Public procurement in Poland does not allow for free performance of acts by the ordering party. Only entities which fulfil criteria specified in the Public Procurement Act are allowed to provide the services in question. Article 24 in the Public Procurement Act specifies criteria which are taken into account when excluding contractors. The above act also specifies criteria which must be fulfilled by bidding entities.   

Interestingly, the term bid is not uniformly understood by public procurement law. What is more, public procurement law introduces its own rules and may regulate some issues in a different way than other laws. A conclusion? In spite of frequent use of the term “bid” in Polish law, there is no legal definition of this term. Competences as regards proper understanding of “bid” term are in the hands of the National Chamber of Appeals and common courts. For example, Civil Code provisions may be applied only when public procurement law does not include its own regulations or when they are incomplete.  

All that was mentioned above is just a short summary of the publication for legal advisors (Radca Prawny, Zeszyty Naukowe nr 2/2015). What do we mean by the bid? Is it just the declaration of the contractor about his obligations? Or perhaps additional documents are also a part of a bid – besides the bid form – if they refer directly to contractor's obligations? So, if a contractor is obliged to submit a complete bid which includes all declarations and documents, perhaps the name of the bid should also mean objective and financial schedule required by the ordering party if the schedule also shows that the contractor is obliged to perform particular parts of the order in specified periods of time. Consequently, does it mean that also expected deadlines for the payments of invoices issued by the contractor should also be treated as a part of the bid? The authors of the publication mentioned above are sure that the term “bid” is not uniformly understood.

Public orders mean public money which must be spent rationally and guarantee best possible effects. Because of this the principle of freedom of contract is limited. However, the current legal status in this field is not perfect.  

In the last issue we discussed a problem of disputes arising on the ground of completing orders (also public ones) highlighting the opportunity to reach consensus by mediation. Now it is time to have a closer look at relations between buyers and sellers, which means, in case of contracts for specific work and construction works contracts – also relations between investors and contractors. Most of us are, I think, aware of the fact that a very important (for construction and stone branches) amendment to the Civil Code was introduced last year.  

The amendment introduced by means of the consumer rights act as of 30 May 2014 (Journal of Laws 2014, point 827) transposes into Polish law the European Parliament and Council directive (no. 2011/83/EU as of 25 October 2011) on consumer rights. According to the law, the statutory warranty makes the seller responsible for physical defects of a property if this defect is noticed five years before the property was handed over to the buyer. Expiration period of the rights under statutory warranty (in case of properties' defects) has been extended by two years.  

- It is an important change, in my opinion. Stone goods are often exposed to harmful weather factors since they are installed (for example sculptures or tombstones) or laid (paving stones) outdoor and must be resistant to freeze/thaw cycles. Longer statutory warranty period will make the responsibility bigger – says Grzegorz Skórka, the head of the Inspection Department of the Silesian Provincial Office.

- The above mentioned changes in civil law show that consumer rights are bigger and bigger. It is worth stressing that although we are now in a transitional period it refers only to contracts and related warranties which were concluded before 24 December 2014. New law refers to contracts concluded from 25 December 2014 (article 51 of this act says that agreements concluded before the date of entry into force of this act shall be subject to the legislation hitherto in force).  

Developers who had commenced their investment before the law changed, used to make construction work agreements with general contractors in which statutory warranty and/or warranty for defects was 3 years long. The statutory warranty time will depend on the fact if the sales agreement had been made before the amendments of the civil code entered into force.  

The most important changes in the law touch upon sales warranties making the seller's responsibility and the buyer's rights bigger. These rules are also applied in contracts for a specific work and construction works contracts. The amendment makes the definition of the term „physical defects” of things broader.   

- Broadening the definition of „physical defect” is, as for me, significant for distributors of stone goods. Now they must know if a product they offer on sale is suitable for the customer's needs. It is easy to imagine effects of the situation when a customer wants paving stones for paving a car park for trucks and the seller or his employee sells them paving stones designed only for making pavements for pedestrians” adds Grzegorz Skórka.

According to the definition, a physical defect means that a sold or built product is not as it is described in the sales agreement. It means that we also speak about a defect in a situation when a thing does not fit for the purpose about which the buyer informed the seller when signing an agreement (and the seller did not object to that use). We can also speak about a physical defect when the thing was badly installed, even if it was done by the buyer (unless he did not follow the manual).

In order to keep the statutory warranty we do not need to bring lawsuits before the statutory warranty expires. It is enough for a buyer to submit (before the statutory warranty expires) a declaration that a given thing has defects. After submitting the declaration about defects there is a year-long deadline for making claims to repair defects or change the thing. We must have in mind, however, that according to article 563 of the Civil Code, in case of sales contracts between entrepreneurs, the statutory warranty expires unless the buyer checks the thing within a time and in a way accepted for the things concerned and informs promptly the seller about the defect; or unless he informs the seller about the defect promptly after it is revealed (if the defect is revealed later).

Another important law for professionals says that in relations between entrepreneurs the seller may refuse to change the thing for a defect-free one or remove the defect if the costs are bigger than the value of the product sold. If a faulty thing has been installed, the investor will be allowed to demand to dismantle the thing and install it again after changing the thing into the fault-free one or after removing the fault. In case the contractor does not do it, the investor will be able to do it at the contractor's expense. It is worth mentioning that till now the entitlement of the investor to the so-called substitute performance was valid only during the performance of works (article 636 of the Civil Code) and not under statutory warranty. This change is potentially unfavourable to the contractor who should take care of a proper reduction of this risk in a contract.

Next, in place of the former entitlement to claim a lower price from the seller, the amendment grants the buyer (in case there are defects in the product) an entitlement to submit a one-page declaration about lowering the price or pay. It means that the buyer may indicate the amount to which the price should be reduced. We need to remember, however, that if the legal proceedings start, the buyer will have to prove that this amount is justified. This is another reason to recall the advantages of mediation – hearing of evidence is not so important then for  consensus-seeking.
   

What do new regulations offer to contractors? It is more and more often so that the stone in the wholesale is chosen by investors or ordering parties (for example to raise a monument). What if our customer purchases the material and asks us to do the work and the material turns out to be incorrectly selected? This situation may result in defects of the final work. From 25 December 2014 the law says directly that the contractor is not responsible for defects if they are result of a cause that is present in the material provided by the orderer. But watch out! We should inform the ordering party promptly about it (this fact should be written down in the agreement), because only then the contractor is not responsible (under statutory warranty) for defects of the work. If we do not do this, we may be liable to damages under the general provisions.

- We must take into consideration a specific character of stone goods, both those classified as construction goods (for example paving stones, stone bowls for making retaining walls) as well as sculptures, tombstones because their defects are often revealed after installation, especially after first winter. It would be absurd to tell the buyer to test frostresistance of each part of goods. I think it is acceptable to test the thing after first winter – says G. Skórka.

We should treat all we have said above as an opportunity for building a competitive advantage on the market if we aspire to be experts in our field.

So far we have analysed changes which are important for professionals who perform bigger works. Now we need to ask the following question: what is the difference between construction works contracts and contracts for a specific work? The latter one is usually applied when we deal with small architecture like tombstones. Unfortunately, in practice, defining a small architecture object is not so easy. The construction law says directly that small architecture object is „a small object, especially of religious worship such as chapels, roadside crosses, figures, statues, water effects and other garden architecture objects, recreation objects such as swings, sandpits, ladders, but also litter baskets”. Construction works contract cannot be applied here because the main criterion that differentiates this type of contract from contract for a specific work is assessment of the investment according to construction law requirements. In case of raising tombstones mandate contracts cannot be applied (article 734 of the Civil Code) because they are duty-of-care contracts. The parties should make a contract for a specific work because it is not about performing a work but achieving a result, so, in our case, not only raising a tombstone but also installing it.

Interestingly, in order to conclude contracts for a specific work we must apply rules concerning consensus contracts. In the Civil Law Code there are no special provisions concerning concluding contracts for a specific work. What is more, this type of contract does not need to have a special form. The contract can be also concluded verbally or it can be even implicitly assumed.  

Once we said that in our branch it is recommended to conclude agreements in a written form. It is important to specify a detailed scope of works or what the tombstone is supposed to look like (we need at least an outline). It is not recommended to speak about technical details with the orderer. Instead of a monument's technical drawing (where all dimensions are very precise), it is better to familiarise the orderer with estimated dimensions (length, width) and just an approximate thickness of a slab. Why? Many stonemasons lost their cases in courts because they installed covers which were half a centimetre thinner than declared in the drawing. Professionals know that thickness of slabs may vary by half a centimetre or even more.  For similar reasons, setting a precise completion date for building small funeral architecture objects is not a good idea, either. It is better to indicate a maximum deadline than a precise completion date. This way we can protect ourselves against weather conditions which can make installation of tombstone on that very day impossible.

Let us go back to discussing the differences between contracts for a specific work and construction works contracts. The main difference between these two types of contracts lies in the assessment of investment according to construction law requirements. It is important to see that contract for raising a tomb should be called a “contract for a specific work” and not a “mandate contract”. Why a “contract for a specific work”? Here, “work” means creating something new or changing one thing into another that does not exist now. It is important  when we apply Civil Code provisions to this type of contract as well as in assessment of will and obligations of the parties involved in a dispute. The contractor, being a party of a construction works contract, is obliged to build a thing in conformity with the project planning documents, technical knowledge and current technical and construction standards and then commission the building – depending on the provisions in the contract. Creating a “work” means achieving a specified result, for example creating a new thing, repairing, renovating or maintaining already existing things, etc. Contracts for a specific work shall be subject to the Civil Code provisions. These contracts are not subject to the Labour Code so they give the parties involved more freedom in setting rights and obligations (for example as regards the performance of the contract).   

A true stonemason should be also interested in the final effect, that is proper installation of a tombstone in the cemetery. It happens that installation is not performed well enough and it is a badly prepared ground that is the main reason for customer's complaint. It is sad to see leaning tombstones in cemeteries, but that is another story.