with the above right.
The time limit for the performance indicated in an act in law shall be deemed, in
case of doubt, as reserved to the benefit of the debtor (Article 457 CC), which means
that unless otherwise agreed, the debtor is entitled to perform before the date is due
and the creditor may not refuse to receive the performance. The parties may set in
contract clauses that the time of performance shall be deemed as reserved to the
benefit of the creditor, so as the creditor would be entitled to claim the performance
earlier than previously agreed and the debtor may not perform earlier without the
127
creditor’s consent. The time of performance may be agreed on the benefit of both
parties, in this situation the creditor may not claim the performance earlier than it
has already been agreed, nonetheless, he is entitled to refuse the performance in case
the debtor wants to render the performance before it becomes due.
142. The proper performance should bring a contract to an end only when it is
rendered in proper place. The place where debtor makes performance may be
directly laid down in the contract terms or may be implied from the nature of the
obligation. Under Article 454 section 1 CC, if the place where the performance is to
be made is not specified and does not follow from the nature of the obligation, the
latter shall be performed at the debtor’s place of residence or seat at the time of con-
cluding the contract. However, a performance in money shall be made at the place
of the creditor’s place of residence or seat at the time of the satisfaction of the per-
formance; if the creditor changed his place of residence or seat after the inception
of the obligation, he shall bear the surplus cost of the remittance caused by that
change. If the obligation is connected with the enterprise of the debtor or that of the
creditor, the seat of the enterprise shall be decisive for the place where the perfor-
mance is to be made (Article 454 §2 CC). When the parties agree on a cashless
method of payment, the place of performance is the place of branch of bank, where
the creditor’s bank account is administered.156 The issue of where exactly is the
place of performance is important also for the procedural reasons, as the local juris-
diction of given court for litigation regarding the contract performance disputes may
be determined by the claimant by the proper place of performance.
143. Under Article 452 CC if the performance was made to a person not entitled
to accept it and the acceptance of the performance was not confirmed by the credi-
tor, the debtor shall be released to the extent in which the creditor profited from the
performance. The provision shall apply correspondingly where the performance was
made to the creditor, who was incapable of accepting it. However, when the per-
formance is made to a person, who shows a receipt drawn by the creditor it releases
the debtor, unless it has been stipulated in contract that the performance is to be
made to the creditor in person or if the debtor acted in bad faith (Article 464 CC),
that is, he knew or could have known if he would have observed the required level
of due diligence.
When the debtor has rendered the performance to a person not entitled to accept
it, the contractual obligation is discharged only after the creditor has acknowledged
to the debtor the receipt of performance.
Polish CC does not stipulate the general rule that the debtor performing in good
faith to a person who is not entitled by the creditor to receive performance is dis-
charged from contractual liability. In case of uncertainty of who is the creditor (e.g.,
after the creditor’s death), the debtor may perform upon stipulation of return. Gen-
erally, when the debtor makes performance to a third person, he is entitled to claim
the performance back under the provisions regulating the unjust enrichment rem-
edies. However, the debtor may not claim the unjust performance back if he knew
that he was not obliged to render it to the third person, unless the performance was
156. See judgment of the Supreme Court of 8 Nov. 1989, III CRN 345/89, Palestra nos 1–2 (1992).
128
made upon stipulation of return, in order to avoid duress or the debtor made per-
formance and the contract was an invalid act in law (Article 411 CC).157
144. In contract law, substitute performance may apply when using a method
different to one provided for in the originally agreed contract provisions in order to
perform the obligations under the contract. In certain situations, the rule pacta sunt
servanda may not be fully applied. Such alternate method may be stipulated directly
in the contract terms: (a) agreed by the parties later on (b) usually when the prima-
rily agreed performance is unavailable or commercially unreasonable, or the com-
petence to change performance may be vested to debtor by virtue of statutory law,
what is called facultas alternatica (c). It is though highly important to note the
change of performance always requires both parties’ consent, statutory provision or
the judge decision (d) and may not result from the intent of one party only, even
when the change would be a commercially reasonable substitute or profitable per-
formance for the other party:
– The parties may stipulate in the contract two or more types of performance of
which one only will be due. The right to choose the performance due may be
given to one of the contracting parties or a third person. Under Article 365 sec-
tion 1 CC, if the debtor’s obligation is such that the discharge of the obligation
may take place by the fulfilment of one of several performances (alternative obli-
gation), the choice of the performance shall be with the debtor unless it follows
from an act in law, provisions of statutory law, or circumstances that the creditor
or a third party is entitled to make the choice. The choice shall be made by a dec-
laration addressed to the other party. If the debtor is entitled to make the choice,
he can make it also by effecting the performance. If the party entitled to choose
the performance does not make the choice, the other party may set him the appro-
priate time limit for that purpose. After an ineffective lapse of that time limit, the
right to make the choice shall pass to the other party.
– Though the contract may be changed with both parties consent with regard to the
performance features, there is still an important difference between two ways the
change may be done. First, when the parties change the contract terms with the
contract amendment, the situation of debtor is changed as the amendment
becomes valid, as the performance change is formed by the mutual consent of two
parties. When the new performance becomes impossible, the creditor is not
entitled to claim the old one. Second, CC provides another possibility to change
the subject of performance called datio in solutum. Under Article 453 CC if the
debtor, in order to release himself from the obligation, makes, with the consent
of the creditor, another performance, the obligation shall expire. If the object of
the performance is defective, the debtor shall be liable for a warranty according
to the provisions on warranty on sale. Datio in solutum is a contract that becomes
valid only when the newly agreed performance is fulfilled. When there is only a
sole agreement on the possibility the debtor renders performance different from
originally agreed, the previous original content of contract binds both parties. The
157. See J. Da browa, in Zobowia zania – cze ść ogólna, vol. III, part 1 of System prawa cywilnego, ed.
Z. Radwański (Wrocław: Ossolineum, 1981), 714 ff.
129
contract of datio in solutum is of real character; to enter into a real contract except
of the consent of declaration of will, there must be a transfer of property items
made between parties (delivery of things) or the new performance must be ren-
dered in a proper way. However, when the acquirer (the creditor) of a product –
benefiting from the claims provided under the warranty on sale – rescinds from
the contract because of this product’s defects, the original contract obligation
becomes valid again and the primarily agreed performance shall be rendered. The
parties may nevertheless also agree to conclude an agreement of cessio in solu-
tum. The latter contract stipulates the debtor instead of rendering primarily agreed
performance shall transfer his receivable debt, to which he is a creditor. When the
assignment contract is successfully done and the receivable is transferred to the
creditor, the debtor is free from obligations arisen from the primarily concluded
contract.
– Facultas alternativa is usually a statutory provision vesting debtor with right to
change the subject of performance in a certain, law prescribed way without the
need to seek creditor’s approval. Additionally, the creditor is not entitled to claim
the modified performance, he may sue the debtor only with claim to fulfil the
main originally established performance. CC regulations provide several types of
this kind of provisions, for example, under Article 897 CC if after effecting the
donation the donor falls into penury, the donee shall have the duty, within the lim-
its of his still existing enrichment, to provide the donor with the means which the
latter lacks for satisfying his justified requirements or for discharging his statu-
tory duties of maintenance. However, the donee may release himself from that
duty by returning to the donor the value of the enrichment. Hence, due to above-
mentioned construction the donor although he may claim a kind of monthly pen-
sion for living, may not claim the back-payment of the value the donee is still
enriched with as a result of effecting the donation agreement, still, it is up to
donee whether he pays the pension or returns the whole value he is enriched with.
This kind of stipulation structure may also be entered into the contract terms, so
as the debtor is the only one entitled to modify in a certain way the performance.
It is though important to note that all the time the performance due is the original
one and an impossibility of the latter effects validity of the contract. Hence, when
the original performance is impossible to render, the debtor is not obliged to ful-
fil the modified one when it was stipulated into the contract as a facultas alter-
nativa.
– The court on the debtor’s demand may sometimes decide to change the value of
performance or divide it into instalments, when, generally describing, it is justi-
fied with the equity reasons. Under Article 388 CC if one of the parties, taking
advantage of the state of necessity, inefficiency or inexperience of the other party,
in exchange for its own performance shall accept or reserve for itself or for a third
party a performance whose value at the moment of the conclusion of the contract
glaringly exceeds the value of its own performance, the other party may demand
a reduction of its performance or an increase of the performance due to it, and if
both are excessively difficult it may demand that the contract be declared null and
void. These rights expire after two years from the day of the conclusion of the
contract. Additionally, due to Article 3571 CC, if, following an extraordinary
130
change of circumstances, the performance would be faced with excessive diffi-

culties or threaten one of the parties with substantial loss, which the parties did
not foresee when concluding the contract, the court may, after considering the
interests of the parties, define the mode of performing the obligations and the
degree of the performance, and even decide upon termination of the contract, in
accordance with the principles of community life. When terminating the contract
the court may, as far as necessary, decide upon a settlement of accounts being
guided by the principles specified in the preceding sentence. The Court may also
under Article 3581 section 3 CC change the value of monetary performance that
is; in the case of an essential change of the purchasing power of money after the
arising of the obligation, the court may, after considering the interests of the par-
ties and in accordance with the principles of community life, change the amount
or the mode of making a performance in money even if these were fixed in the
decision or the contract. The party running an enterprise cannot demand a change
of the amount or the mode of effecting a performance in money if the latter is
connected with the running of an enterprise (Article 3581§4 CC).
– Article 506 section 1 CC stipulates that if, in order to cancel the obligation, the
debtor obliges himself, with the consent of the creditor, to make other perfor-
mance or even the same performance but on different legal grounds, the earlier
obligation expires (novation). In the case of doubt, it shall be deemed that a
change of the contents of the earlier obligation shall not be its novation but simple
agreement changing the mode of performance. This shall apply in particular to
the case where the creditor receives from the debtor a promissory note (bill of
exchange) or a cheque. The securities are not generally deemed to change the
original performance the debtor is obliged to make, but under the agreement of
both parties, directly stipulating their intent of novation, the obligation derived
from the securities may replace and discharge the obligation they were former
bound with. If the receivable debt was secured by a suretyship or a limited pro-
prietary right established by a third party, the suretyship or the limited propri-
etary right shall expire at the moment of the novation unless the surety or the third
party consents to the continuation of the security (Article 507 CC).
145. Where two persons are both creditors and debtors with respect to one
another, each of them may set-off his receivable debt from the receivable debt of
the other party if the object of both debts is money or things of the same quality
designated only as to their kind and both debts are due and may be claimed before
the court or other state authority. As a result of the set-off, both receivable debts
shall cancel one another to the amount of the lesser debt (Article 498 §1, 2 CC).
The debtor of one obligation may unilaterally decide not to make performance in
reality (e.g., payment transfer to a bank account of the creditor) but to declare set-
off of debt arisen under second obligation, where he is in a position of a creditor.
Therefore, the performance of the second obligation is recognized as of compulsory
nature, as the debtor of the second obligation is no longer in position where he is
able to decide whether or when he wants to make the payment. This is the reason
why results of set-off are often compared to compulsory execution of debts, as the
party who receives the set-off note is forced to ‘perform’ his obligation. The receiv-
able debts, which may not be subject to enforcement proceedings, are therefore
131
excluded from cancelling by set-off. The full list of receivables of this kind is
included in the provisions of Code of Civil Proceedings.158
The set-off may take place by a single declaration note made to the other party.
The declaration is, under Article 499 CC, to result in retroactive effect as from the
moment when the set-off became possible. If the objects of the set-off are receiv-
able debts with different places for the making of the performances, the party avail-
ing itself of the possibility of the set-off is obliged to pay to the other party the sum
required to cover the loss resulting from it. The postponement of the performance
granted by the court or gratuitously by the creditor shall not preclude the set-off. If
the receivable debt is barred by limitation (due to the lapse of prescription time), it
may be subject to set-off if at the moment when the set-off became possible it has
not been prescribed yet.
The following receivable debts cannot be cancelled by set-off, as it was decided
these kinds of performances should be rendered by the debtor in natura to the hands
of the creditor:
– receivable debts not subject to attachment writ;

– receivable debts for the provision of means of subsistence;
– receivable debts resulting from tort;
– receivable debts the set-off of which is precluded by special provisions.159
The above-stated debts generally are aimed to satisfy basic human living needs
or are of personal character for the creditor, and the social and equity reasons appeal
for the limitation of the freedom to set-off. However, when the creditor of the above-
listed debts wants to set-off his mutual debt, he may decide to set-off both receiv-
able debts.160
II. Breach of Contract
146. If one of the parties fails or refuses to perform his obligations without a
valid reason recognized by law, the other party suffering the consequences of the
breach may claim upon the courts either to force the defaulting party to: (a) perform
its duties (specific performance), (b) may demand compensation in the form of dam-
ages instead of the performance or (c) may demand performance and the damages
together. The effects of lack of performance or undue performance depend on pos-
sibility of performance, its significance to the innocent party and his choice. Some-
times, where the debtor fails to fulfil obligation, his primary obligation to perform
is replaced with secondary obligation to pay damages for the breach. It is possible
though that the obligation to pay damages coexists with obligation to perform the
contract and the guilty party may be claimed for both of them.
158. Arts 823–838, 1061 and 1083 CCP.

159. There are examples of these kind of provisions in the Bankruptcy Act.
160. See K. Gandor, in Zobowia zania – cze ść ogólna, vol. III, part 1 of System prawa cywilnego, ed. Z.
Radwański (Wrocław: Ossolineum, 1981), 849 ff.
132
147. Lack or undue performance of valid obligation (hereinafter called the

‘breach of contract’) is occurred when a party:
– fails or refuses to render the performance;

– incapacitates himself from rendering the performance, especially when the per-
formance has become impossible to render because of this party’s fault;
– renders the performance in a defective manner (wrong quality or quantity, with-
out due diligence);
– fulfils performance to a wrong person, in a wrong place or with any delay;
– is liable for destruction of a particular thing being the subject matter of perfor-
mance;
– dies, when contractual obligations were of personal character and the debtor’s
personal skills were of the contract essence or the nature of obligations decides
that after the creditor’s death the performance may not reasonably be rendered to
the creditor’s successors.
§2. IMPOSSIBILITY, FRUSTRATION AND HARDSHIP: ‘THE UNFORESEEN’
I. Impossibility of Performance
A. Notion of Impossibility
148. The impossibility of performance affects the fulfilment of contract and may
influence its existence; sometimes it changes the subject of performance by replac-
ing it with the obligation to pay damages. The impossibility of performance must
be laid in the nature of the performance (objective impossibility – no one is able to
make the performance) and not in the inability of a given debtor to do it (subjective
impossibility). It must also be of permanent state. Where the personal skills of
debtor are of the contract’s essence, the loss of skills by the debtor or his subse-
quent inability to perform makes the performance impossible as well.
In contracts where the performance of duties depends on existence of given
object, an implied stipulation is that unavailability of subject matter will cause the
cease of contract obligations. The destruction of goods that are irreplaceable gen-
erally makes the subject matter of contract unavailable for anyone and therefore
results in making performance impossible. However, in case of dispute the debtor
must prove it was not possible to have the destructed products replaced or the
destruction defeated the purpose of contract (e.g., a building which was to be rented
has burned down – even if it is possible to rebuild it, it may not be reasonably
required for the debtor to do this, additionally lease contract does not oblige the
debtor to build the building for rent). Accidental loss of the subject matter resulting
in the performance impossibility generally results in ceasing the debtor’s obligation
unless he agreed previously to bear the risk or the debtor was in default. Under
Article 478 CC, if the object of the performance is a thing indicated as to its iden-
tity, the debtor who is delayed shall be liable for the loss of, or the damage to, the
object of the performance unless the loss or damage would have taken place also if
the performance were made in the proper time.
133
When the debtor encounters unforeseen difficulty or unpredictable expenses161

while making performance, he is generally not excused from performance; how-
ever, the law regulations or contract may provide otherwise. For example, if the
debtor is to render specific works using plans and schedules delivered by the other
party, he does not incur the cost of unforeseen additional work (Article 630 CC).
There is also a rule, that the debtor is generally not liable for any failure in the per-
formance of his obligations, which have resulted from force majeure caused by an
impediment factor laying beyond the debtor’s control and foreseen ability.162
B. Initial Impossibility of Performance
149. Impossibility may be initial or subsequent. The first occurs when the per-
formance has already been impossible at the time the contract was concluded, the
latter is when the performance became impossible after the contract had been
entered.
In case of initial impossibility of performance the contract is invalid, according
to the rule imposibilium nulla obligatio est, and the parties must make restitution of
benefits they have conferred to each other (Article 387 §1 CC). These benefits are
of unjust enrichment origin, because there was no valid legal base for rendering any-
thing to the other party, for example, any advance payments must be returned. The
nullity of contract is irrespective of whether any party of this contract was aware of
the impossibility at the time of concluding the contract or has learned it later. None-
theless, the party who knew about the impossibility at the time the contract was
made and did not inform the other party about it, is obliged to compensate the dam-
age suffered by the other party because of concluding this contract (Article 387 §2
CC). These issues were discussed in Chapters 1 and 2 above.
C. Subsequent Impossibility of Performance
150. Under Article 475 CC, the subsequent impossibility of performance ceases
the contract existence only when the debtor is not liable for causes of impossibility.
When the goods being the subject matter of contract have been sold, damaged or
lost, the debtor is obliged to deliver everything he gained in return for them or as a
compensation. In the other case, when the debtor is liable for causes of impossibil-
ity, he is obliged to compensate to the other party the damage incurred, under the
contractual liability regime.
161. The Superior Court in its decision dated 10 Apr. 2003 accepted that the lack of money to remu-
nerate for performance creates no impossibility of performance (III CKN 132/00, OSN 2004, Nos
7–8, item 112).
162. There are though exceptions when the statutory law provisions or contract provide, for example,
according to Art. 478 CC if the subject matter of performance is a thing indicated as to its identity,
the debtor who is delayed shall be liable for the loss of or the damage to the object of performance
unless the loss or damage would have taken place also when the performance was made in time
(casus mixstus liability).
134
Where the contract is mutual, specific legal regulations are applied depending
whether the impossibility is caused by one party’s breach of contract or the perfor-
mance became impossible in consequence of circumstances, for which neither of the
parties is liable. In both mentioned cases, under Article 496 CC one party is entitled
to rescind the contract which would impose both parties on returning to each other
whatever has been received under the mutual contract performances, though each
party is entitled to retention of what shall be returned until the other party offers the
return of performance received or assures the claim for return (ius retentionis).163
After notifying ius retentionis, the party which withholds the return shall not be
deemed in delay:
– If one party’s breach of contract has caused impossibility of performance due, the
other that is, victim party has two options – depending on his will he is entitled
to: (a) demand compensation or (b) rescind the contract and demand compensa-
tion (Article 493 §1 CC). When the victim party chooses to stay in contract he
could demand performance of obligation and claim for damages from the party
in breach, who is liable for the causes of his own performance impossibility. Stay-
ing in contract relationship means the victim party is still obliged to fulfil his con-
tractual obligations and performance promised. When the victim party rescinds
the contract, both parties are no longer obliged to performance and they should
return whatever was received under the contract from the other party, addition-
ally, the party in breach is liable for compensation of damage incurred by the vic-
tim party as a result of impossibility of the performance.
– Where only a part of performance has become impossible due to the debtor’s
breach, generally the victim party is not entitled to totally rescind the contract.
He may terminate the contract only as to the impossible part of performance. The
victim party is released by the rescission from obligations to perform which are
not adequate to the possible part of mutual performance of debtor in breach. The
partial impossibility of performance justifies rescission of the contract in total,
when the victim party (creditor) would take no benefits from the partial perfor-
mance because the partial performance would inflict the nature of the obligation
or the purpose of performance known by the debtor in breach (Article 493 §2
CC). It must be noticed that when the party exercises the option to rescind the
contract, he is entitled to claim for damages, according to Article 494 CC.
– If one of the mutual performances has became impossible due to neither party’s
fault, the party who was to perform it may not demand the other’s party perfor-
mance, yet if the other party has fulfilled his performance the party who received
it is obliged to return it in accordance with unjust enrichment rules (Article 495
§1 CC).
– According to Article 495 section 2 CC where the obligation was mutual and one
party’s performance has became partly impossible due to neither party’s fault, this
163. The rule concerning ius retentionis is applied only in situations where both parties are to return per-
formances received. When only one party is obliged to return the subject matter of performance ius
retentinis rule is not applied. Where the subject matter of a contract is delivery of goods when using
ius retentionis there may be a concurrence of two civil law rules set out in Arts 461 CC and 496
CC.
135
party is no longer entitled to receive the other party’s performance in the appro-
priate part. The other party however, may rescind the contract if the partial per-
formance would inflict the nature of the obligation or the purpose of performance
known by both parties.
II. Frustration and Hardship
151. It must be conceded there is important distinction between events that ren-
der performance impossible and those that result in making the performance of a
contract more difficult for the debtor. Sometimes, the impacts of unforeseen acci-
dents on the performance of a contract are making the performance unexpectedly
difficult or expensive to the extent that might not have been predictable for the
debtor while entering the contract. Therefore, Polish CC provides certain remedies
for debtors in such a situation, as it is presumed there is a non-written assumption
that the contract was entered subject to a condition either express or implied that
certain particular (though unspecified in contract terms) circumstances would con-
tinue to exist while performance is made (rebus sic stantibus). Unforeseeable
change of those circumstances allows under certain conditions the debtor to claim
the court to change the scope of his obligations. It is important that the change of
circumstances has happened after the contract was made; however, when the change
occurred while the debtor has been delayed, he may not benefit from this remedy.
The unforeseeable change of circumstances may not be limited only to individual
situation of the debtor but must refer to wider range of people. The unexpected and
unusual change in economy market, hyperinflation, flood, earthquakes, pandemic
illness, war, strikes may be considered as such change, when their impediments
have been irresistible and unavoidable.
The debtor’s right to use this claim is not limited in time, as it is not subjected to
presumption. However, his right to demand the change of performance may not be
effected when the performance becomes impossible – in the meaning expressed ear-
lier. The claimant is also required to prove the causal connection between the
unusual change of circumstances and substantial difficulty in performing the con-
tract are bound with causal connection.
152. Under Article 3571 CC (called rebus sic stantibus clause), if, following an
extraordinary change of circumstances, the performance would be faced with exces-
sive difficulties or threaten one of the parties with substantial loss, which the parties
did not foresee when concluding the contract, the court may, after considering the
interests of the parties, define the mode of performing the obligations and the degree
of the performance, and even decide upon termination of the contract, in accor-
dance with the principles of community life. When terminating the contract, the
court may, as far as necessary, decide upon a settlement of accounts being guided
by the principles specified in the preceding sentence.
In Polish law, the debtor may not unilaterally change the scope of his contractual
obligation, he may only claim the court change the scope (the mode) of perfor-
mance. The court may not change the subject and kind of performance. The obser-
vance of unpredictable change of circumstances all by itself shall not excuse
136
performance unless the court judgment provides so. The court is not limited with
what the debtor specifically demands under the clause of Article 3571 CC, the judge
may decide to:
– delay the time of performance;

– arrange instalments for a payment;
– diminish the performance of claimant;
– when all three above possibilities may not be applied, the court may decide to
discharge the contract with the retrospective effect (ex tunc), but when the per-
formance is of continuous nature, the court’s decision effects only prospective
(ex nunc).
When the court’s decision results in the contract discharge retrospectively and
one or both parties have already performed partially their obligations, the court may
decide who and in what way it shall return performance or its value and what would
be the exact amount of settlement between the parties.164
153. Where the payment performance is stipulated, the essential unforeseeable

change of the purchasing power of money (e.g., hyperinflation) after the arising of
the obligation may be the reason to apply rule expressed in Article 3581 section 3
CC, under which, the court may, after considering the interests of the parties and in
accordance with the principles of community life, change the amount or the mode
of making a performance in money even if these were fixed in the decision or the
contract. However, the party running an enterprise cannot demand a change of the
amount or the mode of effecting a performance in money if the latter is connected
with the running of an enterprise (Article 3581§4 CC). The judicial valorization of
payment may be applied only when the performance is of monetary nature since the
beginning of contract and the court is to establish the new nominal amount of pay-
ment to restore the balance of purchasing power of performance. The court shall
also decide whether both parties of the contract are to bear the economic risk of
hyperinflation and shall divide the scope of risk level for each of the parties,165 for
example, the party being a consumer shall be charged with smaller rate of risk level
than the party running business.166
154. There are other provisions in CC stipulating remedies similar in function to

the clause of Article 3571 CC, where the prerequisites of their application are less
severe. Wherever they may be applied there is no need to make demand under
Article 3571 CC. Due to Article 632 section 2 CC, in the contract of specific work,
164. See A. Brzozowski, Wpływ zmiany okoliczności na zobowia zania w prawie polskim (Na tle prawa
niektórych państw obcych) (Warsaw 1992); P. Machnikowski, in Kodeks cywilny: Komentarz, ed.
E. Gniewek (Warsaw: C.H. Beck, 2008), 545 ff.
165. See resolution of the Supreme Court of 4 Mar. 2005, III CZP 91/04, Biuletyn Informacyjny Sa du
Najwyższego no. 3 (2005), 7; resolution of the Supreme Court of 2 Mar. 2005, III CZP 98/04, Wok-
anda no. 6 (2005), 8.
552 ff.
137
if as a result of a change of the situation that could not have been foreseen, the mak-
ing of the work might mean to the person receiving the order a glaring loss, the
court may increase the lump sum payment or terminate the contract. In the tenancy
contract, Article 700 CC provides that if, as a result of circumstances for which the
tenant is not liable and that do not pertain to him personally, the usual revenue from
the object of tenancy is considerably reduced, the tenant may claim a reduction of
the rent for the given economic period.
§3. DISCHARGE BY AGREEMENT
I. The Agreement to Discharge Contract
155. The parties to a contract may agree at any time to end it, even when at the
time the contract was concluded they previously had agreed that voluntary dis-
charge agreement would not bring any effects. Such an agreement as to bringing the
contract to an end is itself another contract, with all the consequences required for
its validity. Apart from the congruent intention of the parties, their declarations of
intent sometimes must have special form. Under Article 77 section 2 CC, if the con-
tract was concluded in writing, its discharge with the consent of both parties must
be stated in writing for evidentiary purposes. If the contract was concluded in
another special form (e.g., notary act), its termination with the consent of both par-
ties shall require the same form either provided for by statutory law or agreed by
the parties for conclusion of the contract, otherwise the discharge by agreement is
not valid.
If both parties have obligations under the contract that have not yet been per-
formed, consent as to mutual release from those obligations counts as consider-
ation, so nothing more is required. Where performance has not been completed both
parties consideration to abandon the contract is effective and ceases mutual obliga-
tions, so the contract could never be enforceable. Where both parties (in mutual con-
tracts) have already performed certain part of their obligation and they decided to
discharge the contract, the agreement to abandon the contract effects generally ex
nunc unless they provided otherwise in the terms of the discharge agreement. Where
the performance has not been completed by one party and the other party has
already fully performed his side of the contract, the latter may require the other
party to give value in exchange for release from the remaining obligation or to
return received performance (if it is possible). The parties may decide differently in
the contract provisions; for example, the party, who has fully performed his obli-
gations may also decide to waive his rights under the contract.
It must be conceded that CC provisions, apart from stipulating the form of the
discharging agreement required, do not regulate directly the prerequisites nor effects
of discharging agreement, so the parties, within the limits of freedom of contract
rule,167 may without restraint, decide on bringing the contract to an end. Depending
on the parties’ intent, their voluntary discharge agreement operates prospectively
167. See K. Kruczalak, ‘Rozwia zanie umownego stosunku zobowia zaniowego na mocy wzajemnego
porozumienia stron w prawie cywilnym’, Palestra 9 (1975): 72.
138
(ex nunc) or retrospectively (ex tunc). The Supreme Court decided however, that it
is not possible to discharge the contract of lease or tenancy (as contracts with con-
tinuous performance) by agreement effecting retrospectively ex tunc.168
However, according to rule specified in Article 497 CC, provision of the preced-
ing paragraph Article 496 CC shall apply correspondingly in the case of the disso-
lution of mutual contract. Under the latter provision, if the parties, after the contract
has been discharged, have to return the mutual performances, either of them shall
have the right of retention until the other party offers the return of the performance
received or gives a security for the claim for return. The party benefiting from the
above-mentioned right of retention may not be considered as delayed.
It is however important to realize that, most contracts are discharged by proper
performance and in many cases, formation and performance are simultaneously
done. Hence, there appears to be doubt whether the contract after it has been totally
performed may be additionally later discharged by agreement, when both parties’
intent is to bring their situation back to the time before the contract was formed. It
is submitted in civil jurisprudence that after the contract transferring the property
has been performed and there is lack of contractual obligations, the contract may
not be discharged by agreement, because there is not any subject matter of this
agreement. The contract after being performed formally does not cease to exist,
because it is an act of law made in the past, which effects the actual legal situation
of both parties (e.g., one of the parties has acquired the ownership of a car under
contract of sale), but as the parties have no more existing rights or obligations under
this contract, there is nothing more to be brought to an end and no reason an agree-
ment to discharge may be entered for. The discharge agreement as to the contract
transferring property may only be entered as long as contractual obligations still
exist.169 There are however different opinions in doctrine of civil law, that even after
the contract has been fully performed the parties may decide to enter an agreement
to discharge it.170
It must also be noted that under Article 83 of Bankruptcy Law Act, the contract
clause stipulating in case of one party’s bankruptcy change or discharge of any obli-
gation of the party, are no longer valid after the bankruptcy of the party in question
has been declared.171
156. Apart from the above-described agreement to discharge a contract, the CC

provides another agreement called agreement of debtor release. Under Article 508
CC, the obligation shall expire if the creditor releases the debtor from the debt and
the debtor accepts the release. Thereafter, the obligation arisen under the previously
entered contract expires. Polish civil law does not allow the creditor to release the
debtor from performance unilaterally without the debtor’s consent. The parties may
168. See resolution of the Supreme Court of 15 Nov. 2002, V CKN 1374/00, Orzecznictwo Sa dów Pol-
skich no. 11 (2003), item 144.
169. See resolution of the Supreme Court (seven judges panel) of 30 Nov. 1994, III CZP 130/94 Orzec-
znictwo Sa dów Polskich nos 7–8 (1995), item 159.
170. See E. Drozd, ‘Rozwia zanie umowy przenosza cej własnoś;ć nieruchośmo;ci’, in Obrót nierucho-
mościami w praktyce notarialnej (Kraków: Zakamycze, 1997), 5 ff.; A. Pyrzyńska, Rozwia zanie
umowy przez strony (Warsaw: C.H. Beck, 2000), 83 ff.
171. Bankruptcy Law Act dated 28 Feb. 2003, Dz. U. 2009, No. 175, item 1361.
139
decide to release the debtor only partially from performance; in this situation, the
obligation still exists within the scope the debtor was not released from perfor-
mance. This agreement may be concluded under a condition or a term specified.
When the creditor releases the debtor from performance and is given nothing
instead, the agreement is deemed to be concluded gratuitously, therefore it is rec-
ognized as a donation agreement.
There is an opinion in the jurisprudence that when the creditor gives to the debtor
a receipt stating the performance has already been performed, while in reality it has
not, there may be considered the agreement of debtor release has been entered per
facta concludentia.
Where the obligation is of several and joint character with plurality of debtors,
Article 373 CC provides that the release from the debt or the renunciation of the
joint and several liability by the creditor with respect to one of the joint and several
debtors shall not be effective with respect to the co-debtors. Therefore, after con-
cluding an agreement to release one of co-debtors from the debt, and one of joint
and several debtors has made the performance he may demand the refund from the
other co-debtors, including the debtor that had been released by the creditor. Yet, in
this case, the creditor may not claim performance nor sue the latter one.
II. Discharge by Operating the Competence by Unilateral Act of One Party
157. One or either party of a contract may be given by the contractual stipula-
tion a competence to influence the contract existence by unilateral act in law. The
competence may be derived from the provisions of statutory civil law or the con-
tract clause agreed by the party while the contract has been concluded or later.
158. First, a contract may contain an express clause that one or either party is
entitled to rescind such contract at his option for a certain period of time, that need
to be directly specified in contract, otherwise this stipulation may not be valid.
Under Article 395 section 1 CC, this clause may stipulate that one or either party
has the right to renounce the contract prior to a specified time limit lapse. That right
shall be exercised by a declaration made to the other party. The exercise of such
right operates as discharge of the contract, but until this happens, the contract is
binding and may never be terminated without justified reason172 if the entitled party
decides not to use his competence. If the right of renunciation is exercised, the con-
tract shall be deemed not concluded. Unless otherwise provided in the contract,
what the parties have already performed shall be subject to return in an unaltered
condition unless that alteration was necessary within the scope of ordinary manage-
ment. An appropriate consideration shall be due to the other party for the services
rendered and for the use of a thing that is to be returned (395 §2 CC).
The clause stipulating the competence of one party to rescind the contract may
not be entered into the contracts where performance is of continuous character and
172. There are provisions in Civil Code that allow unilateral discharge of the contract by one of the
party, when the other party’s performance is default. These provisions will be discussed below in
Ch. 6.
140
the parties agreed the specified time of the contract to last (e.g., tenancy, lease). This
competence clause must be limited with time; the final date to operate the compe-
tence may be set also after the time when performance is supposed to be made and
becomes enforceable. When the competence clause is not limited with time, the
competence is invalid. The competence may also be stipulated under certain con-
ditions that may have occurred in a time specified. The parties may also provide that
operating the competence to rescind the contract would be effective only against
payment of a specified sum for the party who is addressee of the declaration of
intent of the rescinding party (Article 396 CC). In this case, the declaration of
renunciation shall be effective only if it is made simultaneously with the payment
of the said sum.
159. Second, the statutory provisions may stipulate the competence for one or
either party to terminate a contract concluded for non-specified period of time (e.g.,
lease contract); in this case, the termination is a normal way to end the contract after
a certain time limits (specified in the contract or in the law) since the termination
notice is received by the addressee. If the parties do not include the termination
clause into the terms of contract with continuous performance and the specific statu-
tory regulations do not provide otherwise, the general rule is that the continuous
obligations unlimited in time shall expire after a notice has been given by the debtor
or creditor with the observance of contractual, statutory or customary time limits
and, where there are no such time limits, immediately after said notice has been
given (Article 3651 CC).
141
160–161
Chapter 6. Remedies
§1. GENERAL PROVISIONS
160. Contracts are made to establish, change or discharge obligations. A great

majority of them need to be performed in a certain lapse of time; thus, there are a
number of contracts that are fully performed (and therefore discharged) at the same
time they are concluded either by factual human behaviour (buying newspaper at
the street) or by operating effects of statutory law provisions (e.g., assignment con-
tract transfers the receivable debt to the acquirer at the same time the agreement is
reached – Article 510 §1 CC).
The intended effect of obligation created by a contract is performance, when the
performance is not effected or it is not rendered properly the aggravated party is
powered by the statutory law with remedies to use in order to have the intended goal
of the contract reached, that is, have the performance compulsory effected (specific
performance) and a damage remedy provided either additionally to specific perfor-
mance or solely as a substitution of performance.
It must be stressed though that when the impossibility of performance is caused
by circumstances the debtor held no responsibility for, the contract is discharged
despite that the creditor has not reached the goal intended while contracting. A fail-
ure to perform a contract vests the creditor with remedies only when the failure is
caused by the circumstances the debtor is liable for, only in this situation non-
performance or improper performance is recognized as a breach of contract.
§2. SPECIFIC PERFORMANCE
161. In case of the debtor’s breach of contract, the creditor may always (if it is
possible) demand performance of the obligation and the redress of the damage due
to the delay under Article 477 section 1 CC. However, if as a result of the debtor’s
delay the performance lost to the creditor its significance wholly or in the substan-
tial degree, the creditor may refuse to accept the performance and demand the
redress of the damage resulting from the non-performance of the obligation (477 §2
CC).
Specific performance is the remedy aiming to compulsory performance of the
obligation with or without the debtor’s participation. There must be distinguished
two kinds of situations: first, when the performance needs to be rendered personally
by the debtor; and second, when proper performance may be rendered without the
personal participation of the debtor. With regards to the first situation where the
creditor is interested only in the debtor’s personal performance, the creditor is pro-
vided with the claim to demand performance and after the court has issued adju-
dicative judgment the performance may be constrained subject to the enforcement.
If the debtor still does not perform his obligation, the creditor may apply to the court
to impose a fine (one after another) to the debtor in execution proceedings until the
performance is made. The fine is to be paid to the Treasury, not to the benefit of the
142
Part I, Ch. 6, Remedies 162–162
creditor’s estate.173 When the performance may be rendered by a person different

from the debtor, and the debtor is delayed, Article 480 CC stipulates, that in the case
of the debtor’s delay in the performance of the obligation to act, the creditor may,
while preserving the claim for the redress of the damage, demand authorization by
the court to perform the act at the debtor’s expense. Where the performance con-
sists in the debtor’s forbearance (restraining from what he is allowed to do) the
creditor may, while preserving the claim for the redress of the damage, demand
authorization by the court to remove at the cost of the debtor all that which the
debtor did contrary to his obligation. In urgent cases, the creditor may, while pre-
serving the claim for the redress of the damage, perform, without the authorization
by the court, the act at the cost of the debtor or remove at his cost that which the
debtor did contrary to his obligation.
When the object of the performance is a transfer of a specified number of things
designated only as to their kind, the creditor may, in the case of the debtor’s delay,
purchase at his cost the same number of things of the same kind or demand from
the debtor the payment of their value while preserving in both cases the claim for
the redress of the damage resulting from the delay (Article 479 CC).
§3. TERMINATION
I. General Remarks
162. Generally, the presumably accepted rule of contract law implies the obli-
gation bound, in contrast to property rights, is created to exist only for a limited time
period. It is accepted that proper performance of obligation results in its termina-
tion, nonetheless this assumption to the full extent refers only to obligations of one
time performance. There are, however, obligations of different type, where continu-
ous or periodical debtor performance is assumed to last for a certain period of time
or for initially unspecified period.174 The latter are not assumed to exist forever.
Article 3651 of CC specifies in this matter, that continuous obligations unlimited in
time shall expire after a notice has been given by the debtor or creditor with the
observance of contractual, statutory or customary time limits and, where there are
no such time limits, the obligation expires immediately after said notice has been
given. Termination of obligation bound may signify also the contract has been
ceased with the power of declaration of intent expressed by one party of the con-
tract. One party of a contract may be entitled to rescind from the obligation only
when it is provided in statutory law and/or in contractual provisions.
The obligation is recognized as ceased after different legal events have occurred.
According to law, the obligation extinguishes after: proper performance, novation,
datio in solutum, compensation (set-off), confusion, the operation of a resolving
condition, rescission, termination, judgment decision, expiration of the time, death
of one of the party or when the parties voluntarily set the contract aside. A contract
173. Art. 1050 §1 CCP.

174. The continuous performance is typical for contracts of lease, pension, bank account, company,
agency, safe-keeping, storage, annuity.
143
163–163 Part I, Ch. 6, Remedies
whereby the debtor is to perform certain services of a personal nature, and such as
cannot be performed by another person (e.g., successors) is discharged by the death
of either party, whether of the party who was to render such services, or of the credi-
tor for whom such performance was to be made.
II. Difference Between Rescission and Termination
163. Both institutions rescission and termination bring a contract to an end.

Breach of contract by one party, however serious this fact might be, does not auto-
matically cease the rights and obligations arisen from the contract. One or both par-
ties must express the intention of performing an act in law bringing the contract to
an end. Breach of contract sometimes gives to the innocent party a right to termi-
nate or to rescind the contract, always as an option to choose:
– Rescission from the contract is always the exception from the rule pacta sunt ser-
vanda. It is possible only when statutory law or contract clause provide the rea-
son for it. While the rescission is possible it is always only potentially available
for the contracting party, it may never be considered as a potential duty for the
party. Hence, the party’s competence to rescind the contract must be treated as a
kind of self-help remedy exercised by giving notice to the other party of contract.
Rescission involves, as far as possible, restoring the parties to the pre-contract
position and the part of performance, that has already been performed needs to
be undone (rescission ab initio). Generally, the rescission from the contract
should effect that the contract is treated as never having come into existence but
in practice it is not always possible.
– Termination of contract results in bringing a contract to an end but with the pro-
spective effects only. It is the usual way of ceasing contracts with continuous or
periodical performance, however, just as in case of rescission, it is always only
potentially available for the contracting party; it may never be considered as a
potential duty for the party. Polish CC provides two types of contract termina-
tion: first, when contract expires at the time the termination notice was success-
fully delivered to the other party and second, when the contract expires after a
certain period since the notice delivery. The length of that period may be set by
the parties, otherwise statutory or customary time limits are applied. However, in
case of the contract of lease of houses or premises intended for habitation the
statutory time limits for termination period set in the act of lessees of habitation
premises’ protection must be strictly observed for the benefit of lessee.
When contract is terminated by one party’s declaration of intent, the termination

effects in a prospective way only and both parties are released from so far unful-
filled performances and duties, but there is no attempt to undo the part of the con-
tract that has already been fulfilled. This distinction of different legal effects of
termination (prospective effect) and rescission (retrospective effect) is not always
clear, as sometimes rescission effects the same way as termination, when the nature
of performance makes it impossible to demand to restore the part of performance
that has already been rendered; however, the party who reasonably rescinded the
144
contract is always entitled to claim damages, whereas benefiting from termination

of the contract gives no reason to compensation claims. Still, the impossibility of
restoring the status quo ante does not impede rescission, as it allows the innocent
party to be awarded damages instead of obtaining precise pre-contract position.
III. Form of Termination Notice
164. There is no formal requirement to obtain court order to rescind or to ter-

minate the contract. However, the declaration of the party’s own act needs to fulfil
certain requirements. Under Article 77 section 2 CC if the contract was concluded
in writing or by other document (email f.ex.) or electronic form (i.e., email with cer-
tified electronic signature), its rescission or termination notice must be stated in a
document form. A document form in this case is only procedural issue as the act of
notifying the rescission or termination may only be proved at the court with docu-
ment. It means, that theoretically when the notice is made in the form other than
document (verbal) it is valid, but in case of dispute between parties as to the fact of
rescinding the contract by one of them lack of the document form causes problems
with proving it at the court. Nevertheless, the restrictions provided for evidentiary
purposes of procedural nature do not apply to entrepreneurs in business cases and
to consumers disputing with entrepreneur.
When the contract was concluded in special form (notary act, written form with
the signatures authenticated by the notary or with the date officially certified) ter-
mination or rescinding from the contract with one party’s notice requires written
form provided for evidentiary purposes only with the same limitations described
above for the lack of documentary form.
IV. Rescission of Contract and the Property Transfer
165. When the contract has been fully executed and as a result of it the property
has been transferred, the status of title to that property depends on the kind of this
property object. If the contract referred to movable property or has transferred
receivables or other alienable rights, the transferor receives back the title to the sub-
ject matter of this contract immediately after the rescission notice has been deliv-
ered to its addressee. However, when the contract resulted in immovable property
transfer,175 the effect of rescission notice is limited only to create the obligation to
return the ownership back; the acquirer becomes obliged to conclude (in the form
of notarial deed) a contract transferring back the ownership right to the transferor.
When the acquirer does not intend to transfer back the property voluntarily, or
delays too long before concluding the contract, the transferor may as a claimant use
remedy described in Article 64 CC, requiring the court order. Due to this article, a
valid decision of the court stating the duty of a given person to make a specified
175. The transfer of ownership to immovable property requires the form of a notarial deed (Art. 158
CC).
145
declaration of intent shall replace this declaration. Thus, the court order is recog-
nized as the substitute declaration of one party’s intent.
V. Rescission under the Competence Clause
166. A breach of contract does not automatically give the innocent party right to
rescind the contract and claim damages. CC provides statutory remedies in this mat-
ter, but they are provided for contracts of mutual character. However, in spite of
whether the contract is of mutual character the parties may introduce into the con-
tract a clause providing the right to renounce contract in a time specified. Addition-
ally when the contract is of mutual character, the parties may agree that the right to
renounce (rescind) the contract is reserved only for the case of non-performance of
the obligation in strictly defined time (Article 492 CC). The authorized party may,
in the case of the delay of the other party, renounce the contract without setting an
additional time limit required when statutory remedy is considered.
When a contract is unilaterally binding, that is, only one party is obliged to per-
form or the performances of both parties are not of mutual character, the only way
to cease the contract after the debtor is in breach is to provide in contractual terms
adequate clause with the competence of one party to rescind the contract either lim-
ited with time or introduce into the contract a deposit payment. Article 394 section
1 CC provides, that in the absence of a different contractual stipulation or custom,
an advance payment given at the conclusion of a contract shall mean that, in the case
of the non-performance of the contract by one of the parties, the other party may,
without setting an additional time limit, renounce the contract and retain the
advance payment, and if it was that party which gave the advance payment, it may
demand the double amount. The deposit payment clause gives either party compe-
tence to rescind the contract when the other party is in breach of contract. Such
option operates retrospectively whether or not the creditor suffered any damage
caused by the breach.
§4. EXCEPTIO NON-ADIMPLETI CONTRACTUS (THE DEFENCE OF NON-

PERFORMANCE BY THE OTHER PARTY)
167. The defence of the party who is demanded to perform may be based on the
circumstances that the party was ready to render performance, but the other party
situation made it economically not reasonable because the mutual performance of
the latter became slightly probable to be made. This remedy is available in mutual
performances only, when both are of similar economical values (are concurrent),
and the use of this remedy results in temporary suspension of performance. The
obligation of which one party suspends the performance and the mutual perfor-
mance must be strictly derived from the same contract. This plea of non-
performance may not be used to withhold performance because the creditor being
simultaneously the debtor-party in another legal relationship (different contract) is
in default in performance created in the binding latter obligation.
146
The general rule of the date when the debtor should perform if his obligation is
of mutual character is set in Article 488 section 1 CC under which performances
that are the subject matter of obligations resulting from mutual contracts (mutual
performances) shall be made simultaneously unless it follows from the contract,
statutory law or a decision of the court or other competent authority that one of the
parties is obliged to an earlier performance. Additionally, CC stipulates that if the
mutual performances are to be made simultaneously, each party may withhold the
performance until the other party offers the mutual performance. These provisions
are only relatively binding regulations, as the parties may decide the either mutual
performance is to be rendered in different due date.
When the parties agreed or the regulations of statutory law provided the perfor-
mances would not be due and payable simultaneously (which happens very often),
though both performances were of mutual character, there may be different remedy
applied of similar nature.176 Due to Article 490 section 1 CC, if one of the parties
is obliged to make the mutual performance earlier, and the making of the perfor-
mance by the other party is doubtful in view of his financial standing177 the party
obliged to make the earlier performance may withhold it until the other party offers
the mutual performance or gives a security. However, the party that at the time of
the conclusion of the contract was aware of the bad financial standing of the other
party is not vested with the above right (Article 490 §2 CC). When this kind of plea
is used at the court by the debtor whose performance is demanded by the creditor,
the court does not reject the action but makes adjudicative order conditional on
receiving the plaintiff’s performance simultaneously by the debtor.
§5. FAULTY BEHAVIOUR OF THE DEBTOR
168. According to Article 476 CC the debtor is in default when he does not ful-
fil the performance within the specified time limit, or if the time limit is not speci-
fied, when he does not fulfil the performance immediately upon the creditor’s
demand.178 This rule shall not be applied to the case where the delay in the perfor-
mance is a result of circumstances for which the debtor is not liable. The effects of
debtor’s delay depend on whether the delay is due to debtor’s fault resulting from
undue diligence of performance or the delay is justifiable because it was caused by
circumstances the debtor is not liable for. Hence, in Polish law there are two kinds
of delay distinguished: delay not caused by debtor’s fault (excused delay) and unjus-
tifiable delay. The debtor suffers the consequences of both kinds of delay, though
they are different.
176. See P. Drapała, ‘Prawo powstrzymania sie ze spełnieniem;świadczenia (Art. 490 KC) – krytyczna
analiza obowia zuja cych regulacji kodeksowych na tle prawnoporównawczym’, in Zacia ganie i
wykonywanie zobowia zań, ed. E. Gniewek, K. Górska & P. Machnikowski (Warsaw: C.H. Beck,
2010), 62.
177. It may be lower level than the bankruptcy.
178. Where there are no contract stipulations as to the time of performance Arts 455 CC and 488 CC
shall be applied adequately.
147
169. When the performance is in default because of reasons the debtor is not
liable for, the creditor is entitled to set-off his mutual receivable claims acting under
Article 498 CC, unless the mutual claims are of different kinds and therefore cannot
be set-off.
Under Article 481 section 1 CC when the performance in delay is of pecuniary
character, the debtor is obliged to pay the default interest even though he is not
liable for the causes of this delay. The creditor is entitled to default interest in case
he suffered some damage due to the debtor’s delay and also where there is no dam-
age to be recovered. The percentage rate of the interest can be stipulated in contract
clause, otherwise statutory rate is to be applied,179 but if the rate of the interest was
agreed in contract higher than the maximum interest rate stipulated in Article 481
§21 CC, the maximum interest rate would be applied which is doubled statutory
rate. If the damage that the creditor suffered due to the debtor’s delay exceeds the
amount that he would obtain based on default interest, he is entitled to claim the
balance up to the full compensation of the damage, providing the debtor has been
liable for the cause of delay (Article 481 §3).
The due performance becomes receivable at the time of performance set out in
contract or derived from its nature, or is implied according to rules of Article 455
CC or 488 CC. According to Article 356 section 2 CC if a pecuniary receivable debt
is due, the creditor cannot refuse to accept the performance from a third party even
if the latter acts without the debtor’s knowledge. Obviously, the creditor may claim
the debtor for specific performance. However, in this case, the creditor is not
entitled to claim for damages because of lack of the debtor’s fault, unless the scope
of the debtor’s liability was enlarged with the express provisions of contract –
Article 473 section 1 CC stipulates the debtor may assume by contract the liability
of larger than statutory extent.
170. Unjustifiable delay is the default caused by reasons the debtor is liable for.
Where the term of performance has not been agreed by the parties, the debtor is
delayed when he has not fulfilled his obligations immediately after the creditor’s
notice. When the debtor is delayed because of circumstances he is liable for, the
creditor may use above-mentioned remedies and claims provided for him to use
when the debtor is not liable for the delay and additionally remedies set out below.
In every type of obligation (mutual, bilateral, unilateral) when the debtor is unjus-
tifiably delayed, the following legal provisions are to be applied as a base for credi-
tor’s following remedies:
– the creditor except for claiming performance can claim the debtor for damage
caused by the delay under Article 471 CC;
– when the time of performance of the contract is of the essence, and due to the
debtor’s unjustifiable delay the performance is of no value for the creditor, the
creditor can refuse to accept performance and claim damages (Article 477 CC);
179. The statutory rate fluctuates in time and it may varry one period of time to another. In 2019 year
it is equal to the guiding rate of the National Bank of Poland and 5,5 percentage points; currently
it amounts to 7%.
148
– the debtor liability for damage is extended within the scope of Article 478 CC
application: when the subject matter of performance was a thing indicated as to
its identity, the debtor who is in unjustifiable delay is liable for the loss of or the
damage to the thing unless the loss or damage would have taken place also when
the performance was made in time (casus mixtus liability);
– a substitute performance is possible: under Article 479 CC where the subject mat-
ter of performance is a specified number of generic goods designated only as to
their kind, the creditor may purchase the same number of goods of the same kind
at the debtor’s cost or demand payment of their value from the debtor while pre-
serving in both cases the claim for damage resulting from the delay; when credi-
tor decides to purchase the goods at the debtor’s cost the debtor is exempt from
performance stipulated in contract and instead he bears the cost of purchase of
the goods in question;
– under Article 480 section 1 CC where the debtor’s work, service or acting was
the subject matter of performance, the creditor may also use a substitute perfor-
mance remedy, in this case the creditor must seek the court’s agreement autho-
rizing him with the competence to perform the act, work or service at the debtor’s
expense. If the performance in default consists of the debtor’s omission, the credi-
tor must receive authorization by the court to remove, at the debtor’s expense, all
that has been done by the debtor contrary to his obligation. After fulfilling the
substitute performance, the creditor is no longer entitled to claim the debtor for
original performance; he may only claim the debtor for payment of the substitute
performance expenses (Article 480 §2 CC). In both cases (when primary perfor-
mance consisted of the debtor’s acting or omission), the creditor is entitled to
claim for damages he incurred as a result of the unjustifiable delay. In urgent
cases though, according to Article 480 section 3 CC, the creditor may, while pre-
serving the claim for redress of damage, execute the act of performance or
remove all that was done contrary to his obligation of omission by the debtor at
the debtor’s expense, even without the court’s authorization;
– when the delayed performance was of pecuniary character the creditor is entitled
to demand default interest (Article 481 §1 CC), but if the damage, the creditor
has suffered due to the debtor’s delay, exceeds the amount that he would obtain
based on default interest, he is entitled to claim the balance up to the full com-
pensation of the damage, providing the debtor has been liable for the unjustifi-
able delay (Article 481 §3 CC).
171. The creditor has been given a significant remedy under contracts of mutual
type in case of the debtor’s unjustifiable delay. When the contract is mutual the
creditor may, conditionally rescind unilaterally the contract. The law of contract
generally requires contracts must be executed (pacta sunt servanda). One party is
entitled to terminate the contractual relationship with the effect ex tunc only when
the law provisions or contract clause provides so. Except for permitted contract
clauses stipulated in Articles 3651 394–396 CC or under other specific legal provi-
sions, the contract may not be avoided by one party’s autonomous declaration. Nev-
ertheless, where the obligation is arisen from mutual contract and the debtor is
delayed because of reasons he is liable for, the statutory law in Article 491 section
149
1 CC provide the creditor with power to notify the debtor of an additional adequate
time period of reasonable length to fulfil performance.
When the delayed debtor does not perform within the additional subsequent time
period notified by the creditor, the creditor is entitled to:
– Unilaterally rescind the contract, that is, he terminates the contract with his uni-
lateral act. This rescission of contract releases both parties from their obligations
due under it, subject to any damage caused by non-performance, which the debtor
may be due. Rescission of contract does not affect the creditor’s claim for dam-
ages under contractual liability regime. After the contract has been rescinded
there are still claims remaining – including claims for returning the goods or the
price. The claims are thus not contractual (as there is no contract valid) but are
claims for unjust enrichment. Insofar, as the obligations that have arisen under the
contract are not fulfilled at the time of the rescission of contract, they will not
have to be fulfilled later, that is, both parties could refuse to accept performance
after the rescission has been made. Under Article 494 CC when the one party
rescinds the contract, he is bound to return to the other party whatever was sup-
plied or paid under the contract. When the party who rescinds the contract has
performed his own obligations either wholly or in part, he may also claim resti-
tution and damages from the other guilty party. If both parties are bound to make
restitutions, they must do so concurrently.
– Claim for performance – when the creditor chooses not to rescind the contract,
he can request that the obligations be fulfilled by the debtor. In this case, how-
ever, both parties must perform obligations due under the mutual contract.
– Claim for damages that have arisen because of the delay in situation (a) and (b).
Above-mentioned rescission of contract does not affect the creditor’s claim for
damages under contractual liability regime, even though it effects the contract is
destroyed ex tunc, so as the parties are, to the possible extent, in the same situ-
ation as they were at the conclusion of contract. Damages have to be paid because
of delay, even if the contract is later rescinded because of the unjustifiable delay.
When the creditor chooses not to rescind the contract, he may claim performance
(b) and damages concurrently because delayed performance is the breach of con-
tract as it is presumed it has been caused by circumstances the debtor is liable
for.
– According to Article 491 section 2 CC, when both parties’ performances are
divisible and one party is delayed as only to a part of performance, the other party
is entitled to rescind the contract as to the delayed part only or as to the delayed
part and the rest of performance that was not performed yet, depending on his
choice. The part of performance that one party had received in time from due per-
formance is not to be returned. The victim party though can also rescind the con-
tract totally if partial performance eliminated or fundamentally reduced the value
of performance for him with regard to the obligation’s essence or the purpose of
contract known by both parties.
– Rescind the contract without fixing an additional time period for debtor’s perfor-
mance where legal regulations provide so. In order to ease the contract rescission
in case of delay of performance, according to Article 492 CC the special clause
stipulating the creditor has the right to rescind the contract after the unjustifiable
150
debtor’s delay have to be agreed and entered into the contract. This clause (named
lex commisioria) stipulates that in case of the debtor’s unjustifiable delay the
creditor is entitled to rescind the contract without prior notice fixing an additional
period of time for performance. This clause is only valid when the performance
is given in contract a strictly specified time of performance.
– Rescind the contract without fixing an additional time period for debtor’s perfor-
mance. It is possible under Article 492 CC when delayed performance would be
of no value for the party who was to receive it, with regard to the obligation’s
essence or the purpose of contract known by both parties.
As an exception, recently added Article 4921 CC deals with an anticipatory

breach. If the debtor declares that he will not perform, the creditor may rescind the
contract without setting an additional time for performance, also before the original
time for performance lapses.
172. The delay of creditor is generally assumed when, without justified reason,
the creditor refuses to cooperate with the debtor in a manner required to fulfil the
debtor’s performance with regard to the contract’s purpose. The main consequence
of the creditor’s delay is his liability for damage incurred by the debtor as a result
of the delay.
The delay of creditor is to be considered if he refused to accept performance due
offered by the debtor in time and place of performance. Additionally, the creditor is
delayed when the creditor has not performed actions provided for by the provisions
of law, or by the contract’s clause, or arising from the essence of the obligation,
before fulfilling of which the debtor could not perform his obligation. The creditor
accepting performance is obliged, at the demand of the debtor, to issue him a receipt
or other document of receiving performance (Article 462 CC); when the creditor
refuses to issue the receipt, the debtor has the right to withhold performance (Article
463 CC). In this case, the creditor shall be deemed to have delayed.
If the creditor has delayed, the debtor can deposit the owed objects for the credi-
tor at the court (Articles 463 CC, 486 §2 CC). Doing that, the debtor is released
from performance at the moment of depositing it to the court. The debtor must not
be considered to be delayed if the obligation cannot be performed as a consequence
of creditor’s delay.180
§6. LIMITATION OF ACTIONS
173. In Polish civil law, the time limits restraining the possibility to bring an
action at law to the court are divided into two groups. The first group of terms are
distinguished with stronger legal sanctions of the time lapse for the creditor. When
the term of this group expires, the creditor’s right is recognized as extinct and may
never be subject to court action. If despite the time lapse, the creditor demands to
180. See G. Tracz, Sposoby jednostronnej rezygnacji z zobowia zań umownych (Warsaw: Wolters Klu-
wer, 2008).
151
perform the debtor’s duty, the court ex officio (i.e., even without the debtor’s peti-
tion and regardless to his intentions in this matter) always should reject the credi-
tor’s claims. These terms of expiry character are not given the general regulation,
but they are entered into the statutory regulations accidentally where it was deemed
necessary, for example, under Article 568 section 1 CC warranty for defects of sold
goods expires after the lapse of two years, and in the case of defects of a building,
after the lapse of five years from the time of releasing the goods to the buyer.
Nonetheless, the prevailing result of time lapse is totally different in character.
More often the time lapse limits the creditor in a different way because of its pre-
scription nature. This second group of terms is characterized with different result of
time lapse, the claims and rights of the creditor are not expired. After the time lapse
the creditor is still entitled to performance (if the debtor performs, the performance
is due and the debtor cannot claim its return), but the claim cannot be enforced
before the court. As a rule, this inability of the creditor to enforce his claim is taken
into account by the court only if the debtor raises the exception of prescription,
unless this exception is deemed to be an abuse of right under Article 5 CC (stating
that one cannot exercise a right in a manner that would contradict its socio-
economic purpose or the principles of community life). The exception to the rule
applies to consumers – Article 117 §21 CC provides that if the debtor is a consumer,
the court takes into account the limitation of the claim ex officio. Only in extraor-
dinary cases the court may decide the consumer is to perform his duties after the
limitation period has lapsed, after taking into consideration i.a. duration of the
period and duration and cause of creditor’s delay (Article 1171CC)
Unlike the expiry terms, the terms of prescription are given the general regula-
tion in the first book of CC and the specific regulation for some types of claims in
nominate contracts and claims for damages compensation referring to torts. Article
117 section 1 of CC stipulates that barring exceptions provided for by statutory law,
property claims shall be subject to limitation. After a period of limitation has passed,
the person against whom a claim is raised may evade the satisfaction of that claim
unless he renounces the right to raise the defence of limitation. However, the renun-
ciation of that right before the period of limitation has passed shall be null and void
and generally the periods of limitation cannot be reduced or extended by an act in
law.
Generally, unless a special provision states otherwise, the period of limitation
shall be six years and for claims pertaining to periodical performances and claims
resulting from an economic activity, three years. However, a claim certified by a
valid pronouncement of a court or other authority entitled to hear cases of a given
kind, or by a pronouncement of a conciliatory court, and also a claim certified by a
settlement made before the court or the conciliatory court or by a settlement made
before a mediator and approved by the court, shall be barred by limitation of six
years even if the period of limitation for claims of that kind were shorter. If the
claim established in this way includes periodical performances the claim of periodi-
cal performances due in the future shall be barred by limitation of three years.
There are shorter terms provided in specific provisions in CC, for example,
Article 390 section 3 CC provides that the claims under the preliminary contract
shall be barred by limitation of one year from the day on which the promised con-
tract was to be concluded. If a court dismisses the demand for the conclusion of the
152
promised contract, the claims under the preliminary contract shall be barred by limi-
tation of one year from the day on which the decision became valid.
The period of limitation (prescription) begins to run on the day on which the
claim has become due and enforceable. If the enforceability of the claim depends
upon an act taken by the person entitled, the period of limitation shall begin to run
on the day on which the claim would have become enforceable, if the person
entitled had taken that act at the earliest possible time. The period of limitation for
claims of forbearance (omission) begins to run on the day on which the person
against whom the claim is made failed to comply with the contents of the claim
(Article 120 CC).
The period of limitation does not begin to run, and if begun, it shall be subject to
suspension:
(1) for claims by children against parents – for the duration of parental authority;
(2) for claims by persons who have no full capacity for acts in law against person
who exercise guardianship or curatorship – for the period during which that
guardianship or curatorship is exercised;
(3) for claims of one spouse against the other – for the duration of the marriage;
(4) for all claims if due to a force majeure the person entitled cannot vindicate
them before a court or other authority empowered to hear cases of a given kind
– for the duration of the obstacle.
The period of limitation for claims against a person who has no full capacity for
acts in law cannot end earlier than two years after the appointment for him of a
statutory representative or the cessation of the cause of such appointment. And if
the period of limitation is shorter than two years, it begins to run from the day of
the appointment of the statutory representative or the day of the cessation of the
cause of such appointment. The above regulations shall be applied correspondingly
to the running of the period of limitation against a person in respect of whom there
are grounds for his full incapacitation.
The running of the period of limitation may be interrupted and after each inter-
ruption of a period of limitation, it shall run anew. The interruption is made by:
(1) any act before the court or other authority entitled to hear cases or enforce
claims of a given kind or before the conciliatory court, performed directly
either to vindicate or to establish, or to satisfy or to secure a claim;
(2) the acknowledgement of the claim by the person against whom the claim is
made;
(3) the initiation of mediation at the court.
In the case of interruption of a period of limitation by an act in proceedings before

the court or other authority entitled to hear cases or to enforce claims of a given
153
type, or before the conciliatory court or by initiation of mediation, it shall not run
anew until the proceedings are concluded.181
§7. DAMAGES AND EXEMPTION CLAUSES
174. Under Article 471 CC, the debtor is obliged to redress damages resulting
from lack of performance or wrong performance of obligations, unless they have
resulted from circumstances the debtor is not liable for. In order to claim damages
the law requires:
– existence of valid contract (valid obligation);

– the breach of contract caused by fault of one party;
– assessment of damage;
– adequate causal connection between the breach of contract and the damage.
175. Contractual liability for breach is generally based on fault base. Fault is
defined here as a lack of due diligence while rendering performance. According to
Article 472 CC if nothing else follows from a separate provision of law or the legal
act, the debtor shall be liable for the non-observance of due diligence. Any failure
to required level of due diligence and commonly accepted standards of perfor-
mance is assumed faulty, it does not have to reach the level of gross negligence, nor
be intentional. Showing the lack of fault the debtor may exempt himself from liabil-
ity, but there are certain exemptions concerning so-called strict duties, where lack
of fault does not affect liability (e.g., the seller’s liability for default goods). The
strict duties are where the nature of contract or legal provisions provide.
Under Article 354 CC, the debtor must fulfil his obligation in accordance with its
contents and in a manner complying with its socio-economic purpose and the prin-
ciples of community life, and if there are customs established in that respect, also in
manner complying with those customs. Generally, it is the debtor who is liable to
perform his contractual obligations. The creditor is entitled to demand the perfor-
mance, but it is also possible (even in unilateral contracts) he has different kinds of
obligations imposed on him by law or the contract, in order to enable the debtor to
fulfil performance in a manner due. According to Article 354 section 2 CC, the
creditor is obliged to cooperate in the discharge of obligation with the debtor in
accordance with contents of contract, in a manner complying with its socio-
economic purpose and the principles of community life, and also in manner com-
plying with existing customs.
According to Article 355 CC, the debtor is obliged to act with diligence gener-
ally required in relationships of a given kind. The required standard of due dili-
gence is assessed higher for a professional entering contracts within the scope of
his business activity (Article 355 §2 CC). It is possible to vary the standards of
liability described in Article 472 CC and Article 354 CC with the express stipula-
tion in contract, the standards may also be varied by legislation. Article 473 section
181. See B. Kordasiewicz, in Prawo cywilne – cze ść ogólna, vol. 2 of System Prawa Prywatnego, ed.
Z. Radwański (Warsaw: C.H. Beck, 2008).
154
2 CC sets out limits of permitted modification of debtor’s liability in contract

clauses: a contract clause stipulating the debtor is not liable for damage caused by
him intentionally is invalid. However, the debtor may assume by contract the liabil-
ity for non-performance in undue performance of the obligation due to specified cir-
cumstances for which he is not liable by virtue of statutory law (Article 473 §1 CC).
Where the debtor has entrusted the third person with the performance of obliga-
tion, he is liable for this person’s acts or omissions as for his own actions or omis-
sions. This rule is applied also to acts of the person who has assisted the debtor in
performance of contractual duties and the debtor’s statutory representative, who has
performed debtor’s duties. The standard of duty is assumed on the level required for
the person of debtor.
176. Usually, it is the debtor, who bears the cost of damage compensation when
he is liable for the cause of the breach of contract. In Article 471 CC, there is a pre-
sumption implied that the debtor is liable for the breach of contract; in other words,
it is the debtor who must prove he is not liable for non-performance or wrong per-
formance of contract. The claimant is obliged to demonstrate validity of contract
and the lack of due performance, but the burden to prove the debtor is not liable for
the breach of contract bears on the debtor. The law assumes prima facie the debtor
is liable for his inability of due contract performance. The debtor may prove the
breach of contract was caused by factors he is not liable for, and by proving this he
justifies himself from liability and in consequence he incurs no compensation. The
debtor may also excuse himself proving the performance failure was caused by the
other party or a third person he is not responsible for. Unless the debtor is able to
prove he is not liable for the breach of contract, he bears the cost of damage recov-
ery.
The victim party (claimant) however, bears the burden of proof with regard to the
existence and amount of damage incurred. If the redress of the damage is to be in
money, the amount of the indemnity shall be fixed in accordance with the prices on
the day on which the indemnity is fixed, unless extraordinary circumstances require
that prices existing at a different moment be taken as the basis. Where the amount
of damage is not demonstrated and proved, the claim form compensation will not
be satisfied.182
177. The default party may be claimed for financial compensation in the form
of damages equal in value to the loss suffered (damnum emergens) and profits lost
(lucrum cessans) as a result of the breach of contract, but this loss and lost profits
must be directly related to the lack of performance due. Furthermore, courts award
only damages equivalent to those benefits that the parties might reasonably have
expected to receive. Nowadays, the prevailing opinion in Polish jurisprudence and
doctrine is that it is impossible to claim for general non-economic damages using
182. For example, Supreme Court in its judgment of 30 Oct. 2002, V CKN 1322/00 ruled against the
claimant in a situation where the debtor had made major repairs of a snack bar with an unjustifiable
delay and the claimant’s call for compensation amounted to rental payments incurred by claimant
for the period of delay. The court decided that in that situation the damage consisted of the lost of
profits the claimant would have earned within the limits of time of the delay if snack bar had been
repaired in due time, and the claimant has failed to prove the amount of profit lost.
155
the remedies under contractual liability. Non-economic losses, for example, moral
injury, pain, suffering, personal rights infringement or defamation, even if caused
by the act or omission being simultaneously both (i.e., the tort and the breach of
contract), are protected solely by the torts regime remedies183 and claims under
Article 24 CC.
Under Article 443 CC, the circumstance that the act or omission that caused the
damage consisted in the non-performance or improper performance of an earlier
obligation shall not preclude the claim for the redress of the damage as due to a tort
unless something else follows from the contents of the earlier obligation.
178. Polish law allows the parties of a contract to diminish or extend the scope
of liability for damages arisen under lack of performance or improper performance.
The debtor may assume by contract the liability for the non-performance or
improper performance of the obligation due to specified circumstances for which he
is not liable by virtue of statutory law.
There are two general methods of limiting the compensation due. First, parties
may agree the victim party may demand only a lump sum of damages and therefore
introduce a penalty clause into the contract terms so as the victim party may not
demand other than previously agreed amount of damages. A second type of limiting
the debtor’s liability for damages caused by lack of proper performance is contrac-
tual stipulation that the debtor will not be liable for damages caused by certain cir-
cumstances, for which the debtor would be liable for without this clause. However,
the parties are not totally free to decide the debtor is not liable for any damages
caused by improper performance or lack or performance. Under Article 473 section
2 CC, the contractual stipulation that the debtor is not liable for a damage that he
might do to the creditor intentionally shall be null and void.184
Furthermore, certain contractual stipulation can be considered abusive, and as
such are invalid when the contract belongs to the group of consumer contracts. Due
to Article 3851 CC in the case of doubt, the wrongful contractual provisions shall
be those, in particular, that excludes or substantially limits the liability to the con-
sumer for non-performance or improper performance of an obligation by the other
party (professional entrepreneur).
§8. RESTITUTION
179. In Polish civil law, the general rule is that damage shall be redressed,
according to the choice of the injured person, either by the restitution of the pre-
vious state of facts or by the payment of an appropriate sum of money. However, if
the restoration of the previous condition were impossible or if it resulted for the per-
son obliged in excessive difficulties or costs, the claim of the injured person shall
be limited to a performance in money.
If the damage was caused by lack of performance or improper performance, the
claimant may demand restitution in natura, yet he is obliged to prove the restitution
183. Art. 448 CC.

184. See T. Pajor, Odpowiedzialność dłużnika za niewykonanie zobowia zania (Warsaw: PWN 1982).
156
is possible. The victim party may demand, for example, to have their property assets
returned, yet, the demand may be aimed to return exactly the same assets or ones of
the same kind to restore the economical value of the victim party estate. The claim-
ant (injured party) may also demand to have his property assets repaired by the
debtor or by another person at the debtor’s expense; still the amount of the expenses
should be reasonably adjusted to the local market condition and prices.185 Further-
more, if the repaired property value is smaller than its value before the damage was
made, the claimant may claim additional compensation for the property value
decrease.186 On this basis, the victim party may demand the debtor releases him
from obligations that have been made to third person as a result of non-
performance by the debtor.187
185. See judgment of the Supreme Court of 13 Jun. 2003, III CZP 32/03, unpublished.
186. See judgment of the Supreme Court of 12 Oct. 2001, III CZP 57/01, Wokanda no. 2 (2002), 1.
187. See A. Szpunar, Odszkodowanie za szkode maja tkowa : Szkoda na mieniu i osobie (Bydgoszcz:
Branta, 1998), 118 ff.
157
158
180–180
Part II. Specific Contracts
Chapter 1. Agency
§1. GENERAL REMARKS
180. The agency agreement is regulated in Articles 765–773 CC. This regula-
tion was amended in 2000 in order to implement the directive, Council Directive
86/ 653/EEC of 18 December 1986, on the coordination of the laws of the Member
States relating to self-employed commercial agents. However, the regulation
adopted by the CC is universal and therefore is not linked with participation of the
agent negotiating the sale or the purchase of goods only.188
The contract in question is defined as the obligation of the person accepting the
mandate to mediate permanently, within the scope of the activities of his enterprise,
against remuneration, in concluding contracts with clients for the benefit of the
entrepreneur being the principal or in concluding such contracts in the principal’s
name. However, the agent shall be empowered to conclude contracts in the name of
the principal and to receive declarations for the latter only if he has an authorization
to do so.189 The agreement is drafted as double professional as it requires that both
parties are the entrepreneurs. However, pursuant to Article 6494 CC, the provisions
of the code referred to the agency agreement, except for commission, the statement
on the commission and compensating performance, shall apply to the contract con-
cluded with the agent by a person who is not an entrepreneur.
The agency contract is considered to be a mutual and payable agreement which
provides, as essentialia negotii, the understanding as to the payment due to the
agent, referred to as the commission, which should depend on the number or value
of the contracts concluded. Nevertheless, in case the contract does not specify the
amount of commission, the commission due shall be in the amount commonly
accepted in the relationships of a given type, in the venue where the agent pursues
his activities, or, where it is impossible to determine the commission that way, the
commission due to the agent shall be in an appropriate amount that takes into
account all the circumstances directly pertaining to the performance of the acts man-
dated to him.190
188. See Z. Radwański & J. Panowicz-Lipska, Zobowia zania – cze ść szczegółowa (Warsaw: C.H. Beck,
2008), 194.
189. Art. 758 CC.
190. Art. 758(1) CC.
159
181–181 Part II, Ch. 1, Agency
The contract discussed here does not have to be concluded in any special form.
However, each of the parties may demand that the other party confirm, in writing,
the contents of the contract and the provisions that amend or complement it. Waiv-
ing the right to such demand shall be deemed invalid.191 But, in case the agent wants
to be liable for the performance of the obligation by the client, against a separate
remuneration (del credere commission), this kind of agreement requires a written
form ad eventum– which means that when such a form is not observed, the agree-
ment is valid but is deemed as concluded without such a stipulation. The agent’s
liability may relate only to a designated contract or to contracts with a designated
client that were concluded with the mediation of the agent or by the agent in the
principal’s name.192
The agency agreement may be shaped in two ways. Either it may be constructed
as a mediation leading to searching for a contracting party and making the finaliza-
tion of the transaction possible only or it may also provide for empowerment for the
agent to conclude contracts in the name and on behalf of the principal and to receive
declarations for the latter. If the second type is faced, the agent requires an autho-
rization. In case the agent concluding a contract in the principal’s name does not
have it or exceeds its scope, the contract shall be deemed confirmed unless the prin-
cipal, immediately after he has received the information on the conclusion of the
contract, notifies the client that he does not confirm the contract.193 If the contract
does not stipulate it explicitly, it shall be deemed that the agent is authorized to
receive, for the principal, the payment for his performance made for the benefit of
the principal and to receive, for the principal, the performances for which he pays,
likewise to receive notifications about defects and statements pertaining to the per-
formance of the contract, which he has concluded in the name of the principal.194
§2. OBLIGATIONS OF THE PARTIES
181. As the agency agreement provides for the mutual cooperation of the par-
ties, both of them are obliged to remain loyal to each other. The mentioned coop-
eration mostly refers to exchanging information and therefore the regulation
provides for the mutual commitments in this respect. Therefore, the agent must sub-
mit any and all information that is significant to the principal and to abide by his
instructions that are justified in given circumstances, likewise to undertake, within
the scope of the affairs managed, any acts necessary to protect the principal’s rights.
This obligation is considered crucial and this is why any contractual provisions that
violate it shall be null and void.195 Analogue obligations are imposed on the prin-
cipal who is obliged to submit to the agent documents and information required for
due performance of the contract. Moreover, he is also expected to notify the agent,
191. Art. 758 CC.

192. Art. 761(7) CC.
193. Art. 760(3) CC.
194. Art. 759 CC.
195. Art. 760(1) CC.
160
Part II, Ch. 1, Agency 181–181
within reasonable time, of acceptance or rejection of the proposal to conclude a con-

tract and on the non-performance of the contract concluded with the agent’s media-
tion or in the name of the principal. In addition to that, the principal is also required
to notify the agent, within reasonable time, that the number of contracts to be con-
cluded or the value of the object thereof will be much lower than the agent could
normally expect. It is impossible to waive these obligations contractually.
The main entitlement of the agent is his right to receive a commission. He can
demand it for the contracts concluded within the duration of the contract of agency,
if their conclusion was effected as a result of his activities or if they were concluded
with the clients previously obtained by the agent for the contracts of the same type.
In case when the agent was granted the exclusive right with respect to a designated
group of clients or a geographical area and, within the duration of the contract, a
contract with a client from that group or area was concluded without the agent’s par-
ticipation, the agent shall have the right to demand commission for that contract.
With this agent’s right corresponds the obligation of the principal who is obliged to
notify the agent, within reasonable time, of the conclusion of such contract.196 The
agent may demand the commission for the contract concluded after the contract of
agency had been dissolved, if the principal or the agent received the proposal from
a client to conclude a contract before the contract of agency was dissolved, subject
to the fulfilment of the prerequisites stipulated above. The agent may also demand
the commission for the contract concluded after the contract of agency had been dis-
solved, also in the case where the contract concerned was concluded predominantly
as a result of his activities within the duration of the contract of agency and within
reasonable time after it had been dissolved.
The agent acquires the right to the commission at the date when the principal
should have already made his performance under the contract with a client or actu-
ally made it, or when the client made his performance. However, the parties cannot
agree that the agent shall acquire the right to the commission later than at the date
when the client made his performance or would have made it, if the principal had
made his performance. If the contract concluded between the principal and the cli-
ent is to be performed in subsequent parts, the agent shall acquire the right to the
commission to the extent of performance of the contract. The claim for the payment
of the commission shall become enforceable with the lapse of the last day of the
month following the quarter in which the agent acquired the right to the commis-
sion. The provision of the contract of agency that is less favourable for the agent
shall be null and void.197 The agent cannot demand the commission, if it is obvious
that the contract with a client will not be executed due to the reasons beyond the
responsibility of the principal, and if such commission was paid to the agent, it shall
be refunded. The provision of the contract of agency that is less favourable for the
agent shall be null and void.198
In order to inform the agent about the provision due, the principal is obliged to
supply the agent with a statement including information on the commission due to
him not later than on the last day of the month following the quarter in which the
196. Art. 761 CC.

197. Art. 761(3) CC.
198. Art. 761(4) CC.
161
agent acquired the right to the commission. The statement shall include all the data
constituting the base for calculating the amount of the commission due. The agent
may demand that he be allowed access to the information required to establish
whether the amount of commission due to him was correctly calculated; in particu-
lar, he may demand the excerpts from the principal’s commercial books or demand
that the inspection into and excerpts from those books be allowed for the expert
auditor chosen by the parties. These last two requirements are considered to be
semi-imperative as the provisions of the contract of agency that are less favourable
for the agent shall be null and void. In case the information mentioned is not ren-
dered accessible to the agent, he may demand access to it by bringing an action
within six months from the day on which the demand was made to the principal.
The same deadline applies when the agreement between the parties with respect to
the choice of the expert auditor fails; the deadline starts its course on the day when
the demand was made to the principal, that the expert indicated by the court inspects
the books and makes excerpts therefrom.199
In addition to the commission, the agent may claim the reimbursement of the
expenses connected with the performance of the mandate only insofar as they were
justified and did not exceed a usual amount accepted in the given relationships.200
In order to secure the claims for the remuneration and for the reimbursement of the
expenses and advance payments given to the principal, the agent shall have the
statutory right of pledge on the things and securities of the principal received in con-
nection with the contract of agency until those objects are with him or with a per-
son who holds them in his name, or until he can dispose of them by virtue of
documents.201
§3. TERMINATION OF THE AGREEMENT
182. The agency agreement may be concluded either for definite or for indefi-
nite period of time. In the first case once – after the performance thereof and the
lapse of the time for which it was concluded – it is continued, it shall be deemed as
concluded for indefinite time. In case the agreement is concluded for indefinite time,
it may be terminated by a one-month notice in the first year, by a two-month notice
in the second year, and by a three-month notice in the third and any subsequent year
of the duration of the agreement. This provision has the semi-imperative character
as the said statutory terms of notice cannot be shortened. They may, however, be
prolonged in a contract, but the term of notice specified for the principal cannot be
shorter than that which is specified for the agent. Prolongation of the term of notice
for the agent renders identical prolongation for the principal. Unless the agreement
stipulates otherwise, the term of notice shall lapse at the end of the calendar
month.202
199. Art. 761(5) CC.

200. Art. 762 CC.
201. Art. 763 CC.
202. Art. 764(1) CC.
162
Part II, Ch. 1, Agency 182–182
Both types of the agreements may be terminated without the observance of the
terms of notice, due to non-performance of the duties by one of the parties in full
or in significant part, as well as in the case of extraordinary circumstances. If the
termination was effected as a result of circumstances for which the other party is
liable, that party shall be obliged to repair the damage sustained by the party ter-
minating the contract due to such termination of the agreement.203
After the termination of the agreement of agency, the agent may demand from
the principal a compensating performance, if the agent, within the duration of the
agreement, obtained new clients or led to a significant increase in turnover with the
existing clients and the principal is still deriving considerable benefit from the con-
tracts with those clients. The agent shall have the right to that claim if, taking into
consideration all the circumstances, and in particular the agent’s losing the commis-
sions for the agreements concluded with those clients by the principal, the consid-
erations of good reasons shall support such claim. Nevertheless, the compensating
performance cannot exceed the amount of the agent’s remuneration for one year as
calculated on the basis of an average annual remuneration obtained within the last
five years. If the duration of the contract of agency is less than five years, the aver-
age amount for the whole duration of the contract shall be taken into consideration
when calculating the remuneration. It must be stressed, however, that obtaining the
compensating performance shall not preclude the agent’s right to claim a compen-
sation on general terms. It may also, in case of the agent’s death, be claimed by his
heirs. The right to claim the compensating performance shall be dependent on filing
an appropriate demand to the principal by the agent or his heirs, within one year
from the date of the dissolution of the contract. The agent is excluded from the right
to claim the compensating performance if one of the following situations occur: the
principal terminated the agreement due to the circumstances for which the agent is
liable and which form the grounds for termination of the agreement without the
observance of the terms of notice, or the agent terminated the agreement, unless the
termination is justified by the circumstances for which the principal is liable or by
the agent’s age, disability or illness and the consideration of good reasons does not
allow for demanding that he continue performing the duties of agent, or the agent,
on the principal’s consent, transferred his rights and duties arising under the con-
tract onto another person.204 The agent’s entitlement to the compensating perfor-
mance is semi-imperative as the parties cannot provide in the agreement the terms
and conditions that weaken the agent’s position in this respect.
Pursuant to Article 7646 CC, the parties may include in the content of the agree-
ment a provision on the limitation of competitive activity. It limits the agent’s activi-
ties of a competitive nature for the period following the dissolution of the agreement
of agency. Such limitation shall be effective if it relates to a group of clients or a
geographical area covered by the agent’s activities and the type of goods or services
being the object of the agreement. However, it cannot be stipulated for a period
longer than two years from the date of dissolution of the agreement. In this case,
203. Art. 764(2) CC.

204. Art. 764(4) CC.
163
the principal is obliged to pay the agent an appropriate sum of money for the limi-
tation of competitive activity within the duration of the agreement, unless it stipu-
lates otherwise or the agreement of agency was dissolved due to the circumstances
for which the agent is liable. If the sum of the remuneration was not contractually
specified, the amount due shall correspond to the benefits derived by the principal
as a result of the limitation of competitive activity and the agent’s earning oppor-
tunities lost as a consequence thereof. It must be also stressed that until the date of
dissolution of the agreement, the principal may waive the limitation of competitive
activity with such an effect that, after the lapse of six months from the date of
waiver, he shall be released from a duty to pay the remuneration. Both the waiver
and the provision itself need the written form, under pain of nullity. If the agent ter-
minates the agreement due to the circumstances for which the principal is liable, he
may release himself from the duty to observe the limitation of competitive activity
by making a written statement submitted to the principal, before the lapse of one
month from the date of such termination.205
205. See E. Rott-Pietrzyk, Agent handlowy – regulacje polskie i europejskie (Warsaw: C.H. Beck, 2005);
E. Rott-Pietrzyk, in Prawo zobowia zań– cze ść szczegółowa, vol. 7 of System Prawa Prywatnego,
ed. J. Rajski (Warsaw: C.H. Beck, 2004), 487 ff.
164
183–184
Chapter 2. Bailment
§1. INTRODUCTORY REMARKS
183. Bailment in general is a contract by virtue of which one receiving the prop-
erty of another is committed to keep it and return it in kind. In Polish civil law, fol-
lowing types of contracts involving bailment or contracts of similar kind may be
distinguished: safe-keeping, storage and caution. Moreover, CC provides for spe-
cial regulation on liability of persons running hotels and similar establishments.
§2. SAFE-KEEPING
184. Safe-keeping is referred to as a contract in which the keeper shall assume

the obligation to keep the movable thing given to him for safe-keeping in a non-
deteriorated condition.206 It may be drafted as payable or gratuitous, depending on
the party’s will. However, CC comes up with a resumption that should be applied
when the parties did not specify the amount of remuneration and the keeper in the
content of the contract following from the circumstances did not undertake to keep
the thing safe without remuneration. In this case, if the amount of the remuneration
for the safe-keeping is not specified in the tariff, the keeper shall be entitled to the
remuneration usually accepted in the given relationships.207
The keeper is obliged to keep the thing in the manner determined in his obliga-
tion, and it being not otherwise agreed in that respect, in the manner which results
from the nature of the thing kept and from the circumstances. However, he is also
authorized, and even obliged, to change the place and the manner of safe-keeping
of the thing specified in the contract if that proves to be necessary for its protection
against loss or deterioration. If it shall be possible to obtain earlier the approval of
the depositor, the keeper must obtain it before making the change. In the course of
performing the contract, the keeper shall not be allowed to use the thing without the
consent of the depositor unless that is necessary to preserve it in a non-deteriorated
condition.208 This feature distinguishes safe-keeping from irregular deposit as in the
case of the latter, the keeper may dispose of the money or other things designated
only as to their kind and given to him for safe-keeping. In this case, the provisions
on the loan shall apply respectively, and the time and the place of the return of the
thing shall be regulated by the provisions on safe-keeping.209
As to the time and place of return of the thing given for safe-keeping, provision
of Article 844 CC applies. It authorizes the depository to demand the return of the
thing at any time. While the keeper may demand the thing to be received before the
lapse of the time limit specified in the contract only if as a result of circumstances
that he could not have foreseen he cannot, without a loss to himself or without a
danger to the thing, keep the thing in the manner to which he is obliged. If the period
206. Art. 835 CC.

207. Art. 836 CC.
208. Art. 839 CC.
209. Art. 845 CC.
165
185–185 Part II, Ch. 2, Bailment
of the safe-keeping was not specified or if the thing was accepted for safe-keeping
without remuneration, the keeper may demand the thing to be received at any time,
provided that it is not returned at the time inconvenient for the depositor. The thing
shall be returned at the place where it has been kept.
§3. CONTRACT OF STORAGE
185. By a contract of storage, the storage entrepreneur shall assume the obliga-
tion to keep the movable things defined in the contract safe against remuneration. It
constitutes the contract that requires handover of its subject. The form thereof is not
specified, but the storage entrepreneur shall be obliged to give to the storing deposi-
tor a receipt that must specify the kind, quantity, labelling and the form of packing
of the things, and other essential provisions of the contract.210 It may overlap with
irregular deposit and therefore the provisions of the CC regarding contract of stor-
age cannot be applied if storage entrepreneur acquires the ownership of the depos-
ited things and is obliged to give back only the same number of the things of the
same sort and quality.211
The contract of storage comprises of variety of obligations imposed on the stor-
age entrepreneur. First of all, he is liable for a damage resulting from the loss, dec-
rement of or damage to the thing during the period between its acceptance for
storage and its releasing to the person entitled to take it back, unless the entrepre-
neur proves that he could not prevent the damage despite his due diligence. He is
also obliged to maintain the things appropriately,212 to insure them213 and to per-
form acts necessary to protect the property of the storing depositor if the condition
of things arouses the suspicion of missing, decrement, spoiling thereof or damage
thereto.214 He must also notify the storing depositor of the events important for the
protection of the storing depositor’s rights or where such events relate to the con-
dition of the deposited things, unless such notification is not possible.215
The main entitlement of the storage entrepreneur is his claim for remuneration.
In order to secure it, together with his claim for the storage charges and indirect
charges, for reimbursement of the expenses and costs, in particular of the freight and
customs duties, for the repayment of advance payments in the benefit of the storing
depositor and other charges resulting from the contract or contracts of storage, the
storage entrepreneur has the statutory right of pledge on the things to be stored until
they are in his possession or with a person who holds them in his name or until the
storage entrepreneur may dispose of them by virtue of documents.216
210. Art. 853 CC.

211. Art. 854 CC.
212. Art. 855 CC.
213. Art. 856 CC.
214. Art. 857 CC.
215. Art. 855 CC.
216. Art. 8593. CC.
166
Part II, Ch. 2, Bailment 186–187
§4. CAUTION
186. Caution is considered to be a contract by virtue of which the debtor trans-

fers to the creditor a freehold of certain amount of money or some movables in order
to secure possible claims that may arise from the contractual relation binding them.
The creditor, upon acceptance of the caution, undertakes to return the same amount
of money or the same amount of movables of this same kind with the reservation
that he is allowed to compensate his unfulfilled claim being secured with the cau-
tion.217
§5. LIABILITY OF PERSONS RUNNING HOTELS AND SIMILAR ESTABLISHMENTS

AND LIMITATION OF CLAIMS
187. CC provides for a general rule imposing on the persons who run hotels and
similar establishments for profit liability for the loss of, or the damage to, the things
brought in by persons availing themselves of the service of a hotel or a similar
establishment – the guests – unless the damage resulted from the nature of the thing
brought in or force majeure or was caused solely by a fault of the injured person or
a person who accompanied or visited him, or was employed by him. As a thing
brought is understood a thing which, at the time of the guest availing himself of the
service of a hotel or a similar establishment, is in said hotel or similar establishment
or a thing that is outside said hotel or similar establishment and has been entrusted
to the person running a hotel or a similar establishment for profit or to a person
employed by him and either deposited in a place indicated by them or intended for
that purpose. It also applies to a thing that has been entrusted, for a short, com-
monly accepted period preceding or following the period when the guest was avail-
ing himself of the service of a hotel or a similar establishment, to the person running
a hotel or a similar establishment for profit or to a person employed by him and
either deposited in a place indicated by them or intended for that purpose. It does
not refer to motor vehicles and things left therein, as well as living animals.218 The
above rules of liability cannot be precluded or limited by a contract or an announce-
ment.
CC defines also the limitations of obligation to redress the damage as in case of
the loss of, or the damage to, things brought in, the scope thereof by the person who
runs a hotel or a similar establishment for profit is limited, with respect to one guest,
to the sum equal to a hundred times the due for lodgings with which he was pro-
vided, counted for twenty-four hours. However, the liability for one thing shall not
exceed fifty times such due. The said limitation does not apply when the person who
runs a hotel or a similar establishment accepted the things for deposit or refused to
accept them for deposit, although he was obliged to accept them and also in the case
where the damage was caused by the intentional guilt or gross negligence of the said
person or of the person employed by him. It should be added that pursuant to Article
849 section 3 CC a person who runs a hotel or a similar establishment for profit is
217. See R. Longchamps de Berier, Zobowia zania (Poznan: Ksieg. Akademicka, 1948), 639.
218. Art. 846 CC.
167
187–187 Part II, Ch. 2, Bailment
obliged to accept for deposit money, securities and valuable objects, in particular
valuables or objects which have a scientific or artistic value. He may refuse to
accept the said things only where they pose a threat to the security or where, in rela-
tion to the size or standard of the hotel or similar establishment, their value is too
high or they occupy too much space.
The claim for the redress of the damage caused by the loss of, or damage to, the
things brought into a hotel or a similar establishment shall expire if the person
injured after having learned about the damage failed immediately to inform the per-
son running the establishment about the fact. It does not apply however, if the dam-
age was caused by the person running a hotel or a similar establishment for profit
or if he accepted the thing for safe-keeping.219 These claims are barred by limita-
tion of six months from the day on which the person injured learned about the dam-
age, and in any case after the lapse of one year from the day on which the person
injured ceased to avail himself of the services of the hotel or a similar establish-
ment.220
The above rules should be applied accordingly to the bathing establishments.
However, in the case of the objects that are customarily not brought in by persons
availing themselves of the services or the enterprise or establishment of a given
kind, the liability of the person who runs such an enterprise or establishment shall
be limited to the case where he has accepted such an object for safe-keeping or
where the damage resulted from his intentional guilt or gross negligence or from
the intentional guilt or gross negligence of a person employed by him.221
219. Art. 847 CC.

220. Art. 848 CC.
221. Art. 852 CC.
168
188–190
Chapter 3. Gaming and Wagering

§1. GENERAL OVERVIEW
188. The construction of gaming and wagering in Polish civil law is not homog-
enous as they may occur in three types of contractual relations: in relation to gam-
ing and wagering conducted on the basis of the relevant administrative permit,
conducted without the permit but being allowed and honest and being prohibited or
dishonest. As the regulation differs depending on the category of the gaming and
wagering, each will be analysed separately below.
§2. GAMING AND WAGERING CONDUCTED ON THE BASIS OF THE RELEVANT

ADMINISTRATIVE PERMIT
189. This matter is regulated in the Law of 19 November 2009 on gaming that
defines it as the games where the prize is either money or award and where the final
result particularly depends on chance and the terms of which are stipulated in indi-
vidual regulations. They comprise of money games, cash lotteries, telebingo, award
lotteries, cylindrical, card games, dice games, cash bingo, raffle bingo, promotion
lotteries and audiotele lotteries.222 The conduct of the economic activity within the
scope of the number games, cash lotteries, video lotteries and telebingo is deter-
mined by the government monopoly.223 The activity in the scope of the cylindrical,
card games, dice games, cash bingo, mutual wagering, slot machine games and slot
machine games with low prizes can be conducted exclusively in the form of a joint-
stock company or a limited liability company with a seat in Poland.224 Award lot-
teries, raffle bingo, promotion lotteries and audiotele lotteries can be organized by
natural persons, legal persons and organizational units without legal personality on
the basis of the permit granted by the minister responsible for public finance
only.225 In terms of the obligation resulting from this category of the gaming and
wagering, they must be considered as actionable obligations as claims from a gam-
bling game or bet may be vindicated only if the gambling game or the bet has been
approved by a permit of the competent state authority.226
§3. GAMING AND WAGERING CONDUCTED WITHOUT THE PERMIT BUT BEING
ALLOWED AND HONEST
190. This category of the obligation falls into the type of natural obligations that
results from Article 413 section 1 CC, which states that whoever makes a perfor-
mance resulting from a gambling game or bet cannot claim the return unless the
222. Art. 2.1 point 1, 2, 3, 4, 5, 6, 7, 8, 9, 10 and 11.

223. Art. 5.1.
224. Art. 6.4.
225. Art. 7.
226. Art. 413 §2 CC.
169
190–190 Part II, Ch. 3, Gaming and Wagering
gambling game or the bet is prohibited or dishonest. In case of the natural obliga-
tions, the debtor is not liable for the debt and therefore the creditor cannot demand
from the court or any authority to issue a judgment or to enforce against the debtor.
However, the natural obligation is an obligation as once the debtor is willing to per-
form his obligation or performs it, not being aware of impossibility to force him to
perform, cannot claim to have it returned by the creditor.227
227. See A. Janiak, in Prawo zobowia zań– cze ść szczegółowa, vol. 8 of System Prawa Prywatnego, ed.
J. Panowicz-Lipska (Warsaw: C.H. Beck, 2004), 817 ff.
170
191–191
Chapter 4. Sale of Goods

191. The most common type of contract is the contract of sale, whereby a per-
son acquires the ownership of property in return for payment of a certain price. In
the international law, there was a need to create a uniform set of rules that can be
applied to sale contracts entered between parties from different countries in the busi-
ness market. The most important convention with regard to that matter is United
Nation Convention of Contracts for the International Sale of Goods (generally
called the ‘Vienna Convention’ or CISG), which was ratified by seventy states and
came into force on 1 January 1988.
The Polish CC regulations apply to sale contracts entered between parties that
have both their seats in Poland or if the contracting parties not bounded by CISG
clearly expressed their will of applying Polish law in the terms of their contract or
when the seller has its seat in Poland, unless the appropriate specific provisions of
international private law provide otherwise.
Entering the sale contract, its existence and validity is a matter of general con-
tract law and the general part of CC; however, Article 543 CC implies that present-
ing goods at the place of sale in public display with a price attached is deemed an
offer of the goods’ sale. A contract of sale is generally defined in Article 535 CC as
a contract by which the seller obligates himself to transfer the ownership right
(property) over goods to the buyer and to deliver the goods to the buyer, and the
buyer obligates himself to collect the goods and pay the seller the price. This defi-
nition can be broken down into a number of distinct components; there must be: (i)
property transfer, (ii) subject matter of sale contract, (iii) delivery of goods and (iv)
price.228
There are also specific types of sale contract with their own specific regulations.
CC distinguishes following types of sale contract: hire-purchase, that is, sale by
instalments (Articles 583–588), sale with ownership right transfer postponed
(Articles 589–591), sale on approval (Article 592), sale with option of redemption
(Articles 593–595), sale with right of pre-emption (Articles 596–602), sale as trans-
fer of claims (Article 510), sale of legacy (Articles 1051–1057).
The distinction of high importance is to define consumer sale contract. Consumer
sale is a contract transferring the right of ownership of tangible goods, where the
seller acts for purpose relating to his business and the buyer acts as a consumer.229
Specific consumer sale regulations are included in Consumer Rights Law (CRL)
when the consumer sale contract is distance contract or off-premises contract.230
Therefore, sale of immovable between the professional seller and the consumer
228. See W.J. Katner, in Prawo zobowia zań– cze ść szczegółowa, vol. 7 of System Prawa Prywatnego,
229. That is a natural person who carries out with an entrepreneur a juridical act which is not directly
related to his or her economic or professional activity (Art. 221 CC).
230. Ustawa o prawach konsumenta dated 30 May 2014, Dz. U. 2014, poz. 827 with changes – CRL.
Consumer Right Law has implemented to Polish law provisions of Directive 2011/83/EU of The
European Parliament od of the Council of 25 October 2011 on consumer rights, Official Journal of
European Union 22.11.2011, L 304/64.
171
192–192 Part II, Ch. 4, Sale of Goods
buyer is the consumer sale contract under CC, even though the provisions of CRL
are not applied in this case, as according to Article 4 CRL this legal act shall not be
applied to the sale of immovable property.
§2. PROPERTY TRANSFER
192. The transfer of property is central motive to enter the sale contract. Article
155 CC implies terms of principal significance to that matter. The rule embodied in
Article 155 section 1 CC is that, in case of sale of specific or ascertained goods,
property passes to the buyer at the time the contract is entered, unless the terms of
contract or specific statutory provisions provide otherwise. That is why the sale con-
tract is of consensual nature when concerning the specific goods. Thus, it is not the
delivery of the goods, nor is the payment the price that operates to transfer property.
The moment of entering the contract is conclusive, unless the parties’ intention of
postponed transfer of property is clearly expressed in the terms of contract.
On the contrary, Article 155 section 2 CC implies that, in case of sale of unascer-
tained (generic) or future goods, the property passes at the moment of possession
transfer. In case of future or generic goods, the intention of the parties cannot be
conclusive of the time at which property passes, as until the goods that are the sub-
ject matter of the contract have been identified and/or appropriated by the buyer, it
is impossible to transfer the property. Unascertained or generic goods are usually a
part of a bulk (part of a mass of goods), or they are unidentified, and the future
goods do not exist while the consensus of entering the sale contract is being reached
between the parties. The subject matter of ownership right are only things that are
identified (specified) and appropriable; hence, the transfer of property of unascer-
tained or future goods is impossible without identification of the subject goods. To
perform the sale contract, the parties need to make an obligation to transfer the prop-
erty of unascertained or future goods, precise the extent of identification of goods
(e.g., precise the amount or weight of goods) and make an act of real nature that is
identify with sufficient precision the goods in question. The latter is an act of one
party (seller or buyer), the purpose of which is to identify the goods to be sold.
Sometimes, irrespective of the goods qualification as unascertained or specified,
where the law requires, the act transferring the right has a form of an entry to land
register (mortgage book), for example, where the perpetual usufruct is being sold or
in case of the first sale of premises.
The property transfer may be postponed with the direct terms of sale contract.
Additionally, in case of discrepancies between the parties, Article 589 CC implies
that when the seller has reserved for himself the property of movable goods sold
until the total price is paid, in case of doubt, it is considered the transfer of property
is subject to a precedent condition. In this case, the sale contract does not transfer
the property of movable specified thing; the property passes at the moment the price
is paid. However, when the thing sold has been delivered to the buyer prior to the
payment, Article 590 section 1 CC provide the reservation of property to the seller
must be contained in a written form. It is effective against the buyer’s creditors if
the document has the certified date.
172
Part II, Ch. 4, Sale of Goods 193–194
§3. SUBJECT MATTER OF SALE CONTRACT
193. The provisions included in Articles 535–555 CC apply originally to sale of

goods. A sale of services is a different contract regulated by the virtue of Article 750
CC under Articles 735–749 CC. When the subject matter of contract are specific
goods that need to be produced by one contracting party in the future, the different
contract of work and materials (Articles 627–646 CC) must be concerned.
Goods are defined in Articles 45 and 46 CC as all materially existing objects
including movables and immovable, they need to be also appropriable. Where the
sale of immovable is made the contract must be formed in authenticated deed at
notary, otherwise it is invalid (Article 158 CC). The sale regulations in CC apply
adequately to sale of energy and sale of transferable rights (i.e., things in action,
claims, shares) by the virtue of Article 555 CC.
Under Article 546 CC, the seller is obliged to provide the buyer with necessary
explanations regarding the legal and material status of goods sold and hand over
essential documents concerning the goods he possesses. If it is necessary for proper
use of the goods according to their purpose, the seller must attach an instruction of
use on paper. Under the consumer sale law, the seller is obliged to inform the buyer
about every important feature of product and various data required under specific
provisions of the code (Article 5461 CC).
§4. DELIVERY OF GOODS
194. Delivery is not defined expressly in CC, but in jurisprudence, it is defined

as transfer of possession from seller to buyer. In most sale transactions, it takes the
form of physical transfer of possession, but is also acceptable to construct the sense
of the concept that what is actually transferred to the buyer is the control of goods
rather than physical possession, or it is also the situation where seller enables the
buyer to collect goods by not interrupting the collection. If a seller is authorized or
required to send the goods to a place not being the actual place of performance,
delivery of the goods to a carrier for the purpose of transmission to the buyer is
deemed to be a delivery of the goods to the buyer (Article 544 §1 CC).
The significance of ‘delivery’ is not only confined to transferring the property of
unascertained or future goods, it extends also to such matter as passing of acciden-
tal lost or damage risk together with benefits and burden related to the goods
(Article 548 §1 CC). This rule, however can be displaced by the express terms of
the contract, but according to Article 548 section 2 CC, it is considered in case of
doubt, that the lost or damage risk, benefits and burden pass at the same moment to
the buyer. Unless otherwise agreed, the place of delivery is the seller’s place of busi-
ness (Article 454 CC), so the buyer is obliged to collect the goods. Unless other-
wise provided, the seller must bear the cost of delivering and shipping the goods,
cost of measuring, package and carriage insurance and the buyer bears cost of col-
lection (Article 547 §1 CC). Where the goods are agreed to be sent to a place not
being the actual place of performance the buyer additionally bears the cost of insur-
ance and shipment (Article 547 §2 CC).
173
§5. PRICE AND PAYMENT
195. The price is the money consideration paid by the buyer. The price must be
fixed by the parties, because it is an essential term to create the sale contract.
When the performance by the buyer assumes a form other than the money pay-
ment, the contract cannot be a sale; exchange contract may be considered instead.
Supreme Court in its decision of 5 February 2002 decided that fixing the price was
an essential sale contract term; when the price was fixed in a manner violating the
law provisions or there was no price fixed, the sale contract was void.231
The price may be fixed in several ways:
– Fixed expressly by terms of contract itself as certain amount of money.

– It may be left to be fixed later in a manner agreed by the parties, in that situation,
the amount of money to pay is determined by the value of given product or index
at a given time.
– The law provisions may fix the price of specific goods (Article 537 CC) or may
only fix the minimum (Article 539 CC) or maximum price (Article 538 CC) for
given products, as well as the law may empower a public administration body
with the competence to impose the manner of price calculation (calculated price
– Article 540 CC) for certain types of goods. Under Article 541 CC, the seller’s
claim for payment in case the price was underpaid and the buyer’s claim for back-
payment when the price was overpaid, resulting from violating the law regula-
tions imposing the calculated, minimum or maximum price, are subject of one-
year prescription period.
The price payment is to be done either in cash or using the cashless modes of pay-
ment, for example, the money transfer on bank account. Unless otherwise provided,
the buyer shall pay the price in the place where the seller had his seat at the time the
contract was entered (Article 454 CC). Under Article 19 of Entrepreneurs Law
Act232 when both parties of sale contract are professional business entities (entre-
preneurs) the payment must be done by transfer on bank account, in other cases (i.e.,
consumer sale) only if a total payment in one business transaction equals or amounts
over PLN 15,000, it must be paid by transfer on bank account. Supreme Court in
sentence of 8 November 1989 decided when the parties agreed the bank transfer
payment, the seat of bank department running the sellers’ bank account is deemed
the place of payment.233 The place of payment is a supplementary factor indicating
the local jurisdiction of court in case of a payment dispute between parties of con-
tract.
The price must be paid at the time agreed under the terms of contract and in case
of default payment interests are due. When parties do not specify the time of pay-
ment, Article 488 section 1 CC is applied as sale contract is a mutual contract.
Under this article, performances of both parties must be made simultaneously, so
231. Judgment of the Supreme Court of 5 Feb. 2002, II CKN 726/00, unpublished.
232. Ustawa Prawo przedsie biorców dated 6 March 2018, Dz. U. 2019, poz. 1292 with changes.
233. Judgment of the Supreme Court of 8 Nov. 1989, III CRN 345/89, Palestra nos 1–2 (1992).
174
generally the date of delivery is the date of payment. This rule, however, can be dis-
placed by the express terms of the contract, law provisions or court decision. Under
Article 488 section 2 CC, each party may withhold his performance until the other
party offers its corresponding performance.
Under Article 544 section 2 CC if the goods sold are to be sent by the seller to
a place that is not a place of performance, the buyer is obliged to pay the price only
after arrival of the goods at the place of destination and after he has examined the
good’s condition. When the payment is agreed to be made on bank account, the date
when the buyer’s account is debited is insignificant, the date price amount is cred-
ited on the seller’s bank account is deemed to be the time of payment, unless oth-
erwise agreed between the parties.
§6. PRESCRIPTION
196. Debtors have been given an important defence instrument – defence of pre-
scription. In Polish law, creditors’ claims are subject to prescription demur that may
be raised by the debtor. In consumer sale contract dispute, the court is obliged to
consider ex officio the prescription of the other party claims in favour of the con-
sumer (Article 117 section 21 CC). General prescription periods are provided in
Articles 118–125 CC. The general period of prescription is six years. When a claim
relates to business activity of a creditor or claim concerns periodical performance,
the prescription period is three years, unless a shorter term is prescribed for a given
claim by law. The general terms are not binding where specific law provisions pro-
vide otherwise. Sale regulation in CC sets out in Article 554 CC a two-year pre-
scription period for claims for payment referring to creditor’s business activity,
artisan’s activity and farmer’s claims for payment for rural and forest products sold.
The general prescription terms (six or three years) are applied to remaining
claims that may have arisen from the sale contract (example of which are buyer’s
claim for delivery of goods, seller’s claim for collection and claim for payment
raised by non-professional seller). However, it must be noted that Article 541 CC
sets out additional one-year prescription period for claims for payment that may
arise in result of violation of rules on maximum, minimum and calculated price set
out in specific law regulations.
A claim for interest is an ancillary claim to the claim for payment, that implies
the consequences for the lapse of prescription period assigned. Interest are periodi-
cal performance due under Article 481 CC when the main payment is default or oth-
erwise when agreed by contracting parties. The period of prescription of claims for
periodical performance is generally set out in Article 118 section 1 CC as a three-
year period. There was a question of prescription period applied to claims for inter-
est payment ancillary to claims being given the two-year prescription period under
Article 554 CC (in sale contract). There were some discrepancies in jurisprudence
and doctrine, which ended when Supreme Court passed a resolution on 26 January
2005234 deciding that the period of prescription for a claim for interest of ancillary
234. Judgment of the Supreme Court of 26 Jan. 2005, III CZP 42/04, Biuletyn Informacyjny Sa du Najw-
yższego no. 1 (2005), item 9.
175
nature expires in three years, but not later than the period of principal claim. The
resolution resulted in applying the two-year prescription period to claims for default
interest payment laid by creditor within the scope of his business activity covered
by Article 554 CC.
§7. WARRANTY IN LAW
I. General Overview
197. In the event of failure by the buyer to perform his obligation under the con-
tract of sale, the seller is provided with general obligation law instruments to seek
satisfaction with remedies possible to use in the case of breach. There are possible
three different approaches: seller may claim for performance or terminate the con-
tract and/or use claims for damages.
Thus, in the event of failure by the seller to perform his obligation, the instru-
ments buyer can use are more numerous. The buyer can use claims under remedies
of the general obligations part of CC and additionally law provided him with spe-
cific claims under warranty in law and guarantee in deed law provisions grouped in
Articles 556–581 CC. The specific sale regulations imply two regimes of the sell-
er’s liability for defects of a sold good. One is obligatory for the seller and is called
a warranty in law (regulated in Articles 556–576 CC), the second is optional –
depending upon the expression of the seller’s or producer’s intent – called guaran-
tee. Warranty in law and guarantee are not the same thing (though claims may be
similar) but may both stand together.
Warranty in law provides the seller’s absolute liability for physical and legal
defects of goods sold. The contractual duties of the seller with regard to the quality
of goods are strict. Lack of seller’s fault is no excuse for inability to supply the
goods of required quality and state. The parties may extend, limit or exclude the
seller’s liability under the warranty in law; however in case of consumer sale, limi-
tation or exclusion of liability is admissible only where specific law regulations pro-
vide (Article 558 §2 CC). The limitation of seller’s liability is ineffective where the
seller concealed the defect from the buyer with deceit. Under Article 557 CC, the
seller is released from the liability for defects when the buyer knew the defects at
the moment the contract was concluded or learned about them at the moment of
delivery as generic or future goods were concerned unless the buyer was the con-
sumer (Article 557 §2 CC). Defects that were apparent at the time of making the
contract and were known to the buyer cannot be relied on warranty in law.
II. Physical and Legal Defects
198. There is no specific term that sets out the quality of fitness for any particu-
lar purpose of goods supplied under the sale contract regulations other than
expressly provided for generic goods in Article 357 CC, according to which the
seller should provide goods of average quality unless there are specific regulations,
parties otherwise agreed or other relevant factors or circumstances indicate the
176
appropriate quality. The seller does not bear liability for defects arisen after risk has
passed to the buyer, unless defects resulted from a cause lying in the goods previ-
ously. Under Article 556 section 1 CC, physical defects are when the sold goods are
not in conformity with contract stipulations CC contains list of the defects but it is
only of exemplary nature. Article 5561 CC provides that physical defects:
– exist when the product does not possess qualities or characteristics defined in
contract or implied by circumstances, or those that are typical for goods of that
kind in question;
– are noticeable when goods supplied do not have features ensured by the seller
(especially when samples were presented);
– exist when the product may not be used for the purpose expressed by the buyer
to the seller where seller did not oppose when the contract was concluded;
– are noticeable when goods were delivered in incomplete state.
– when the consumer sale is concerned – defect exist when the product lack quali-
ties publicly presented by the producer or manufacturer in commercials or adver-
tisements if they were reasonable, unless the seller have informed about the lack
or the seller could not have been given the normal opportunity to know them or
if the
1
buyer had not been influenced by these public information (see Article
556 §3 CC and Article 557 §3 CC for more details);
Under Article 5563 CC the seller is liable to the buyer if goods sold constitute the
property of a third person or are charged with the right of a third person (e.g., ser-
vitude, easement). Thus, it must be remembered that good faith buyers may be pro-
tected with confidence of purchase within the scope of Article 169 CC application.
III. Remedies
199. When the consumer notices a defect within one-year period since the deliv-
ery of good, he benefits from legal presumption that the product was defective at
the moment of delivery. This is a rebuttable presumption, where the seller holds the
burden of proof (Article 5562 CC). According to Article 560 CC, after the defect
notification, the buyer may:
– claim the seller for price reduction proportionally to the diminishing goods’ value
or rescind the contract,235 unless the seller declares he is ready to deliver goods
free from defects or immediately remove the defects, though when the same
defects occur once again the buyer may definitely rescind the contract when the
defect is crucial. When the seller exchanges questioned goods, he incurs the cost
of delivery; the buyer consumer may choose between removing the defect and
fixing the defects by the seller unless it is not reasonably justified or impossible;
– claim the seller for delivery of the equal quantity of goods, unless the goods were
specified (Article 561 §1–2 CC);
235. The buyer must not rescind the contract when the defect is not significant.
177
– claim for defects reparation when the defect is reparable and the costs of repa-
ration are reasonably justified (Article 561 §3 CC).
If due to physical or legal defect of goods sold the buyer uses the above-
mentioned claims, he may additionally claim the seller for damages caused by the
defect’s existence within the limits set out in Articles 566 and 574 CC.
Recourse Claim of the Seller
Articles 5761–5764 CC provide the seller, who has satisfied the warranty claims of
the consumer buyer, with the right of redress towards previous sellers in the chain
of contracts.236 According to Article 5761 CC, if the item sold does not have the
properties or qualities required by the contract purpose, or promised in public
announcements as referred to in Article. 5561 §2 CC, or was delivered in the state
of incompleteness, the seller, who incurred costs as a result of exercising the rights
under the warranty for physical defects raised by the consumer, can claim back
compensation for the damage suffered from that of the previous retailer responsible
for the defect in question.
IV. Time Limits
200. According to Article 568 §1 CC, claims under the warranty in law for
physical defects expire usually after two years beginning with the day of the goods
delivery to the buyer. The five-year period is provided when building defects are
concerned. However the seller liability arises when the defect was discovered within
two or five years frame since the delivery, the one-year prescription time for buyers
warranty claims begins with defect discovery day (Article 568 §2 CC), but for the
consumer claims the prescription time must not be shorter than two years from
delivery of goods. Claims under the warranty in law for legal defects are limited
with one-year prescription time beginning with the day when the third-person claim
was raised and the buyer was informed of the legal defect existence. When the buyer
learned of it after a third person sued, the one-year expiry term runs with the day
when the court judgment has become final (see Article 576 CC for more details)
§8. QUALITY GUARANTEE
201. Quality guarantee is commonly deemed a source of additional remedies in

case the goods sold are defective. The law regulations do not impose the seller or
producer on providing the buyer with the guarantee document. Usually, the seller or
producer of goods sold is the issuer of guarantee. The issuer is obliged to render
performance to the beneficiary (the buyer) only where the guarantee was entered
within the sale contract terms or separately in the form of a document of quality
guarantee.
236. Implementation of Art. 4 of directive 1999/44/EC of the European parliament and of the Council
of 25 May 1999 on certain aspects of the sale of consumer goods and associated guarantees.
178
Except as otherwise provided in the document of guarantee, if the seller gave the
buyer a document of guarantee signed it is considered that he is obliged to remove
physical defects of goods or deliver goods free from defects in return, if the defects
were noticed to him within the time limit specified in guarantee document (Article
577 §1 CC). If the document does not stipulate the time limit for guarantee liability,
the period is two years since the goods delivery to the buyer. If the seller perform-
ing guarantee obligations has replaced the goods sold with the new ones or made
essential repairs, the guarantee time limit run anew from the moment of returning
the goods to the buyer. When the seller has replaced only a part of the product sold
(Article 581 §1 CC), the guarantee period is prolonged only to this part. In other
cases, the guarantee period is extended with the time when the buyer could not use
the goods due to the defect.
The buyer may raise claims listed in document of guarantee or claims under war-
ranty in law. The seller must not impose the buyer on using claims under guarantee.
Even when quality guarantee is provided, the buyer may enforce warranty in law
claims, depending on his own choice (Article 579 CC).
§9. REMEDIES IN CONSUMER SALE
202. Until 2014, consumer buyers have been given different from warranty – in
law remedies as a result of enforcement of the Consumer Sale Act. The act has been
repealed since 24 December 2014.
§10. PRE-EMPTION RIGHT
203. In the Polish law, the right of pre-emption is regulated in statutory law; the
civil law also provides sanctions when the right has been infringed. There are two
sources of the pre-emption right: a contract and law regulations. Under Article 596
CC, if a law regulation or a legal act reserves a priority of purchase of specified
good to one party in case the other party was selling the good to a third person, the
provisions of CC are to be applied, unless specific regulations provide otherwise.
The right of pre-emption entitles one party (creditor) and imposes the debtor (the
person bound here is the seller) when he sells the goods to the third party on enter-
ing into the sale contract with a third party under the condition the creditor does not
enforce his right. However, the pre-emption right does not entitle the creditor to
demand the seller to enter the sale contract. The seller is free to decide whether he
sells the specified goods, but when he is to enter the sale contract, he should enter
into it the condition term.
The pre-emption right is a subjective right of creditor forming a new legal rela-
tionship when it is used. The creditor enforcing the pre-emption right can make a
declaration of will to the seller in the appropriate form,237 and if he does this, he
buys the specified good for the price and under other terms set out in sale contract
primarily agreed with the third person. When the seller enters the conditional sale
237. The notary act form is necessary when pre-emption right refers to immovable.
179
contract with the third person, he must notify the creditor as to the content of the
sale contract. The right of pre-emption with regard to real estate can be enforced
within a month, and as to other goods – within a week from notifying the creditor
the sale contract was concluded (Article 598 §2 CC). The pre-emption right may be
entered into the land register of the immovable it refers to.
If the seller has sold the goods without the above-mentioned condition, or with
no notice to the creditor, or with false notice (especially as to the price amount),
there are two kinds of sanctions prescribed:
(1) generally the sale contract is valid and the debtor is liable for damage result-
ing from the pre-emption right infringement (Article 599 §1 CC);
(2) the sale contract (entered with the third party) is invalid where the pre-
emption right was addressed by the virtue of statutory regulation to the Trea-
sury or to the local government entities, to the co-owner, or the leaseholder
(Article 599 §2 CC).
The statutory pre-emption right arises as to real estate from (examples):
– Article 166 CC for co-owner of a farm immovable.

– Article 109 of Real Estates Management Act238 for community (local govern-
ment entity).
– Article 3 of Agricultural System Development for real estate agency (KOWR)
acting on behalf of the Treasury or for leaseholders of farm land.239
Under Article 602 §1 CC, the pre-emption right is not transferable, though it is
commonly accepted the right enters into the heritage by the virtue of universal
succession.
238. Ustawa o gospodarce nieruchomościami 21 Aug. 1997 (Dz. U. 2018, item 2204 with changes).
239. Ustawa o ksztaltowaniu ustroju rolnego 11 Apr. 2003 (Dz. U. 2019, item 1362 with changes).
180
204–206
Chapter 5. Building Contracts, Hire of Work and Skills

§1. GENERAL OVERVIEW
204. The analysis of building contract and hire of work and skills should be
commenced with the latter as, pursuant to Article 656 CC, it shall be applied respec-
tively to the following building contract’s claims resulting from the delay by the per-
former of the beginning of the building work or finishing of the object or
performance of building work in a manner which is defective or inconsistent with
the contract, the warranty for the defects of the object built, and also to the inves-
tor’s right to renounce the contract before the object is completed. Hire of work and
skills contract in the Polish law is referred to as the ‘contract of specific works’.
Therefore in the below analysis this term will be used.
§2. CONTRACT OF SPECIFIC WORKS
I. Introductory Remarks
205. The ‘contract of specific works’ is defined in Article 627 CC that states that
as a result of a contract of specific work, the person accepting the order (the con-
tractor) shall assume the obligation to make a specified work, and the person order-
ing the work, to pay the remuneration to him. It is considered to be a mutual
agreement aimed at providing the person ordering the work with the certain out-
come of the work undertaken being always a result of future and individual human
being’s activity. This feature distinguishes a contract of specific work from the sale
agreement. No special form of the contract in required. Although the remuneration
is classified as essentialia negotii, it is not necessary to define it literally or by the
indication of the basis of its calculation in the content of the contract as in this case,
the interpretation clause included in Article 628 CC will apply. According to that, if
the parties did not fix the remuneration nor indicated the basis for its calculation, it
shall be deemed, in case of doubt, that they meant the ordinary remuneration for a
work of that kind. If the remuneration cannot be determined in that way either, the
remuneration due shall correspond to the justified input of labour and other outlays
by the contractor.
II. Rights and Obligations of the Parties
206. The main obligation of the contractor resulting from the contract of spe-
cific consists in performing the work properly and within the agreed timeframe. If
the latter was not literally stipulated by the parties, according to Article 455 CC, it
shall be made immediately upon demand. The contract does not have to be per-
formed by the performer personally, if not agreed otherwise. If it takes place – the
181
206–206 Part II, Ch. 5, Building Contracts, Hire of Work and Skills
one accepting the order is liable, as for his own act or omission, for acts and omis-
sions of the persons with the assistance of whom he performed the obligation.240
The way of performing the work should be stipulated in the contract. The person
accepting the order does not have to abide by the instructions provided by the per-
son ordering the work but in case he does and it may result in destruction or dam-
age of the work, the performer must warn the person ordering the work thereof.
The person ordering the work may control the person accepting the order as to
performing the work in line with the timeframe defined as well as the manner of
performing the order. Out of this right, the entitlement to renounce the contract
arises. If the person who has accepted the order is in delay with beginning or fin-
ishing the work so much that it is unlikely that he could finish it on time, the person
ordering the work may, without setting an additional time limit, renounce the con-
tract even before the lapse of the time limit for making the work.241 Due to the man-
ner – if the person who received the order makes the work defectively or in the
manner inconsistent with the contract, the orderer may ask him to change the mode
of its making and to set him an appropriate time limit. After an ineffective lapse of
that time limit, the person ordering the work may renounce the contract or entrust
another person with the correction of further making of the work, at the cost and
risk of the person who received the order. If the person ordering the work supplied
the material, he may, in the case of renouncing the contract or entrusting another
person with making of the work, demand the material to be returned and the com-
menced work to be released.242
The order is usually made out of the material delivered by the person ordering
the work. Therefore, the person accepting the order shall use them in the proper
manner, render an account, and return the part that has not been used up.243 In case
it is not suitable for the proper making of the work, or if there are other circum-
stances that may prevent its proper making, the person receiving the order shall
immediately notify the person ordering the work about that fact.244 However, the
risk of an accidental loss of, or damage to, the material for the work to be per-
formed shall be borne by its supplier.245
Making of the work may demand cooperation between the person ordering the
work and the person accepting the order. In case such cooperation is lacking, the
person accepting the order may set the person ordering the work an appropriate time
limit with the sanction that after an ineffective lapse of that time limit he will be
entitled to renounce the contract.246
In this case, when the person accepting the order was ready to make it but was
prevented from doing it for causes originating from the person ordering the work,
240. Art. 474 CC.

241. Art. 635 CC.
242. Art. 636 CC.
243. Art. 633 CC.
244. Art. 634 CC.
245. Art. 641 §1 CC.
246. Art. 640 CC.
182
Part II, Ch. 5, Building Contracts, Hire of Work and Skills 206–206
the latter cannot refuse the payment of the remuneration in spite of the work not
being made. He may, however, deduct what the person accepting the order has saved
for not making the work.247
Once the work is completed, the person ordering the work is obliged to receive
the work that the person accepting the order releases to him in accordance with his
obligation.248 From the date of handling the work to the person ordering the work,
the warranty commences. Generally, the regulation of the warranty for sale applies
unless non-conformity arose from a reason inherent in the material supplied by the
person ordering the work.249
The main obligation of the person ordering the work is to pay the remuneration
due to the person who accepted the order and made the work. In the absence of a
different stipulation, the person accepting the order shall receive his remuneration
at the time of delivery of the work. But if the work is to be delivered in parts and
the remuneration has been calculated for each part separately, the remuneration shall
be due upon effecting of each part of the performance.250 The remuneration may fall
into one of the two categories: remuneration by cost estimation or in the form of a
lump sum payment. The first one, which is determined on the basis of the listed
planned operations and the expected costs, is more flexible and may be changed in
the course of performing the order. It will take place in two kinds of situations: when
in the process of the performance of the work an order of the competent state
authority changed the prices or rates previously binding in cost estimation, either
party may demand a respective change of the remuneration agreed upon. This, how-
ever, does not apply to the sums due for materials or rates that were paid before the
change of the prices and rates. The second one refers to necessity to carry out opera-
tions not envisaged on the list of the operations planned as the basis for the calcu-
lation of the remuneration based on cost estimation but only if the list was drawn
by the person ordering the work. It enables the person accepting the order to demand
the appropriate increase of the remuneration agreed upon. If the list of the planned
operations was drawn by the person accepting the order, he may demand an increase
of the remuneration only if, in spite of observing due diligence, he could not have
foreseen the necessity of additional operations. The said increase, once there is the
necessity of considerably increasing the remuneration based on cost estimation, the
person ordering the work may renounce the contract, but he shall do that immedi-
ately and pay to the person who accepted the order of the appropriate part of the
remuneration agreed upon.251
Regarding the remuneration in the form of the lump sum, the person accepting
the order cannot demand an increase of the remuneration even if it was impossible,
at the time of concluding the contract, to foresee the size or the cost of the opera-
tions to be carried out. However, if as a result of a change of the situation which
247. Art. 639 CC.

248. Art. 643 CC.
249. Art. 638 CC.
250. Art. 642 CC.
251. Art. 641 CC.
183
could not have been foreseen and making of the work might mean to the person
receiving the order a glaring loss, the court may increase the lump sum payment or
terminate the contract.252
III. Termination of the Contract of Specific Works
207. Apart from the situations pointed out above, until the work is completed
the person ordering the work may, at any time, renounce the contract by paying the
remuneration agreed upon. However, in such case the person ordering the work may
deduct what the person accepting the order has saved by not making the work.253
Moreover, when performance of the contract depends on the personal qualifications
of the person, accepting the order shall be terminated as a result of that person’s
death or inability to work. If the material was the property of the person accepting
the order and the partly made work is, in the light of the purpose of the contract,
valuable for the person ordering the work, the person accepting the order or his heir
may demand that the person ordering the work receive the material in the condition
in which it actually is; when doing so the person ordering the work shall pay for its
value and the appropriate part of the remuneration.254
It should be also noted that under Article 646 CC the claims resulting from the
contract of specific work are barred by limitation of two years from the day of the
completion of the work, and if the work has not been completed, from the day on
which it had to be completed in accordance with the contract.255
§3. BUILDING CONTRACTS
208. The building contract is considered as a special kind of the contract of spe-
cific works distinguished because of the size of the works.256 It explains why in cer-
tain aspects, the provisions of CC as to the contract of specific works are to be
applied accordingly. As it was mentioned above, it refers to the effects of the delay
by the performer of the beginning of the building work or the finishing of the object
or performance of building work in a manner which is defective or inconsistent with
the contract, to the warranty for the defects of the object built, and also to the inves-
tor’s right to renounce the contract before the object is completed.257 It is defined as
a contract by virtue of which the contractor assumes the obligation to complete the
object specified in the contract, erected in accordance with the plan and the prin-
ciples of technology, and the investor assumes the obligation to perform the acts
required by the relevant provisions and connected with the preparation of the con-
struction work, in particular to provide the building site and the plan, as well as to
252. Art. 642 CC.

253. Art. 644 CC.
254. Art. 645 CC.
255. See A. Brzozowski, in Prawo zobowia zań– cze ść szczegółowa, vol. 7 of System Prawa Prywat-
nego, ed. J. Rajski (Warsaw: C.H. Beck, 2004), 315 ff.
256. Judgment of the Supreme Court of 7 Nov. 1997, II CKN 446/07, OSN No. 4 (1998), item 67.
257. Art. 656 CC.
184
Part II, Ch. 5, Building Contracts, Hire of Work and Skills 208–208
accept the object and to pay the remuneration agreed upon.258 The regulation of CC
as to the building contract should be applied respectively to the contract for repairs
of a building or a construction.259
The building contract, which component part consists of the documentation
required by the relevant provisions, shall be ratified in writing.260 This form is con-
sidered as stipulated for evidentiary purposes only (ad probationem). Therefore, it
shall have the effect that, if it had not been observed, in the case of a dispute, the
evidence by witnesses and the evidence in the form of statement by the parties con-
cerning the performance of the act shall not be admissible.261 It does not apply to
the acts in law in relations between entrepreneurs.262 It should be also mentioned
that, according to the interpretation provision of Article 649 CC, in case of doubt,
it shall be deemed that the performer has undertaken to do all work covered by the
plan, which is a component part of the contract.
Special provisions, of Article 6471 CC, which was adopted in 2003, apply to the
building contracts concluded between an investor and a contractor (general contrac-
tor) who intends to perform it with the assistance of the sub-contractors or further
sub-contractors. In this case, the parties shall specify the scope of works to be done
by the contractor itself or with the assistance of sub-contractors. In order to allow
the investor to maintain a control upon the entities performing the building con-
tract, conclusion of the construction works contract between a contractor and a sub-
contractor requires the consent of an investor. If the investor, within fourteen days
of having been presented by a contractor with a contract with a sub-contractor or its
draft, along with the part of documentation regarding the performance of the works
specified in the contract or its draft, does not notify in writing of any of their objec-
tions or disapprobation, the conclusion of the contract shall be deemed consented to
by the investor. In case of further sub-contractors, the same applies to the require-
ment of consent of investor and contractor. Apart from the requirement of the con-
sent, Article 6471 CC introduces two major modifications of the general rules – first
consists of imposing joint and several liability for the payment of remuneration for
the construction works performed by the sub-contractor upon the party which con-
cludes a contract with a sub-contractor, as well as the investor and the contractor.
And the second refers to the form of the building contract. In case it is concluded
by the investor and general contractor, it must be drawn up in writing under pain of
nullity. The same applies to the building contract concluded between the general
contractor and sub-contractor and the latter and further sub-contractors. This form
is prescribed ad solemnitatem and provisions that differ from regulation of Article
6471 CC should be null and void.
The main obligation of the performer is to construct the object specified in the
contract. If he has taken over from the investor the building site by protocol, he shall
be liable, until the time of handing over the object, on general principles for the
258. Art. 647 CC.

259. Art. 658 CC.
260. Art. 648 CC.
261. Art. 74 §1 CC.
262. Art. 74 §3 CC.
185
damage resulting on that site.263 However, if the documentation, the building site,
the machines and facilities supplied by the investor are not suitable for the correct
performance of the building work or if there are other circumstances that may pre-
vent the correct performance of that work, the performer shall immediately notify
the investor about the fact.264 In case the object made undergo destruction or dam-
age as a result of the defects of the materials, machines or facilities supplied by the
investor or as a result of the work being done in accordance with the investor’s
instruction, the contractor may demand the remuneration agreed upon or its appro-
priate part if he warned the investor of the danger of destruction of, or damage to,
the object or if, in spite of observing due diligence, he could not have found the
defects of the materials, machines or facilities supplied by the investor.265
The main obligation of the investor is to pay the remuneration due to the per-
former. In addition to that, he is obliged, upon the demand of the contractor, to take
over the work done partially, as it is completed, and to pay the appropriate part of
the remuneration. The latter may be stipulated by the parties in the content of the
agreement differently.266
Moreover, CC in this respect was amended by the Act of 8 January 2010 that
entered into force on 16 April 2010. It added provisions on guarantee of agreed
punctual payment for the works performed by the performer.267 The said guarantee
is constituted of the bank or the insurance guarantee, as well as bank letter of credit
or suretyship. The performer’s entitlement to claim thereto cannot be contractually
excluded, and the investor’s withdrawal from the contract resulted from the per-
former’s claim for the guarantee is ineffective.268 The right to claim for the guar-
antee up to the amount of the possible claim resulting from the contract may be
executed by the performer at any time. It does not prevent him from claiming the
entire remuneration to be paid.269 If the performer’s claim to have the guarantee
issues is not satisfied, he may within forty-five days withdraw from the contract at
the investor’s fault.270 It shall be accordingly applied to the sub-contractor in rela-
tion to the performer.271
263. Art. 652 CC.

264. Art. 651 CC.
265. Art. 655 CC.
266. Art. 654 CC.
267. Art. 649(1) CC.
268. Art. 649(2) CC.
269. Art. 649(3) CC.
270. Art. 649(4) CC.
271. See J. Strzêpka, in Prawo zobowia zań– cze ść szczegółowa, vol. 7 of System Prawa Prywatnego,
186
209–210
Chapter 6. Lease, Commercial and Agricultural Leases

209. It must be stated that the Polish law distinguishes between two kinds of
lease: ‘lease’ (in Polish called ‘najem’) and ‘usufruct lease’ (in Polish called
‘dzierżawa’).
The first one takes effect when the subject is passed to the lessee who acquires
the right to use it for definite or indefinite period, in return of the rent due to the
lessor.272 A ‘usufruct lease’ takes effect when the lessee, once the subject of lease is
passed, acquires also the right to collect civil or natural proceeds therefrom.273
The above distinction is based on the history of Polish law as originally the ‘usu-
fruct lease’ was mainly connected with the usufruct of land for agricultural activity
and ‘lease’ was mainly associated with leasing premises in order to inhabit them. At
present the said distinction plays significant role too as, although there are some
regulations that are common for both, in many cases different provisions of Polish
law must be applied to the lease and to the usufruct lease. Moreover, CC also pro-
vides for special regulation that applies to lease of both commercial and residential
premises. It will be analysed separately below.274
The contract of lease may be concluded in any form with one exception. The con-
tract of lease of an immovable property or premises for a period longer than one
year shall be concluded in writing. In the case of non-observance of that form, the
contract shall be deemed to have been concluded for indefinite time.275 The length
of time for which the lease is concluded is also discretional, but the lease concluded
for period longer than ten years shall be treated as an agreement concluded for
indefinite period after the ten years have passed.276 The above rule is modified for
the usufruct lease agreement, as pursuant to Article 695 CC the usufruct lease agree-
ment concluded for a period longer than thirty years shall be treated as an agree-
ment concluded for indefinite period after the thirty years have passed. The above
provisions play a very significant role because as a result of transformation into the
agreement concluded for indefinite period, also the rules of termination change.
§2. RIGHTS AND OBLIGATIONS OF THE PARTIES
210. The main obligation of the lessor is to release to the lessee the thing in a
condition suitable for the use agreed upon. In addition to that, he must maintain it
in such condition throughout the period of the lease with two exceptions – small
outlays connected with the ordinary use of the thing shall encumber the lessee and
272. Art. 659 CC.

273. Art. 693 CC.
274. See J. Panowicz-Lipska, in Prawo zobowia zań– cze ść szczegółowa, vol. 8 of System Prawa Pry-
watnego (Warsaw: C.H. Beck, 2004), 3 ff.
275. Art. 660 CC.
276. Art. 661 CC.
187
210–210 Part II, Ch. 6, Lease, Commercial and Agricultural Leases
if the leased thing has been destroyed as a result of circumstances for which the les-
sor is not liable, he shall have no obligation to restore it to its former condition.277
The liability of the lessor for enabling the lessee to use the object of lease without
any disturbance is complemented with his liability for certain defects thereof.
Therefore if the thing leased has defects which limit its suitability for the use agreed
upon, the lessee may demand the appropriate reduction of the rent for the period of
the duration of such defects. If at the time of being released to the lessee the thing
had defects that made it impossible to use it in the way envisaged in the contract,
and if such defects arose later, and the lessor in spite of being notified about the fact
failed to remove them in an appropriate time, or if the defects cannot be removed,
the lessee may terminate the lease without observing the time limit for the notice.
However, the claims for a reduction of the rent due to the defects of the thing leased,
and the right to an immediate termination of the lease cannot be made by the lessee
if he knew about the defects at the time of concluding the contract.278
The main obligation of the lessee consists in payment of the agreed rent. If the
date of payment of the rent was not specified in the contract, the rent shall be paid
in advance, namely: if the lease is to last no longer than one month, for the whole
period of lease, and if the lease is to last longer than one month or if the contract is
for indefinite time, monthly, not later than on the tenth day of each month.279 To
secure the rent and the additional performances with which the lessee is in arrear
not longer than for one year, the lessor has the statutory right of pledge on the mov-
able things of the lessee brought in to the object of the lease unless such things are
exempt from seizure.280 During the period of the lease, the lessee shall use the thing
leased in the manner specified in the contract, and if the contract does not specify
the manner of use, in a manner corresponding to the nature and designation of the
thing. If, during the period of the lease, there arises the need for making repairs that
encumber the lessor, the lessee shall immediately notify the latter about the fact.281
In particular, the lessee cannot make in the thing leased changes at variance with
the contract or with the designation of the thing.282
Regarding the lease agreement, the lessee can sub-lease the subject of lease or
subject it to use free of charge, if the agreement does not state otherwise. In this
case, both the lessee and the third party are liable to the lessor for the thing leased
being used in accordance with the duties resulting from the contract of lease. The
relationship resulting from the contract of gratuitous use or sub-lease concluded by
the lessee expires at the latest at the time of termination of the relationship of
lease.283 It differs as to the usufruct lease as in this case the lessee cannot sub-lease
the subject of lease or subject it to use free of charge without prior consent of the
lessor.284
277. Art. 662 CC.

278. Art. 664 CC.
279. Art. 669 §2 CC.
280. Art. 670 CC.
281. Art. 666 CC.
282. Art. 667 §1 CC.
283. Art. 668 CC.
284. Art. 698 CC.
188
Part II, Ch. 6, Lease, Commercial and Agricultural Leases 211–211
Pursuant to Article 676 CC, if the lease or usufruct lease agreement does not pro-
vide otherwise, once the lessee improved the subject of lease the lessor can discre-
tionally keep the subject of lease improved with the duty to reimburse the
investment costs borne by the lessee or he can require to have the previous condi-
tion of the subject of lease restored.
§3. TERMINATION OF LEASE AND USUFRUCT LEASE
211. Pursuant to Article 673 CC, a lease or usufruct lease agreement concluded
for indefinite period may be terminated by any party with observance of contractual
notice of termination or if the agreement does not stipulate such – with observance
of the notice of termination defined by law. On contrary, a lease or usufruct lease
agreement concluded for definite period may be terminated only in the circum-
stances defined in the agreement.
Therefore, the lease or usufruct lease agreements concluded for definite period
may be terminated by a party only if a circumstance defined in the agreement
occurs. It is also possible that an agreement provides for an open catalogue of such
circumstances defining them as ‘important reasons such as:’ or ‘substantial breach
of an agreement, like in particular’. If one of the circumstances literally provided
occurs, the party may terminate the agreement. However, if another circumstance
that can be defined in line with the agreement (e.g., ‘important reason’ or ‘substan-
tial breach’) occurs, the party can still terminate the agreement. In case of a court
dispute arising thereon, the court will have to find out if the circumstance could have
been defined like ‘an important reason’ or ‘substantial breach’.
As to the notice of termination, it should be stressed that the parties have discre-
tion when stipulating in the agreement the notice of termination. It may be defined
as the termination forthwith or with observance of a period. However, the legal con-
sequences of the stipulation of notice of termination differ in relation to the agree-
ments concluded for indefinite and for definite period.
In the first case, if the parties do not define in the agreement the notice of ter-
mination, the agreement can be terminated with observance of the statutory notice.
However, the parties may also modify the notice provided by law making it longer
or shorter.
Pursuant to Article 673 section 2 CC, the statutory notice of termination for lease
agreements concluded for indefinite period is as follows:
– if the rent is due for the period longer than a month, the agreement can be ter-
minated with observance of three-month notice, it is effective at the end of the
quarter;
– if the rent is due for every month, the agreement can be terminated with obser-
vance of one-month notice;
– if the rent is due for the period shorter than one month, the agreement can be ter-
minated with observance of three-day notice;
– if the rent is due for one day, the agreement can be terminated one day in advance.
189
The statutory notice concerning the usufruct lease agreement concluded for
indefinite period equals six months before the end of the year.285
Therefore, the above shall be applicable for the lease and usufruct lease agree-
ments concluded for indefinite period that do not stipulate otherwise.
On the contrary, the lease and usufruct lease agreements concluded for definite
period of time may be terminated with observance of the notice stipulated thereon.
The length of notice is subject to the party’s decision. It can be stipulated as ‘forth-
with’, or it can be also defined as a particular period of time calculated in days,
weeks or months. A lease or usufruct lease agreement concluded for definite period
does not contain any provision referring to termination thereof, it finishes only when
it expires.
However, it must be also noticed that in CC there are provisions that authorize
the party to terminate the agreement forthwith if a circumstance defined by law
occurs. The said provisions are applicable to both the agreements concluded for
indefinite and definite period. According to the relevant provisions of the Polish CC,
the lease and usufruct lease agreement can be terminated in the following cases:
– If the subject of lease once handed over to the lessee had the defects that made
using it in a way stipulated in the agreement impossible or if the said defects
appeared later but they were not repaired by the lessor in the timeframe appointed
by the lessee or if the subject of lease has defects which cannot be repaired, the
lessee can terminate the agreement forthwith. However, it does not apply if the
lessee had the knowledge about the defects when the agreement was con-
cluded.286
– If the lessee is in arrear with payment of the rent for at least two full periods of
payment, the lessor may terminate the contract of lease without observing the
time limit for the notice.287
– If the lessee uses the subject of lease in a way contradictory to the provisions of
the agreement or appropriation thereof and continues to do so in spite of the writ-
ten call from the lessor to cease thereof or if the lessee neglects the subject of
lease in a way that subjects it to the loss or damage, the lessor can terminate the
lease agreement forthwith.288
The usufruct lease agreement can be terminated in the following cases:
– If the lessee sub-leased the subject of lease or subjected it to use free of charge
without obtaining the prior consent of the lessor, the lessor can terminate the
agreement forthwith.289
– If the lessee is in delay with payment of the rent due for at least two full periods
of payment or, if the rent is paid annually if the lessee delays in payment for at
285. Art. 704 CC.

286. Art. 664 §2 CC.
287. Art. 672 CC.
288. Art. 667 §2 CC.
289. Art. 698 §2 CC.
190
least three months, the lessor can terminate the agreement forthwith. However,
before that, the lessor must appoint an additional three-month period for the les-
see to pay the outstanding rent.290
Moreover, regarding the usufruct lease agreement, the lessee can claim for
decrease of rent if the civil or natural proceeds collected from the subject of lease
in course of performing the usufruct lease substantially diminished, resulting from
the circumstances the lessee is not responsible for.
§4. SITUATION OF NEW LESSOR
212. Pursuant to Article 678 CC, when the subject of lease is transferred in the
course of lease, the purchaser enters into the lease or usufruct lease agreement in
place of vendor; however, the purchaser is entitled to terminate the lease with obser-
vance of the statutory notice period as defined by law.
CC does not define any timeframe for this termination. However, it should be per-
formed by the new lessor within the nearest term of termination, commencing on
the moment the new lessor gets to know about the lease agreements. The above right
does not apply if the lease agreement was executed for definite period in writing and
with the certified date and that the subject of lease was handed over to the lessee or
if the lease was disclosed in the land and mortgage register kept for the purchased
real estate.
The analysis of the above provision must be started with the explanation of the
term ‘certified date’. Pursuant to Article 81 section 1 CC: ‘If the law subjects the
validity or only the relevant legal effects to the official certification of date, this cer-
tification also binds the parties who have not take part in the legal act (certified
date).’ The above is extended by the subsequent Article 81 section 2 CC that pro-
vides as follows:
The legal act holds the certified date also if:
– the fact of performing the legal act was evidenced by any official document –
from the date of the said document;
– if there is a note of any administrative authority, self-government body or notary
public indicated on the document put – from the date of the said note.
In case of death of a party which signed the document, it is assumed that the
document holds the certified date from the date of death.
The above Article 81 section 1 CC substantially differs from Article 81 section 2
CC as the first one confirms that the parties performed the legal act on a certain day.
Therefore, the date of the legal act and the certificate must be done simultaneously
or on the same date at the latest. On the contrary – Article 81 section 2 CC defines
the certificate that does not have to be issued the same day as of the legal act. The
certified date on the document only confirms that the legal act did not occur later.
290. Art. 703 CC.
191
Pursuant to the judgment of the Supreme Court, Article 678 CC refers to Article 81
section 2 CC but the date of the certified date cannot be later than the date of trans-
fer of the subject of lease.291
§5. LEASE OF COMMERCIAL AND RESIDENTIAL PREMISES
213. To lease of the premises, the general regulation of lease apply with obser-
vance of the below provisions. Some, because of their nature, may apply to the lease
of residential premises only. Their regulation is also supplemented with the Act on
the inhabitants’ protection,292 hereinafter referred to as ‘Act’.
I. Situation of the Lessee of the Premise
214. By virtue of law and irrespective of the property relations existing between
spouses, both of them shall be lessees of the premises if the relation of lease of the
premises supposed to satisfy housing needs of the family they started has been
established during their marriage. Termination of a property co-ownership during
the marriage shall not cause termination of the joint lease of the premises supposed
to satisfy housing needs of the family. However, the court may, by applying respec-
tive provisions on establishing property separation in a judgment, for important rea-
sons and at the demand of one of the spouses, terminate the joint lease of the
premises.293
Special regulation also applies to succession of the rights resulting from the lease
of the premises. Where the lessee of a living accommodation has deceased, the rela-
tion of lease of a living accommodation shall be entered into by: the spouse not
being a co-lessee of such accommodation, children of the lessee and of the lessee’s
spouse, other persons the lessee was obliged to maintain or pay alimony dues to,
and the person the lessee actually co-habited with. However, it will take place only
if these persons inhabited the accommodation together with the lessee until his
death. They may terminate the relation with the observance of statutory time limits
even if the contract of lease was concluded for a specified time period. Where the
relation of lease of a living accommodation is terminated by a notice by some of
such persons, the termination shall be valid with respect to the persons who gave an
appropriate notice. If there are no persons referred to above, the relation of lease of
a living accommodation expires.294
The CC also imposes joint liability for payment of rent and other due charges on
the lessee and adult persons permanently residing with him. However, the liability
of the latter is limited to the amount of rent and other charges due for the period of
291. Judgment of the Supreme Court of 5 Feb. 2009, I CSK 325/08, LEX No. 490437.
292. Ustawa z dnia 21 czerwca 2001 r. o ochronie praw lokatorów, mieszkaniowym zasobie gminy i o
zmianie Kodeksu cywilnego.
293. Art. 680(1) CC.
294. Art. 691 CC.
192
their permanent residence.295 The situation of the lessee is, however, intensified as
to the protection of the rights of the lessee to use the premises the provisions on the
protection of ownership shall apply.296
II. Termination of Rent
215. The CC makes the distinction between termination of lease agreement as

such and termination of lease rent as one of the elements of the lease agreements.
Pursuant to Article 6851 CC, the lessor may increase the lease rent by termination
of the hitherto lease rent. The termination is effective at the end of the next month.
The above Article 6851 CC was adopted in 2001 but, as to its temporary provi-
sions, it is applicable to the lease and usufruct lease agreements of the commercial
premises concluded after 1 January 2005 only.
As to the termination of the lease and usufruct lease agreements concluded for
indefinite time, the lessee facing the termination of the lease rent provided by the
lessor, may terminate the agreement with observance of the contractual or in its
absence – statutory notice. However, it appears that the increased rent due since it
became effective until expiry of the agreement as a result of its termination done by
the lessee is due to the lessor. Therefore, the termination of the agreement provided
by the lessee does not suspend the enforceability of the increased rent. The situation
differs when termination of rent regards the agreement concluded for definite
period. Facing the increase, the lessee cannot terminate the agreement with obser-
vance of the notice defined by law, but it has to do that in line with the relevant pro-
vision of the agreement. If the agreement does not stipulate a provision authorizing
the lessee to terminate the agreement if the rent is increased, the lessee cannot do
that and the rent becomes due. The only way in which the lessee could defend him-
self against the increase is to raise a claim of abuse by the lessor at the proceeding
commenced by the lessee for payment of the due increased rent.
III. Special Regulation of the Act
216. The Act, passed in June 2001, applies also to the lease agreements that were
concluded before the adoption thereof; therefore, all the lease agreements that have
not expired yet must be analysed by reference to the Act.
The Act provides for following rules concerning termination of an existing lease:
(1) The lessor can terminate the lease agreement with one-month notice if the les-
see:
– uses the premise in the way that is contradictory to the relevant provisions
of the lease agreement or does not fulfil his/her duties causing damage to
the subject of lease or causes damage to the subject of lease or makes the
use of other premises impossible;
295. Art. 688(1) CC.

296. Art. 690 CC.
193
– is in delay of payment of the rent in the amount exceeding the amount due
for three full periods of payment, but there must be a call for payment with
the additional one month assigned to the lessee;
– sub-leased the subject of lease without the prior written consent of the les-
sor, if required;
– uses the premise that has to be cleared because of the demolition or reno-
vation of a building. In this case, the lessor has to secure the lessee of a sub-
stitute premise and cover his removal expenses; however, the lessee must
not live in the substitute premise for the period longer than a year when the
lessor has to make the renewed premise available for the lessee for the same
rent as before the renovation.
Or
– If the rent does not exceed 3% of the reconstructive value of the premise (as
defined by the Act), the lessor can terminate the lease agreement:
– with six-month notice if the lessee has not been living in the premise for more
than twelve months;
– with one-month notice if the lessee has the legal title to other premise located
in the same city and the lessee can use that premise and it fulfils the conditions
as to the substitute premise.
Or
– If the lessor wants to inhabit his own premise and the lessee has a legal title to
other premise that he can occupy on the same conditions as he would have when
occupying the substitute premise or if the lessee provided the substitute premise
to the lessor, the lessor can terminate the lease agreement with six-month notice.
Or
– If the lessor wants to inhabit his own premise and the lessee does not have the
legal title to other premise that he can occupy on the same conditions as he would
have if occupying the substitute premise or if the lessee did not provide the sub-
stitute premise to the lessor, the lessor can terminate the lease agreement with
three-year notice. However, if the lessor did not inhabit his own premise or
ceased inhabiting it before six months from the date of expiry of the lease agree-
ment, the lessee is entitled, in his discretion, to return to the premise on the same
conditions as hitherto or to claim from the lessor for the difference in the lease
rent paid actually and the rent paid to the lessor due for one year. If the lessee
decides to return to the premise, the lessor has to cover the moving expenses.
Moreover, the lessor has to pay to the lessee the penalty in the amount of 15% of
the reconstructive value of the premise (as defined by the Act). However, if the
lessee is more than 75 years old when the lease agreement is terminated and he
does not hold a legal title to any premise and he does not have any relatives
obliged to perform maintenance for him, the termination takes its effect when the
lessee dies.
194
Moreover, the Act together with the regulation of the Polish Code of Civil Pro-
cedure provide for the following special rules governing the enforcement:
– If the premise is used without any legal title or the lease was terminated in accor-
dance with the rules of termination established by the Act, the lessee shall return
the premise to the lessor.
– To enforce the restitution of the premise a court order of eviction is required.
– The court in order can adjudicate to the debtor (e.g., the former lessee, herein-
after referred to as the debtor) the right to claim for a social premise from the
local community.
– When the above court order is legally valid, the enforcement procedure is con-
ducted by the court bailiff.
– The court bailiff, before starting the enforcement proceedings, must call the
debtor to quit the premise voluntarily.
– If the debtor does not fulfil his duty voluntarily, the bailiff starts the enforcement
proceedings. However, if the debtor is entitled to the social premise, the enforce-
ment cannot be conducted until the local community provides the said premise.
Moreover, even if the social premise is not adjudicated to the debtor by the court
but the debtor neither has a legal title to other premise nor found a premise where
he could stay, the bailiff shall call the local community to provide a temporary
premise to the debtor.
– However, the bailiff cannot suspend the enforcement procedure because of lack
of the social or temporary premise offered by the local community, if the creditor
(i.e., the former lessor) provides the temporary premise to the debtor.
– The temporary premise must meet the criteria set out in the provision of Article
1046 section 6 of Polish Code of Civil Procedure: it must be inhabitable, must
have at least 5 square metres per person, be located in the same or neighbouring
city, if as a result of moving to a neighbouring city the conditions of life of the
debtor are not aggravated significantly.
– The court order, which does not adjudicate to the debtor the right to claim for the
social premise from the local community, cannot be enforced in the period start-
ing from 1 November until 31 March.
– The persons who occupy the premise without a legal title are obliged to pay to
the creditor the compensation due until the premise is vacated.
– The above compensation equals the lease rent that could be obtained by the credi-
tor if the premise is leased on arms’ length terms.
– If the local community does not provide the social premise to the debtor entitled
thereto, the creditor can claim from the local community the additional
compensation.
195
217–217
Chapter 7. Compromise Settlement

217. The compromise settlement may be concluded when the dispute was borne
or at least a doubt as to the relationship existing between the parties. Therefore, the
settlement does not lead to creation of the new contractual link but results in speci-
fication or modification of the existing relation.297 Pursuant to Article 917 CC by a
settlement, the parties shall make mutual concessions within the scope of a legal
relationship between them in order to eliminate uncertainty as to the claims result-
ing from that relationship or to secure their performance or in order to evade an
existing or potential dispute. The settlement is defined as a mutual agreement as
both parties are requested to set up some concessions. Therefore, an agreement in
which only one party agrees to cede cannot be considered as the settlement. Inter-
ruption of the course of prescription should be considered as one of the main effects
thereof.298 In case by virtue of the settlement the one party became obliged to a new
performance replacing the previous one, it is agreed that the performance became
novated.299
The general rules of the acts in law apply except for the mistake as in this respect
CC provides for a special provision. The avoidance of the legal effects of a settle-
ment concluded by mistake shall be admissible only if the mistake pertains to a state
of fact which, in accordance with the contents of the settlement, both parties con-
sidered undisputable, and the dispute or uncertainty would not have arisen if at the
time of concluding the settlement the parties knew the true state of things. How-
ever, it should not be possible to evade the legal effects of a settlement following
the discovery of evidence concerning the claims to which the settlement pertains
unless the settlement was concluded in bad faith.300
297. See J. Jezioro, in Kodeks cywilny: Komentarz ed. E. Gniewek (Warsaw: C.H. Beck, 2008), 1427;
M. Pyziak-Szafnicka, in Prawo zobowia zań– cze ść szczegółowa, vol. 8 of System Prawa Prywat-
nego, ed. J. Panowicz-Lipska (Warsaw: C.H. Beck, 2004), 853 ff.
298. Judgment of the Supreme Court of 3 May 1974, II CR 508/69, Orzecznictwo Sa dów Polskich no.
10 (1975), item 213.
299. Judgment of the Supreme Court of 15 Oct. 1999, III CKN 373/98, Wokanda no. 1 (2000), 4.
300. Art. 918 CC.
196
218–218
Chapter 8. Suretyship
218. Pursuant to Article 876 section 1 CC by an agreement of suretyship, the
surety shall undertake to perform the obligation with respect to the creditor where
the debtor fails to perform it. It is considered to be an obligation creating the per-
sonal security imposed on the surety. The agreement is constructed as a kind of the
defined agreement of the accessorial character that is always connected with some
other obligation, being secured thereby. However, it must always be referred to
some specific obligation of the debtor as according to the judgment of the Polish
Supreme Court once it refers to unspecified group of the debtor’s debts or all of
them, it is considered invalid.301 However, it shall be possible to assume suretyship
for a future debt to the amount specified in advance and suretyship unlimited in time
for a future debt may be revoked at any time before the debt arises.302
The suretyship provided in the Polish CC does not have subsidiary character but
is rather treated as causing the equal-rank liability. If the agreement does not stipu-
late otherwise, the surety shall be liable as a joint and several co-debtor.303 The
scope of the surety’s obligation shall be determined each time by the scope of the
debtor’s obligation. However, an act in law performed by the debtor with his credi-
tor after the granting of suretyship cannot increase the obligation of the surety.304 It
may also be the case that the obligation of the surety turns into the principal debt if
the suretyship was granted for the debt of a person who could not have assumed an
obligation because of a lack of capacity for acts in law. It takes place only if at the
time of assuming suretyship he knew about the lack of the legal capacity of that per-
son or could have easily learned about it.305
The agreement requires a special form as the declaration by the surety must be
made in writing under pain of nullity.306 It does not refer to the statement of the
creditor which may be made even implicitly.
The CC provides with the specific rules defining the way of execution of the sure-
ty’s liability. First, if the debtor delays performing his obligation, the creditor must
immediately notify the surety about the fact.307 If it comes to the litigation, the
surety may raise against the creditor all those defences to which the debtor is
entitled; in particular, the surety may set-off the receivable debt that the debtor has
against the creditor and he shall not lose the right to such defence even if the debtor
has renounced them or recognized the creditor’s claim. In the case of the debtor’s
death, the surety cannot resort to a limitation of the heir’s liability resulting from
the provisions of inheritance law.308 When the vindication commences, the surety
against whom the claim is vindicated shall immediately notify the debtor about that
fact and call upon him to join the case. If the debtor fails to join the case, he cannot
raise against the surety those defences that he had against the creditor and that the
301. Judgment of the Supreme Court of 29 May 2005, V CK 827/04, Prawo Bankowe nos 3–4 (2006).
302. Art. 878 CC.
303. Art. 881 CC.
304. Art. 879 CC.
305. Art. 877 CC.
306. Art. 876 §2 CC.
307. Art. 880 CC.
308. Art. 883 CC.
197
218–218 Part II, Ch. 8, Suretyship
surety had not raised because he was not aware of them.309 The surety shall imme-
diately notify the debtor about his payment of the debt for which he has given the
suretyship. Should he fail to do that and should the debtor perform his obligation,
the surety cannot demand from the debtor the reimbursement of what he paid to the
creditor unless the debtor has acted in bad faith.310 And if the suretyship was given
with the knowledge of the debtor, the latter shall immediately notify the surety
about the performance of the obligation. Should he fail to do that, the surety who
has satisfied the creditor may demand from the debtor the reimbursement of what
he has paid to the creditor, unless he has acted in bad faith.311
In order to protect the position of the surety, he is given a right to demand that
the creditor call upon the debtor to pay the debt or give notice at the earliest speci-
fied date. He has this entitlement only when the time limit for the payment of the
debt is not specified or if the payment of the debt depends on notice, the surety may,
after the lapse of six months from the date of granting the suretyship, and in the case
of a future debt, from the date on which the debt arose. If the creditor fails to com-
ply with that demand, the surety’s obligation shall expire (Article 882 CC).312
309. Art. 884 CC.

310. Art. 885 CC.
311. Art. 886 CC.
312. See Z. Radwański, in Prawo zobowia zań– cze ść szczegółowa, vol. 8 of System Prawa Prywat-
nego, ed. J. Panowicz-Lipska (Warsaw: C.H. Beck, 2004), 397 ff.
198
219–219
Chapter 9. Pledge
219. Pledge in the Polish law is considered to be a limited proprietary right and
therefore it is placed in the Book 2 of the CC – ownership and other property
rights.313 Pledge is one of the tools that secures the claim. Its definition is included
in Article 306 CC pursuant to which in order to secure a specified receivable debt,
a movable thing may be encumbered with a right by virtue of which the creditor
can claim satisfaction from the thing regardless of whose property it has become,
and with priority over the personal creditors of the owner of the thing, except those
who by virtue of statutory law have special priority. A pledge may also be estab-
lished to secure a future or conditional receivable debt.
The pledge results from the contract concluded between the owner and the credi-
tor. Moreover, it is drafted as a real law act as it also requires the release of the thing
to the creditor or to a third party agreed upon by the parties. However, if the thing
is held by the creditor, the contract shall suffice for the establishment of the pledge.
The contract is to be concluded by the pledgor – being the owner and the pledgee
who receives security. However, it must be stressed that the pledge may be estab-
lished by both the personal debtor of the creditor and by the third party. In the first
case, the personal and real liability coincides while in the second – two different per-
sons become liable. In case when the pledgor is not a debtor may, regardless of the
defence to which he is entitled personally against the pledgee, raise the defences to
which a debtor is entitled.314 It should be also noted that the provisions on the acqui-
sition of ownership of a movable from a person not authorized to dispose of that
thing shall apply correspondingly to the establishment of a pledge.315
Apart from the pledge regulated by the CC, three different kinds of pledge may
be distinguished – registered pledge, statutory pledge and treasury pledge. The first
one derives from the Act of 6 December 1996 on registered pledge and register of
pledges. Previously it might have been established by the pledgees listed in Article
1, encompassing the State Treasury, banks and financial institutions, only. This pro-
vision was amended in 2009 and since then this personal limitation does not exist.
The contract of the registered pledge must be concluded in writing, and the pledge
must be entered into the register kept by the court. The object of the pledge may be
left in the possession of the pledgee which constitutes one of the main differences
distinguishing this type of the pledge. Statutory pledge is established by virtue of
the provision of law. As an example Article 670 section 1 CC stating that in order
to secure the rent and the additional performances with which the lessee is in arrear
not longer than for one year, the lessor shall have the statutory right of pledge on
the movable things of the lessee brought in to the object of the lease unless such
things are exempt from seizure may be quoted. The treasury pledge results from the
313. See J. Golaczyñski, in Prawo rzeczowe, vol. 4 of System Prawa Prywatnego, ed. E. Gniewek (War-
saw: C.H. Beck, 2007).
314. Art. 315 CC.
315. Art. 309 CC.
199
220–220 Part II, Ch. 9, Pledge
Tax Ordinance of 29 August 1997 and provides the State Treasury and self-
government units with the right to establish a pledge on all movables and transfer-
able rights of the debtor and its spouse if the value of the particular movable or right
exceeds Polish Zloty (PLN) 10,000.
§2. THE PLEDGE CONTRACT AND ITS CONTENT
220. In general, the pledge secures the particular debt. However, it also secures
claims connected with the secured debt, in particular claim for interest not being
prescribed, compensation resulting from non-performance or improper performance
of the obligation, for the refunding of outlays on the thing and awarded costs of the
proceedings.316 As it was mentioned before, the pledge has the accessorial nature
and therefore it cannot exist without the secured debt. It explains why the transfer
of a receivable debt secured by a pledge results in the transfer of the pledge and if
the receivable debt is transferred with the exclusion of the pledge, the pledge
expires. The pledge cannot be transferred without the receivable debt that is secured
by it.317
Given the nature of the pledge as the limited proprietary right, the owner of the
object of the pledge is allowed to dispose it. Moreover, the stipulation whereby the
pledgor assumed with respect to the pledgee the obligation not to transfer or encum-
ber the thing before the expiry of the pledge, shall be null and void.318
The obligations of the pledge encompass the following: if the thing has been
released to the pledgee, he should take care of its preservation in accordance with
the provisions for safe-keeping against consideration and after the expiry of the
pledge he ought to return the thing to the pledgor;319 if the thing brings fruits he
may, if not agreed otherwise, collect them and count them towards the receivable
debts and the claims connected therewith but after the expiry of the pledge he shall
be obliged to present the accounts to the pledgor.320 If the pledgee has made outlays
on the thing to which he was not obliged, the provisions on the management of other
person’s affairs without mandate shall apply.321 If the thing encumbered with pledge
is exposed to loss or damage, the pledgor may demand either that the thing be
placed in a court deposit or returned to him with the simultaneous establishment of
another security of the receivable debt or the sale of the thing. Once the thing is
sold, the pledge shall be transferred upon the price obtained, which must be placed
in a court deposit.
316. Art. 314 CC.

317. Art. 323 CC.
318. Art. 311 CC.
319. Art. 318 CC.
320. Art. 319 CC.
321. Art. 320 CC.
200
Part II, Ch. 9, Pledge 221–222
§3. SATISFACTION OF THE PLEDGEE AND EXPIRY OF THE PLEDGE
221. Pursuant to Article 312 CC, the satisfaction of the pledgee from the encum-
bered thing shall take place in accordance with the provisions on court execution
proceedings. He may however, claim satisfaction from the thing encumbered by the
pledge regardless of the limitation of the liability of the debtor resulting from the
provisions of inheritance law and also those that the debtor renounced after the
establishment of the pledge.322 And the limitation of a receivable debt secured by
the pledge shall not infringe the pledgee’s right to obtain satisfaction from the
encumbered thing that also applies to a claim for interest or other accessory perfor-
mances.323
The pledge expires when the pledgee waives it, in case of transfer of the receiv-
able debt with the exclusion of the pledge and if the pledgee returns the thing to the
pledgor, regardless of any stipulation to the contrary. It will not take place if the
receivable debt secured by the pledge is encumbered with a right of a third party or
seized for the benefit of that person in spite of the encumbered thing being acquired
by the pledgee to be his property.324
§4. PLEDGE ON RIGHTS
222. The CC also points out the special category of the pledge that is the pledge
on rights. It refers to the rights that are transferable only. Provisions on the pledge
on movable things shall apply correspondingly to the pledge on rights with the
observance of the special provisions defining some distinctions.
The provisions on the transfer of a right shall apply correspondingly to the estab-
lishment of the pledge on right with one minor modification – the contract of the
establishment of the pledge on rights must be concluded in writing with an authen-
ticated date even if a contract on the transfer of that right does not require such
form. Moreover, if its establishment on a receivable debt does not take place by the
release of a document or an endorsement, the establishment of the pledge shall
require a notification of the creditor by the pledgor in writing.325
The provisions setting up the rules as to performance of the obligation by the
debtor must be also stressed. The pledgor of the receivable debt and the pledgee
shall be jointly entitled to receive the performance. Each of them may demand the
performance to both of them jointly or the depositing of the object of the perfor-
mance with the court.326 If the debtor of a receivable debt encumbered by a pledge
has made the performance before the secured receivable debt becomes due, both the
pledgor and the pledgee may demand that the object of the performance be placed
in a court deposit.327 And if a pecuniary receivable debt secured by a pledge is
already due, the pledgee, instead of the payment, may demand that the pledgor
322. Art. 316 CC.

323. Art. 317 CC.
324. Art. 325 §2 CC.
325. Art. 329 CC.
326. Art. 333 CC.
327. Art. 334 CC.
201
222–222 Part II, Ch. 9, Pledge
transfer upon him the encumbered receivable debt, if it is pecuniary, to the amount
of the receivable debt secured by the pledge. The pledgee may vindicate his part of
that receivable debt with precedence to the part of the pledgor.328
328. Art. 335 CC.
202
223–224
Chapter 10. Loans

223. The contract of loan is regulated by CC as an agreement pursuant to which

the lender shall assume the obligation to transfer to the borrower the ownership of
a specified sum of money or a specified amount of things designated only as to their
kind, and the borrower shall assume the obligation to return the same sum of money
or the same amount of things of the same kind and the same quality.329 Moreover,
the contract of loan is also subject of the regulation of the Banking Law and the Act
on Consumer Credit, which was adopted on 12 May 2011 and which implemented
the Council Directive 2008/482/EC of 23 April 2008 on consumer credit. Both of
them will be analysed in details below.
According to the doctrine, the contract of loan is considered to be a contractual
agreement, contrary to the previous opinions on its real character. It allows a bor-
rower to take advantage of the object passed by the lender for the specified period
of time with the obligation to return the same amount of the loan and not this same
object. The contract of loan may be drafted as a payable one or free of charge. In
case of the first type – usually the interests accrued are considered as remuneration.
It does not require any special form, except for the contract of loan whose value
exceeds PLN 1,000, which shall be concluded in document form. This form, how-
ever, is considered as ad probationem and pursuant to Article 74 section 2 CC does
not apply to the relations between the entrepreneurs.
§2. OBLIGATIONS OF THE PARTIES
224. The main obligation of the lender is to provide the borrower with the sub-
ject of the loan. In case the date of fulfilment of this duty was not specified in the
contract, Article 455 CC pursuant to which ‘if the time limit for the performance is
not specified and does not follow from the nature of the obligation, the performance
shall be made immediately upon demand’ applies. The lender’s duty ceases in two
cases: if he renounces the contract if the return of the loan is doubtful due to the
bad financial standing of the other party. The lender, however, does not have that
right if at the time of concluding the contract he was aware of the bad financial
standing of the other party or could have easily learned about it330 or when the
claims of the borrower for the delivery of the object of the loan gets prescribed. It
takes place after a lapse of six months from the time when that object had to be
released.331 In addition to that, the lender is liable for the defects of the object of the
loan. In this case, he should redress the damage made to the borrower by the fact
that, being aware of the defects, he did not notify the latter. It does not apply if the
borrower could have easily noticed the defects.332
329. Art. 720 §1 CC.

330. Art. 721 CC.
331. Art. 722 CC.
332. Art. 724 CC.
203
225–225 Part II, Ch. 10, Loans
The main obligation of the borrower is to return the loan to the lender. If the time
limit of the return of the loan is not specified, he shall be obliged to return the loan
within six weeks from the notice given by the lender.333
§3. SPECIAL REGULATIONS
225. In the Consumer Credit Act, the consumer credit is distinguished from the
CC regulation because one of the parties entering thereto is a consumer. The Con-
sumer Credit Act defines the contract of consumer credit as an agreement whereby
a creditor grants or promises to grant to a consumer a credit in any form, including
loan and bank loan.334 It requires that it is concluded in the written form,335 speci-
fies its content and provides a consumer with the special right to withdraw from the
contract within the period of fourteen days from its conclusion.336
Bank loan is regulated in the Banking Law of 29 August 1997. These provisions
apply to the credit that was transferred by the bank and that relates to money only.
The bank credit must always be payable with the interests as remuneration. Usually
the bank standard forms of contracts and rules supplement the agreement.
333. Art. 723 CC.

334. Art. 3 of the Consumer Credit Act.
335. Art. 29.1 of the Consumer Credit Act.
336. Art. 52 of the Consumer Credit Act.
204
226–226
Chapter 11. Contracts with the Government and Other Public

Administrations
226. The special regulation of the contracts to be concluded with the govern-
ment, self-government and other public authorities is included in Public Procure-
ment Law of 29 January 2004. Pursuant to the general rule, set up in Article 139
public procurement contracts shall be regulated by the provisions of CC, unless the
provisions of the Public Procurement Law provide otherwise. Therefore, it is nec-
essary to analyse the special regulation provided thereby in order to present the dif-
ferences.
The procurement contract shall, under the pain of nullity, require a written form,
unless separate provisions provide for a special form. It also should be open and be
made accessible pursuant to rules laid down in the provisions concerning public
information.337 The scope of the contractor’s performance resulting from the pro-
curement contract must be identical with the commitment undertaken in the tender
and in the part that it exceeds the object of contract specified in the specification of
essential terms of contract, the President of the Procurement Office may apply to
the court for invalidation.338 Moreover, the authority of the President of the Pro-
curement Office to require a court invalidation of the procurement contract applies
in the following cases:
– if the awarding entity used the negotiated procedure without publication or single
source procurement in breach of provisions of the Public Procurement Law;
– if the awarding entity failed to place the contract notice in the Public Procure-
ment Bulletin or submit it to the Publications Office of the European Union;
– if the awarding entity prevented entrepreneurs who were not admitted to partici-
pate in a dynamic purchasing system so far from submitting indicative tenders or
prevented entrepreneurs who were admitted to participate in a dynamic purchas-
ing system from submitting tenders in a contract award procedure conducted
under framework of that system;
– if the awarding entity awarded a contract under framework agreement prior to the
expiry of ten or five days time limit defined by the Public Procurement Law;
– if the awarding entity used the request-for-quotation in the breach of provisions
of the Public Procurement Law.339
However, in case the awarding entity had reasonable grounds to believe that it
acts in compliance with the Act and the contract was concluded respectively five
days after the notice of intention to conclude a contract was placed in Public Pro-
curement Bulletin or ten days after such notice was published in Official Journal of
the EU or the awarding entity had reasonable grounds to believe that it acts in com-
pliance with the Act, and the contract was concluded after the expiry of five or ten
days’ time limits – the contract should not be invalidated.340 The annulment of the
337. Art. 139 of Public Procurement Law.

339. Art. 146 §1 of Public Procurement Law.
205
226–226 Part II, Ch. 11, Public Contracts
contract shall be in effect from the moment of its conclusion.341 The authorization
of the President of the Procurement Office expires after four years from the day, on
which the contract was concluded or modified.342
A procurement contract shall be concluded for a definite duration. However, the
awarding entity may conclude a public contract, having as its object periodical or
continuous services, for a period longer than four years, if the performance of a con-
tract results in lower costs of the performance of contract for a longer period of time
than the costs of the performance of contract in four-year period or it is justified by
the payment capacity of the awarding entity or the scope of envisaged outlays and
the period necessary for repayment.343 Contracts may be concluded for indefinite
duration only in cases provided in the Public Procurement Law if the contract object
is the supply of water via the water and sewage network or disposal of sewage to
such a network or gas from the gas grid or heat from the heat distribution network
or license for software. Contracts may also be concluded for indefinite duration
where the contract objects are services of transmission and distribution of electric-
ity or natural gas.344
Co-contractors, in line with Article 141, are jointly and severally responsible for
performance of the public contract and for provision of security of due performance
of the contract. The Public Procurement Law also provides for a regulation allow-
ing renouncing a contract. It may take place in the event of a material change of
circumstances which causes that the execution of the procurement contract is no
longer in the public interest, and which could not have been foreseen at the time of
concluding the contract, within a period of thirty days from the date on which they
became aware of these circumstances. In this case, the contractor may demand
remuneration due for the performed part of the procurement contract.345
Also a special regulation as to the security on due performance of the contract,
which may be requested from the awarding entity to cover the claims in respect of
non-performance or improper performance of the contract, must be taken into
account. The security may be provided at the contractor’s choice in one or several
of the following forms cash, bank sureties or guarantees of collective savings-loan
fund, however the surety of collective savings – loan fund is always a financial
surety, bank guarantees, insurance guarantees or sureties granted by entities,
referred to in Article 6b paragraph 5 item 2 of the Act of 9 November 2000 on the
establishment of the Polish Agency for Enterprise Development.346 With the
approval of the awarding entity, a security may be provided also bills of exchange
with the surety of bank or collective savings-loan fund, by establishing a pledge on
securities issued by the State Treasury or unit of territorial self-government or by

342. Art. 144a §2 of Public Procurement Law.
206
Part II, Ch. 11, Public Contracts 226–226
establishing a registered pledge, in accordance with the principles laid down in the
provisions concerning registered pledges and the pledge register.347 In the course of
the performance of procurement contract, the contractor may change the form of
security to one or several of those listed above.348

207
227–227
Chapter 12. Contract of Partnership

227. Pursuant to Article 860 section 1 CC by a contract of partnership, the part-

ners shall undertake to promote the attainment of a common economic objective by
acting in a specified manner and, in particular, by making contributions. The most
crucial element of the agreement is defining the ‘affectio societatis’ that distin-
guishes the contract of partnership from other contractual agreements. In case it is
adopted by only some partners or in case its lack makes it impossible to assume that
the contract was validly performed.349 The said common economic objective shall
not be limited to earning purpose only as it may also encompass other positive out-
comes rather than only aimed at multiplication of the gains.350 The partners may be
both private individuals and the companies, and there may be more than only two
partners involved. Therefore, bearing in mind that each partner is at the same time
the distinct party, the contract of partnership is referred to as the multi-party agree-
ment.
What must be stressed is the fact that the contract of partnership creating a stable
contractual relationship between its parties does not produce a legal person with the
legal capacity. The partnership cannot be recognized as organizational units not
being legal persons to whom Article 33(1) CC refers. The mentioned provision
allows applying accordingly the provisions on legal persons to such organizational
units that have been granted the legal capacity by virtue of statutory law. However,
the partnership as not being granted the legal capacity, on contrary to the personal
commercial companies, is revoked to be considered organizational unit. It cannot
be treated as an independent entrepreneur, either while the partners receive such a
status. However, it obtains the position of the employer.351
The contract of partnership shall be made in writing,352 which constitutes ad pro-
bationem form and implies the manner of proving the fact of entering into the agree-
ment as well as its content.
As according to the definition of the ‘contract of partnership’ the partners are
obliged to approach the common economic purpose, the commitment of each part-
ner must be specified in the agreement. It does not imply the duty of each to pro-
vide the contribution as Article 860 section 1 CC only mentions that contribution
may be one of the manners of action. However, if it is the case – a partner’s con-
tribution may consist in contributing property or other rights into the partnership or
in providing services.353 In this first case, where a partner has undertaken to con-
tribute the ownership of things to the partnership the provisions relating to sale shall
apply respectively to the performance of that obligation as well as to the liability
349. See J. Gudowski, in Komentarz do kodeksu cywilnego ed. G. Bieniek, vol. III, part 2 (Warsaw: Lex-
isNexis, 2009), 849.
350. See Z. Radwański & J. Panowicz-Lipska, Zobowia zania – cze ść szczegółowa (Warsaw: C.H. Beck,
2008), 317.
351. See judgment of the Supreme Court of 10 May 1996, I PRN 63/95, OSNAPiUS no. 23 (1996), item
355.
352. Art. 860 §2 CC.
353. Art. 861 §1 CC.
208
Part II, Ch. 12, Contract of Partnership 228–228
arising from warranty and to the risk of loss or damage of things while if the things
are to be contributed for use only, the provisions relating to lease shall apply respec-
tively.354 It shall be presumed that the partners’ contributions are of equal value.355
This presumption may be reversed by the person willing to prove otherwise. As the
contributions made by the partners constitute a common property of the partners,
none of them can make any disposition of his share in the partners’ common prop-
erty or of his share in particular elements of such property. During the partnership’s
lifetime, a partner cannot demand the division of the partners’ common property and
also during the partnership’s lifetime a partner’s creditor cannot demand satisfac-
tion either from his share in the partner’s common property or from his share in par-
ticular elements of such property.
Entering into the contract of partnership also results with joint and several liabil-
ity of the partners for the partnership’s obligations.356 This provision is absolutely
binding and therefore cannot be modified by the agreement. The creditor may com-
mence enforcement from any of the partners and from any kind of the partner’s
property as the regulation does not require that the enforcement must be first aimed
at the common property of the partners.
Each partner’s proportion to share the profits and losses and their part should be
defined in the contract of partnership. The proportion of a partner’s share in the
profits, provided for by the deed of partnership shall also apply, in case of doubt, to
his share in losses. It is admissible to exempt certain partners from sharing in the
losses, but no partner can, however, be excluded from his sharing in the profits. In
case of lack of the relevant provision of this kind – each partner shall be entitled to
an equal share in profits and shall share the losses in the same proportions notwith-
standing the nature and the value of his contribution.357 A partner may claim the
division and payment of the profits only after the dissolution of the partnership.
Where, however, the partnership has been formed for a longer period, the partners
may demand the division and payment of the profits at the end of each financial
year.358
§2. THE PARTNERS’ DUTIES AND OBLIGATIONS
228. Apart from making the contribution, one of the main duties of the partner
is to manage the partnership’s affairs. Each partner may, without any previous reso-
lution of the partners, manage the affairs not exceeding the scope of ordinary acts
of the partnership. Where, however, prior to the completion of such affair, even one
of the remaining partners objects to the management thereof, a resolution of the
354. Art. 862 CC.

355. Art. 861 §2 CC.
356. Art. 864 CC.
357. Art. 867 CC.
358. Art. 871 CC.
209
229–229 Part II, Ch. 12, Contract of Partnership
partners shall be required. Additionally, each partner may, without any previous
resolution of the partners, perform an urgent act, the default of which would expose
the partnership to an irreparable loss.359
The second main obligation refers to representation of the partnership. In the
absence of contrary provisions of the deed of partnership or a partners’ resolution,
each partner is entitled to represent the partnership within the limits to which he is
entitled to conduct its affairs.
§3. TERMINATION OF THE PARTNERSHIP
229. In case the partnership has been established for an indefinite period of time,
each partner may withdraw therefrom by giving the notice of withdrawal of his
share three months before the end of the financial year. For important reasons, a
partner may give the notice of the withdrawal of his share without observing the
terms of notice, even if the partnership has been established for a definite time. A
stipulation to the contrary shall be null and void.360 Upon a partner’s withdrawal
from the partnership, the things which he has brought into the partnership for use
shall be returned to him in kind, while the value of his contribution specified in the
deed of partnership, and in the absence of such specification, the value of his con-
tribution at the time of its making, shall be paid to him in cash. The value of the
contribution that consists in providing services or in using by the partnership the
things belonging to the partner shall not be returnable. Furthermore, the withdraw-
ing partner shall be paid in cash such a part of the value of the common partners’
property remaining after the deduction of the value of all the partners’ contribu-
tions, which is adequate to the proportion in which the withdrawing partner has
shared in the partnership’s profits.361
The entitlement to claim withdrawal of a partner from the partnership is also
given to the partner’s personal creditor who has attached the rights to which the
partner would be entitled in the event of withdrawing from a partnership or the dis-
solution thereof, in case during the last six months an execution on the partner’s
movable properties has been ineffective. The creditor must give notice of with-
drawal of his share from the partnership three months in advance even if the part-
nership has been established for definite time. If the contract of partnership provides
for a shorter period of notice, the creditor may take advantage thereof.362
It may be stipulated in the contract of partnership that the partner’s heirs shall join
the partnership in his stead. In such a case, they shall indicate to the partnership one
person who is to exercise their rights. Until it has been done, the remaining partners
may themselves perform all acts within the scope of the partnership’s affairs.363
For important reasons, each partner may demand the dissolution of the partner-
ship by a court and the partnership shall be dissolved on the date when the partner
359. Art. 865 CC.

360. Art. 869 CC.
361. Art. 871 CC.
362. Art. 870 CC.
363. Art. 872 CC.
210
Part II, Ch. 12, Contract of Partnership 229–229
has been declared bankrupt. From the time of a partnership’s dissolution, the pro-
visions relating to co-ownership in fractional parts shall apply accordingly to the
partners’ common property, in compliance with the provisions below. From the
property remaining after paying off the partnership’s debts, the partners shall have
their contributions returned to them. The remaining surplus of the common prop-
erty shall be divided among the partners in proportion to their shares in the part-
nership’s profits.364
364. See A. Herbet, Spółka cywilna: Konstrukcja prawna (Warsaw: C.H. Beck, 2008).
211
230–230
Chapter 13. Quasi-Contracts

§1. NEGOTIORUM GESTIO
230. The regulation of CC regarding negotiorum gestio tries to conciliate a rule

that no one should invade into the sphere of another person’s affairs without man-
date on one hand and benevolent approach towards people who take care of busi-
ness of the others for altruistic reasons on the other hand.365 It applies to a person
who manages another person’s affairs being aware that he is not dealing with his
own case. The negotiorum gestor must not have any authorization to do so, but he
is obliged to act to the benefit of that person and in accordance with his likely inten-
tion, and in doing so he shall be obliged to observe due diligence.366 Once the action
is taken, negotiorum gestor is obliged, as far as possible, to inform the person whose
affairs he manages and shall, according to circumstances, either await that person’s
instructions or continue to manage his affairs until the person concerned can man-
age them himself.367 Moreover, the person managing another person’s affairs with-
out a mandate shall render account of his acts and release all that he has obtained
as a result of those acts to the person whose acts he managed.368
The main result of undertaking the acts in law without mandate, upon fulfilment
of the prerequisites defined above, is that the negotiorum gestor may demand the
reimbursement of justified expenses and outlays including the statutory interest, and
the release from the obligations assumed when managing the case. Otherwise, if the
prerequisites were not met, the negotiorum gestio is illegal and deserves neither any
legal protection nor the right to demand the reimbursement of expenses; in this case,
the negotiorum gestor is for damage unless the intention of that person is contrary
to statutory law or the principles of community life.369 Therefore, if the person man-
aging another person’s affairs without a mandate has carried out changes in the
property of the person whose affairs he manages without any clear need or the ben-
efit of that person or contrary to that person’s intention of which he was aware, he
shall be obliged to restore the previous condition, and if that were not possible, to
redress the damage. He may withdraw the outlays if that can be done without dam-
aging the thing.370 The sole exception is constituted by Article 757 CC pursuant to
which whoever in order to avert a danger threatening another person rescues that
person’s interests, may demand from the latter the reimbursement of justified
expenses even if his act remained ineffective and shall be liable only for intentional
guilt or gross negligence.371
365. See Z. Radwański & A. Olejniczak, Zobowia zania – cze ść ogólna (Warsaw: C.H. Beck, 2008),
163.
366. Art. 752 CC.
367. Art. 753 §1 CC.
368. Art. 753 §2 CC.
369. Art. 754 CC.
370. Art. 755 CC.
371. See P. Drapala, Prowadzenie cudzych spraw bez zlecenia: Konstrukcja prawna (Warsaw: C.H.
Beck, 2009).
212
Part II, Ch. 13, Quasi-Contracts 231–231
The person whose affairs were managed can confirm the acts of law undertaken
by the negotiorum gestor making them legal and as effective as a mandate.372
§2. UNJUSTIFIED ENRICHMENT
231. The provisions as to the unjustified enrichment are to be applied when there
is not any other base for a claim or even if it exists – it is difficult to meet all its
prerequisites.373 However, once some special regulation on which the claim may be
based exists, Article 405 CC cannot be applied.374 The enrichment without cause is
also considered an autonomous source of obligation. In order to have it borne, it
does not matter how the defendant gained some benefits at the expense of another
person.375
Pursuant to Article 405 CC whoever without legal grounds has gained a material
benefit at the expense of another person shall be obliged to return that benefit in kind
and, if that is impossible, to return its value. All the four prerequisites must be met
jointly. The material benefit may result from whichever source, it may refer both to
increasing the assets and diminishing the liabilities. It cannot have any ground – nei-
ther coming from the act of law, nor from the provision of law, nor court judgment
nor administrative decision.376 Between the said material benefit and impoverish-
ment of another person there must be a causation link.
The main consequence of the unjustified enrichment is the duty to return to the
situation before enrichment took place. The impoverishment cannot claim more
than the loss he suffered or the benefit gained by the enriched.377 The latter is
obliged to return the obtained benefit in kind which includes not only the benefit
gained directly, but also all that which in the case of sale, loss or damage has been
gained in exchange for that benefit or as the redress of the damage.378 Only once it
is impossible, the value of the benefit shall be returned. The person obliged to return
the benefit may claim the refund of necessary outlays insofar as these had not been
compensated by his use thereof. He may claim the refund of other outlays insofar
as they increase the value of the benefit at the time of its release; he may, however,
remove those outlays while restoring the previous condition. But whoever, when
making outlays, knew that the benefit was not due to him, may claim the refund of
the outlays only insofar as they increase the value of the benefit at the time of its
release. If the person who claims the release of the benefit is obliged to refund the
outlays, the court may order, instead of the release of the benefit in kind, the refund
of its value in money with the deduction of the value of the outlays that the demand-
ing party would have to refund.379 The duty of returning the benefit devolves upon
372. Art. 756 CC.

373. See judgment of the Supreme Court of 15 Sep. 1945, C I 116/45, Państwo i Prawo no. 4 (1946),
120.
374. See judgment of the Supreme Court of 11 May 1972, III CZP 22/72, OSN No. 12 (1972), item 213.
375. See judgment of the Supreme Court of 2 Aug. 2007, V CSK 152/07, LexPolonica No. 1536113.
376. See judgment of the Supreme Court of 17 Nov. 1998, III CKN 18/98, unpublished.
377. See judgment of the Supreme Court of 19 Mar. 2002, IV CKN 892/00, unpublished.
378. Art. 406 CC.
379. Art. 408 CC.
213
232–232 Part II, Ch. 13, Quasi-Contracts
the party who was disposed of the benefit gained without legal grounds gratu-
itously.380 The duty to return the benefit or to return its value expires if the person
who has gained the benefit, used it up or forfeited it in such manner that he is no
longer enriched, unless if relinquishing the benefit or using it up he should have con-
sidered the duty to return it.381
Moreover, in the exceptions pointed out in Article 411 CC, the claim of the
impoverishment to have the performance returned is not allowed. It takes place in
four situations: if the maker of the performance knew that he was not obliged to
make it, unless the performance was made upon stipulation of return or in order to
avoid coercion or while performing an invalid act in law; if the making of the per-
formance complies with the principles of community life; if the performance was
made to satisfy a claim barred by limitation and if the performance had been made
before the receivable debt became enforceable.382
§3. MONEY PAID BUT NOT DUE
232. In the Polish law, money paid but not due is referred to as an undue per-
formance. It constitutes a special kind of the unjustified enrichment, and therefore
the provisions applicable thereto shall apply to the undue performance as well.
Undue performance is faced in the following four types of situations:
(1) lack of obligation (condictio indebiti) – which occurs if the person who made
would have no obligation at all or he would have no obligation to the person
to whom he made the performance;
(2) the grounds for the performance had ceased to exist (condition causa finita);
(3) the intended purpose of the performance had not been attained (condition
causa data causa non secuta);
(4) the performance was null and void and did not become valid after the making
of the performance (condition sine cause).383
380. Art. 407 CC.

381. Art. 411 CC.
382. See E. Łe towska, Bezpodstawne wzbogacenie (Warsaw: C.H. Beck 2000); P. Mostowik, in Prawo
zobowia zań– cze ść ogólna, vol. 6 of System Prawa Prywatnego, ed. A. Olejniczak (Warsaw: C.H.
Beck, 2009), 203 ff.
383. See W. Dubis, in Kodeks cywilny: Komentarz, ed. E. Gniewek (Warsaw: C.H. Beck, 2008), 675 ff.;
P. Mostowik, in Prawo zobowia zań– cze ść ogólna, vol. 6 of System Prawa Prywatnego, ed. A. Ole-
jniczak (Warsaw: C.H. Beck, 2009), 203 ff.
214
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220
Index
The numbers here refer to paragraph numbers.
Actio pauliana, 14, 17, 51, 136 Contract of specific works, 67, 148, 154,
Administrative contracts, 10 204–207
Agency, 11, 180–182
Arbitration clauses, 117 Damages, 20, 25–28, 68–71, 103, 115, 138,
Auction and tender, 37, 43–48, 102 146, 148, 150, 166, 169–178
Avoidance (relative invalidity, relative Defect of consent (of declaration of will),
nullity), 37, 83, 84, 86, 88, 99, 102 49, 62, 78–88, 99, 102
Delay, 115, 139, 141, 147, 161, 166,
Bailment, 183 168–172
Breach of contract, 25, 26, 35, 114, 140, Deposit payment, 116, 166
146, 147, 150, 160, 161, 163, 166, 171,
174–177 Exemption clauses, 114, 174
Building contract, 135, 137, 204, 208
Burden of proof, 65, 67, 176 Fiduciary agreement, 23, 33
Form of contract (of declaration of will),
Capacity for acts in law, 75–77 16, 54, 55, 57–60, 57–64, 81, 99, 102
Cause, 92 Formation of contract, 37–48
Commercial contracts, 11 Framework contract, 22, 226
Compromise settlement, 217 Fraud, 78, 82, 85, 86, 102
Condition and conditional contracts, 125
Consideration, 50 Gaming and wagering, 24, 52, 188–190
Contract Good faith, 34, 65, 66, 81, 143, 198
consensual, 16 Gross disparity (unfair exploitation), 78,
definition of, 12 89–91, 102
disposing, 15, 77, 92
gratuitous, 17, 51, 78, 83, 85, 136 Illegality, 95, 99
innominate, 19 Implied terms, 104
nominate, 19 Impossibility
obliging, 15, 77, 92 initial, 94, 148, 149
onerous, 17, 18, 51, 78, 81 subsequent, 148, 150, 160
random, 24 Improper pressure (undue influence, threat),
real, 16 87, 88, 102
reciprocal (mutual, synallagmatic), 18, Interference with contractual rights, 27–28
89 Interpretation, 37, 49, 62, 101, 104,
Contract for the benefit of a third party, 118–124
128
Contract of partnership, 13, 227–229 Lease, 209–216
Contract of sale, 15, 39, 93, 130, 191–203 Legal capacity, 72–74
221
Index
Loans, 184, 223–225 Restitution, 70, 149, 171, 179
Mistake, 17, 37, 49, 51, 78, 82–84, 102, Sale of goods, 191, 193
217 Set-off, 145, 162
Specific performance, 160, 161, 169
Natural obligation, 52, 190 Standard agreement model, 107, 108, 109,
Negotiations, 42, 69, 70, 71, 85 113
Negotiorum gestio, 26, 29, 137, 139 Standard terms (standard agreement
Notary, 58, 64, 155, 164, 193, 212 models), 107–113
Notarial deed, 58, 60, 64, 81 Sub-contractor, 135, 208
Nullity (invalidity), 79, 95, 99–101, 208, Subjective right, 15, 66, 94
218 absolute, 1, 30, 31, 36, 79
relative, 31, 36, 84, 86, 88, 99, 102, 216
Subrogation of creditor, 137
Object of contract, 94, 226
Suretyship, 134, 144, 208, 218
Obligation of means, 67
Obligation of result, 67 Taking over the debt, 129
Offer and acceptance, 38, 45, 70 Termination of contract, 130, 163
Time of performance, 141, 152, 169, 170,
Parol evidence, 61 171
Payment performance, 153 Tort, 177
Penalty clause, 115, 178 Transfer of contractual obligations, 129,
Pledge, 32, 134, 181, 185, 210, 219–222 132–134
registered, 219 Transfer of contractual rights (assignment
statutory, 219 contract), 129
treasury, 219 Trust, 33, 49
Pre-contractual liability, 68–71
Pre-emption, 203 Undue performance (money paid but not
Preliminary agreement, 20, 22 due), 26, 232
Prohibited contract provisions (unfair Unjustified enrichment (enrichment without
terms), 113 cause), 231
Public policy, 98 Usufruct lease, 215
Public procurement, 226
Warranty, 199, 204, 206, 208
Quasi-contract, 29, 230–232 Warranty in law, 130, 197, 200, 201, 202
222

FOURTH EDITION
Derived from the renowned multi-volume International Encyclopaedia of Laws, this

practical analysis of the law of contracts in Poland covers every aspect of the subject
– definition and classification of contracts, contractual liability, relation to the law
CONTRACT LAW
of property, good faith, burden of proof, defects, penalty clauses, arbitration clauses,
remedies in case of non-performance, damages, power of attorney, and much more.
Lawyers who handle transnational contracts will appreciate the explanation of
IN POLAND
fundamental differences in terminology, application, and procedure from one legal
system to another, as well as the international aspects of contract law. Throughout
the book, the treatment emphasizes drafting considerations. FOURTH EDITION
An introduction in which contracts are defined and contrasted to torts,
quasi-contracts, and property is followed by a discussion of the concepts of PIOTR MACHNIKOWSKI

‘consideration’ or ‘cause’ and other underlying principles of the formation of
contract. Subsequent chapters cover the doctrines of ‘relative effect’, termination of JUSTYNA BALCARCZYK
contract, and remedies for non-performance. The second part of the book, MONIKA DRELA
recognizing the need to categorize an agreement as a specific contract in order to
determine the rules which apply to it, describes the nature of agency, sale, lease,
building contracts, and other types of contract. Facts are presented in such a way
that readers who are unfamiliar with specific terms and concepts in varying contexts
will fully grasp their meaning and significance.
Its succinct yet scholarly nature, as well as the practical quality of the information it
provides, make this book a valuable time-saving tool for business and legal
professionals alike. Lawyers representing parties with interests in Poland will
welcome this very useful guide, and academics and researchers will appreciate its
value in the study of comparative contract law.

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Contract Law in Poland

Contract Law in Poland

PIOTR MACHNIKOWSKI, JUSTYNA BALCARCZYK & MONIKA DRELA

Derived from the renowned multi-volume International Encyclopaedia of Laws, this

PIOTR MACHNIKOWSKI, JUSTYNA BALCARCZYK & MONIKA DRELA

This book was originally published as a monograph in the International

Founding Editor: Roger Blanpain

Sold and distributed by:

Printed on acid-free paper

e-Book: ISBN 978-94-035-2931-8

© 2020, Kluwer Law International BV, The Netherlands

Printed in the United Kingdom.

Prof. Dr Piotr Machnikowski obtained his master’s in Law

Dr hab. Justyna Balcarczyk studied law at the University of

Dr Monika Drela studied Law at the University of Wrocław

§1. THE GENERAL BACKGROUND OF THE COUNTRY 17

§2. POLISH LAW AND LEGAL FAMILIES 25

§3. POLISH LAW AS A STATUTORY LAW 25

§4. THE POSITION OF THE JUDICIARY 26

§5. DISTINCTION BETWEEN PUBLIC LAW AND PRIVATE LAW 26

§6. DISTINCTION BETWEEN CIVIL LAW AND COMMERCIAL LAW 27

Introduction to the Law of Contracts 29

§1. DEFINITION OF CONTRACT 29

§2. HISTORICAL BACKGROUND OF THE LAW OF CONTRACTS 30

§3. CLASSIFICATION OF CONTRACTS 32

§4. CONTRACT AND TORTS 37

§5. CONTRACT AND QUASI-CONTRACT 40

§6. CONTRACT AND THE LAW OF PROPERTY 40

§7. CONTRACT AND TRUST 41

§8. GOOD FAITH AND FAIR DEALING 42

§9. STYLE OF DRAFTING 42

§10. SOURCES OF THE LAW OF CONTRACTS 43

Part I. General Principles of the Law of Contract 47

§1. AGREEMENT AND QUID PRO QUO (RECIPROCITY) 47

§2. FORMAL AND EVIDENTIAL REQUIREMENTS 57

§3. LIABILITY AND NEGOTIATIONS 64

Chapter 2. Conditions of Substantive Validity 68

§1. CAPACITY OF THE PARTIES 68

§2. DEFECTS OF CONSENT 70

§3. OTHER CONDITIONS OF VALIDITY 80

§4. THE CONSEQUENCES OF A DEFECT OF CONSENT OR A LACK OF

Chapter 3. The Contents of a Contract 89

§1. THE DIFFERENT CLAUSES 89

§2. INTERPRETATION 100

§3. CONDITIONAL CONTRACTS 106

Chapter 4. Privity of Contract 108

§1. THE RULE OF PRIVITY OF CONTRACT 108

§2. TRANSFER OF CONTRACTUAL RIGHTS AND OBLIGATIONS 110

§3. THE SPECIAL CASE OF A ‘SUB-CONTRACT’ IN BUILDING CONTRACTS 118

§4. ACTIO PAULIANA 119

Chapter 5. Termination of the Contract 123

§1. PERFORMANCE AND BREACH 123

§2. IMPOSSIBILITY, FRUSTRATION AND HARDSHIP: ‘THE UNFORESEEN’ 133

§3. DISCHARGE BY AGREEMENT 138

Chapter 6. Remedies 142

§1. GENERAL PROVISIONS 142

§2. SPECIFIC PERFORMANCE 142

§3. TERMINATION 143

IV. Rescission of Contract and the Property Transfer 145

§4. EXCEPTIO NON-ADIMPLETI CONTRACTUS (THE DEFENCE OF NON-

§5. FAULTY BEHAVIOUR OF THE DEBTOR 147

§6. LIMITATION OF ACTIONS 151

§7. DAMAGES AND EXEMPTION CLAUSES 154

§8. RESTITUTION 156