In the event of doubt, the reservation in the improvement contract to the consumer of a contractual punishment for each day of hold not providing for the right to compensation beyond that punishment may be regarded as an unlawful provision. Especially erstwhile the punishment has been reserved in a grossly low height. This is the crux of the Friday resolution of the 3 ultimate Court civilian Chamber judges.
Two-year hold and tiny penalty
This issue resulted in a case which the plaintiffs demanded from the developer PLN 125 1000 compensation for losses they suffered due to the fact that it was about 2 years late with the construction and transfer of the property. Among another things, they had to terminate the contract to the tenants of their second flat to temporarily live there.
In their assessment, Article 484(1) of the civilian Code should not apply in this case, which excludes the anticipation of claiming compensation exceeding the contractual punishment (unless the parties have decided otherwise). The parties to this improvement agreement did not foresee the anticipation for the purchasers of the flat to claim compensation beyond the penalty, which amounted to approx. PLN 5 thousand.
The punishment was set (based on the developer's formula) at a very low level of 0.01% of the amounts paid by purchasers to the price of the requested premises for each day of hold in its transfer to consumers. “This compensation is contrary to Article 5 KC, i.e. it violates the principles of social coexistence,” said the plaintiffs.
The territory court planted 40 1000 PLN for them, and the Court of Appeal in Warsaw asked the ultimate Court the following question: Whether the specified omission, in the improvement contract, in the order to reserve from the developer a contractual punishment for each day of hold in the conclusion of the contract for the transfer of ownership of a dwelling, the right to claim compensation beyond the amount of the reserved contractual penalty, constitutes an unauthorised contractual provision which importantly limits the liability of the trader to the consumer for the improper performance of the obligation.
Consumer hazard must be investigated
The justice of the appeal court, Edyta Jefimko, presented 3 possible approaches to this issue in the justification of the question. 1 of them foresees that the specified usage in the improvement agreement of a punishment limiting contractual liability causes this provision to be prohibited as it may limit the liability of the developer to the consumer for improper performance of the contract. It is besides possible that the creditor is entitled to seek, alongside a contractual penalty, supplementary compensation up to the amount of harm actually suffered. Finally, an indirect position can be considered. According to him, the deficiency of a reservation in the contract of the right to compensation exceeding the amount of the contractual punishment charged does not, in itself, constitute a regulation on the liability of the developer to the consumer for the failure to execute or improper execution of the obligation, unless the punishment clause contained in the contract reserves its advanced limit.
Attorney for Reasons Piotr Modzelewski argued before the SN that in this case the fine of PLN 5 1000 was almost apparent and it was a safety for the developer alternatively than consumers.
The SN adopted a resolution that, in the event of doubt, the provision of a improvement contract reserving a punishment to the consumer for each day of hold in the conclusion of the contract for the transfer of the right to separate ownership of a dwelling which does not supply for the right of the consumer to claim compensation above the amount of the reserved contractual punishment (Article 484 §2 of the second KC), is considered to be an unlawful contractual provision, in peculiar erstwhile the punishment has been reserved in a grossly low amount.
Judge Karol Weitz briefly stated in the explanatory memorandum of the resolution that the specified fact that specified a clause was included in the improvement contract was not adequate to be regarded as an abusive one, it must be stated that the punishment is grossly low and risky for the consumer.
File number: III CZP 22/25
Stefan Jacino
attorney, Wardyński & Partners
Contractual penalties are intended not only to motivate the performance of the work within the time limit, but besides to simplify the procedure for the investigation of their payment – without command, or what losses. On the another hand, penalties should not be a origin of advanced income at the expense of a counterparty that failed to meet the deadline. Therefore, there are provisions to request a average punishment of gross exaggeration. However, the determination of the punishment in the contract excludes the anticipation of actual compensation, unless expressly permitted in the contract. The application of a fine grossly low and at the same time excluding a full compensation investigation, alternatively of facilitating the recovery of damages, becomes a protective shield for an unreliable counterparty. Entrepreneurs can deal with each another that way – what they lose on one, they gain on another. The consumer does not have specified a possibility, hence its extended protection is full justified so as not to be deprived of the anticipation of real compensation.
