Force Majeure in Poland – definition
Although the term force majeure appears in numerous legal acts, there is no explicit definition of this concept in Polish legislation. However, the well-established case law of the courts and the views of legal scholars indicate three key criteria that must be met for an event to be considered an act of force majeure:
- Externality – the event must be entirely independent of either party to the contract, with no causal link to them;
- Unpredictability – the event could not have been reasonably foreseen at the time the contract was concluded;
- Inevitability of consequences – there must be no realistic way to prevent the effects of the event using standard means.
Classic examples of force majeure include catastrophic natural events such as
- hurricanes,
- floods,
- fires,
- or earthquakes.
This category also encompasses actions by public authorities, such as: expropriations or the declaration of a state of emergency, as well as large-scale social or political events, such as wars, acts of terrorism, or riots. The COVID-19 pandemic has also been recognized as an instance of force majeure.
What Are the Effects of Force Majeure on Contracts in Poland?
As early as 1971, the Polish Supreme Court held that force majeure constitutes a general ground for excluding liability, not only under the principle of strict liability but also under the principle of fault. In other words, if a party fails to perform or improperly performs its obligations – whether written or oral – as a result of force majeure, it will not be held liable.
If the effects of force majeure are already well established in case law, why should this phenomenon be regulated in contracts? Practice shows that such regulation is advisable at the very least to eliminate uncertainty and enable enhanced responsiveness in times of crisis.
Within this framework, two categories of contractual clauses stand out as especially significant: the force majeure clause and the material adverse change (MAC) clause.
Why is the force majeure clause important in a contract?
It is advisable to include an appropriate force majeure clause in every contract. The parties are free to define what constitutes force majeure in their contractual relationship – they can specify exactly which events qualify as vis maior and which do not.
Importantly, a force majeure clause may not only refine the definition of extraordinary circumstances but may also, within the limits of contractual freedom, modify the scope of the debtor’s liability. It can further introduce additional legal safeguards if obligations are not performed, or are performed improperly, due to such unforeseen events.
How to draft a Force Majeure Clause in Poland?
Force majeure provisions are now widely used, both in domestic and international contracts. A well-drafted clause should specify how the occurrence of force majeure affects the mutual rights and obligations of the parties. A properly constructed clause should include:
- Definition of force majeure – start with a general description identifying the characteristic features (externality, unpredictability, and inevitability), followed by specific examples, taking into account local conditions. What is extraordinary in one region (e.g., a strike) may be common in another.
- Means of documenting the event – not every event will be widely known, so it is worth indicating how the occurrence of force majeure is to be confirmed.
- Impact on obligations – the clause should specify which obligations are affected by the exemption and to what extent (e.g., only in case of delays exceeding a specified period).
- Rights of the parties – does the affected party merely receive a waiver of the duty to perform, or may it also, for example, terminate the contract after a certain period?
- Notification duties – it is advisable to specify the time and manner of notifying the other party about the occurrence and cessation of force majeure, taking into account the realistic possibilities during a crisis (e.g., the obligation to notify “without delay, when possible and without jeopardizing safety”).
- Cut-off dates – e.g., automatic cancellation of orders, contract termination after a certain time, or the right to withdraw from the agreement.
What is a Material Adverse Change (MAC) Clause?
A second commonly used solution – particularly in transactional agreements – is the material adverse change (MAC) clause. Although rooted in common law systems, its use is permissible under Polish law within the framework of contractual freedom.
Key features of this clause include:
- It is mainly used in agreements involving the acquisition of assets or shares (e.g., in companies), where a transitional period is foreseen between the signing of a preliminary agreement and the final one.
- An adverse change event may include situations similar to force majeure (e.g., natural disasters), as well as other negative internal developments, such as a plant fire due to negligence, a significant increase in raw material prices, or the loss of key customers.
- The MAC clause aims to ensure the possibility of renegotiating contract terms or- if necessary – withdrawal from the agreement. This clause is most often included for the benefit of the buyer or the financial institution involved in the transaction.
What If the Contract does not contain a Force Majeure Clause?
In the absence of appropriate provisions, the parties may attempt to renegotiate the contract. Problems arise when only one party bears the consequences of the event and loses its ability to act as an equal partner.
In such situations, it is possible to invoke general provisions, particularly Article 357¹ of the Polish Civil Code – the so-called rebus sic stantibus clause. This provision states that if, as a result of an extraordinary change in circumstances, the performance of the obligation would entail excessive difficulty or pose a risk of gross loss to one of the parties, and this situation was unforeseeable, it is possible to:
- modify the manner of performance,
- adjust the amount of the obligation,
- or even have the contract terminated by a court.
However, it is important to remember that in such cases, the final decision rests with the court – which may lack sufficient knowledge of the business realities involved. Business litigation can be lengthy, and the outcome may fall short of what the parties anticipated when signing the contract. This is neither a quick nor fully predictable solution.
Why Every Contract Needs Force Majeure Caluse?
Exceptional circumstances have always been a part of reality and are bound to arise again. The recent floods in Poland are one example, but over the past few years the region has also experienced war and a global pandemic. These experiences highlight the importance of incorporating appropriate force majeure provisions into contracts as a standard practice.
Including well-considered clauses in contracts allows the parties to define procedures in times of crisis, provides greater flexibility, and protects their interests without the need to involve the courts. It is also a key element of responsible risk management – particularly in a business environment where flexibility and speed of response are crucial.
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