contract | In Principle

The statute of limitations for claims arising from a contract for a specific work is regulated differently from the general rules. Pursuant to Civil Code Art. 646, these claims become time-barred two years after the work is delivered, or if the work has not been delivered, two years after it was supposed to be delivered under the contract. This is a short timeframe, and requires great care to avoid forfeiting claims—especially as the way it is counted can raise practical questions, and in some cases a three-year term is used.

One of the participants in the construction process carried out under FIDIC contract terms is the engineer, acting as the contract administrator. The engineer’s task is to take the necessary steps to ensure that the contract is performed correctly and on time. Among other things, the engineer can issue a determination on how to handle a matter. When can the engineer do this?

In agreements with foreign counterparties, provisions on which courts have jurisdiction to resolve disputes are standard, but they are often drafted by rote, without deeper reflection. If a dispute unexpectedly occurs, this can lead to serious problems. Based on our experience, we suggest how to avoid the worst mistakes.

For many years, the consortium has been a familiar form of cooperation between businesses pursuing public contracts. But this construction still raises legal questions, especially when a dispute arises and goes to court. Because this structure is deceptively similar to an ordinary partnership, sometimes it is unclear which members of a consortium may participate in court proceedings. The Supreme Court of Poland examined this issue in its judgment of 30 June 2021 (case no. III CSKP 75/21).

Contractual penalties are a common instrument for sanctioning failures to perform non-monetary obligations (e.g. completing construction on time). Contractual penalties can be cut by the courts, but generally the Polish Civil Code indicates only the grounds for mitigating a contractual penalty. The details must be sought in the legal literature and the case law. Indeed, the regulations do not even provide guidance on how much contractual penalties can be reduced. Thus each case should be treated individually, guided by the principles discussed below.

The construction market is facing more challenges. After many problems associated with the pandemic, other major difficulties have arisen due to Russia’s war on Ukraine. This presents the second recent case of force majeure affecting the economy. Although the construction sector did well in the pandemic crisis, this time the outlook is much more pessimistic. Thus the new reality requires a rapid response and search for solutions to mitigate numerous risks.

On 9 December 2021, the Supreme Court of Poland issued a resolution (case no. III CZP 26/21) examining liquidated damages in construction contracts. In construction, liquidated damages are particularly common, generating serious disputes even threatening the completion of projects. In practice, this instrument is mainly used by investors, and the problem usually affects general contractors and subcontractors.

A limited-liability company is represented by its management board. The right of the management board to represent the company covers all actions, including entering into contracts, court actions, making declarations, accepting declarations, etc. It cannot be restricted. However, the management board cannot represent the company in its dealings with a member of the management board.

The EU’s Single CMO Regulation provides for heavy penalties for use of a form contract with even minor deviations from the formal requirements under that regulation. As a result, the National Support Centre for Agriculture may impose administrative fines of millions of zlotys on businesses.

The Brexit transition period is coming to an end. Whether or not it is still possible for the UK and the EU to reach a new trade agreement, many businesses operating on both sides can expect a number of uncertainties and challenges. Fortunately, one of the issues that will remain stable is the choice of law in contracts. Here Brexit will result in only technical changes.

Contracts for publication of video games are concluded between game developers and companies specialising in publishing games (sometimes referred to “dev-publisher agreements”).

Many contracts provide for a contractual penalty for reputation of the contract due to the other party’s fault and a contractual penalty for delay in performing the contract. But in such cases can both of these penalties be pursued simultaneously?