On June 1, 2020, the Act of July 31, 2019, amending certain acts to reduce regulatory burdens, will enter into force. This regulation introduces a revolutionary change in the application of unfair terms, warranties, and withdrawal from distance contracts. Specifically, these provisions will no longer apply only to consumers, but also to individuals running sole proprietorships.
Currently, if a contract is concluded between two entrepreneurs, it constitutes a fully professional transaction, and both parties are required to demonstrate a higher standard of knowledge and diligence in protecting their interests. However, the new regulation aims to protect small entrepreneurs, who are often in a weaker negotiating and economic position, and lack the appropriate knowledge and information regarding a given type of transaction compared to the entrepreneur with whom they are entering into a contract.
The presented change should be carefully analyzed by entrepreneurs who enter into contracts using template contracts with individuals conducting so-called sole proprietorships. It is important to note that the new regulation does not apply to partnerships and companies, as the provision refers to individuals conducting business activity. Therefore, the current simple division between consumers and entrepreneurs will become obsolete, as from June 1, 2020, the category of entrepreneurs should also be divided into entrepreneurs who, under a given contract, are professionals and those who are treated as consumers.
Before the new regulation comes into force, entrepreneurs should analyze whether their contract templates contain prohibited clauses. To comply with the new regulation, current contract templates should be reviewed to ensure they comply with the new regulations, which are intended for clients running sole proprietorships.
First, it is necessary to verify with whom the contract is being concluded. Second, whether the contract with the sole proprietor is directly related to their business activity. For the provision to apply, the content of the contract must indicate that it is not of a professional nature for the entrepreneur. To simplify matters, the legislator has indicated that the entry of the subject of the business in the CEIDG (Central Registration and Information on Business) may be relevant. Therefore, contracts under which a given entrepreneur provides services or supplies goods should not be covered by this regulation. In other cases, it will be necessary to analyze the subject of the contract in the context of the individual's business activity. Given that, according to the amendment, the CEIDG entry will be significant, sole proprietors should review their entries to ensure they do not contain entries that are irrelevant to their business activity or to ensure that the PKD (Polish Classification of Activities) is not too general.
Equalizing the status of consumers and individuals conducting business activities in the context of unfair contract provisions can have significant consequences. Specifically, if a contractual provision shapes the rights and obligations of a sole proprietor in a manner that is contrary to good practice and grossly violates their interests, such provisions will not be binding on the entrepreneur. In extreme cases, the entire contract may be deemed invalid.
The application of abusive clauses to individuals conducting business activity, if the contract is not of a professional nature for such an entity, is not the only change. Similarly, the legislator has introduced regulations regarding statutory warranty, thus expanding the seller's liability for non-conformity with the contract to that of a consumer, as well as the ability to withdraw from a distance contract and an off-premises contract without giving a reason within 14 days.
In accordance with the transitional provisions, the regulation in question will not apply to contracts concluded before 1 June 2020. Therefore, all contracts concluded before that date will not be subject to review in terms of abusive provisions.
What to do
Given the new regulation and its potential consequences, entrepreneurs concluding contracts with sole proprietors should review their standard contract templates to ensure they comply with the new regulations. It should be noted that the Code's list of examples of prohibited provisions alone contains 23 items, presented in a general manner.
Furthermore, due to the expansion of the list of entities authorized to withdraw from distance contracts, it is necessary to review your documents and procedures related to concluding contracts remotely (including electronically) or off-premises. In particular, you should consider the verification procedure for contractors to ensure that they are not entering into a contract not directly related to their business activity, where the contract is not of a professional nature for them. It should be noted that failure to provide notice of the right of withdrawal extends the period during which this right can be exercised.
