Framework obligations of the Parties and the procedure for notification of subcontractors based on the requirements of FIDIC Subclause 4.4.

In contract practice, we observe the notification by General Contractors of contracts, the subject of which is a de facto future obligation to order and deliver materials, provide designated services, respectively.

Within the framework of such contracts, the parties agree on the quantity of services, materials to be ordered/delivered within a specified time frame (e.g., within a period of 12 months from the date of conclusion of the contract), the unit price, the method of placing orders for the performance of supplies/services.

As a rule, the parties agree that the execution of the contract will be carried out on the basis of relevant orders, which will specify the quantity/scope of the ordered supplies/services and the date of their execution.

Based on the content of such agreements, the Investor receives general information about the assumed/planned scopes of supplies/services and the maximum value of the concluded agreement, i.e. obtains knowledge of certain boundary frameworks of cooperation between the contractor and the subcontractor.

Given the above practice, the question arises:

• about the legal nature of such contracts and the orders placed under them,
• whether, in the above circumstances, we are dealing with so-called framework agreements, on the basis of which subsequent civil law contracts are concluded,
• whether these individual orders require notification under the provisions of FIDIC Sub-Clause 4.4.

In contract law, there is no legal definition of the above-mentioned contractual relationships, which in practice function as so-called framework agreements.

Although a legal definition can be found in the Public Procurement Law (Article 7 item 26) as well as the Payment Services Law (Article 2 item 31), the scope of this definition does not apply to legal relations on the line of general contractor – subcontractor.

The issue of framework agreements was considered by the Sąd Najwyższy of March 29, 2017, ref: I CSK 395/16. The court’s considerations lead to the following conclusions:

• the framework agreement does not specify the provisions of subsequent agreements concluded by the Parties in view of the assumed commitment to cooperation,
• the framework agreement does not specify the elements of the target contracts to be concluded, orders to be placed,
• the framework agreement does not contain specific, firm, final obligations to purchase/perform supplies/services,
• the framework agreement leaves to the parties the final decision on the actual implementation of the obligations of the order or performance of certain activities stipulated therein,

Thus, it is reasonable to conclude that a framework agreement is not a contract whose content concretizes the material and procedural conditions of cooperation, i.e., which contains:

• a specific obligation to perform designated activities (e.g., a commitment to purchase 1,000 tons of aggregate and an obligation to deliver the quantity of aggregate in question, during the term of the contract),
• describes the method of placing orders,
• indicates the amount of prices, discounts, includes references to the calculation of prices, discounts (e.g., to available price lists in effect on the date of service/delivery),
• indicates the method of payment regulation, persons authorized to carry out the established procedures.

Orders placed on the basis of the provisions of the legal relationship structured in this way, i.e. orders constituting the technical element of the implementation of contractual obligations, despite the fact that their content indicates the scope of the service/supply, the date of execution, the price, the place of execution (i.e. the essential elements of the contract in the context of the formal-legal evaluation) do not justify each time their notification in connection with the procedures in force in the construction processes for notification of contracts concluded with subcontractors.