On July 12, 2017, the new law on combating with unfair use of contractual predominance in trading with agricultural and food products dated December 15, 2016 will enter into force (Journal of Laws 2017, item 67) http://isap.sejm.gov.pl/DetailsServlet?id=WDU20170000067.
This Act sets forth the rules and procedures for combating with the practices which unfairly exploit a contractual predominance by a supplier of agricultural or food products or purchasers of those products.
Significantly, this Act applies to contracts for purchasing of these products, if the total turnover between the parties in the year of opening the relevant proceeding regarding unfair practices or in any two years preceding the year of initiation of the proceeding, exceeds PLN 50 thousand and if the turnover of the buyer or supplier, who used unfair practice the (or the capital group to which he belongs), in the year preceding the year of initiation of the proceedings exceeds PLN 100 million.
The unfair predominance shall mean in particular: (i) unreasonable termination of the contract or threat of termination of the contract; (ii) granting only one party the right to terminate an agreement and the right to withdraw from an agreement; (iii) making the conclusion or continuation of the contract subject to acceptance or fulfillment by one of the parties of another benefit, which has no substance or customary connection with the object of the contract; (iv) unreasonably extending the payment deadlines for delivered agricultural or food products.
Penalties for even unintentional breach of the prohibition can reach up to 3% of the turnover of the punished entrepreneur, achieved in the financial year preceding the year of imposition of the penalty. In addition, the Act provides for the possibility of imposing a fine equal to EUR 50 000 000 in case of even unintentional prevention or obstruction of inspection or failure to provide information requested by the President of the Office of Competition and Consumer Protection.
The main objection against this Act is the use of general clauses, which are difficult to interpret at this stage (such as the definition of “contractual advantage” in Article 7 of the Act), while at the same time we deal with very rigorous approach to business relations between suppliers and purchasers in the food and agriculture sector and high penalties.
