The statute of limitations for claims under a contract for a specific work vs. a request for an amicable settlement attempt

A contract for a specific work (Polish: umowa o dzieło) is one of the most common forms of cooperation, particularly in sectors such as construction, art or IT. Under such a contract, one party – the contractor – undertakes to complete a specific work, while the other party – the client – is required to accept it and pay the agreed compensation. It is worth bearing in mind, however, that the rights under a contract for a specific work are not unlimited in time. Claims for both the payment of compensation and possible damages are subject to the statute of limitations, which significantly affects the possibility of enforcing them by legal means.

Case Study: The statute of limitations for claims in a contract for a specific work

Company A entered into a contract with Company B for work that was to be completed and handed over by 31 October 2022. Despite the deadline, the work had not been completed in full and part of it contained significant defects that had not been remedied. As a result, the client, Company A, decided to pursue a claim against the contractor by filing a request for an amicable settlement attempt on 31 December 2024. The date for the settlement meeting was set for 31 March 2025. In view of this, the question arises: when exactly will Company A’s claims against the contractor be time-barred?

General rules on the statute of limitations for claims under a contract for a specific work

Pursuant to Article 646 of the Polish Civil Code, claims arising from a contract for a specific work are time-barred two years from the date on which the work was handed over. If, however, the work has not been handed over, the statute of limitations starts to run from the date on which – according to the contractual provisions – it was to be handed over. In the case under review, this means that the statute of limitations began to run on 31 October 2022.

Furthermore, by virtue of the second sentence of Article 118 of the Civil Code, the statute of limitations always ends on the last day of the calendar year in which the two-year period passes. Therefore, in this case, the statute of limitations would have expired at the end of 2024.

Suspension of the statute of limitation

How does a request for an amicable settlement attempt affect the statute of limitations on claims?

It is worth remembering that there are mechanisms in place to ‘extend’ the statute of limitations for claims arising from a contract for a specific work. One such mechanism is to request an attempt to reach an amicable settlement. In light of Article 121(6) of the Civil Code, amended as of 30 June 2022, such a request suspends the course of the statute of limitations for the duration of the settlement proceedings.

This is a significant change compared to the previous state of the law, when a request for an amicable settlement attempt interrupted the course of the statute of limitations, causing the statute of limitations to start anew after the conclusion of the proceedings. The suspension now means that the time remaining before the expiry of the statute of limitations is ‘stayed for the duration of the settlement procedure’ and the period continues to run once the settlement procedure has ended.

Practical problems in calculating the statute of limitations after settlement

Doubts about calculating the time remaining under the statute of limitations

When applying the amended Article 121(6) of the Civil Code, interpretation problems arise regarding the calculation of the time remaining under the statute of limitations after the settlement proceedings are concluded. These difficulties are particularly evident in situations where the request to attempt an amicable settlement has been filed at the end of the calendar year in which the statute of limitations was originally due to expire, and the settlement hearing itself is set for the following year.

Two divergent views have developed in this context:

1. First view: continuation of the original term

According to this approach, once the settlement has been completed, the statute of limitations continues to run for exactly as long as the time remaining at the time when the request for an amicable settlement attempt was filed. For example, if the request was filed on 31 December 2024 and the settlement meeting took place on 31 March 2025, the statute of limitations was suspended for a period of three months. At the end of the proceedings, the statute of limitations would ‘extend’ by only one day, which would expire immediately after the end of the suspension – in this example on 1 April 2025. This interpretation is favourable to the contractor, as it limits the time for the client (creditor) to take action.

2. Second view: general rule – end of the calendar year

The second view refers to the second sentence of Article 118 of the Civil Code, which indicates that the end of the statute of limitations is the last day of the calendar year. According to this interpretation, if the request was filed at the end of the year, the statute of limitations – once the suspension is over – should run until the end of the following calendar year. In the example used here, even if the request was filed on 31 December 2024 and the hearing took place on 31 March 2025, the creditor would have time to act until 31 December 2025. This interpretation is clearly more favourable to the client (creditor), as it extends the time to pursue the claim.

Summary

At the moment, there is still no court decision that would clear up these doubts. The lack of an unambiguous interpretation means that both contractors and clients must act with caution when planning their legal action. This is all the more so because the two-year statute of limitations for claims arising from a contract for a specific work is a relatively short period of time, and mechanisms allowing for its extension, such as a request to attempt an amicable settlement, raise additional interpretative doubts.

From a business perspective, the management of claims and limitation periods should be part of the risk strategy in contractual relationships. A failure to address these issues can lead to significant financial losses, as well as undermining relationships with contractors. Both clients and contractors should put internal procedures in place to ensure that contract performance is monitored on an ongoing basis and that appropriate legal action is taken quickly in the event of delays or problems. A client that decides to call for a settlement attempt in order to suspend the running of the statute of limitations should take further action, such as filing a lawsuit, immediately after settlement, to avoid the risk of losing claims.

It is also worth taking into account that delays in the recovery of claims may affect the liquidity of the company. A failure to act in a timely manner not only complicates the legal situation, but can also limit access to funds that could be used to grow the business. In light of this, companies should invest in legal training and contract management consultancy, which will allow them not only to avoid risks, but also to more effectively safeguard their interests with business partners.