In a resolution dated December 9, 2021, ref. III CZP 16/21 The Supreme Court has addressed the problem of stipulate contractual penalties for late payment without specifying the final date of calculation of the contractual penalty or its maximum amount. This is especially true when the amount of the contractual penalty is expressed as a contractually specified percentage of remuneration for one day of delay. As practice shows, the failure to reserve an upper limit for contractual penalties in contractual provisions is a very common phenomenon. As a rule, it was desired by the ordering parties, who wanted to discipline contractors in this way. The assessment of the legal effectiveness of such provisions is of great importance, because in the event of the collapse of the contractual contract clause, it will only be possible to seek compensation on general principles, which is much more difficult, and in some cases completely inadequate to the violations against which the contractual penalty clause was intended to protect.
The Supreme Court's position in the December resolution is clear: the contractual penalty can be specified as a percentage of the contractual remuneration for each day of delay, with no need to specify the final date for calculating the contractual penalty or its maximum amount. The thesis of the Supreme Court's decision is clear, but its reasoning will also be important, the publication of which is expected soon.
The resolution of December 9, 2021 is not the first Supreme Court decision in which it was deemed permissible to stipulate a contractual penalty without setting an upper limit. For example, in its May 20, 2021, ruling IV CSKP 58/21, the Supreme Court held that "it is permissible caveat contractual penalties for delay in the fulfillment of non-monetary performance in the form of a fraction (percentage) of the value of the performance for each unit of time of delay, without specifying in advance the maximum amount of such contractual penalty."
However, a different position has also been expressed in the Supreme Court's previous jurisprudence, according to which not specifying in the contract the final date for the accrual of contractual penalties or their maximum amount leads to "burdening the obligee with this benefit for an indefinite period of time, so in essence it creates a perpetual, never-ending obligation" (Supreme Court judgment of October 22, 2015, ref. IV CSK 687/14), and consequently - leads to the invalidity of the provision as contrary to Article 483 § 1 of the Civil Code. This view was not subsequently shared by other Supreme Court formations, so it should be considered isolated. However, this did not change the fact that the stipulation of contractual penalties without specifying the maximum amount raised certain doubts in the jurisprudence. and contractual provisions with such a construction were considered invalid (cf. the judgment of the District Court in Siedlce of 22.10.2020, ref. no. I C 679/17 and the judgment of the District Court in Poznań of November 13, 2017, ref. no. I C 87/16).
The inability to completely eliminate the risk of challenging the validity of a liquidated damages clause significantly affected the course of contract negotiations and the enforcement of liquidated damages. Often the parties preferred to introduce a limit on contractual penalties into the contract out of caution, to safeguard the effectiveness of the clause. However, this involved limiting the authority to impose contractual penalties.
It is worth mentioning at this point that the Supreme Court resolution of December 9, 2021. does not have the force of a legal principle. Thus, it cannot be ruled out that some common courts will continue to consider contractual penalty clauses that do not contain an upper limit as invalid. Equally importantly, even a valid reservation of a contractual penalty clause for late payment without a cap on its amount does not mean the exclusion of the institution of its mitigation.
