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Amendment of regulations concerning the joint and several liability of the investor and the contractor

On 1 June 2017, the Act of 7 April 2017 Amending Certain Other Statutes entered into force. The purpose of this act is to facilitate claiming debts. Under the act, among other provisions of law, Article 647(1) of the Polish Civil Code was amended. The article concerns the issue of the joint and several liability of the investor and the contractor (general contractor) for the payment of a subcontractor’s fee in exchange for construction works carried out thereby.

The motivation behind the amendment is to facilitate the procedure whereby the contractor notifies the investor about a subcontractor – the requirement to provide the investor with the agreement concluded with the subcontractor was waived, as well as the regulation whereunder the investor’s failure to raise objections or express reservations within 14 days from receiving the agreement concluded with the subcontractor or a draft thereof (with relevant documentation) was taken to mean that the investor had expressed consent for such agreement to be concluded and, as a result, was jointly and severally liable for the payment of the fee for construction works carried out by given subcontractor.

Today, in order to extend to the investor the liability for the payment of the fee due to a subcontractor on account of construction works carried out thereby, one should only provide the investor with a detailed description of what the construction works of given subcontractor are to concern, which should be taken care of before the start of said works. The investor will be jointly and severally liable with the contractor (general contractor) for the payment of the fee due to such subcontractor unless, within 30 days from notifying the investor about the subcontractor, the investor notifies the subcontractor and the contractor that it objects to such works being carried out by the subcontractor.

Nevertheless, in the case where construction works to be carried out by given subcontractor are described in detail in the agreement concluded between the contactor and the investor, the investor and the contractor (general contractor) will be jointly and severally liable without the need to notify the investor as specified above.

The investor’s liability for the payment of the fee to the subcontractor is expressly limited under the discussed provision of law to the value of the fee determined in the agreement between the subcontractor and the contractor, unless the amount of the fee of the subcontractor is higher than that of the contractor. Should this be the case, the investor’s liability for the payment of the subcontractor’s fee is limited to the fee due to the contractor.

All contractual provisions excluding the application of the regulation in question are invalid.

07.07.2017

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