Immigration law

The scope of application of the act on contractual advantage

The scope of application of the act on contractual advantage

On December 11, 2018, the amendment to the Act on contractual advantage will come into force (law on counteracting unfair usage of contractual advantage in agricultural product trade) and it will significantly extends the scope of its application.

Contractual advantage until December 11, 2018

Until December 11, 2018, the act on contractual advantage was applied to relations between buyers and suppliers of agricultural and food products, provided that the so-called thresholds of fragility (PLN 50,000 for transactions between parties and PLN 10,000,000 for the one that uses advantage or his capital group).

The contractual advantage after December 11, 2018

From December 11, 2018, the Law on Contractual Advantage will be applied in isolation from any thresholds of fragility and economic values, since they were removed from the Act. Consequently, the Act will now simply apply to all contracts for the purchase of agricultural or food products between buyers suppliers, except for direct deliveries.

Agricultural and food products

As the Law on contractual advantage applies to the purchase of agricultural and food products, it is crucial to precisely define product groups, which are included in this scope. In this respect, the Act refers to Regulation No. 178/2002 of the European Parliament and of the Council of 28th of January 2002, which provides that agricultural and food products are

  • any substance or product, whether processed, partially processed or unprocessed, intended for human consumption or which are expected to be for human consumption;
  • drinks, chewing gum and all substances, including water, consciously added to food during its production, preparation or processing;
  • also water – in accordance with the standards set pursuant to art. 6 of Directive 98/83 / EC and without prejudice to the requirements of Directives 80/778 / EEC and 98/83 / EC;

However, the agricultural and food products are not feed, living animals unless they are to be placed on the market for human consumption, plants before harvest, medicinal products within the meaning of Council Directives 65/65 / EEC and 92/73 / EEC, cosmetics in within the meaning of Council Directive 76/768 / EEC, tobacco and tobacco products within the meaning of Council Directive 89/622 / EEC, narcotics or psychotropic substances within the meaning of the 1961 Narcotics Conventions and the 1971 Psychotropic Convention, residues and contaminants .

Supplier and buyer in the act on contractual advantage

The concept of supplier and buyer under the act on the contractual advantage is to be understood quite intuitively:

  • supplier – an entrepreneur who manufactures or processes agricultural or food products or for a fee, sells them to the buyer,
  • buyer – an entrepreneur who directly or indirectly purchases agricultural or food products from the supplier for the purposes of sale, resale or processing.

Exception from the application of the law on contractual advantage

Act on contractual advantage does not apply when:

  • the supplier sells the agricultural or food products of the buyer in the form of a cooperative of which supplier is a member;
  • a supplier who is a member of:
    • a group of agricultural producers within the meaning of the regulations on groups of agricultural producers and their associations and sells agricultural or food products to the group of agricultural producers of which it is a member,
    • a pre-recognized group of fruit and vegetable producers as the organization of fruit and vegetable producers within the meaning of the regulations on the organization of fruit and vegetable markets and the hop market and sells fruit or vegetables to members of this group,
    • a pre-recognized organization of fruit and vegetable producers within the meaning of the regulations on the organization of fruit and vegetable markets and the market for hops and sells fruit or vegetables to members of this organization.
Author team leader DKP Legal Michał Dudkowiak
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