Right of withdrawal in construction contracts – how to avoid falling into the trap of Article 395 of the Civil Code?

The provisions of the Civil Code define situations in which both the ordering party and the contractor may withdraw from a construction contract. Pursuant to Article 635 of the Civil Code, the ordering party may withdraw from the contract without setting an additional deadline if the contractor is delayed in commencing or completing the work to such an extent that it is unlikely the work will be completed on time. However, what if the parties, acting lawfully and within their contractual freedom, have stipulated a contractual right and deadline for withdrawal? What is the relationship between the regulation of Article 635 of the Civil Code and Article 395?

The introduction of a contractual right of withdrawal is permissible, provided its content does not conflict with mandatory provisions of law. According to legal doctrine and case law, Article 635 of the Civil Code is not a mandatory provision (ius cogens), and therefore the parties may contractually exclude its application. However, such exclusion must be explicitly stated in the agreement. It should be remembered that the statutory regime governing withdrawal from a contract is subordinate to the will of the parties expressed in the agreement.If the parties have defined the conditions for withdrawal in the contract — including those referring to the mechanism provided in Article 635 — they may not invoke statutory provisions without taking the contractual arrangements into account. As the Supreme Court pointed out in its judgment of 6 July 2016, case no. IV CSK 687/15, only after the expiry of contractual provisions — for example, the expiry of a contractual withdrawal period — may the parties invoke statutory mechanisms of withdrawal, including Article 635 of the Civil Code.

When drafting a contract, one might consider including a withdrawal clause under Article 395 providing for a maximally long withdrawal period. However, it should be borne in mind that in such case it would be impossible to rely on the provision of Article 635, since the parties would be bound by their contractual arrangements, which would prevail.

The parties may establish their own contractual method of withdrawing from the agreement, different from the regulation contained in Article 635. However, the ordering party must remember that the possibility of invoking Article 635 is permissible only when the ordering party has fully complied with its obligations and the delay is solely attributable to the contractor. Regardless of the above, it is essential to distinguish between the contractual regime and the statutory regime concerning withdrawal from the contract, and upon the expiry of contractual provisions and deadlines, one should bear in mind the mechanisms provided by statute.