Implied warranty and guarantee in the construction works contract

Construction works represent a significant cost for investors, yet unfortunately they are not always performed professionally, i.e., in accordance with technical knowledge, engineering practice, or the design. They are also often completed much later than specified in the contract. 

What can an investor do in case of defects?

Article 647 of the Civil Code states that “under a construction contract, the contractor undertakes to deliver the structure specified in the contract, executed in accordance with the design and technical knowledge, while the investor undertakes to perform actions required by relevant regulations related to the preparation of the works, in particular to deliver the construction site and provide the design, and to accept the structure and pay the agreed remuneration.”

In the event of non-performance or improper performance, investors may pursue claims against contractors in three ways:

Since compensation under general principles does not differ in construction matters from general rules, the remainder of this article discusses statutory warranty and guarantee mechanisms. 

Statutory Warranty for Defects 

Statutory warranty in construction contracts provides a special form of investor protection that is entirely independent of the contractor’s fault or knowledge, and independent of whether damage occurred as a result of delivering a defective object. It is separate from claims arising from non-performance or improper performance under general rules, as well as from any quality guarantee. 

The Civil Code does not contain detailed provisions on warranty for defects in construction works. Under Article 656 §1, “the provisions on contracts for specific work apply accordingly to warranty for defects of the completed structure.” This refers to Article 638 §1, which states that “the provisions on statutory warranty in sales apply accordingly to warranty for defects in a work.” It also excludes the contractor’s liability if the defect arises from materials supplied by the ordering party (here: the investor). 

Thus, in construction contracts, the provisions governing statutory warranty in sales apply “accordingly,” which may mean applying them fully, with modifications reflecting the specifics of a construction contract, or not applying them at all. 

Case law:

The liability of the seller under Article 556 §1 of the Civil Code is strict; it is sufficient to establish that the item sold has characteristics qualifying it as defective in the given legal relationship. (Supreme Court judgment of 27.01.2017, V CSK 161/16).

Physical Defect

Under Article 556¹, a “physical defect” means nonconformity of the structure with the construction contract. In particular, the structure will be considered noncompliant if it: 

A physical defect also includes improper installation or commissioning (of systems, devices, etc.) performed by the contractor or a third party for whom the contractor is responsible, or by the investor acting on the contractor’s instructions. 

Case law: 

1. Distinguishing between material and non-material defects has significant legal consequences. If a work has material defects, its handover does not make the contractor’s remuneration due. For nonmaterial defects, remuneration becomes due and the ordering party may demand their removal or, if impossible, a price reduction. (Court of Appeal in Poznań, 14.10.2020, I AGa 137/20). 

2. A defect may be both removable and material. The notions “material defect” and “irremovable defect” are not synonymous. (Court of Appeal in Łódź, 22.03.2016, I ACa 1154/15). 

3. Material defects are those that make the structure unfit for use or clearly contradict the contract. (Court of Appeal in Lublin, 12.01.2024, I AGa 98/23). 

Warranty Period

Under Article 568 §1, the contractor is liable under warranty if a physical defect is found within two years, and for real estate – within five years – from delivery. In construction contracts, the Civil Code uses the term “structure”. 
It is reasonable to conclude that “structure” should be interpreted as “real estate” for the purpose of warranty, meaning the warranty period is five years. 

Warranty Rights 

Within the warranty period, if the structure has a defect, the investor may demand its removal (Art. 561 §1). The contractor must remedy the defect within a reasonable time without undue inconvenience. If impossible or excessively costly, the contractor may refuse. 

If the investor is an entrepreneur, the contractor may refuse even if the repair cost exceeds the contractor’s remuneration. In such cases, the investor may demand a price reduction or withdraw from the contract. 

The investor may also declare a price reduction or withdrawal unless the contractor promptly removes the defect. Withdrawal is excluded if the defect is nonmaterial. 

Case law: 
The ordering party may refuse acceptance and payment if the work has material defects preventing proper use or violating the contract. (Supreme Court, 21.02.2025, II CSKP 2353/22). 

Deadlines for Reporting Defects 

The investor’s claim to remove a defect expires one year after its discovery. For consumers, this period cannot end earlier than five years from delivery. 

If the investor requested defect removal, the time to withdraw or demand a price reduction begins after the ineffective lapse of the repair deadline. Fraudulent concealment of a defect eliminates deadline limitations. 

Case law: 
The deadline in Article 568 §1 is peremptory; filing a lawsuit is required to meet it. Notifying the seller is insufficient. (Court of Appeal in Katowice, 26.07.2017, I ACa 168/17). 

Contractual Modification of Warranty 

Under Article 558 §1, parties may extend, limit, or exclude warranty liability. However, such limitations are invalid in consumer contracts unless permitted by special provisions. Any exclusion is also ineffective if the contractor fraudulently concealed a defect. 

Case law: 

1. Warranty may be excluded, but not if defects are concealed fraudulently. (Court of Appeal in Łódź, 31.10.2017, I ACa 318/17). 

2. Fraudulent concealment requires intentional actions such as masking the defect. (Supreme Court, 7.11.2013, V CSK 579/12). 

Quality guarantee

Unlike warranty, a quality guarantee applies only if provided by the contractor and only within the scope specified. Even without a guarantee, the investor may always rely on statutory warranty. 

A guarantee is granted through a declaration specifying the guarantor’s obligations (e.g., refund, replacement, repair). The parties may freely define the guarantee period, defectreporting procedure, and consequences of nonperformance. 
Failure to follow formal reporting procedures may result in losing guarantee rights. 

Q&A 

Summary 

Statutory warranty and guarantee are two key mechanisms protecting investors in construction contracts. Warranty is a statutory, strict liability regime lasting five years, covering physical defects and enabling repair, price reduction, or withdrawal in case of material defects. Its scope may be contractually modified (with limits), and fraudulent concealment voids exclusions. 
 
A guarantee is optional, depends on the contractor’s declaration, and only applies within its terms. Missing required procedures may bar claims. Even without a guarantee, investors remain protected under statutory warranty. 

Authors:

Paweł Góra, Attorney at Law 
Marcin Hoffmann, Trainee Attorney at Law 
Grzegorz Witczak, Advocate

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