The effects of the government's measures are plain to see: closed restaurants, empty streets, canceled events. Most entrepreneurs are encountering such restrictions for the first time in their business history. Doubts arise, particularly regarding the fulfillment of contractual obligations. How can you protect yourself from problems with your company's ongoing operations?

The Polish legal system is familiar with the concept of force majeure (vis maior), which, despite the lack of a statutory definition, has been interpreted in a wealth of case law and legal doctrine. A force majeure event is unpredictable, external in nature, and produces consequences that cannot be prevented.

When concluding a contract, pay attention to the wording of the clause concerning force majeure and its consequences for the contract.
The current situation is not the only one in which it may apply.

The inability to predict a given event usually stems from its suddenness and exceptional nature. The external nature of force majeure refers to the occurrence of a given event independent of the company's operations and structures. The impossibility of prevention stems from the entrepreneur's powerlessness in the face of the impending danger. Classic examples of force majeure include natural disasters such as floods, fires, and hurricanes, as well as political phenomena such as wars and terrorist attacks.

The current situation meets all of the criteria outlined above. It was further legally confirmed by the Minister of Health in the Regulation of the Minister of Health of March 13, 2020.

Businesses should pay attention to the contractual provisions regarding liability for force majeure events in their contracts. It's worth examining the issues surrounding mutual obligations and ascertaining whether additional action would be justified in the current situation.

The lack of contractual clauses addressing the consequences of force majeure forces parties to refer to general civil law provisions on the consequences of non-performance. The current situation should emphasize the importance of carefully drafting contracts, including provisions that are often underestimated. As it turns out, an "epidemic" is not the same as a "state of epidemic threat."

We recommend immediately initiating discussions with your business partners regarding current and past opportunities to fulfill your obligations. Perhaps the service you were supposed to provide is currently unavailable, and you should renegotiate the contract.

Pursuing legal rights may currently be significantly more difficult. Courts across the country are suspending their operations, most of them only hearing urgent cases, as listed in the Rules of Procedure for Common Courts. Reducing court staff to the bare minimum will negatively impact the speed of proceedings, for example, in the delivery of procedural documents and the scheduling of hearings. We are also receiving reports of the possibility of the Polish Post suspending its operations, without whose involvement the circulation of documents in court proceedings could face additional difficulties. Discussions are currently underway within the legal community to prevent a paralysis of the justice system by introducing new regulations, the effects of which we will be closely monitoring.

If you are having trouble meeting your obligations, it is worth collecting evidence to support your claims about the difficulties you have encountered.

To maintain smooth trading and financial security, we recommend first analyzing the clauses in existing contracts. In the event of any doubts or discrepancies in the interpretation of specific contract provisions or actual events, it's wise to provide ongoing support to your counterparty and keep them informed of any anticipated performance issues. This will allow for the development of solutions acceptable to both parties. It's also worth checking government announcements on official ministry websites, while avoiding reliance on dubious sources of information that could spread "fake news."

What to do?

• review the contract provisions regarding force majeure clauses
• ensure contact with the contractor and fulfillment of mutual obligations
• document the impact of force majeure on the current functioning of the enterprise
• determine what we can do in light of applicable regulations
• monitor the situation in the country on an ongoing basis

Please contact us by email at biuro@kglegal.pl or by phone at +48 22 856 36 60. You can also contact the lawyers handling your case directly.

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