The Terms of Repaying a Loan in Poland

by | Jul 6, 2017

What is the Term of Repaying a Loan if the Parties Have Not Indicated It in the Contract?

Sometimes it happens that by borrowing some money we do not specify the exact term of the loan repayment. When the parties have not agreed on a repayment date in the agreement, provisions of art. 723 of the Civil Code shall apply, which provides that the debtor is obliged to return the loan within six weeks of the termination of the agreement by the lender. Therefore, the lender should first give the borrower a statement (preferably in writing) concerning the termination of the loan agreement and at the same letter lender should call for its repayment by indicating a 6-week term. In those letter lender should also indicate the manner of repayment of the loan, i.e. by specifying the bank account number to which the borrower should return the loan. If the amount of the loan is not repaid within 6 weeks, the lender can take the legal action.

When the Debtor May request to reduce the Contractual Penalty?

Contractual penalty is a contractual sum of money which is compensation for non-performance or improper performance of a non-monetary obligation. This compensation is regulated by art. 483 of the Civil Code. Even if the parties specify in the contract the amount of the contractual penalty, the debtor may demand a reduction of the contractual penalties specified in the contract. Reducing the amount of contractual penalties is possible in two cases, i.e. when the liability has been substantially preformed or the contractual penalty is abnormally excessive. Evaluating the performance of a commitment, is taken into account the significance of what has been done for the creditor. On the other hand, “grossly excessive” contractual penalty is assessed individually in each proceeding.

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