Construction law
A contractual penalty, a handover with defects, or additional work carried out without an annex - on a construction site the dispute often starts with what the documents say, or with what they left out.
What I do
- Construction works contracts. I draft and review construction works contracts, including subcontracting agreements.
- Contractual penalties. I pursue contractual penalties and defend against them being charged.
- Handovers and defects. I analyse handover protocols, defect lists and claims under the statutory warranty and the guarantee.
- Additional and substitute works. I help settle work that was not in the cost estimate or that changed the original scope of the contract.
- Joint and several liability of the investor. I handle cases concerning payment of a subcontractor’s remuneration by the investor under Article 6471 of the Polish Civil Code.
- Payment disputes. I handle payment cases against the investor, the general contractor and subcontractors.
A contractual penalty is not always due
Before you pay a contractual penalty, two things are worth checking.
First, whether the penalty clause is valid at all. A contractual penalty may be stipulated solely for the non-performance or improper performance of a non-monetary obligation. If the contract provides for a penalty for delay in payment, such a clause may be invalid. Late payments are dealt with through interest.
Second, it is worth assessing whether there are grounds to reduce the penalty. The court may lower it if the obligation has been performed in substantial part or if the amount of the penalty is grossly excessive. Such a request must, however, be raised explicitly and properly justified. The court will not reduce the penalty on its own initiative.
What it costs
You can choose one of two forms of billing: an hourly rate or a flat fee agreed up front. We settle the billing method before the work starts, so that it is clear from the outset what costs you need to reckon with.
If the case goes to court, the court fee on the statement of claim will also have to be paid. In payment cases its amount depends on the value of the claim pursued. Before we file the claim, I will tell you what fee will apply in your case.
If you win, you may seek reimbursement of the costs of the proceedings from the other side, including the costs of legal representation. The court sets them, however, according to the rates laid down in the regulations, and not on the basis of the full fee agreed with your attorney. In practice the amount awarded may therefore cover part of my fee, but not always all of it.
In payment cases a judgment on its own does not yet mean that the money will reach your account straight away. Effectively recovering the debt and the awarded costs also depends on whether the other side holds assets against which enforcement can be carried out.
Frequently asked questions
I was charged a contractual penalty on a Polish construction contract. Can it be reduced?
Yes, in certain circumstances. Under the Polish Civil Code, a court may reduce a contractual penalty if the obligation has been performed to a substantial extent or if the penalty is grossly excessive. The amount of the penalty, the seriousness of the breach, the actual consequences and the wording of the contract should therefore be reviewed before payment is accepted as due.
Does FIDIC apply in Poland?
FIDIC conditions do not apply automatically as Polish law. They apply when the parties incorporate them into their contract, usually together with Particular Conditions modifying the standard wording. Mandatory provisions of Polish law, and, where relevant, Polish public procurement rules, continue to apply regardless of the FIDIC wording.
The main contractor has not paid my subcontractor invoice. Can I claim directly against the investor?
Potentially yes. Under Article 647¹ of the Polish Civil Code, the investor may be jointly and severally liable with the main contractor for payment for construction works if the statutory notification requirements concerning the subcontractor and scope of works were satisfied. In particular, the investor normally has 30 days after receiving a proper notification to object to the subcontractor’s works.
We signed the handover protocol with defects listed. What are my rights now?
Listing defects in the handover protocol does not normally mean that you have waived your rights concerning them. Depending on the contract and the nature of the defects, you may be able to demand rectification, rely on warranty or guarantee rights and claim contractual penalties or damages. The contract should also be checked because statutory warranty rights can be modified in B2B relationships.
We did extra work without an annex. Can we still get paid?
Possibly, but the absence of a written annex can make the claim significantly more difficult. The result depends on the original contract, any contractual form requirements, evidence that the additional work was ordered or accepted and whether private or public procurement rules apply. In some private-law cases, alternative claims such as unjust enrichment may also need to be considered.
Describe your case in three sentences. I will tell you whether I can help.
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