The contract with a foreign business partner – what Polish company has to pay attention to? – Part 2

„Clear and coherent contract with foreign counterparty is the key to success” – truism or the most urgent issue for Polish companies? The authors’ practise regarding legal advice indicates, that polish entrepreneurs conclude contracts with foreign counterparties on grave adverse conditions for its legal position. We present hereafter the most common mistakes that Polish companies make by conducting foreign contracts.

“7 deadly sins” are:


4. Lack of proper security of payments

Polish entrepreneurs do not impose their conditions of payments by using clauses providing security of receiving payments for foreign service or product, which has been sent aboard. There are multiple simple legal instruments, which (in case of being included in the contract) could be surely recognized by foreign companies as standard solutions, acceptable in those situations. Various forms and types of international security considering commercial contracts represent so spacious thoughts, that authors decided to discuss them in a separate article.

5. Inconsistency of clauses caused by negotiations

While negotiations parties often create additional regulations to the current shape of the contract, whose purpose are to specify responsibilities of parties. Those clauses are often added without previous logic analysis of their consistency with other clauses. In those cases it is possible to be secured by standard clause placed in miscellaneous, which let the parties indicate, that more specific regulations are more binding than general clauses.

6. Lack of using international contract clauses

Polish entrepreneurs do not pay attention to verified methods of international standardisation when it is about contractual relations. For example, instead of specifying with counterparty conditions of responsibility for damages in transport and their costs, there is a possibility to use applicable rules of Incoterms, which clearly and consistently indicate who is liable for transport and who takes a risk connected to performance of the contract.

7. Keeping in the contract references to internal and general contract conditions of counterparty’s company.

Foreign contracts concluded by Polish subjects often include references to general contract conditions of foreign company, which can be almost always found on its website. Polish companies tend to keep those references in their contracts. This kind of acting totally changes parties’ legal positions, and therefore it is worth to pay attention, that the negotiated contract should include all of the conditions. 

Elimination of foregoing mistakes or only discussing them with counterparty while negotiations could protect polish company and could help avoiding situations, when the contract will not be ever performed or will generate grave adverse conditions or consequences.

The information was prepared by Jakub Gładkowski and Małgorzata Kiełtyka of KG Legal Polish Law Firm (translated by Anna Bednarska). KG Legal provides specialised legal assistance to IT, Life Science as well as investment processes in Poland and organises networking between Polish and international companies and research centres.

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