Limiting a developer’s liability by stipulating a low contractual penalty constitutes an infringement of consumer rights.
Supreme Court resolution of 31 October 2025, case ref. III CZP 22/25
Issued in response to a legal question referred by the Court of Appeal in Warsaw in a case brought by clients of attorney Piotr Modzelewski, the Supreme Court handed down a resolution unequivocally confirming the soundness of their procedural position.
Background of the dispute
The clients purchased a residential unit from a developer — the agreement was concluded before the building had been erected. Owing to serious delays in the development process, the unit was handed over more than a year later than the agreement provided for. As a result, the clients suffered substantial loss, the redress of which they sought in court proceedings. According to the developer’s argument, the compensation should be limited in amount by virtue of a contractual penalty stipulated in the developer agreement.
Content of the resolution
The Supreme Court held that contractual provisions stipulating a grossly low penalty (as was the situation in the present case) are impermissible, particularly where the consumer is not entitled to claim compensation exceeding the amount of the stipulated penalty.
Legal consequences
The resolution in question has a clearly positive impact on the clients’ situation, as it unequivocally undermines the soundness of the principal line of argument advanced by the defendant developer. At the same time, it will affect the situation across the entire housing market — contractual penalties of this kind (and the limitation of contractors’ liability through their use) have to date been an absolutely standard arrangement.