Contract for services – what should it include and what should you know about it?

This article answers the following questions:

• What are the characteristics of a contract for services?
• What are the differences between a contract for services and similar agreements?
• How to properly draw up a contract for services?
• Can a contract for services be terminated overnight?

A contract for services – even though not always formalised – is one of the most common agreements concluded between businesses. Under this contract, one party (the service provider) undertakes to perform specific activities on behalf of the other party (the client), typically in return for payment. However, since this agreement is so common, a lot of businesses do not pay much attention to it and adopt general solutions which are not adjusted to their needs and frequently fail to hold up in a dispute between the parties. This article explains why it is recommended to sign a contract for services in written form and suggests what provisions should be included in it. 

What is a contract for services?

A contract for services is an agreement to perform certain activities for and to the benefit of another party. A contract for services may set out the delivery of a one-time service, a specific number of services, or an indefinite number of services. Its parties may be all entities under civil law, i.e. businesses and other persons (including individuals).¹

Notably, under a contract for services, the service provider does not assume the risk to produce the successful outcome of the agreed-upon activities. The service provider's liability for proper performance of the contract is based on the duty of care (Article 355(1) of the Polish Civil Code)², which means that if the service provider has completed all the agreed-upon activities with due care required under given circumstances, the service provider has fulfilled their obligation under the contract and is entitled to receive due payment, even if the objective laid down in the contract has not necessarily been attained.³

Contracts for services and similar agreements under Polish civil law

A contract for services must be distinguished from a specific work contract (Polish: umowa o dzieło), the object of which is to produce a specific work, i.e. achievement of a specific result of human activity, which must be: 

• concrete,
• designated individually,
• objectively attainable,
• certain⁴.

A contract for services should also not be confused with a fee-for-task contract (Polish: umowa zlecenie), where the consideration of one of the parties (the contractor) is to perform a specific legal transaction (and not a factual operation, as in the case of a contract for services) for the principal.⁵

Notably, the regulations governing the fee-for-task contract apply accordingly to the contract for services. 

Is written form necessary to execute a contract for services?

Save for cases defined in special provisions, there is no obligation to execute a contract for services in written form in Poland. Written formulation of the rights and obligations of the parties is undoubtedly helpful in the event of a dispute between the parties. In such a case, it is the written contract that constitutes the basis for determination of the mutual obligations of the parties.

How to properly draw up a contract for services?

It is impossible to create an ideal standard contract, but there are several aspects which must be absolutely considered. In drawing ap a contract for services, the parties must precisely set out: 

• The description and scope of the services provided, including performance standards. As mentioned above, the object of a contract for services may only be factual operations.
• The obligations which each party is to perform within the framework of the services provided.
• Terms of cooperation, in particular pertaining to exchange of information. In the case of a master agreement, where the provision of services is each time conditional on the client’s decision, the contract should clearly state the method of communication with the service provider, e.g. via e-mail, telephone, or form.
• Terms of payment, in particular its amount, frequency, dates, and methods. If the amount of payment is variable – i.e. if it depends on the number of hours worked or the position of the person who provides the services on the part of the service provider – it needs to be mandatorily stated in the contract.
• Payment adjustment mechanism (if the services are to be provided on a long-term basis).
• Liability in the event of non-performance or improper performance of the contract. If not stipulated in the contract, the general rules and regulations of the law apply, which means that the parties have unlimited liability for any damage arising from the performance of the contract. Within the bounds of the freedom of contract, the contract may stipulate the scope of liability, compensation, and the distribution of non-performance risk.⁶ Corporate advisory experts recommend that the contract contain provisions limiting the liability for damage only to cases of damage by wilful misconduct and within the boundaries of actual damage or setting liability caps.

Can a contract for services be terminated overnight?

The regulations on fee-for-task contracts apply accordingly to contracts for services. Since no specific notice periods are provided for, as a general rule, a contract for services – similarly to a fee-for-task contract – can be terminated with "immediate" effect. In addition, there is no obligation to provide the reasons for termination. 

Nevertheless, while drawing up the contract, the parties should consider its duration and the provisions governing termination. The presence (or absence) of "good cause" has a significant impact on the effects of the termination. The party which terminates a paid service without good cause will be liable to pay indemnity.

As such, immediate termination is not always an effective and viable solution. What safeguards can, therefore, be included in a contract for services to prevent it from being terminated overnight? The legal regulations concerning termination are of default character, which means that the parties may – in line with the freedom of contract rule – include a different provision in the contract, i.e. freely arrange its notice period.⁷ The parties may also establish different rules of termination and notice periods depending on the reasons, i.e. set out different rules of termination for "good cause" and different ones in its absence.⁸

A recommended solution is to clearly define "good cause" for each party by including in the contract a list of situations which entitle the party to terminate it. Some examples of good cause can be as follows:

• loss of confidence in the other party,
• a change in economic relationships,
• the need for cooperation ceasing to exist (or being substantially reduced)⁹.

Example 1¹⁰

The parties agree that each of them may terminate the contract for services with prior three months' notice in writing without stating the reasons for the termination. Termination for "good cause" is neither excluded nor limited in the contract. Since the parties did not include a provision to terminate the contract for "good cause" or its absence, the three-month notice period applies only to termination of the contract without "good cause". Termination with immediate effect applies only to "good cause". 

Example 2¹¹ 

The parties agree that each of them may terminate the contract for services with prior three months' notice in writing. In addition, the parties agree that each party may terminate the contract for services with immediate effect for "good cause" (e.g. a serious breach of the contract by the other party).

Example 3 

The parties agree that they do not intend to terminate the contract for services with prior notice in writing, so they explicitly preclude the application of the provision of Article 750 of the Civil Code in conjunction with Article 746(1) of the Civil Code. Importantly, they are still entitled to terminate the contract with immediate effect for "good cause".

When establishing the rules of cooperation, it is worth clarifying the form of submitting the notice of termination. If this issue is not regulated in the contract (e.g. if written form is not stipulated), it will be sufficient to submit a notice in document form within the meaning of Article 77² of the Civil Code in order to terminate the contract.

In accordance with Article 77² of the Civil Code, the document form of a legal transaction is maintaned if a declaration of intent in the form of a document is submitted in a manner allowing the identification of the person who has submitted the declaration¹². For example, such a notice can take the form of an email or text message. In contrast, written form requires a letter signed by its author.

Precision is what really matters when drawing up a contract for services

Obviously, the issues described in this article do not exhaust the topic of the wording of a contract for the provision and performance of services. If you are uncertain as to whether your contract (especially for long-term cooperation) poses legal risks, do not hesitate to seek professional support in reviewing and negotiating commercial contracts offered by RSM Poland. 

¹ E. Gniewek, P. Machnikowski (ed.), Kodeks cywilny. Komentarz, 11th edition, 2023, Legalis. 

² Judgment of the Supreme Administrative Court of 19 July 2023, II GSK 841/20, Legalis. 

³ Judgment of the Supreme Administrative Court of 15 May 2023, II GSK 1501/19, Legalis.

⁴ Decision of the Supreme Court – the Labour and Social Security Law Chamber of 6 September 2023, I USK 217/22, Legalis

⁵ E. Gniewek, P. Machnikowski (ed.), Kodeks cywilny. Komentarz, 11th edition, 2023, Legalis.

⁶ M. Gutowski (ed.), Kodeks cywilny. Volume III. Komentarz. Articles 627–1088, 3rd edition, 2022; Judgment of the Supreme Court – the Civil Chamber of 16 January 2013, II CSK 331/12, Legalis.

⁷ Judgment of the Court of Appeal in Warsaw of 17 January 2017, file no. I ACa 1133/13, Legalis. 

⁸ Judgment of the Court of Appeal in Warsaw of 17 January 2017, file no. I ACa 1133/13, Legalis.

⁹ W. Trybka [in:] M. Załucki (ed.), Kodeks cywilny. Komentarz, 4th edition, 2024, Article 746, Legalis. 

¹⁰ On the basis of the Judgment of the Court of Appeal in Warsaw of 17 January 2017, file no. I ACa 1133/13, Legalis;

¹¹ On the basis of the Judgment of the Court of Appeal in Warsaw of 17 January 2017, file no. I ACa 1133/13, Legalis.

¹² Judgment of the District Court in Tychy – 6th Commercial Division of 24 January 2020, VI GC 1046/19, Legalis.