In the event that an employer on a project does not consent (either expressed or deemed) to sub-contracts let by a general contractor, any such sub-contract between the general contractor and sub-contractors are unenforceable. Clearly, this creates a difficulty for sub-contractor in pressing claims against general contractors for money owing for work performed on the project.
The non-enforceability of the sub-contract could equally create problems for a general contractor. In the event that the sub-contractors' works are incomplete, defective or not in accordance with plans and specifications (intended to form part of the sub-contract), a general contractor will not be able to simply rely upon the provisions of the sub-contract to demonstrate the sub-contractor's failure of performance. Further, any warranties required of a sub-contractor by the general contractor pursuant to the terms of the sub-contract, which are in excess of those with otherwise be implied by the Civil Code would equally be unenforceable. It could even be questionable whether even statutory warranties would apply to work carried out pursuant to a contract which is unenforceable.
This creates a problem where a general contractor may be required to give an extended warranty to the employer pursuant to the terms of the general contract (e.g.: a ten year warranty for roofing or structural work). In the normal course of events, the general contractor would pass on this requirement to the sub-contractor, requiring a warranty for the same period of time under the sub-contract.
In the event that the sub-contract is declared unenforceable, due to the problems outlined above, the general contractor will be left exposed for the extended period of time under the terms of the general contract, without the right to claim against the sub-contractor pursuant to its warranty under the sub-contract.
It seems clear now that the legislation was introduced without proper consultation within the industry and consideration of problems which could follow. Sadly, it may be that the legislation will create further difficulties for those parties that it was intended to benefit in the first place.
For further information, please contact Darren Haines-Powell at darren.haines-powell@cmck.com or on +48 22 520 56 82.
The above information is provided courtesy of leading international law firm CMS Cameron McKenna. To review an archive of information and to register for CMS Cameron McKenna's email update service on topical legal issues in Poland, please click on: http://www.law-now.com/law-now/bankier/
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