The Effects of Crises on the Binding Force of Contracts: Polish Solutions

Abstract

Pacta sunt servanda principle is a basis of the law of obligations, assuring the necessary stability of legal relationships. This principle is declared by the Polish civil code in Article 354. This provision sets a frame of the manner in which an obligation is to be carried out. Due to the fact that Polish economy resisted the negative economic phenomena to a great extent there was no need to narrow this principle. Sufficient enough turned out to be an original solution that we can find in the Polish civil code. This solution was to be Art. 3571 of the civil code. The provision reads as follows: “If, due to extraordinary change in relationship concerning fulfilling the obligation, it would be connected with undue hardship or one party would be at a risk of a gross loss and which was not foreseen by the parties while concluding a contract, court may, having considered the interests of both parties and in accordance with social coexistence, decide on the manner of performing the duty, the amount of compensation or even decide on terminating the contract.”