PurpLE Senior researcher Michal Kania took part in the “Public procurement in times of crisis: national experiences” conference organised by the Public procurement law research group at the University of Tartu, School of Law on 26 January 2023. Michal’s presentation focused on the so-called “hardship clause” in the context of public procurement law in the context of the Coronavirus pandemic and war in Ukraine.

The presentation is part of research conducted under the umbrella of Sustainable Public Procurement through the private Law Enforcement (PurpLE) project where research is conducted on the relationship and impact of public procurement law on private (contract) law. One of the examples here might be the hardship clause.

Both the Coronavirus pandemic and Ukraine’s war have affected public procurement contracts. First, lockdowns, disruptions in supply chains, labour shortages, energy crises, and inflation have affected three critical aspects of public contracts, i.e., price, time, and manner of performance. Minimising risks associated with unexpected circumstances is primarily associated with the use of review and adaptation clauses. Under, for example, the Polish Public Procurement Act, adopted on September 11, 2019 (Journal of Laws of 2019, item 2019) and other regulations related to Coronavirus and war crises, some of these clauses are obligatory, while others are optional. However, their application does not give the parties to a public procurement contract complete protection against the occurrence of unexpected consequences.

For this reason, there is currently an increased interest in the Rebus sic stantibus clause in the Polish public procurement market. The Rebus sic stantibus is a kind of hardship clause under which the courts may intervene in cases of extraordinary change in circumstances if performance entails excessive difficulties or exposes one of the parties to a serious loss that the parties did not foresee when executing the contract. The Rebus sic stantibus clause is provided under article 357(1) of the Polish Civil Code.

Applying the Rebus sic stantibus clause on the grounds of public procurement contracts raises several questions These relate primarily to whether the Rebus sic stantibus creates an autonomous basis for the public contract modification beyond those provided for in articles 454 and 455 of the Polish Public procurement Act (respectively, article 72 of the Directive 2014/24/EU on public procurement). Alternatively, whether the Rebus sic stantibus clause is a modification of the solution provided in article 455(1)(4) of the Polish Public procurement act (respectively art. 72(1)(c) of the Directive on public procurement). The application of the Rebus sic stantibus clause is also related to the question of the limits of judicial intervention in the modification of public contracts.

In his presentation, Michał first briefly pointed out the origins of the hardship clause. Then, the basis for applying the Rebus sic stantibus clause in public procurement contracts was discussed. Finally, problems related to applying the Rebus sic stantibus clause in public procurement law were indicated.