Limitation periods in a contract for a specific work
The statute of limitations for claims arising from a contract for a specific work is regulated differently from the general rules. Pursuant to Civil Code Art. 646, these claims become time-barred two years after the work is delivered, or if the work has not been delivered, two years after it was supposed to be delivered under the contract. This is a short timeframe, and requires great care to avoid forfeiting claims—especially as the way it is counted can raise practical questions, and in some cases a three-year term is used.
A special statute of limitations
Art. 646 of the Polish Civil Code provides for a short, two-year, specific limitation period for claims arising out of a contract for a specific work (umowa o dzieło). This is different from the general rules, according to which claims become time-barred after three or six years. In the case of a contract for a specific work, in addition to shortening the limitation period, the code also regulates differently the time when the limitation period begins to run. Under the general rules, the limitation period begins to run from the date when the claim matures (i.e. becomes due and payable), but in the case of a contract for a specific work, the date of delivery of the work (actual or contractual) is decisive.
Types of claims with two- or three-year limitation periods
The two-year limitation period applies to all claims arising from a contract for a specific work. It will apply to a claim by the contractor for payment of the fee, a claim by the client for delivery of the work, or a claim for reimbursement of the cost for a third party to perform or improve the work in accordance with Civil Code Art. 636 §1. After two years, claims for damages of both parties to the contract for a specific work will also expire.
An exception is a claim for payment of liquidated damages reserved for termination of a fixed-term contract for a specific work. This is recognised in the case law as not being a claim arising out of the contract for a specific work within the meaning of Civil Code Art. 646 (Supreme Court of Poland judgment of 20 October 2006, case no. IV CSK 178/06). However, the Supreme Court also ruled on 18 November 1997 (case no. II CKN 465/97) that a contractual penalty stipulated in a contract for a specific work (Civil Code Art. 483 §1) becomes time-barred along with the limitation on the main obligation (Art. 646). But that judgment was rendered in a case where a contractual penalty was claimed for delay in performance of the work, and therefore for improper performance of the obligation of timeliness, which is part of the essence of a contract for a specific work.
The two-year time limit also does not apply to warranty claims for defects in the work, due to incorporation by reference of the provisions on a contract of sale under Art. 638 of the Civil Code. In addition, claims arising out of repudiation of the contract under Art. 494 become time-barred under general rules, i.e. Art. 117–118 of the Civil Code (Supreme Court judgment of 21 October 2010, case no. IV CSK 112/10).
Beginning of the limitation period
The limitation period for claims under a contract for a specific work begins to run from the date of delivery of the work, or if the work has not been delivered, from the date when, under the contract, it was supposed to be delivered.
Therefore, this deadline is linked with handing over of the work by the contractor, and not taking over of the work by the client or acceptance linked with payment of the fee. This is confirmed by the Supreme Court judgment of 7 October 2010 (case no. IV CSK 173/10), allowing a situation in which the contractor may unilaterally set the beginning of the running of the limitation period for a claim arising from a contract for a specific work. In that case, the court reasoned that since Art. 646 of the Civil Code ties the beginning of the running of the limitation period to the delivery of the work, and delivery of the work is an action taken by the contractor and dependent on the contractor’s will, conditioning the beginning of running of the limitation period on that event was the legislative intent.
Pursuant to Art. 646 of the Civil Code, the running of the limitation period can begin in two main ways—contractual or actual:
- Contractual deadline for delivery of the work:
- When the work has not been delivered at all, or
- When the work has been delivered, but was delivered more than two years after the contractual deadline for delivering the work (so the work was not delivered before expiration of the limitation period calculated from the contractual deadline for delivering the work)
- Actual date of delivery of the work:
- When the work was delivered in compliance with the contractual deadline for delivery, or
- When the work was delivered within two years after the deadline (i.e. before expiration of limitation period counted from the contractual deadline for delivering the work).
What if payment is due more than two years after delivery?
A practical problem in determining the beginning of the limitation period may arise when the deadline for payment for the work falls after the work has been delivered. The view in the legal literature is that when the parties have contractually agreed on a deadline for payment of the fee more than two years after delivery of the work, the two-year period should be calculated from the time when the claim for payment of the fee matured, i.e. when the fee became due and payable. But this position could lead to an impermissible modification of the limitation period, and thus could be challenged. Therefore, in pursuing claims under a contract for a specific work, the parties should be cautious, and the safest approach is to adopt a two-year time limit.
Agata Jóźwiak, attorney-at-law, Dispute Resolution & Arbitration practice, Wardyński & PartnersPoczątek formularzaDół formularza
