Kochanski Public Procurement

Withdrawal from and termination of a contract – latest recommendations of the State Treasury Solicitors’ Office

28 September 2022 | Knowledge, News

On 1 September 2022, the State Treasury Solicitors’ Office published recommendations on the dissolution, termination of and withdrawal from reciprocal contracts. Although the document primarily targets contracting authorities, it is also a rich source of knowledge for economic operators performing public contracts.

Dissolution, termination, withdrawal – what are the differences?

The State Treasury Solicitors’ Office highlights various ways to cease a contractual relationship, including:

  • withdrawal from a contract,
  • termination of a contract,
  • dissolution of a contract,

The above terms are frequently used interchangeably in contracts, despite having different legal effects.

What are the effects of dissolution, termination and withdrawal?

As explained by the State Treasury Solicitors’ Office: “Withdrawal from a contract is a unilateral action leading, in principle, to the expiry of an obligation with a retroactive effect (ex tunc), i.e. from the time the contract was concluded, nullifying its effects. Termination of a contract is also a unilateral action, but having a future effect (ex nunc), i.e. it does not nullify the existing effects of the contract. The exercise of each of these rights is effected by a declaration of intent made to the other party. The differences in the purpose and effect of withdrawal from and termination of a contract make each of these legal actions characteristic of a different category of contracts. […] Withdrawal is most often a way of responding to the other party’s non-performance or improper performance of a contract. […] The purpose of termination is to end the contractual relationship without interfering with the effects of contract performance that have already occurred”.

Dissolution of a contract, on the other hand, requires joint declarations made by both parties to cancel the existing obligation relationship.

Withdrawal from a contract is most often seen in public procurement.

Tenders and public contracts – when a contract can be withdrawn from

In short, a contract can be withdrawn from when certain circumstances occur during its performance, giving rise to one party making a declaration of withdrawal. This withdrawal can be carried out based on the grounds either provided for by generally applicable laws (statutory grounds) or contained in the contract itself (contractual grounds).

Statutory grounds include, but are not limited to:

  • delay in the performance of an obligation by fault of a debtor under a reciprocal contract,
  • failure to perform an obligation within a strict deadline,
  • a declaration by a party that it will not render a performance to which it was obliged,
  • lack of cooperation necessary to perform a work, etc.

However, contractual grounds for withdrawal from a contract depend on the intent of the parties to the contract.

A frequent example of a contractual ground for withdrawal occurs where one party is in breach of a contract, but in a manner other than through delay without fault. This could be, for example, the use of inappropriate materials to complete a work, or the use of subcontractors despite a contractor being obliged to render a performance on its own.

When withdrawal from a contract is ineffective

The mere submission of a declaration of withdrawal does not mean that the declaration is actually effective and produces legal effects.

The effectiveness of a declaration of withdrawal requires the answering of a number of questions, such as:

  • Are the contractual provisions on withdrawal valid in the light of statutory provisions?
  • Has a declaration of withdrawal been drawn up in correct form?
  • Was a declaration of withdrawal given within the period prescribed by relevant contractual provisions/laws?
  • Are the circumstances giving rise to withdrawal attributable to the other party to a contract?

Depending on the specifics of the situation, a negative answer to any of the above questions may lead to the declaration of withdrawal being ineffective.

If so, the disputed contract continues to be binding upon both parties.

Recommendations on withdrawal – an important position of the State Treasury Solicitors’ Office

The State Treasury Solicitors’ Office recommendations constitute a general position on the application of the provisions on withdrawal from, termination or dissolution of a contract.

Nevertheless, as the authors themselves point out – the publication is general in nature and does not refer to a specific contract, nor does it constitute an assessment of specific findings of fact or of law, either existing now or in the future.

Therefore, in each case involving withdrawal from a contract – whether by a contracting authority or an economic operator – a thorough and in-depth legal assessment of the admissibility of intended withdrawal or the effectiveness of already declared withdrawal is essential.

We can assist you in matters concerning withdrawal from public contracts via:

  • preparation of model public contracts, taking into account the legitimate interests of a contracting authority with regard to the possibility of withdrawal,
  • analysis of the findings of fact and assessment of the possibility of making a declaration of withdrawal from a public contract,
  • analysis of the findings of fact and assessment of the effectiveness of a submitted declaration of withdrawal from a public contract.

Any questions? Contact the authors directly:

Jakub Krysa, PhD

Michał Waraksa

See also
Remuneration indexation in public contracts – latest recommendations of the State Treasury Solicitors’ Office

Latest Knowledge

The new National Cybersecurity System

The amendment to the Act on the National Cybersecurity System (UKSC) is one of the most significant regulatory reforms in recent years. Its main objective is to align Polish law with Directive (EU) 2022/2555 of the European Parliament and of the Council. The directive, also known as NIS2, substantially raises digital security requirements across the Union. The Polish Act on the National Cybersecurity System has undergone a thorough overhaul, covering more organisations (with estimates suggesting nearly 40,000 entities), introducing more demanding obligations, statutory personal liability for management board members, and even more stringent rules for imposing financial penalties. In the case of the most serious violations, these penalties can reach 100 million PLN.

‘Made in Europe’ is no longer just a slogan. It is becoming law

Until recently, ‘Made in Europe’ was just a label. While it was useful for marketing purposes, it lacked any hard, normative content. This may soon change. On 4 March, the European Commission published a proposal for the Industrial Accelerator Act, stipulating that, from 2027 onwards, the Union origin of components will be a prerequisite for participating in renewable energy auctions, accessing public funding, and for being eligible to participate in public procurement procedures. The slogan ‘Buy European’ could become a concrete instrument for supporting local production and controlling foreign investment.

Non-obvious cases of transferring an establishment to a new employer

The transfer of all or part of an establishment (zakład pracy) is a special concept in labour law relating to changes in ownership. Put simply, it is the automatic transfer of all the rights and obligations of the employer from one entity to another, without the need for any additional actions or consents from the parties involved. However, this must be preceded by the fulfilment of a range of informing obligations by both the new and former employers. Let’s take a look at what the process should involve.

Protecting yourself against tax risks in the deposit-return system

The deposit-return system has been in place since October 2025, raising significant tax concerns from the outset. Although the regulations came into force, it was unclear for a long time how to apply them in practice. Some of the regulations needed clarification, some solutions were missing and the published explanations did not cover all the key issues. Consequently, the market began to develop its own operating standards.

Banking sector overview | Banking today and tomorrow | March 2026

On 12 February 2026, the Court of Justice of the European Union (CJEU) issued a judgment concerning the use of the WIBOR index in loan agreements. The CJEU judges confirmed that, in consumer cases, courts cannot examine the correctness of the WIBOR calculation. The banks had correctly informed their clients about the reference rate in accordance with national and EU law.

The issue of the National Labour Inspectorate reform has resurfaced

A new draft law proposing changes to the way the National Labour Inspectorate operates has been submitted to the Sejm. During its first reading on 25 February, the draft was not rejected and was therefore referred to the Social Policy and Family Committee for further consideration. Despite the concerns and controversies raised so far, including by businesses, the legislature continues to pursue the thorough modernisation of Poland’s employment model, which involves increased supervision of the labour market and curbing the abuse of civil law contracts. In this article, we will take a look at the proposals included in the new draft and explain what they mean for businesses.

Polish AI boom

According to the latest data, nearly 15,000 companies dealing with artificial intelligence were registered in Poland in 2025.[1] This testifies to an undoubted boom in AI, as well as to the dynamic changes related to the development of this technology. However, amid the rush to implement AI, do companies consider the most important issue: securing the outcomes of their work and protecting themselves against competitors? In this article, we explore this issue and suggest ways to avoid costly problems.

Length of service now includes periods of self-employment

The length of service no longer depends solely on work carried out under a contract of employment. The amendment to the Labour Code introduces significant changes, as work carried out under civil law contracts or as part of business activity will now also be included when calculating service, which affects employees’ rights. What will this mean for employees and employers?