Contracts — domestic and international

A good contract clearly sets out the parties, the subject, the price and the deadline — and above all what happens when something goes wrong.

Four elements form the base: who with whom (the parties), what (the subject), for how much (the price) and by when (the deadline). These decide whether the contract even came into being and what can be enforced. But your position in a conflict is usually decided by the clauses no one reads carefully. They include liability and its limits, contractual penalties, the conditions and periods for termination, and payment security.

Example: two contracts can carry the same price. Yet in one the liability cap is the contract value, and in the other just a month of cooperation. In a serious loss that is the difference between real compensation and a token refund. Add to this the way disputes are resolved, which sets where and how quickly you recover what you are owed. A good contract is also clear to both sides, because an ambiguous clause is an invitation to a dispute. The rest — warranties, confidentiality, rights to results — we tailor to the specific transaction.

A contractual penalty is a pre-agreed sum for the non-performance or improper performance of a non-monetary obligation — you cannot stipulate it for a delay in payment alone (that is what interest is for).

The basis is art. 483 of the Polish Civil Code. Its great advantage is that you do not have to prove the size of the loss. It is enough to show that the other side failed to perform the covered obligation. So it is used where timing or quality matters: late delivery, a defect in the work, a breach of a non-compete. We describe the amount and the triggering event precisely, so there is no argument over whether it is due. It can also be tied to a daily rate, so it grows with the length of the breach.

There is a limit, though. Under art. 484 CC a court may “moderate” — reduce — a grossly excessive penalty. It may also cut one where the obligation has largely been performed. Example: a penalty for a week's delay on an almost-finished order is often cut to a fraction of the original sum. So we set penalties to genuinely motivate the other side while still holding up in court. We tie them to the value of the performance and the gravity of the breach, not to a striking but detached figure.

A contract for specific work (umowa o dzieło) obliges you to deliver a defined result, while a mandate contract (umowa zlecenia) obliges you to act with due care; the difference decides, among other things, social-security (ZUS) contributions and liability.

The difference is practical, not just a matter of naming. Under a contract for specific work you answer for the result — a finished design, a translated text, a working app. Only its acceptance ends the contract. Under a mandate you undertake to perform the task with care, but you do not guarantee a specific outcome. Contributions (ZUS) are generally due on a mandate but not on a contract for specific work, and it is this cost gap that drives disputes.

That is why ZUS and the courts readily reclassify “contracts for specific work” that are in fact mandates or even employment. Example: a recurring “contract for specific work” for monthly servicing or repetitive tasks will almost always be treated as a mandate. The consequence is a duty to pay arrears of contributions plus interest, often for several years back. So we match the contract type to what is actually to be produced, so the name matches the substance. We settle this at the drafting stage, when the change is free, not during an inspection.

We match the security to the amount and the risk: domestically usually a deposit, a contractual penalty, a promissory note or a surety, and internationally — an on-demand bank guarantee or a documentary letter of credit.

Securities differ in who pays when the counterparty fails. A deposit is the simplest tool: if the deal falls through by one side's fault, the other keeps a real compensation without suing for damages. A promissory note and a surety add another estate you can enforce against, faster than an ordinary lawsuit. An on-demand bank guarantee and a letter of credit shift the payment risk onto the bank. The bank pays once the formal conditions are met, regardless of any dispute between the parties.

A letter of credit is the safest, but it costs money and demands strict documents. It makes sense for large, one-off foreign transactions with a new partner. In an ongoing, tested relationship a good payment clause with security and late-payment interest is usually enough. Example: we secure the first shipment to an unknown buyer with a letter of credit, and later deliveries with a cheaper payment term. We fit the tool to the risk, instead of wrapping every invoice in the most expensive instrument. Good security should be a shield, not a cost that eats the deal's margin.

For most contracts yes — in the EU a qualified electronic signature is legally equivalent to a handwritten one.

The basis is the eIDAS Regulation (since 2024 eIDAS 2.0). One distinction is key: not every “electronic signature” equals a handwritten one. That equivalence applies to the qualified signature, issued by a trusted provider and tied to your verified identity. A plain scan, a “signature” in an email footer or clicking “I accept” is not the same. They may evidence intent, but they lack the same force. The gap usually surfaces only in a dispute, when you have to prove who signed what.

The second trap is special form. Some acts require a notarial deed — for example the sale of real estate — and there no electronic signature will do. For a typical commercial contract, a mandate or an NDA, a qualified signature is fully safe. Example: a SaaS contract with a partner in another EU state can be validly signed by both sides with a qualified signature. No paper is sent. That cuts conclusion from weeks to hours. We advise which form is right, so no one can later challenge the contract's validity over how it was signed.

The contract is governed by the law you name in its text — and if you name none, the conflict-of-laws rules decide.

In the EU this mechanism is ordered by the Rome I Regulation. If the parties choose nothing, a sale contract is usually governed by the seller's law and a service contract by the provider's law. That means your rights may be decided by a law you do not know and whose wording you have not checked. Choosing the law does not, by itself, change the language of the contract or the court. Those are three separate decisions we settle one by one. Without such a choice the outcome turns on the transaction's incidental links, not on your decision.

Example: a Polish provider with no choice-of-law clause may end up bound by the counterparty's law or, depending on the setup, its own. It often finds this out only in a dispute. So we state the governing law expressly, in one sentence, and choose it deliberately. Polish law is not always best: sometimes a neutral law, or one that better protects your role in the deal, is more favourable. We also check that the chosen law does not strip away the protection you care about. A deliberate choice turns a conflict-of-laws lottery into a predictable rule of the game.

For a non-EU counterparty arbitration usually wins, and for an EU partner a court; what decides is where you will recover the money.

The decision comes down to one question: where the counterparty has assets and how to enforce a ruling there. A judgment from an EU state is enforceable across the Union under the Brussels I bis Regulation — without a separate declaration of enforceability. Against an EU partner an ordinary court is therefore fast and cheap. Outside the Union, though, a Polish court judgment alone can be hard to enforce, because its recognition depends on local rules. The dispute clause is no formality — it sets the ground for later enforcement, so we settle it before a dispute is even likely.

This is where arbitration has the edge. An arbitral award is enforceable in close to 170 states thanks to the 1958 New York Convention. That makes it a real enforcement path on other continents. Example: with a buyer outside the EU, an arbitration clause gives you a title recognised where its factory or bank account sits. Arbitration is also often faster and confidential, but costlier upfront, and its downside can be limited appeal. We base our recommendation on the real enforcement path, not on the prestige of the forum.

The Vienna Convention (CISG) is international sales law that applies automatically to B2B goods contracts between businesses from contracting states — and Poland has been a party since 1996.

Automatic application is the crux here. If both firms are seated in contracting states and nothing is agreed otherwise, CISG enters the sale contract — even if no one mentioned it. It regulates, differently from the Polish Civil Code, contract formation, the parties' obligations, the passing of risk and the effect of defects. It can therefore change, say, the deadlines for reporting a defect or the grounds for withdrawing from the contract. CISG covers the sale of goods, not services, so we first check whether it comes into play at all.

You can exclude it, but that is a deliberate decision, not the effect of silence. Example: a firm writes a contract “under the Civil Code” without excluding CISG. In a dispute it then turns out the Convention governs, with different complaint rules. So we always check whether CISG works in your favour or against it. Sometimes its rules suit an exporter better. Sometimes it is better to return to the familiar domestic law — and then we exclude it expressly. We record that choice in one sentence, so there is no doubt later.

Each Incoterms rule fixes the point at which risk and costs pass from seller to buyer — from EXW (the buyer collects from the warehouse) to DDP (the seller delivers cleared for import).

An Incoterms rule answers three questions at once. Who arranges and pays for transport, at what moment the risk of loss passes to the buyer, and who handles customs clearance? Under EXW almost everything rests on the buyer, under DDP on the seller, and most real transactions sit in between. The choice of rule therefore decides who bears the loss if the goods are lost or damaged in transit. Incoterms 2020 are rules of the International Chamber of Commerce, recognised by counterparties worldwide.

The most common mistake is a rule inconsistent with how the transport actually runs and who insures the cargo. Example: the parties write EXW, but it is the seller who arranges carriage and clearance. After a loss they then argue over who really bore the risk. So we match the Incoterm to the real logistics setup, then enter it identically into the contract, the invoice and the transport documents. The same rule across three documents removes the most common source of dispute over cost and risk. A well-chosen Incoterm also orders the insurance: it is clear who holds a policy and for which leg.

They can prohibit performance overnight — which is why we screen the counterparty and the goods against sanctions lists and insert a sanctions clause.

Sanctions act immediately and independently of your contract. If the other party, its owner or a specific product is listed by the EU or OFAC, further performance can become illegal. That holds despite a validly concluded contract. So we first screen the counterparty, its ownership structure and the subject of the deal against the current lists. The company name alone is not enough — we also check who actually controls it. We repeat the screening on longer contracts, because the lists change while they run.

Export control of dual-use goods — items that can serve military ends — matters too. Example: a component ordered through an intermediary may need a licence, and its absence burdens the seller as well. Since 2022 this is part of basic compliance, not a formality for large corporations. A sanctions breach risks criminal liability and frozen bank accounts — and a bank can block payments faster than any court. The sanctions clause is therefore your emergency exit from a contract you may no longer perform. It lets you lawfully suspend or terminate it, without liability for non-performance.

Reviewing a ready contract is usually a few working days, and drafting one from scratch takes from one to several weeks, depending on the value and complexity (a domestic contract is often quicker than a multilingual cross-border one).

Several factors drive the time and cost. A review is quicker, because we work on a finished text and point out risks and fixes. Drafting from scratch takes longer, because we set the transaction structure and the security. For a foreign contract we add the governing law, jurisdiction and language version. It grows with the number of parties, the value of the contract and the number of contested points to negotiate. Urgency counts too — an express deadline means reshuffling the team and raises the cost.

We work on a fixed project quote or as part of ongoing support with an agreed budget. We always start with a short conversation about the transaction, to learn its scale and its risks. On that basis we give you a scope and a range before we begin — no surprises on the invoice. Example: reviewing a standard sale contract closes faster than negotiating a multilingual framework contract with a foreign partner, so the quote will differ too. Ongoing support is often cheapest for firms that sign contracts regularly.