Amendment to the Civil Code – changes to the provisions on exploitation

In the list of legislative works of the Council of Ministers, the assumptions for the bill was published to amend the Act – Civil Code, providing for an amendment to the provisions on the institution of exploitation, regulated in art. 388 of the Civil Code.

The expected changes pertain to:

1. introducing an additional premise in the form of a lack of understanding – in the current version of the provision of Art. 388 of the Civil Code, exploitation occurs in the event of the exploitation of a forced position, incompetence or inexperience of the other party. The planned changes provide for the addition to this catalog of an alternative circumstance in the form of taking advantage of the other party’s “lack of understanding”. According to the assumptions of the authors of the project, the lack of understanding is “the lack of knowledge necessary to responsibly consider the purposefulness and consequences of concluding the proposed contract. This premise does not include an element of assessment, especially it does not refer to fault „;
2. the establishment of a presumption, according to which if the value of the performance of one of the parties exceeds twice the value of the consideration, it is presumed that it grossly exceeds it;
3. leaving to the discretion of the party whether the contract is to be changed or canceled – in the current legal state, the exploited party is entitled, in principle, to demand the compensation of benefits (reduction of its performance or increase of the benefit due to it). On the other hand, the annulment of the contract is possible only if the balancing of the benefits is excessively difficult. The proposed changes are to leave the exploited party to choose one of the alternative rights in the form of changing the contract by balancing the mutual benefits of the parties or canceling the contract;
4. introducing the statute of limitations on the claims of the exploited party – in the light of the current regulations, the exploited party may exercise its rights to request a change or annulment of the contract within the prescribed period of 2 years. After this period, if the exploited party does not file a claim with the court, its rights expire. The proposed changes provide that the exercise of rights will be time-barred. As a result of the limitation period, the claim does not expire, but is transformed by virtue of law into a natural claim. As a result of raising the charges of limitation, the action is, in principle, dismissed. However, due to the principles of equity, the court may disregard the plea of limitation and grant the claim;
5. extension of the protection period – the exploited party will be able to pursue claims in respect of exploitation within the 6-year limitation period calculated on general principles in accordance with the provisions of the Civil Code.

The bill of the amending act has not been published so far, hence the exact wording of the proposed provisions of the amended Art. 388 of the Civil Code. Certainly, however, the published description of the legislator’s assumptions indicates far-reaching changes that may significantly affect various contracts such as consumer loan agreements, contracts concluded with the elderly, contracts concluded outside the company’s premises when presenting health products or everyday products, as well as contracts in professional trade, concluded using the dominant position of one of the parties, stipulating disproportionate mutual benefits of the parties (e.g. franchise agreements).