Entrepreneur protected like a consumer

In Polish law, consumers within the meaning of art. 22¹ of the Polish Civil Code, that is natural persons, performing legal transactions with entrepreneur that are not related directly to their economic or professional activity, are subject to special protection as a party to a transaction that has a weaker market position than an entrepreneur.

On 1 January 2021, the amendment to the Civil Code and some other Acts entered into force which aims at “limiting regulatory burdens”. One of the important but also controversial changes is granting number of rights have so far been reserved only for consumers to natural persons running sole economic activity.

The rights granted to the above-mentioned group of entrepreneurs concern in particular:

• extended warranty right;
• legal presumption of the existence of a defect or its cause when the risk passes to the buyer;
• the right to withdraw from a contract entered into at a distance outside the business premises within 14 days;
• the applicability of art. 385 (1) of the Polish Civil Code i.e. not binding the consumer with contractual clauses that were not individually agreed and are prohibited.

Under the newly introduced regulations i.e. in particular: Art. 385 (5), 556 (4), 556 (5), 576 (5) of the Civil Code and art. 38a of the Act on consumer rights, natural persons running a business may use the protection provided for consumers if they conclude a contract directly related to its economic activity and it results from that contract that it is not of a professional nature to them, resulting in particular from the subject of the economic activity performed by it disclosed on the basis of the provisions on the Central Register and Information on Economic Activity.

For example, an entrepreneur producing furniture will be treated as a consumer when buying a computer to be used in his business to receive orders and conduct correspondence with customers. However, if he makes a purchase in the online store, he will be able to use a 14-day right of withdrawal, and in the event of a defect in the goods, he will be able to use the warranty within one year of the delivery of the goods with the presumption of the defect existing at the time of delivery of goods.

The application of regulations on prohibited contractual provisions is also important. For example, if it is found that the contract with the telecommunications operator or the bank granting the loan includes clauses which are contrary to the law or good practices or they grossly violate its interests, the challenged provisions will also become ineffective for the person running a sole economic activity. Such regulation has so far been only applied to insurance contracts (Art. 805 § of the Civil Code).

The above changes affect not only the legal situation of a natural person who runs a business but also entities that have commercial relations with that person and which will have to determine each time which law governs particular transaction. The condition for the application of consumer provision to a sole business owner is that a particular contract is not of a professional nature.

Although in this respect the Act refers to the subject of the activity of a particular entrepreneur disclosed in the Central Register, the phrase “in particular” may lead to interpretational doubts.

However, it should be emphasized that the transitional provisions show that the new provisions do not apply to contracts concluded before 1 January 2021.