Contract in Poland – PART 1

– The contract with a foreign contractor – what Polish company has to pay attention to?

„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:


1. Discrepancy of various language versions

Parties coming from various legal jurisdictions often use different language versions of the contract. Those language versions are different,  when it comes to used terminology. Parties do not clearly indicate, which of them is the most significant. It concerns in particular situations, when parties coming not from English-speaking jurisdiction prepare the contract in English language (which is found to be a standard, but this language is still “foreign” for them); it is worth in those cases to be based on a mother language of at least one party.

2. Applicable law

Polish entrepreneurs conclude foreign contract often as a subcontractor of bigger aboard project. In those situation they create bilingual version of a contract on the basis of foreign company’s form (counterparty’s). Polish companies believe, that in order  to secure their interests it is enough to have a good translation of such a form. Standard clauses often refer to foreign law. Those kinds of clauses could result in recognizing a legal position of parties as a totally different and most of them change it to the detriment in respect of a Polish site, even worse that it comes out from literally understanding of the contract.

3. Lack of the Polish jurisdiction

Litigation aboard on the grounds of the contract is often so expensive, that this necessity moves this conflict with unfair counterpart to the limit of lack of profitability. It regards especially jurisdiction applying in “old” European Union. This argument is often ignored by Polish entrepreneurs while signing the contract. If foreign counterparty does not agree for using the Polish judicial system, we can always submit an offer of the Polish arbitration. It could be more acceptable for foreign contractor, because arbitration is the common solutions for “west” countries and it is there used more often that in the Easter Europe.

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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