- Under Polish law, general provisions concerning statutory warranty apply both to B2B contracts and sales to consumers. However, there are some special rules which provide greater protection to consumers.
- Current legislation does not entitle companies to completely rule out or even limit consumers’ rights arising from the statutory warranty, it may however be extended. At the same time, in B2B contracts the parties may in principle freely determine conditions governing their relationship and extend, restrict or completely rule out statutory principles on warranty as they see fit. Such limitation or exclusion is however ineffective if a seller concealed a defect.
A material defect exists if the good does not comply with the contract, and in particular if it: i) does not have the characteristics which goods of this kind should have due to the circumstances or purpose of their use; ii) does not have characteristics of which the seller has assured the purchaser; iii) is not fit for the purpose of its use (if the purchaser informed the seller about such purpose at the time of concluding the contract); iv) was handed over to the purchaser as incomplete; or v) was improperly installed by the seller or by the purchaser who acted in compliance with the seller’s instructions.
A legal defect exists if the good sold is actually owned by a third party, if it is encumbered with a third party right or if the purchaser cannot fully exercise its property rights due to a court ruling or an administrative decision.
Rights and Remedies of Purchaser
- Replacement or repair of the defective goods
- A price reduction or withdrawal from the contract
- Claim for damages
- In the event of a defect the purchaser may first demand that it be repaired or replaced.
- It is only permitted in B2B contracts to provide for a restriction to one of the two types of subsequent performance.
Right to Choose Subsequent Performance
- Claims under statutory warranty are an alternative, and it is at the discretion of the purchaser to choose which one it demands.
- Transferring the right to choose between repair and replacement to the seller is generally deemed permissible in contracts between business entities.
Costs of Subsequent Performance
- If the purchaser exercises its rights under the statutory warranty it is obliged to deliver the defective good to the seller. However, the seller has to bear the costs related to the replacement of the good or its repair, including the costs of its delivery, labour, materials, reinstallation, etc.
- In sales between business entities, the seller may reject the purchaser’s demand to reinstall the good if the cost of reinstallation exceeds the price of the good sold.
Conditions for Claims for Damages
- A purchaser who has exercised its rights under statutory warranty may also claim for the full compensation of damage it suffered due to concluding a contract without knowledge of the defect. Such a claim may be filed even if the damage was caused due to circumstances for which the seller is not liable.
- Apart from the above, a purchaser may also seek redress under general provisions on contractual liability subject to the following conditions:
- breach of contractual obligation due to circumstances for which the seller is liable
- causal link between the damage and improper performance of a contract by a seller
Extent of Claims for Damages/Limitation of Liability
- The extent of claims for damages under statutory warranty covers any damage suffered due to the conclusion of a contract without knowledge of the defect, e.g. costs of transportation or storage of the good.
- The extent of claims for damages resulting from contractual liability covers an actual loss and loss of profit.
- The extent of liability may not be restricted to the detriment of the consumer in contracts vis-à-vis consumers.
Withdrawal from Sales Contract
- The right to reduce the price or withdraw from the contract arises only if the seller does not immediately and without excessive inconvenience for the purchaser replace the defective good or remove the defect.
- A purchaser may also withdraw from the contract if the good has already been replaced, repaired or the seller has not fulfilled its obligation to replace or repair the good.
- However, in any event the purchaser may withdraw from the contract only if the defect is significant.
Limitation Period for Claims for Defects
- The statutory warranty covers defects which become apparent within two years of the good being handed over to the purchaser. However, the abovementioned two-year period does not apply if a seller concealed the defect.
- The purchaser may bring a claim within one year of becoming aware of the defect (this period may be extended to 2 years as it cannot expire before liability under the statutory warranty expires). However, in any event the seller is not liable for a defect if the purchaser knew about it at the time of concluding the contract.
Purchaser’s Obligation to Inspect Goods and Report Defects in B2B Contracts
- In B2B contracts the purchaser must inspect the goods at a time and in a manner generally accepted for such goods. Any defects must be reported to the seller immediately. The purchaser must also report hidden defects immediately upon becoming aware of them.
In contracts between business entities, the obligation to inspect the goods and report any defects may be extended, limited, or completely excluded.