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Civil Law regulation

In Polish law, a franchise agreement is not regulated in a direct manner. As a result, it is impossible under Polish law to name the characteristics of a franchise agreement, which would enable us to classify it as one of the co-called “nominate” contracts and to specify its entire contents. Under these circumstances, it is worthwhile to note the importance of customs to franchise agreements used in business dealings. This is so due to the provision of Art. 56 of the Civil Code, which recites that an act in law produces not only the effects expressed therein, but also those stemming from the relevant legislation, the principles of social co-existence and well-established customs. Customs are extremely important also from the viewpoint of the principles for interpreting declarations of intent, which should be construed as required, due to the circumstances in which they were made, by the principles of social co-existence and well-established customs (Art. 65 of the Civil Code). Customs may be identified only in relation to those “innominate” contracts which are repeatedly used in business dealings and which have given rise to widespread practice. In the case of franchising, the solutions applied by Polish entrepreneurs were strongly influenced by their counterparts in the EU and the U.S. As a result, Poland has adopted the franchising model established in the Western, reflecting the ideas and solutions accepted in the local jurisdictions.

As was noted above, in Polish law a franchise agreement belongs to so-called “innominate” contracts, i.e., contracts that are not regulated in the Civil Code or in any other provisions of civil laws. Under Polish law, franchise agreements may be concluded (just like leasing agreements in the past) on the basis of the so-called freedom of contract principle, as set forth in Art. 3531 of the Civil Code, whereby the contracting parties may shape their legal relationship at their own discretion, so long as the subject matter or the purpose thereof does not conflict with the character (nature) of the relationship, statute or the principles of social co-existence. The above-cited provision is a general clause and indicates that franchise agreements may operate in Polish law as innominate contracts within the limits circumscribed by the freedom of contract principle. In regard to franchising, such limits are laid down by the mandatory provisions of the Competition and Consumer Protection Law.

As a criterion for restricting the freedom of contract, statutory provisions are the easiest to use of all the criteria mentioned in Art. 3531 of the Civil Code. The other two, i.e., the principles of social co-existence and the nature of a relationship, present major interpretive problems. These problems stem from the fact that the principles of social co-existence are in the nature of a general clause, and that Polish jurisprudence has not yet worked out an interpretation of the principles of social co-existence principles with respect to franchise agreements. In this regard, it would be easier to determine [business] customs, to which Art. 3531 does not refer, however. The term “principles of social co-existence” was adopted in Polish law as a Soviet concept after World War II. Although it has a completely different meaning in the present-day political system of Poland, many people – especially foreign businesspeople – may still associate it with a socialist moral doctrine. This is why there are ever-increasing attempts at replacing it with similar terms used in business before the war, such as “good faith”, “principles of fair dealing”, “good customs” or “principles of equity.” These are usually translations of terms established by, and well-known to, Western jurisdictions.