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Micro, small and medium-sized businesses make up the vast majority of businesses in Poland and generate a large share of jobs. Yet they often face the greatest business risks and depend on much larger entities. Risk can arise not only in day-to-day operations but also in B2B contracts, particularly when the parties have unequal bargaining power. We explain which clauses deserve special attention and how to protect your interests.
Freedom of contract: its limits and what to consider in a B2B agreement
The Civil Code’s principle of freedom of contract, a foundation of business transactions that also applies to B2B agreements, has important limits set out in Article 353¹.
The provision states: “Parties entering into a contract may arrange their legal relationship as they see fit, provided that its content or purpose does not conflict with the nature of the relationship, the law or the principles of social coexistence.”
Businesses can therefore shape their contracts, but the clauses cannot violate the nature of the relationship, statutory provisions or the principles of social coexistence.
Legal scholarship and case law increasingly identify B2B clauses that may exceed freedom of contract. In practice, this particularly concerns unequal relationships in which a smaller business, with weaker bargaining power, fewer resources or time pressure, accepts a larger company’s ready-made terms.
Which B2B clauses deserve particular attention? Here is our list.
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A unilateral right to change contract terms
The first clause that should not appear in a B2B agreement and may be challenged is a unilateral right to change contractual terms.
One party being unable to terminate or negotiate is a textbook example of contractual imbalance. A contract cannot create an extremely one-sided relationship. Every change should require written form and an amendment signed by both parties.
Automatic renewal: is this clause permitted?
Automatic renewal for another period without an opportunity to negotiate or terminate can be a trap. Avoid such clauses, especially as renewal may bring worse terms and require continued payment for services you no longer need. This creates a business risk that can easily be avoided through appropriate contract drafting.
Contractual penalties: excessive amounts imposed on only one party
Contractual penalties appear regularly in B2B agreements and are not inherently wrong. Problems arise when they are grossly excessive and imposed on only one party for the smallest breaches, while the other party faces no consequences for any breach.
Non-compete obligations without compensation
B2B agreements prohibiting a party from competing both during and after the contract should, as a rule, provide compensation. No compensation for a loyalty obligation opens the way to challenging the clause.
The non-compete provision should be as precise as possible, particularly regarding the compensation amount and its duration.
Beware of B2B clauses characteristic of an employment relationship
Last week, the TaxCoach blog reported that the planned reforms giving the National Labour Inspectorate administrative powers to convert B2B and civil-law contracts into employment contracts had, for now, been halted by the Prime Minister.
This does not mean contract inspections have disappeared. The Inspectorate is already intensifying its examination of relationships in which B2B and mandate contracts exhibit the characteristics of employment in practice. Its reform remains one of the adopted National Recovery Plan milestones, so changes should still be expected.
Including clauses characteristic of employment in a B2B agreement is therefore risky. Provisions requiring services under the other party’s strict direction, combined with Labour Code benefits, may lead a court to reclassify the B2B agreement as an employment contract.
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Summary
Before signing a B2B agreement, look beyond price and scope of services. Unilateral changes, automatic renewal, one-sided penalties and uncompensated non-compete obligations can create substantial risks. The way work is organised also matters, because clauses resembling employment may affect the contract’s classification.
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