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Tenders and public contracts – when a contract can be withdrawn from

In short, a contract can be withdrawn from when certain circumstances occur during its performance, giving rise to one party making a declaration of withdrawal.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

Announcement of Income Tax Reform

On 19 August, during a press conference, the Prime Minister announced a package of tax changes planned for next year. According to the announcement, the reform is intended, on the one hand, to ease the burden on the middle class and, on the other, to shift a greater fiscal burden onto the wealthiest individuals and the largest companies. We take a look at the proposals included in the announced package and explain what they might mean for taxpayers.

Family foundations and the tax authorities: what draft bill UD447 proposes and why this is not the end of the troubles

Family foundations were intended to provide entrepreneurs with a stable framework for intergenerational wealth management. Yet not even four years have passed since the first such foundations were established, and the rules governing their taxation are set to be changed once again. This is because the scale of interest and the practical problems uncovered have overwhelmed the drafters of the legislation, as best illustrated by the figures – 927 applications for individual tax rulings and 77 opinions issued from the Head of the National Revenue Administration. This does not, however, mean that family foundations are being used on a massive scale for aggressive tax optimisation. A significant proportion of the queries concerned simply how to correctly apply the complex regulations.

NIS2 and the National Cybersecurity System Act in transport: what you need to do before October 2026

The amended Act on the National Cybersecurity System (UKSC) has been in force since 3 April 2026. For transport sector undertakings, this means a specific compliance timeline, including an obligation to register with the National Cybersecurity System (KSC) registry by 3 October 2026. Failure to do so may result in substantial financial penalties, coupled with the risk of personal liability for senior management. Not every undertaking, however, automatically falls within the scope of the new regime. Read on to find out whether your organisation is affected and what you need to do before the deadline for preparation.

Family foundations: the government has done the maths and presented the bill

Three years. That’s how long we’ve been waiting for what the Council of Ministers had seen in the data from the outset – and has now disclosed in its review of the Family Foundation Act. The document not only diagnoses the problems, but also previews substantial changes to rules that founders and their advisers treated as settled and stable. And therein lies a problem that goes far beyond tax matters. If the rules of the game are changed while the game is being played, there can be neither planning stability nor trust in the law. It is no coincidence that one of the greatest concerns among entrepreneurs considering setting up a foundation is not the level of taxation, but the stability of the legal framework – which today is once again being called into question.

What the new swiss franc act means for banks

We now have a new Act on Special Measures for the Adjudication of Cases Concerning Loan Agreements Denominated in or Indexed to the Swiss Franc. The provisions come into force 14 days after publication. So now is a good time to look at what lies ahead and what banks should be doing today.

New draft Pay Transparency Act – what has changed since December 2025?

A second version of the draft act on strengthening the application of the right to equal pay for equal work or work of equal value between men and women has now been published. It refines procedures and deadlines and introduces a new supervisory body. We have already discussed the changes affecting the recruitment stage and the three pillars of the forthcoming pay transparency framework, noting that Poland will miss the EU transposition deadline of 7 June 2026. Now, we take a closer look at the further changes, new developments and risks that have emerged in the latest, April version of the draft.

Payment Services Regulation (PSR) – between consumer protection and due diligence

The draft Payment Services Regulation (PSR) is one of the most significant elements of the reform of the EU legal framework for payment services. Its principal aim is to enhance the security of cashless transactions and to reduce the scale of financial fraud, in particular that arising from the growth of digital channels. At the same time, the new rules are intended to introduce a liability model that will not result in risk being transferred entirely to financial institutions, whilst retaining an important role for independent due diligence on the part of the user.

Energy deregulation – key changes for businesses and energy consumers

The President has now signed the Energy Deregulation Act (UDER92). The new provisions cover both the relationships between energy undertakings and consumers, and matters relating to investment, district heating, and the administrative obligations of energy market participants. The Act introduces changes in the areas of billing, communication with consumers, grid connection, and the operations of undertakings in the energy and district heating sectors. We set out the key points to note.

Banking sector overview | Banking today and tomorrow | July 2026

Under the draft legislation, banks will be required to offer existing borrowers a switch from WIBOR-based to POLSTR-based interest rates, a mechanism intended to speed up the voluntary transition of financial instruments to the new benchmark. The banking sector has responded positively to the proposal, according to Tadeusz Białek, President of the Polish Bank Association.