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DWF Alert: Contract with a farmer like with a consumer from January 2024

22 December 2023
The new year will change a lot in contracts between businesses and farmers. 

What is changing?

As of 7 January 2024, the provisions of Articles 3851-3853 of the Civil Code regarding consumers will apply also to individuals operating a farm. For the sake of simplicity, these individuals are referred to herein as "farmers." The legal basis for the changes in question, including the data of the Act, can be found in the final sections of this text.

As a result, the Act extends the provisions of the Civil Code regarding unfair contractual terms (so-called abusive clauses) to contracts with farmers. Such provisions are those that have not been individually agreed with the consumer, if they shape his rights and obligations in a manner contrary to good practices, grossly violating his interests. Moreover, those provisions of the contract on the content of which the consumer had no real influence are considered not having been individually agreed. In particular, this applies to contract provisions taken from the contract template proposed to the consumer by the counterparty. These are actually broad concepts, developed by court rulings and practice of the Office of Consumer and Competition Protection.

What could be the effects of the Act?

Adding farmers to the list of persons covered by the aforementioned consumer protection regulations will, in effect, have a significant impact on contracting rules and the position of farmers in their relations with entrepreneurs, including those operating in the RES industry (especially with regard to lease agreements).

According to the Civil Code, unfair contractual terms are not binding for the consumer. From 7 January 2024 farmers will also be authorized to refer to this legal effect.

This risk is of particular importance for the RES sector, due to the practice of concluding contracts with farmers, especially lease agreements, on commonly used contract templates.

Which provisions of contract templates may be abusive?

Identification of unfair contractual terms in the template adopted by the entrepreneur for use requires individual analysis. The Civil Code contains only an exemplary catalogue of such provisions. In this catalogue alone some clauses are listed which are known from the templates used on the RES market, and which:

  • allow the entrepreneur to assign rights and transfer obligations under the contract without the consumer's consent;
  • make the conclusion, content or performance of a contract dependent on the conclusion of another contract, not directly related to the contract containing the provision under review;
  • make performance conditional on circumstances that depend only on the will of the consumer's counterparty.

In general, the abusiveness features may be demonstrated by those provisions that give the entrepreneur the power to unilaterally shape the legal relationship with the farmer, without taking into account the position of the farmer – which is, as a rule, weaker in this relationship - to whom the Act extended the protection that had previously been due to consumers.

What action should be taken?

In view of the significant impact of the Act on contractual relations between entrepreneurs and farmers, it is necessary to analyze all the model contracts used in the business operations so far, especially lease agreements, in terms of the risk of abusiveness of the clauses existing therein. The result of the analysis should be identification of the risks and consultation with the legal counsel on possible ways to mitigate them, including a possible decision by the entrepreneur to modify the binding template.

Legal basis

Act of 14 April 2023 on consumer pawnbroker loan (Journal of Laws, item 1285), which will come into force on 7 January 2024 (in this text as the "Act").

Article 6 sec. 4 of the Act of 20 December 1990 on social insurance for farmers.

How to contact us?

We encourage you to contact us if you have questions or would like to ascertain whether the Act will also affect contracts entered into before its effective date. The DWF team is also at your disposal if you need support in the process of adjusting your business in relations with farmers to the new legal reality.

Further Reading