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Contracts and business transactions: New advantage act signed by the President

Contracts and business transactions: New advantage act signed by the President

The new advantage act almost fully implements and duplicates the regulations contained in Directive (EU) 2019/633 of the European Parliament and of the Council of April 17, 2019 on unfair commercial practices in relations between enterprises in the supply chain of agricultural and food products. The intention of the EU legislator was to limit unfair trading practices by entities stronger on the agri-food market, and thus to ensure contractual balance and prevent the misallocation of resources on the EU market.

Compared to the previous one, the new Polish advantage act has a wider scope of regulations. It covers the rules and procedures for counteracting practices that unfairly use contractual advantage by buyers of agricultural or food products or suppliers of these products, if such use causes or may have effects on the territory of Poland, and the principles of protecting the interests of suppliers and buyers in the public interest. The Act will apply to contracts for the purchase of agricultural or food products concluded between the buyers of these products and their suppliers. The new solutions adopted by the legislator compared to the previously applicable ones include:

  • a wider than before list of agricultural and food products, the turnover of which is subject to the provisions
    of the Act - according to the new definition, agricultural or food products are products listed in Annex I to the Treaty on the Functioning of the European Union, as well as products processed for consumption with the use of the products listed in this appendix, as a result of which the scope of the act will cover more market participants than before,
  • change in the definition of a buyer;
  • the catalog of practices which the legislator deems illegal "in particular" (although the catalog itself is still open) extended significantly, up to 16 examples; practices have been divided into strictly prohibited and allowed practices - provided that they have been clearly and unambiguously agreed in the contract between the buyer and supplier before their use,
  • defining contractual advantage as a significant disproportion in economic potential between buyers and suppliers and introducing a presumption of advantage using the criterion of quantified differences in the amount of annual turnover between contractors, determined by comparing the annual turnover of the supplier and the buyer,
  • extending the competences and obligations of the President of the Office of Competition and Consumer Protection as a control authority, including the right to present before a common court views relevant to the case in cases of civil law claims related to the use of practices dishonestly using contractual advantage,
  • introducing a procedure of voluntary submission to a financial penalty.

It is worth noting that, pursuant to the new act, the existing provisions apply to contracts concluded before the date of its entry into force (with the exception of procedural provisions concerning proceedings instituted in the case
of unfair practices). However, if such contracts will continue to be performed after April 30, 2022, from May 1, 2022, the provisions of the new act shall apply to these contracts as well. Nevertheless, even such contracts in force so far should be revised before the indicated deadline in terms of a new, wide catalog of practices that the legislator explicitly considers unfair.

The act comes into force within 14 days of its promulgation.



Michał Dudkowiak

Lawyer

Michał Dudkowiak

Barrister, Managing Partner

Michał Dudkowiak

Contact:

Rondo ONZ 1
00-124 Warsaw