Claims under a preliminary agreement

The extent of the protection available in the event of non-performance of a preliminary contract depends on the form in which it was concluded.
The legislator provides for two types of sanctions in the event of non-performance of the obligation to conclude a promissory contract: a weaker and a stronger one.

Weaker effect

If the preliminary agreement does not fulfil the requirements for the validity of the final agreement, in particular as regards form, the other party may demand from the party obliged to conclude the agreement compensation for the damage it has suffered by relying on the conclusion of the final agreement. The parties may specify the scope of damages differently in the preliminary agreement (Article 390 § 1 of the Civil Code).

The damages are limited to the so-called negative contractual interest. Damages that fall within the scope of negative contractual interest include, for example: costs for the preparation and conclusion of the preliminary agreement, costs for the preparation for the conclusion of the final agreement, costs for negotiations, travel, notary and fiscal fees (actual losses) and lost earnings due to the time spent on negotiations preceding the conclusion of the preliminary agreement and subsequent activities (lost profits).

It is, in principle, permissible to contractually modify the extent to which a party obliged to conclude a preliminary contract may be liable for non-performance of that obligation. It is understood that the scope of this liability may be limited or extended. However, as far as the extension of the scope of damages to be compensated for non-performance of the preliminary contract is concerned, there are some reservations raised in legal science regarding the possibility of challenging these provisions in consumer relations as prohibited. Caution should therefore be exercised with regard to the introduction of contractual modifications in this respect.

Stronger effect

If the preliminary agreement fulfils the conditions for the validity of the final agreement, in particular the requirements as to form, the holder of the claim for the conclusion of the final agreement – in addition to the claim for damages under the negative contractual interest – is also entitled to a claim for the conclusion of the final agreement. It is up to the entitled party to choose the claim asserted. They may be asserted alternatively in the statement of claim. An action for performance of a contract has the character of an action for shaping the legal relationship. A judgment upholding an action for performance of a contract, or more precisely, a demand for an obligation to oblige the other party to make a declaration of will of a specified content, pursuant to Article 64 of the Civil Code in conjunction with Article 1047 of the Civil Procedure Code replaces the missing declaration of will.

The case law adopts an interpretation, which does not fully find its basis in the wording of the provisions, that a judgment allowing a claim for the conclusion of a final agreement supersedes the parties’ agreement (see Resolution of the Supreme Court composed of 7 judges of 7 January 1967, III CZP 32/66, OSN 1968, No 12, item 199). This means that the entitled party acting as plaintiff does not have to make its own declaration of intent in the form of a notarial deed. However, different types of solutions to this situation are encountered in practice.

Limitation period for claims under a preliminary agreement

The limitation period for claims under a preliminary contract is one year from the date on which the contract should have been concluded. If the court dismisses the claim to conclude the final agreement, claims under the preliminary agreement shall become time-barred one year from the date on which the judgment has become final.
For example, if the parties agreed that the contract was to be concluded on 31 May 2014 at the latest, claims under Article 390 of the Civil Code will become time-barred on 31 May 2015. The extension of the limitation period to the end of one year provided for in the general provisions does not take place, as the limitation period is less than two years. If the claimant seeks to assert a claim for the conclusion of the Promised Agreement in the first action without filing a claim for damages and the court dismisses it, then the limitation period for claims for damages begins to run on the date on which the judgment dismissing the action became final. The entitled party may, within one year from the date on which the judgment dismissing the action to conclude the final agreement becomes final, bring another action for damages.
Legal status: 2.10.2024