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Increase of lump-sum remuneration by the court — Article 632 § 2 of the Polish Civil Code

Ten artykuł jest dostępny także po polsku. Dieser Beitrag ist auch auf Deutsch verfügbar.

Material prices can wipe out an entire margin within a year, and a lump-sum price — rigid by design — does not grow with them. Article 632 § 2 of the Polish Civil Code is the only statutory route to changing the price for works covered by the contract. It leads not through an annex, which the employer will usually refuse to sign, but through a judgment by which the court reshapes the contract. Below we take this mechanism apart: the three conditions, the figures from case law that mark the threshold of a „gross loss” — 23.87%, 37%, 8%, 1.24% — the dispute over the right moment to raise the claim, and what this route does not offer. At the end we show what works faster than litigation in Polish public procurement today: the mandatory indexation clause of Article 439 of the Public Procurement Law and a settlement based on Article 54a of the Public Finance Act.

Why there is usually no annex and the case ends up in court

The judicial mechanism of Article 632 § 2 of the Civil Code becomes relevant only once the contractual route has failed. And it fails for reasons that can be named precisely.

First, the employer has no motive. Since the dominant reading of Polish law construes the lump sum broadly — we analysed this in the article on the scope of lump-sum remuneration — the employer may assume in good faith that the agreed price covers everything needed to achieve the result. A willingness to pay anything beyond the lump sum simply never arises on its side.

Secondly, the contracts themselves close the door to informal arrangements. The standard is a clause requiring amendments in writing on pain of nullity, plus a condition that unforeseen works be recorded in a necessity protocol signed by both parties. In the sports-hall case, to which we return below, the parties stipulated exactly such a mechanism — and neither an annex on remuneration nor a necessity protocol was ever signed, although the building was constructed to an enlarged scope (judgment of the Supreme Court of 12 April 2013, IV CSK 568/12, OSNC-ZD 2014, No. 1, item 18, LEX No. 1324322). Whoever counts on a signature „after the fact” loses to a simple observation: once the works are done, the employer no longer has any reason to sign anything.

Thirdly, in public procurement statutory rigours and the personal liability of decision-makers come on top. The contract requires written form on pain of nullity (Article 432 of the Public Procurement Law of 11 September 2019, consolidated text Dz.U. 2024 item 1320, „PZP”), a material amendment requires a new award procedure (Article 454(1) PZP), and the amendments admissible without a new procedure are locked in the catalogue of Article 455 PZP. On top of that, amending a contract in breach of public procurement law is a breach of public finance discipline (Article 17(6) of the Act of 17 December 2004 on Liability for Breach of Public Finance Discipline, consolidated text Dz.U. 2025 item 1484). A mayor or the director of a public entity who signed an annex „out of fairness” risks personal liability — so they will choose litigation, letting the court decide about payment in their place. The obstinacy of Polish public employers is not malice. It is a rational response to the system.

Settlements stopped being taboo only in 2017. Since 1 June 2017 a public finance sector entity may settle a disputed civil-law claim if a written assessment shows that the effects of the settlement are more favourable for it than the probable outcome of court or arbitration proceedings — taking into account the merits of the disputed claims, the prospects of satisfying them, and the expected duration and costs of the proceedings (Article 54a(1) and (2) of the Public Finance Act of 27 August 2009, consolidated text Dz.U. 2025 item 1483). Performing such a settlement does not breach public finance discipline (Articles 5(4), 11(2) and 15(2) of the Public Finance Discipline Act). The practical conclusion: whoever wants a settlement with a Polish public entity must hand it the material for that written assessment — a reliable calculation of the loss and an analysis of the litigation risk. Without it the decision-maker has nothing to hide behind and will choose the courtroom.

Where the application of Article 632 § 2 to construction contracts comes from

Article 632 § 1 of the Polish Civil Code of 23 April 1964 (consolidated text Dz.U. 2024 item 1061, „the Civil Code”) provides: „Jeżeli strony umówiły się o wynagrodzenie ryczałtowe, przyjmujący zamówienie nie może żądać podwyższenia wynagrodzenia, chociażby w czasie zawarcia umowy nie można było przewidzieć rozmiaru lub kosztów prac” — if the parties have agreed on lump-sum remuneration, the contractor may not demand an increase of the remuneration, even if at the time of concluding the contract the extent or costs of the works could not have been foreseen. The exception is written into § 2: if, however, as a result of a change of circumstances which could not have been foreseen, the performance of the work would threaten the contractor with a gross loss, the court may increase the lump sum or dissolve the contract.

Both provisions concern the contract for a specific work (umowa o dzieło). They do not apply directly to a construction works contract, because the reference in Article 656 § 1 of the Civil Code covers only the consequences of delay and defective performance, warranty and the right to withdraw — it says nothing about remuneration. For years Polish case law was torn between a line applying Article 632 § 2 to construction contracts by cautious analogy and a line reading the silence of Article 656 § 1 as a deliberate choice of the legislature. The dispute was cut by an enlarged panel of the Supreme Court:

„Provisions of Articles 629 and 632 § 2 of the Civil Code may be applied by analogy to a construction works contract.”

— resolution of a panel of seven judges of the Supreme Court of 29 September 2009, III CZP 41/09, OSNC 2010, No. 3, item 33

The reasoning of the resolution is worth knowing, because it exposes the historical roots of the problem. The silence of Article 656 § 1 was not a choice against contractors — as the Supreme Court relates, following its earlier judgment of 15 June 2007, V CSK 63/07 (OSNC 2008, No. 10, item 116), the provisions on the work contract governing remuneration were left out

„only because the assumption behind the enactment of the Civil Code provisions on the construction works contract was that the remuneration of the contractor of construction works would be regulated by special provisions.”

— from the reasoning of resolution III CZP 41/09 (translation by the author)

Those special provisions — in the previous system the general conditions of contracts for units of the socialised economy — were repealed after 1989 and never replaced by anything. We wrote more about this gap, which shapes disputes over the scope of the lump sum to this day, in the article on additional works under lump-sum remuneration. The resolution also contains a constitutional argument: Articles 629 and 632 § 2 give the contractor more intensive protection of property rights than the general hardship clause, and refusing to apply them precisely to construction works would lead to unequal protection of property rights (Article 64(2) of the Polish Constitution).

The conditions are three and must be met cumulatively: a change of circumstances unforeseeable at the time of contracting, the threat of a gross loss if the object is completed, and a causal link between the two. The burden of proving all three rests on the contractor (Article 6 of the Civil Code).

Scope of application — seven findings worth knowing before filing suit

The sixth finding expresses a view that is gaining ever stronger ground in the case law:

„It is rightly pointed out in the case law that Article 632 § 2 of the Civil Code concerns an increase of the lump sum, where the substantive conditions are met, in relation to the remuneration agreed by the parties for the subject matter of the works covered by the contract. It cannot, however, apply to construction works not covered by the scope of the contract, because in that case the parties are not linked by a contractual relationship with an agreed lump-sum remuneration which could be modified by the court under Article 632 § 2 of the Civil Code by increasing the lump sum.”

— judgment of the Court of Appeal in Warsaw of 19 April 2017, VI ACa 1713/15, LEX No. 2335230, citing the Supreme Court judgment IV CSK 354/12

First condition: a change of circumstances that could not have been foreseen

„[A] material change of circumstances within the meaning of Article 632 § 2 of the Civil Code concerns exclusively an external event, independent of the parties, which they were unable objectively to foresee at the date of concluding the contract. Excluded under this provision are circumstances dependent on the parties, as well as random events of an individual character threatening the contractor with a gross loss.”

— judgment of the Supreme Court of 21 February 2013, IV CSK 354/12, LEX No. 1311808

The Supreme Court adds that what is meant are „cases going beyond the scope of ordinary contractual risk” (IV CSK 733/13), and the boundary of ordinary risk is drawn by the tender calculation:

„The reference to a gross loss underlines that what is meant is a loss which destroys the calculation carried out by the contractor, allowing for ordinary contractual risk.”

— judgment of the Supreme Court of 21 August 2014, IV CSK 733/13, LEX No. 1541191, likewise judgment of the Supreme Court of 5 December 2013, V CSK 2/13, LEX No. 1438655

Court practice has carved out several typical groups of situations.

Additional and substitute works — usually not this way

The prevailing view is that additional works are not a „change of circumstances”. Defects of the design documentation existed already at the moment of contracting and originate in the sphere of one of the parties, not outside. This is plainly visible in case IV CSK 354/12, where works on road drainage, embankments on peat and soil replacement worth a total of PLN 400,337.73 resulted from defective design documentation — the Supreme Court reproached the lower courts for mixing up the regimes and indicated that such facts are assessed under unjust enrichment or damages, not under Article 632 § 2.

The sports-hall case ended just as instructively. After the contractor had been selected in a tender, the employer demanded a building with changed parameters — more seats in the auditorium and an additional conference room. The contractor performed the works, and the lower courts increased the lump sum of PLN 33,823,000 by more than PLN 2 million, finding a gross loss exceeding PLN 4 million. The Supreme Court set that judgment aside: the investor’s demands are not a „change of circumstances”, because „an entity constructing a building on the basis of a validly concluded contract with the investor is not obliged to submit, without a prior amendment of the contract, to the investor’s expectations that it will construct an object with different parameters” (IV CSK 568/12). Changed expectations of the employer are matter for an annex and a price agreed before performance — whoever builds „on credit” without a contract amendment risks receiving neither an increased lump sum nor remuneration for additional works.

Rises in material prices — yes, given sufficient scale and pace

This is the best documented group, and its history can be told through one case — the Kraków housing estate, which will keep reappearing until the end of this article. When the courts of both instances dismissed the contractor’s claim, treating the price rises of 2006-2008 as ordinary risk, the Supreme Court ruled otherwise:

„Undoubtedly, a rapid rise in the prices of construction materials and services after a long, nearly 10-year period of their stability may be regarded as a circumstance unforeseeable at the time of concluding the contract, justifying a change of the lump-sum remuneration fixed in a contract concluded under the regime of that Act.”

— judgment of the Supreme Court of 20 November 2008, III CSK 184/08, LEX No. 479317 („that Act” being the former Public Procurement Act of 1994, under which the contract had been awarded)

Case law repeats the „10-year stability” formula to this day (cf. the judgments of the Supreme Court of 12 April 2013, IV CSK 568/12, and of 29 October 2015, I CSK 901/14). Whether a price rise stops being ordinary risk is decided jointly by the scale, the scope and the pace of the change:

„The very element of the scale of that increase (23.87%, of which inflation for construction materials was 7.8% and the rise above inflation 16%), the material scope of the increase […] and the very period (pace) of the said increase could — viewed objectively — indicate the occurrence of a material change of circumstances within the meaning of Article 632 § 2 of the Civil Code.”

— judgment of the Supreme Court of 29 October 2015, I CSK 901/14, LEX No. 1818856 (at issue was a rise in the prices of most construction materials by almost one quarter during the boom of 2007)

In the same case the Supreme Court disposed of two objections which employers raise almost by reflex. The first: a prudent contractor should have tied its suppliers down with contracts in advance. The answer: even a carefully calculating construction contractor is not always able to foresee a sudden rise of material prices on a significant scale, and there is no reason to suggest that such movements are foreseeable cyclical changes. The second: whoever bid low has itself to blame. The answer: an underpriced calculation may affect the assessment of the size of the loss itself, but it decides nothing about the foreseeability of the change of circumstances.

Changes of taxes and public charges — yes, but not automatically

The prototype of this group is the judgment of the Supreme Court of 18 September 1998, III CKN 621/97 (OSP 1999, No. 1, item 9), which arose from a change of customs rates. The modern benchmark was set by the increase of the VAT rate on construction works from 7% to 22% on 1 May 2004. First, however, a frequent misunderstanding must be defused — the change of the rate does not transfer itself onto the price:

„The increase, as of 1 May 2004, of the rates of the tax on goods and services for construction works, effected by the Act of 11 March 2004 on the tax on goods and services, does not justify — without an amendment of a contract concluded before 1 May 2004 — an obligation of the employer to pay the net remuneration increased by the tax on goods and services at the higher rate.”

— resolution of the Supreme Court of 21 July 2006, III CZP 54/06, OSNC 2007, No. 5, item 66

Since there is no automatism, what remains is an amendment of the contract or the judicial route. And here the case law is favourable to contractors: „a change of tax law provisions during the life of a contractual relationship (including one arising from a construction works contract) may be regarded as an event causing an extraordinary change of circumstances” (judgment of the Supreme Court of 17 January 2008, III CSK 202/07, LEX No. 398491, decided under Article 357¹). The same judgment contains a distinction of great practical value: the ability to foresee a change of a tax rate (even in a specific amount) is one thing, and the foreseeability of the threat of a gross loss is another. A contractor who could foresee the change of the law itself did not have to be able to foresee its ruinous effect on the specific contract.

A borderline example: waste in the ground

Constructing a stadium, the contractor took over earthworks covering masses from a former landfill estimated at some 220,000 m³. In the course of the works it emerged that the man-made ground contained hazardous waste not disclosed in the procurement documents. The Supreme Court approved the assessment that „the necessity of removing waste of this kind was an event which could not have been foreseen, and it led to an extraordinary change of circumstances” (IV CSK 733/13). The line is thin: removing the landfill masses was covered by the contract, and only their composition proved unforeseeable.

Second condition: the threat of a gross loss

Two definitions decide matters here. The first concerns the loss itself:

„Loss means the excess of the costs incurred by the contractor over the remuneration obtained by it for performing the work. […] It need not be a loss that would shake the financial standing of the contractor or threaten it with insolvency. An ordinary gross transactional loss suffices.”

— judgment of the Supreme Court of 3 June 2015, V CSK 589/14, LEX No. 1766009

The second draws the boundary from below and excludes lost earnings from protection:

„As the Supreme Court explained in its judgment of 18 September 1998, III CKN 621/97 (OSP 1999, No. 1, item 9), the general financial condition of the contractor is of no great relevance here. It must therefore be accepted that what matters is a gross loss incurred within the specific legal relationship defined by the concluded contract.”

— judgment of the Supreme Court of 15 November 2006, V CSK 251/06, LEX No. 278677

The same judgment puts it bluntly: the provision protects only against the contractor suffering a gross loss, not against the loss of expected income. A contract that has stopped being profitable but generates no loss is not subject to correction.

How much is „grossly” — the Kraków case in figures

The ending of the Kraków housing-estate case is the most instructive. The municipality ordered the design and construction of an estate — ten buildings whose flats were to have a combined usable area of 12,459.70 m² — for a lump sum of PLN 24,904,445.65 gross (contract of September 2005). In July 2007, still in the course of the works, the contractor sued for an increase of the remuneration by PLN 7,676,051.70 on account of the rise of prices in construction. The expert established that the cost of building the estate at prices of the third quarter of 2005 was PLN 23,088,930 gross, and at prices of the third quarter of 2008 — PLN 34,199,434, an increase of 48% against a profit margin typical for the industry of 15%.

The Court of Appeal in Kraków carried out a calculation worth knowing for its method. Taking the cost of construction at 2008 prices without margin, i.e. PLN 32,623,469, the contractor’s loss was PLN 8,727,122, that is 37% of the gross remuneration. The assessment was unequivocal:

„A loss at the level of 37% is undoubtedly gross. Contractors of works of this kind should assume that they will sometimes achieve no profit, and a contract may even end in a loss, but a loss several times exceeding the normal margin (15%) is not a normal loss.”

— judgment of the Court of Appeal in Kraków of 5 November 2013, I ACa 618/13

The court also addressed the foreseeability of the rise itself: a cost increase of 48% between the conclusion of the contract and the handover of the object could not be regarded as foreseeable. And it added a sentence which captures the essence of the threshold of Article 632 § 2 well: a rational entrepreneur cannot assume that every contract will end in profit.

It is worth seeing this case as a whole, because it shows the real cost of the judicial route. The suit was filed in July 2007. The court of first instance dismissed it in November 2007, the appellate court dismissed the appeal in February 2008. Only the Supreme Court, by the judgment of 20 November 2008 (III CSK 184/08 — quoted above), set that ruling aside, and the final ending came on 5 November 2013. From filing to the closing judgment more than six years passed.

What to relate the loss to

Employers often argue that the loss should be related to the contractor’s total turnover or profits — with a large business any amount will then look immaterial. The case law has separated two questions here. The size of the loss itself is examined solely within the given project, not across the contractor’s entire activity (V CSK 251/06). The size of the enterprise may, however, matter at another stage — when deciding how to spread the consequences of the change of circumstances between the parties. In the Kraków case the court noted that on a turnover criterion the contractor was more than six times larger than the municipality and would have had to bear about 86% of the loss, which, with a local government unit involved, would be irreconcilable with the principle of equal treatment of the parties. In the end the loss was split half and half. Had businesses stood on both sides, the criterion of the proportion of turnovers might have come into play. One reservation: this model of sharing was developed for price rises, which can be attributed to neither party — transferring it to works resulting from defective documentation, and thus from the employer’s sphere, raises our fundamental doubts.

Reference points from other cases

For comparison: additional works of some 8% of the contract value were not recognised as a gross loss (judgment of the Court of Appeal in Szczecin of 13 November 2014, I ACa 319/14, LEX No. 1649284). At the other end lies a FIDIC motorway contract with an accepted contract amount of PLN 643,844,502.55 gross, in which the consortium had calculated its profit at a mere 1%. The loss from the rise of asphalt and fuel prices came to PLN 11.825 million net, about 2.23% of the remuneration — and was assessed as falling within typical business risk, while the claim failed above all because the contractors proved neither the actually calculated profit nor the loss (judgment of the Court of Appeal in Warsaw of 4 July 2016, VI ACa 569/15, LEX No. 2109567, decided under Article 357¹, the remuneration being of a remeasurement type). The court noted at the same time that a loss at the level of 1.24% of the contract value would have been gross in those realities — had the 1% profit been proven. One more methodological lesson flows from that case:

„The agreed remuneration includes not only the reimbursement of the outlays incurred by the claimants, but also profit at a certain level, which cannot be disregarded when establishing the condition of a gross loss. Part of the increase in costs is therefore consumed by that part of the remuneration which was to constitute the contractor’s profit.”

— judgment of the Court of Appeal in Warsaw of 4 July 2016, VI ACa 569/15, LEX No. 2109567

The conclusion from lining up 37%, 8%, 2.23% and 1.24% is that there is no rigid percentage threshold. The outcome turns on the relation of the loss to the remuneration and the calculated profit in the specific case — and cases are lost most often on proof of quantum, not on principle.

Third condition: causation and the moment of assessment

The threat of a gross loss must flow precisely from the unforeseeable change of circumstances, not from the contractor’s own calculation error, faulty site organisation or an underpriced bid. The practical difficulty lies in catching the moment at which the threat can already be demonstrated. In the course of performance it is rarely known whether the circumstances revealed so far are everything, or whether more will come. Since neither lost profit nor an ordinary loss justifies the claim, the decision to sue requires a reliable calculation before the statement of claim is filed — and ongoing documentation of costs from the moment the change of circumstances reveals itself.

What a win actually gives — a judgment reshaping the contract

This question is asked far too rarely before litigation. A claim under Article 632 § 2 is a claim for modification: the court does not award „outstanding remuneration” — it changes the contract. It has two competences: it may increase the lump sum or dissolve the contract. The choice stays within the limits of the relief sought, and dissolution is in practice a last resort for situations where further performance has lost economic sense.

A successful claim yields compensation of the increased costs actually incurred — without the profit on which the contractor calculated its bid. The provision removes the loss. It does not restore profitability. The payment claim becomes due only upon delivery of the judgment, because the ruling reshapes the contract anew — until then no default interest runs, and the contractor finances the construction from its own funds. In the Kraków case that took more than six years. This arithmetic must be honestly weighed against the alternative which Article 54a of the Public Finance Act opened up in public procurement — see below.

Burden of proof: a calculation broken into elements

The burden of proof rests on the contractor (Article 6 of the Civil Code) and this is the most frequent cause of defeat. One must produce the original tender calculation broken down into individual cost elements, with the profit separated out, and then set it against the actual costs. Only on that basis can an expert answer four questions: whether a loss occurred, whether it was caused by the change of circumstances, whether it is gross, and how to express it in figures. Without a tender estimate at bid-date prices, purchasing records and a settlement of the contract, even a large loss remains an assertion.

What this looks like in practice is shown by a sports-hall case in which some 3,500 purchase invoices were at stake. The court considered a precise determination of the actual costs impossible, relied on averaged figures and reduced the demand by the labour-price discount which the contractor itself had granted in the tender (21.6%) — and the judgment was still set aside on procedural grounds (judgment of the Supreme Court of 9 August 2012, V CSK 366/11, LEX No. 1231630). In the Kraków case, in turn, the court accepted a hypothetical cost calculation drawn up by the expert, although the burden of proving the loss lay on the contractor. In our assessment such a relaxation of rigour calls for caution: Article 322 of the Code of Civil Procedure (consolidated text Dz.U. 2026 item 468) allows the court to award an appropriate sum according to its own assessment only where strict proof of the amount of the claim is impossible, excessively difficult or plainly pointless, and its catalogue covers cases for damages, for revenues, for return of unjust enrichment and for a life-annuity benefit — a demand to reshape remuneration is not literally on that list. It is safer to assume that the court will demand strict proof than to count on leniency.

Hence a practical evidence checklist: the tender estimate with prices from the calculation date and profit separated out, supply contracts and purchase invoices from the performance period, a schedule with the dates materials were built in, correspondence documenting the moment the change of circumstances came to light, and a written demand for an increase addressed to the employer before suit.

The weak points of this route — let us say them openly

Public procurement today: contractual indexation before judicial

In Polish public contracts the first line today is the mandatory indexation clause. A contract for construction works, supplies or services concluded for longer than 6 months must contain provisions on the rules of changing the remuneration in the event of a change in the prices of materials or costs (Article 439(1) PZP). The statute forces the parties to define in the contract the level of price change that triggers indexation, the initial date for establishing the change, the method of determining it — by reference to an index, in particular one announced by the President of Statistics Poland (GUS), or to a list of types of materials or costs — and the maximum value of the change of remuneration (Article 439(2) PZP). It works both ways, because a price change also means a decrease (Article 439(4) PZP). A contractor whose remuneration has been indexed must correspondingly change the remuneration of its subcontractors (Article 439(5) PZP).

The second line are annexes within the limits of Article 455 PZP: changes provided for in the procurement documents in the form of clear, precise and unambiguous review clauses (Article 455(1)(1)), changes forced by circumstances which a diligent employer could not foresee, up to 50% of the original contract value (Article 455(1)(4)), and minor changes — for construction works up to 15% of the original contract value and below the EU thresholds (Article 455(2)). The third line is a settlement backed by the written comparison test of Article 54a of the Public Finance Act, described at the beginning.

The judicial route of Article 632 § 2 remains open in parallel, but one enters it only after exhausting the contractual path — it is slower and requires proof of a gross loss, while contractual indexation operates from the agreed threshold. One closing caveat: contractual notification procedures cannot extinguish the indexation claim. In the FIDIC case the court held that the lapse of the claim after the 28-day contractual time bar of sub-clause 20.1 „would directly circumvent Article 119 of the Civil Code” — the claim being subject to the three-year statutory limitation period (VI ACa 569/15). Neglecting notification may have other consequences, but it does not take the statutory claim away from the contractor.

Which basis to choose — a map of situations

Article 632 § 2 fits one configuration: works covered by the contract have become grossly more expensive as a result of an unforeseeable change of circumstances. If the problem is that works had to be performed which the contract did not cover, the proper basis is unjust enrichment (Articles 405 and 410 of the Civil Code). If the source of the extra costs lies in defects of the design documentation supplied by the employer, contractual damages come into play (Article 471 of the Civil Code). We discuss the boundaries between these regimes — and the consequences of confusing them in a statement of claim — in the survey article on additional works under lump-sum remuneration, and what falls within the scope of the performance in the first place in the analysis of the scope of lump-sum remuneration.

Frequently asked questions

Is a rise in material prices enough to increase the lump sum?

Not by itself. It must go beyond ordinary contractual risk and genuinely threaten a gross loss. The case law treated as unforeseeable a rise of 23.87% during a boom following a long period of price stability (I CSK 901/14) and a 48% rise in construction costs (I ACa 618/13). Increases in the low teens, by contrast, were often assessed as falling within the contractor’s risk. What matters is the combination of scale, scope and pace of the change.

Do I have to be on the brink of insolvency?

No. A gross transactional loss on the given contract suffices, without any threat to the standing of the whole enterprise (V CSK 589/14). The loss is related to the specific project, not to the company’s turnover.

Will I also recover the profit I counted on?

No. The court compensates the increased costs actually incurred, and the loss of expected income remains outside the protection (V CSK 251/06). What is more, the cost increase first „consumes” the calculated profit, and only the excess above it constitutes a loss (VI ACa 569/15).

The contract excludes indexation. Do I still have any claim?

Probably yes. A boilerplate clause on the invariability of the remuneration does not automatically rule out judicial correction (I CSK 901/14). The provision is, however, non-mandatory — a clause which expressly covers an unforeseen significant rise of prices may effectively close the judicial route (V CSK 436/12). The wording of the specific clause decides.

Can I demand an increase after completion and final settlement?

This is still disputed. The traditional position requires the obligation to subsist (IV CSK 733/13), while newer decisions allow the claim to be pursued after performance as well, because the contractor cannot be required to hold up the construction just to preserve the claim (IV CSK 109/16, VI ACa 569/15). The safe course is to raise the demand in writing at once and sue before the final settlement.

Does a VAT increase raise my price automatically?

No. Without an amendment of the contract the employer is not obliged to pay remuneration increased by the higher rate (III CZP 54/06). A change of tax law may, however, justify judicial modification of the remuneration as a change of circumstances — and in public procurement, first of all an annex within the limits of Article 455 PZP.

Can a Polish municipality settle with me at all?

It can — since 1 June 2017 expressly on the basis of Article 54a of the Public Finance Act, after a written assessment that a settlement is more favourable than the probable outcome of litigation. Performing such a settlement does not breach public finance discipline. In practice it is the contractor who should supply the employer with the material for that assessment.

Quotations from Polish judgments and legislation have been translated by the author. All translations are unofficial. The Polish texts are authoritative.

State of the law: 7 August 2026.

Author: Artur Barczewski PhD — Polish attorney-at-law (radca prawny), conducts construction payment disputes for contractors and employers alike. About the author · Discuss your case →