- In respect of existing business-to-business (B2B) agreements that do not contain an explicit price adjustment clause:
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In respect of future B2B agreements:
- a. Is it permissible to include an explicit price adjustment clause in the agreement? If so, what price adjustment clauses typically exist in your jurisdiction?
- b. What legal issues need to be considered (if any) to ensure that the price adjustment clause is enforceable? Is there any key legislation or case law that parties should be aware of regarding enforceability of price adjustment clauses in your jurisdiction?
- c. Are there any other issues that parties should consider when formulating a price adjustment clause (e.g. any sector-specific regulation)?
- Do any additional considerations or rules apply to the inclusion of price adjustment clauses in business-to-consumer (B2C) agreements?
jurisdiction
1. In respect of existing business-to-business (B2B) agreements that do not contain an explicit price adjustment clause:
a. Is the supplier permitted to unilaterally increase prices (or does it have other rights regarding price increases)? If so, to what extent?
As a rule, a supplier cannot unilaterally increase prices in existing B2B agreements that do not contain an explicit price adjustment clause.
In general, all B2B agreements are governed by Polish civil law, under which the contracting parties must hold to what they have agreed (pacta sunt servanda).
There are only a limited number of tools for unilaterally adjusting (or terminating) agreements for external reasons arising after conclusion of the agreement and unforeseen by both parties, namely force majeure, the rebus sic stantibus clause, and the consequential impossibility of performance of the agreement.
b. Do (extreme) price increases give the customer the right to terminate the agreement? If so, are there any specific rules or regulations to comply with?
As mentioned in Question 1(a) above, a supplier cannot unliterally increase prices unless a price adjustment clause is specifically provided for in the B2B agreement.
However, under Polish civil law, should – due to an extraordinary change of circumstances – the performance of the obligations under the agreement result in excessive difficulties or threaten one of the parties with a substantial loss, which situation was not foreseen by the parties when concluding the agreement, the civil court may, after considering the interests of the parties, determine the manner of performance of the obligation, the amount of the obligation, or even rule on termination of the agreement.
2. In respect of future B2B agreements:
a. Is it permissible to include an explicit price adjustment clause in the agreement? If so, what price adjustment clauses typically exist in your jurisdiction?
It is permissible to include an explicit price adjustment clause in a B2B agreement which follows from the general principle of freedom of contract.
The most common price adjustment clauses used in commercial agreements are based on references to specific indices, foreign currencies, or commodities.
b. What legal issues need to be considered (if any) to ensure that the price adjustment clause is enforceable? Is there any key legislation or case law that parties should be aware of regarding enforceability of price adjustment clauses in your jurisdiction?
There are no key legal regulations on the enforceability of price adjustment clauses in B2B agreements.
As a general rule, in agreements governed by Polish law, the specific wording of the price adjustment clause should be formulated in a clear manner and tailored to specific business needs, on a case-by-case basis.
c. Are there any other issues that parties should consider when formulating a price adjustment clause (e.g. any sector-specific regulation)?
Under Polish law, there are some sector-specific regulations concerning price adjustment.
Most importantly, pursuant to the Polish Public Procurement Law, in the case of public procurement agreements concluded for a period of more than six months, the ordering party is obliged to specify the rules on adjustment of a contractor’s fee if prices of materials or costs of performance of the agreement increase. The Public Procurement Law provides certain requirements for the wording of the price adjustment clause, but these are general requirements.
For public sector contracts, there are special requirements for price adjustments due to raw material price increases. Please refer to our CMS Expert Guide on rising raw material prices.
3. Do any additional considerations or rules apply to the inclusion of price adjustment clauses in business-to-consumer (B2C) agreements?
Under Polish civil law, in the context of B2C agreements containing price adjustment clauses, it should be pointed out that such agreements need to be reviewed for abusive clauses, i.e. prohibited contractual provisions.
Pursuant to the Polish Civil Code, contractual clauses are deemed to be abusive if they shape the rights and obligations of the consumer in a manner contrary to good practice, grossly infringing their interests.
These may include clauses which entitle the consumer’s counterparty to unilaterally amend the agreement without a valid reason indicated therein, or which provide for the consumer’s counterparty to determine or increase the price or remuneration after the conclusion of the agreement without granting the consumer the right to terminate the agreement.
As an aside, it should be borne in mind that the Polish provisions governing abusive clauses also apply, under certain conditions, to individuals conducting a one-person (sole trader) business activity.
