In Poland the following acts regulate contracts for the design and carrying out of buildings works:
Last modified 13 Mar 2025
In accordance with Polish Building Law the construction work may only be commenced upon obtaining a decision containing the building permit. A certain number of less important construction works (for instance: construction and repair of telecommunication network, electric power network, water supply, sewage and heating networks carried along existing routes or rebuilding and repair of roads, railway tracks and railway equipment) shall not require the building permit, however the competent authorities must be usually notified of them.
It should be noted, that on 18 September 2020 the catalogue of construction works not requiring the building permit has significantly changed (as well as the catalogue of construction works, which have to be notified to competent authorities).
In some cases prior to obtaining a building permit an environmental decision should be obtained. These cases are specified in the Ordinance of the Council of Ministers dated 10 September 2019 on investments that may significantly affect the environment eg power plants, refineries, major roads, airports etc.
Last modified 13 Mar 2025
There are various statutory regulations relating to safe plant and machinery in the workplace, the provision of protective clothing and equipment, training, supervision and the maintenance of a safe working environment, the control of hazardous substances, the control of major accident hazards and fire precautions. Statutory duties give rise to criminal liability which means that an offender can be prosecuted by enforcement agencies and brought before the courts to answer alleged offences in addition to civil liability.
In accordance with Polish Building Law the building and the building facilities connected thereto shall be designed and built, taking into account the anticipated period of use, in the manner specified in the relevant legislative provisions, including technical and building regulations and principles of technical knowledge.
The building object shall be used in the manner consistent with its use and environmental protection requirements, and its appropriate technical condition and external appearance shall be maintained, protecting it against excessive deterioration of its condition and technical efficiency.
Last modified 13 Mar 2025
In Poland the following major acts deal with environmental issues affecting building works:
Last modified 13 Mar 2025
This depends on the nature of the development and can only be determined on a case-by-case basis. Generally, the agreement is entered into between a local planning authority and/or utility suppliers regarding the provision of services and connection of new infrastructure, such as new roads, water, sewage, gas, electricity installations. The costs of services and infrastructure on public land is met by local authorities and utility suppliers, however the construction or reconstruction of public roads caused by a non-road project is the responsibility of the investor of this project. In practice, the investor bears the costs of the road investment and hands over the road to the municipality after its completion. In general, the cost of infrastructure on private land to be connected to public infrastructure system is met by the owner.
Last modified 13 Mar 2025
Certain provisions are implied into construction contracts by case law and statute.
Every contract must include an adequate mechanism for determining what payments become due, when they become due and a final date for payment. A party is also entitled to payment by instalments, stage payments or other periodic payment.
In addition, the contractor has to complete the work with all proper skill and care. Breach of this duty includes the use of materials containing patent defects. There is also an implied warranty that the contractor will use materials that are reasonably fit for the purpose for which they are to be used and of good quality.
Last modified 13 Mar 2025
In Poland industry bodies, organisations or associations don’t produce standard form contracts for use within the construction and engineering sectors. Generally, construction contracts are created by the parties’ negotiations and no standard forms are used.
With reference to international forms of contract (such as FIDIC) such forms are sometimes used in investments with high capital expenditure and involving foreign parties. Otherwise, international forms of contracts are rarely used in Poland.
Last modified 13 Mar 2025
In a construction project the following entities are usually involved:
The party procuring the work and typically a land owner or land developer.
Engaged by the employer to carry out and complete the works.
Comprising architects, civil and structural engineer and project manager.
Provides finance to the employer towards the development for example a bank. Depending on the size of the project, there might be a single bank or a syndicate of banks.
Last modified 13 Mar 2025
In Poland, the building contractor is responsible for the construction of the works and often takes on responsibility for design of the works.
Force majeure concerns a party that is unable to perform its obligations because of an unforeseeable event outside its control. According to a force majeure clause such party may avoid liability for non-performance of the agreement. Standard building contracts do contain a force majeure clause allowing the contractor additional time to complete the works.
Last modified 13 Mar 2025
In Poland, public-private partnership (PPP) is quite a new concept and not commonly used (according to data published by the Polish Ministry of Investments and Development, the number of PPP proposals in 2020 was 31, and there were 13 concluded agreements). The number of PPP projects has gradually decreased since 2015. This is probably attributable to the fact that approximately only 25% of PPP proposals (166 out of 628 in the years from 2009 until first quarter of 2022) were successfully converted into PPP projects. The effects of the COVID-19 pandemic were still visible on the PPP market in Poland. Economic uncertainty significantly reduces the level of investment in the private sector, which also has a negative effect on interest in public investment. In 2022, ten PPP contracts worth PLN 269 million were signed. In total, 19 PPP contracts worth nearly 557 million PLN were concluded in 2024. During this period, 26 PPP procedures were announced (with a total value of 481 million PLN).
Last modified 13 Mar 2025
It is possible to draft a construction contract where the price is fixed for given works. Often both the employer and the building contractor will want to have some flexibility built into the contract; the employer will usually want to have the right to make variations and the contractor will want the right to claim for losses suffered and expenses incurred for which it is not at fault.
In essence, what parties usually mean when they talk about a fixed price contract is a lump sum contract where the contractor’s entitlement to additional money is limited, for example there are no variation provisions and/or the events which would usually entitle the contractor to recompense for loss and/or expense are restricted.
Last modified 13 Mar 2025
A typical construction contract includes obligations on the contractor to maintain third party liability insurance. The contractor is then covered if injury to a person or damage to property is caused by the contractor or his company.
Contractors are also typically requested to take out professional liability cover that insures the proper performance of construction works that are being undertaken (construction all risks insurance). The contractor may also take out product liability insurance that covers risks caused by any product supplied, such as bricks or lifts.
Last modified 13 Mar 2025
Documents commonly contain by way of security the following:
Last modified 13 Mar 2025
Methods of payment vary according to the works. In Poland, there are two main types of payment:
1. Lump sum: A pre-agreed sum that the contractor/consultant/sub-contractor will be paid to carry out either a stage or the whole of the works that are required under the contract (subject to various provisions, including variations for which the contractor may receive additional monies).
2. Measurement: The work is measured and valued according to a schedule or formula.
Generally, payments to the general contractors are made monthly based on the monthly progress reports delivered to the investors by the general contractors.
Last modified 13 Mar 2025
Construction contracts require the works to be completed by a specified date. The aggrieved party may bring a claim for general damages (compensation) for late completion of the works by the building contractor or parties may also include in the construction agreement contractual penalty provisions in the case of any delay in completion of the works.
Last modified 13 Mar 2025
Contractual mechanisms for dealing with variations to the works vary depending on why the variation is requested. Most contracts will provide that the client has the right to request variations to the works, for which the building contractor is entitled to additional time and money. The building contractor is also entitled to raise reasonable objections to material changes. Where variations are necessary due to the building contractor's error, delay or default, the contractor is not usually entitled to additional time or money under the contract. The contractor is also liable for any delays caused to the project by these variations, and where the variation means that the work has not been carried out in accordance with the contract.
Last modified 13 Mar 2025
A building which is subject to a building permit, may be put to use after having notified the competent authority of the completion of the construction unless the said authority has raised, by a decision, objections within 14 days from the date of service of the notice. Further decisions will be required in certain circumstances under the Schedule to Building Law or the buildings are to be used prior to completion of the works.
The employer is obliged on completion of the construction works to notify a number of authorities including stating its intention to use the building. The notice must have attached to it a number of documents including a statement of compliance with the building design and any conditions specified in the building permit authorizing construction. The authorities can raise issues with the building by reference to the building plans.
Generally, occupation of any building should be preceded by obtaining an occupancy permit. However, due to the COVID-19 epidemic and the adoption of the Anti-Covid Act (Act on special solutions related to the prevention, counteraction and combating COVID-19, other infectious diseases and emergencies caused by them; (ustawa o szczególnych rozwiązaniach związanych z zapobieganiem, przeciwdziałaniem I zwalczaniem COVID-19, innych chorób zakaźnych oraz wywołanych nimi sytuacji kryzysowych) dated 2 March 2020), for the duration of an epidemic or epidemic emergency, the occupancy permit was replaced by a notice from the investor to the building supervisory authority on the completion of the construction works. The occupation of the building was possible if the building supervisory authority did not file an objection within 14 days from the date of delivery of the notice.
However, on 1 July 2023, the state of epidemic emergency ended, so the COVID-19 provisions on a simplified procedure for obtaining the occupancy permit essentially ceased to apply and the investor should obtain the occupancy permit, if applicable.
Last modified 13 Mar 2025
In Poland, limitation periods are imposed by the Civil Code. There are different limitation periods for different types of action. Unless a specific provision states otherwise, the period of limitation is ten years and three years for claims pertaining to requirements for periodical performance (eg paying money on a regular basis) and claims resulting from an economic activity. The period of limitation for claims resulting from a construction contract is three or six years (depending on the professional character of the party).
Last modified 13 Mar 2025
In accordance with Polish Civil Code, a warranty for physical defects shall expire in the case of defects in a building, after five years have lapsed from the time of releasing the building to the buyer. The person who procures or carries out building works is liable for both physical damage and economic loss suffered by the end user of the completed development. This liability can be excluded or limited with end users who are not classified as consumers, ie in transactions between business entities.
Last modified 13 Mar 2025
In a typical development project, there is no contractual relationship between the parties in connection with the design and construction of the development (the architect, engineers, other consultants, main building contractor and sub-contractors) and the end users of the completed building. For this reason, end users may require the main construction parties to provide them with separate collateral warranty agreements or third-party rights.
Last modified 13 Mar 2025
Third parties who are not parties to the construction contract – such as purchasers, tenants and lending banks providing finance towards the development – usually do not have protection and rights against the original designers and contractors involved in the design and construction of the project as there is no direct contractual relationship between those entities, unless such protection has been conferred to them in the construction contract. The parties may conclude a separate agreement with the contractor covering such liability, or acquire such rights pursuant to the building agreement with the employer on the assignment of the rights of the employer against a contractor. There is also a market practice that the rights under the documents securing the construction contracts are transferred to the financing banks.
Last modified 13 Mar 2025
Civil law disputes are between contracting parties and fall within the competence of a common court. Claims of lesser value start in a district court while more substantial civil claims are heard in the regional court.
Last modified 13 Mar 2025
In Poland it is common for construction disputes to be referred to arbitration. The most popular arbitration court is the Court of Arbitration at the Polish Chamber of Commerce in Warsaw.
According to Polish Civil Proceedings Code submission of the dispute to be resolved by arbitration requires the agreement of the parties, in which the subject-matter of the dispute or the legal relationship from which the dispute may arise or has arisen should be mentioned (arbitration agreement). The provisions of the arbitration agreement are ineffective if they infringe the principle of equality of the parties, in particular entitling only one of the parties to file a request for arbitration or a statement of claim before a court. An arbitration agreement may indicate an arbitration institution as having jurisdiction. Unless otherwise agreed by the parties, they are bound by the rules of the arbitration institution in force at the time of conclusion of the arbitration agreement.
If court proceedings are brought in a matter relating to a dispute which is subject to an arbitration agreement, the court shall reject the statement of claim or application to start proceedings if the respondent or participant of the non-trial proceedings makes a plea that there is an arbitration agreement before submitting his first statement on the substance of the dispute.
Bringing an action in the courts does not prevent the arbitration tribunal from proceeding with the case. Submission of a dispute for resolution by arbitration does not exclude the possibility of being granted an interim injunction by the court in respect of claims pursued before the arbitration tribunal.
The advantages of arbitration as compared to state court proceedings are, in general, lower fees and faster proceedings.
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Mediation as a method of seeking compromise by referring a dispute to an independent third party who has expertise in the field of the dispute and skills at brokering a settlement is not mandatory and not commonly used in Poland. In accordance with Polish Civil Proceedings Code the adjudicator must reach a decision within a deadline indicated by the court not exceeding three months of the referral (subject to the extension of the deadline upon the request of the parties or due to other important reasons) and the court is entitled to approve the effects of mediation.
Even though the mediation is voluntary, there is an obligation imposed on the plaintiff regarding ADR. A statement of claim submitted to the common court shall contain information whether the parties have tried mediation or any other out-of-court settlement method, and if no such attempts have been made, explanation of reasons thereof.
Last modified 13 Mar 2025
What arrangements are usually made with the local authorities and utility suppliers in relation to infrastructure (new roads, sewers etc) to support a new development?
This depends on the nature of the development and can only be determined on a case-by-case basis. Generally, the agreement is entered into between a local planning authority and/or utility suppliers regarding the provision of services and connection of new infrastructure, such as new roads, water, sewage, gas, electricity installations. The costs of services and infrastructure on public land is met by local authorities and utility suppliers, however the construction or reconstruction of public roads caused by a non-road project is the responsibility of the investor of this project. In practice, the investor bears the costs of the road investment and hands over the road to the municipality after its completion. In general, the cost of infrastructure on private land to be connected to public infrastructure system is met by the owner.
Last modified 13 Mar 2025