Mateusz Grochowski, Freedom of Contract on Crossroads: The Struggle over the Concept of Contract Liberty in 20th Century Poland in:

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Mateusz Grochowski* Freedom of Contract on Crossroads: The Struggle over the Concept of Contract Liberty in 20th Century Poland** Abstract The text delves into the origins and theoretic premises of the concept of freedom of contract that developed in Poland throughout the 20th century. It attempts to provide a more precise understanding of the economic and political dynamics that led to creati‐ on of the quite strong laissez faire perception of contract liberty, which still seems to underpin most of the Polish discourses about contract law. In so doing, the article seeks to analyze two crucial dynamics that seem to be determinative for the current shape of freedom of contract in Poland: the direct translation of the inter-war model of contract liberty into the current civil law, as well as the rapidity and profoundness of the transformation from the centrally-steered to free market economy in the 1990 s. This view on intellectual history of contract liberty is, in turn, applied to analyze fric‐ tions in transposition of EU contract law, which occur conspicuously in the Polish realities. Introduction Freedom of contract occupies dearly the central position in the conceptual framework of contract law. It does not merely constitute one of its principles, but encapsulates its more foundational ideological premise.1 It has been traditionally perceived as an epi‐ I. * Mateusz Grochowski, Ph.D., LL.M. (Yale), Max Weber Fellow at the European University Institute, Assistant Professor in the Institute of Law Studies of the Polish Academy of Sciences and Affiliated Fellow at the Information Society Project (Yale Law School). Email: ** The article is partly based on a revised version of the working paper: M. Grochowski, Lost in transition? Freedom of Contract in Poland and the Central European Experience and, in part, on the results of a research project financed by the Polish National Science Center No. 2016/20/S/HS5/00458. I am truly grateful to Daniel Markovits, Roy Kreitner, Ewa Łętowska and Martijn Hesselink, as well as to the Fellows of the Edmond J. Safra Center for Ethics, Market and Law at The Buchmann Faculty of Law, Tel Aviv University, for their valuable comments to earlier versions of this text. 1 See also P. Cserne, Freedom of Contract [and Economic Analysis], in: J. Backhaus (ed.), Encyclopedia of Law and Economics, Springer 2015; B. Mensch, Freedom of Contract as Ideology, 33 Stanford Law Review 1981; T.M.J. Möllers, Working with Legal Principles – demonstrated using Private Autonomy and Freedom of Contract as Examples, 14 European Review of Contract Law 2018, p. 130; Z. Radwański, Teoria umów, Wydawnictwo Praw‐ nicze 1977, p. 94–96. OER 1/2020, DOI: 10.5771/0030-6444-2020-1-34 tome of a liberal agenda of contract law2 (usually being equalized with a strong lais‐ sez-faire version of liberty).3 On the flipside, freedom of contract is often revoked as a heuristic tenet4 of the general attitude adopted by the particular legal system towards economic and social liberalism. In this way, it serves as a “touchstone to reveal per‐ ceptions about individual autonomy and the legitimacy of self-interest.”5 The same vantage point on contractual freedom has been incessantly adopted in the intellectual history of the Central European6 contract law in the 20th century.7 The text delves more deeply into the intellectual history of this development, focusing on one of the countries in the region – Poland. Due to different starting points in the pre-war period and divergent ways of development in the communist and post-communist era, each of the countries has its own specificity that does not allow for wholesale generalizati‐ ons. At the same time, however, the most overall dynamics that occurred in this re‐ gard were undoubtedly shared by all the countries of the region. The development of Polish contract law since the end of the World War I encapsulates the main features of the changes that took place in the region. This line of development has been reflected in the structure of the paper. At the beginning (point 2) it attempts to briefly analyze the focal points of the development of the concept of freedom of contract (and the liberal agenda of contract law) from the inter-war period till the final years of communist regime. The subsequent part (point 3) seeks to delve more deeply into the consequences for contract law conceptual agenda that have been triggered by the transition from the centrally-steered economy to the free-market agenda. Finally, point 4 discusses two instances where the “fossili‐ 2 See also P. Bourdieu, The Force of Law: Toward a Sociology of the Juridical Field, 38 Hastings Law Journal 1987, p. 850 f. 3 H. Dagan, M. Heller, Freedom of Contracts, Columbia Law and Economics Working Paper No. 458,, p. 1. 4 See also R. Kreitner, Calculating Promises: The Emergence of Modern American Contract Doctrine, Stanford 2006, p. 97. 5 I. Markovits, Justice in Lüritz: Experiencing Socialist Law in East Germany, Princeton 2010, p. 221. 6 The concept of Central Europe is, as such, quite vague and its geopolitical and historical boundaries can be set differently, depending on a variety of assumptions (cf. e.g. R. Okey, Central Europe / Eastern Europe: Behind the Definitions, 137 Past and Present, 1992, p. 102ff). For the sake of this text, the Central Europe will be understood as the group of countries located south of the Baltic Sea, which after the Second World War fell under the Soviet political control, yet did not become incorporated to the Soviet Union. The further remarks will pertain mostly to Poland, Czechia, Slovakia and Hungary, with extension to the German Democratic Republic (which, though normally is perceived not as one of the Central European countries, shared with these countries a few meaningful elements of legal deve‐ lopment). On various concepts of Central Europe from the legal scholarship vantage point see e.g. R. Mańko, Delimiting Central Europe as a Juridical Space: A Preliminary Exercise in Critical Legal Geography, 89 Acta Universitatis Lodziensis. Folia Iuridica (2019) and R. Mańko, M. Škop, M. Štěpáníková, Carving Out Central Europe as a Space of Legal Culture: A Way Out of Peripherality?, 6 Wroclaw Review of Law, Administration and Economics 2018, along with further publications referred to by the authors. 7 The text attempts to base on the sources on Central European contract law available in English and in German. In some parts it supports the analysis with sources in Polish language, where the relevant data or ideas were not featured in publications in the other two languages. Freedom of Contract on Crossroads 35 zed” concept of contract freedom that emerged in Poland after the post-communist transition conspicuously impacted the actual functioning of contract law as an instru‐ ment of market regulation. These remarks are admittedly far from exhausting the dis‐ cussion over the origins of freedom of contract in the current Polish (and partly, the Central European) contract law. They rather aim to frame these phenomena and to of‐ fer a general explanatory framework for the phenomena which still – after 30 years since post-communist transformation and after 16 years since the EU accession – seem to be one of the most definitive underlying features of contract law discourses in Poland. The emergence of the laissez faire concept of contract law in Poland The inter-war liberal concept of contract law The end of the World War II found CE countries with a relatively well-developed structure of contract law established in the inter-war period. In most of the countries of the region contract law was still rooted in the rules created before the World War I, especially the Austrian Allgemeines Bürgerliches Gesetzbuch (ABGB), supplemented by the German Bürgerliches Gesetzbuch (BGB)8, the French Code Civil and the Swiss Obligationenrecht. All of these codes strongly endorsed traditional 19th century version of economic liberalism and strongly endorsed parties’ equality and autono‐ my.9 As opposed to most of the other CE countries, at the end of the World War I Polish civil law was deeply heteronymic and encompassed German, Austrian, Russi‐ an, modified French and Hungarian legal systems.10 The codification works started almost immediately after the end of the war resulted in enactment of the Code of Ob‐ ligations of 1933.11 It embraced most of the general part of contract law and the law of contractual and non-contractual obligations. At the conceptual and policy level the 1933 Code ascribed to the dominant trends of its era and was rooted in a laissez-faire II. 1. 8 Cf. A. Bakardijeva Engelbrekt, The impact of EU enlargement on private law governance in Central and Eastern Europe: the case of consumer protection, in: F. Cafaggi, H. Muir-Watt (eds.), Making European Private Law. Governance Design, Cheltenham – Northampton, MA 2008, p. 101. 9 Cf. H.-W. Micklitz, On the Intellectual History of Freedom of Contract and Regulation, 4 Penn State Journal of Law and International Affairs 2015, p. 21–25. 10 Cf. M. Lewandowicz, Is There a Polish Legal Tradition: On the Margins of Considerations regarding the 1933 Code of Obligations, 8 Journal on European History of Law 2017, p. 75 f.; A.W. Rudziński, Sovietization of Civil Law in Poland, 15 The American Slavic and East European Review 1956, p. 216 f; L. Górnicki, Prawo cywilne w pracach Komisji Kodyfikacyjnej Rzeczypospolitej Polskiej w latach 1919–1939, Kolonia 2000. 11 Enacted on 27 October 1933. On the codification efforts in the inter-war period see e.g. B.A. Wortley, Poland’s New Codes of Law, Birmingham 1937, p. 3 f (and a broad bibliographical record on p. 13–19; S. Gołąb, The Codification of Polish Law, 6 Journal of Comparative Legislation and International Law. Third Series 1924, No. 1, p. 95–99; Z. Nagórski, Codifi‐ cation of Civil Law in Poland (1918–1939), in: Studies in Polish and Comparative Law. A Symposium of Twelve Articles, London 1945, p. 44ff. 36 Mateusz Grochowski view of a state–market relation.12 It understood contract law as a sphere of individual freedom, which should be subjected to state’s intervention only to a limited extent. The Code, hence, recognized freedom of contract as one of the core principles13 and framed it in Article 55 as a freedom to arrange the contract according to parties’ in‐ tent, as long as the content and the aim of the agreement are compliant with “the law, the legal order or good mores.” Only to a limited extent the 1933 Code acknowledged that market may create im‐ balances between parties, which should be addressed through mandatory rules.14 Along this thread, the Code introduced insular rules that aimed to remedy abuse of bargaining power and exploitation between the parties.15 Only in one instance it pro‐ vided more comprehensive set of rules that aimed to protect one of contractors – na‐ mely, the employee in a labor agreement.16 At the same time, the Code and the ac‐ companying scholarship was also drawing a clear-cut distinction between labor agree‐ ments and other types of professional market relations (for instance in mandate agree‐ ments, such as commercial agency).17 While the labor contracts were perceived as afflicted with the typical imbalance in parties’ market position, all the other agree‐ ments were treated as, by definition, not distorted by any disparity. In the outcome, contract law was roughly divided into two spheres: quite intensely regulated labor contracts (dominated by mandatory rules) and the other types of agreements, where the regulatory component was minimal and most of the rules was of non-mandatory nature. The symbolic expulsion of contractual freedom The establishment of the communism in CE after the end of World War II triggered profound consequences for the existing framework of contract law. The concept of freedom of contract found itself in the very center of the substantial change of private 2. 12 Cf. A.W. Rudziński, New Communist Civil Codes of Czechoslovakia and Poland: A General Appraisal, 41 Indiana Law Journal 1965, p. 37; D.T. Ostas, Institutional Reform in East- Central Europe: Hungarian and Polish Contract Law, 26 Journal of Economic Issues 1992, p. 514; D.T. Ostas; B.A. Lette, Economic Analysis of Post-Communist Legal Reform: The Case of Hungarian Contract Law, 36 Acta Juridica Hungarica 1994, p. 190 f. 13 See, e.g., U. Rukser, Das neue polnische Obligationenrecht, 8 Zeitschr. ausl. int. Privatrecht 1934, p. 353. 14 On the discussion between libertarian and socially-aware attitudes in travaux preparatoires see M. Derek, Indywidualizm czy socjologizm? Zasada swobody umów w projektach polskiego kodeksu zobowiązań z 1933 roku na tle porównawczym, 67 Czasopismo Prawno- Historyczne 2015. 15 For instance, by recognizing peculiar regulatory needs of standard terms and standard term agreements (Articles 71–72); see e.g. M. Lewandowicz, Is There a Polish Legal Tradition: On the Margins of Considerations regarding the 1933 Code of Obligations, 8 Journal on European History of Law 2017, p. 75. 16 The 1933 Code addressed labour agreements in Articles 441–476 and considered them systematically as one of the contracts within the ambit of the general civil law. 17 See also point IV.2. Freedom of Contract on Crossroads 37 law that ensued in the outcome.18 The Marxist thought, which prevailed in the early post-war scholarship,19 perceives contractual freedom as an attribute of bourgeois market and society and as a vehicle of entrenching social inequalities and exploitati‐ on.20 In this sense, freedom of contract constituted an institutional promise that any valid contract, regardless of its content, will be enforceable with use of state-provided coercion. The contractual liberty was hence perceived as a purely ostensible formula, which in fact opened a way to unfreedom and privilege for an elite cluster of contrac‐ tors.21 As a result, the Marxist legal thought denied autonomy as an underlying prin‐ ciple of contract law and advocated for replacing it with state steering. Under this view, the state was the optimal proxy for citizens’ interests, being able to aggregate and reconcile them – and to achieve thereby just allocation of resources.22 Therefore, the actual autonomy of market actors could be achieved under this view only by deny‐ ing the formal notion of contractual freedom and by replacing it with the collectiveoriented state steering.23 In the outcome sine mid-1940 s contract law in CE countries was gradually depri‐ ved of its previous liberal premises. In some countries this transformation was not, however, entirely upfront. In the Polish law the Article 55 of the 1933 Code was maintained in the unaltered version till mid-1960 s, when the Civil Code of 196424 came into force. The actual relevance of this principle was, however, gradually wate‐ 18 On the post-war tensions regarding freedom of contract, cf. also K. Grzybowski, Reform of Civil Law in Hungary, Poland and the Soviet Union, 10 American Journal of Comparative Law 1961, p. 257–260; J. Pokój, From Capitalism to Stalinism. Transition of Polish Law of Obligations in the Stalinist Period (1948- 1956), XXIst Annual Forum of Young Legal Historians – 6th Berg Institute International Conference, Tel Aviv, 2 March 2015 (available at: italism-to-stalinism-transition-of-polish-law-of-obligations-in-the-stalinist-period-1948-195 6&Itemid=553). 19 Cf. e.g. W.J. Wagner, General Features of Polish Contract Law, in: W.J. Wagner (ed.), Polish Law Throughout the Ages, p. 393–398, Stanford 1970, p. 396 f. 20 See also J. Banaji, The Fictions, p. 90 f; I. Markovits, The Death of Socialist Law?, 3 Annual Review of Law and Social Science 2007, p. 234 f and ea, Last Days, 80 California Law Review 1992, p. 115. 21 See, e.g., C. Rojek, S.A. Collins, Contract or Con Trick?, 17 The British Journal of Social Work 1987, p. 204 f; cf. K. Renner, The Institutions of Private Law: And Their Social Functions, London 1949. 22 Cf. J. Waldron, Foundations of Liberalism, 37 Philos. Q. 1987, p. 147. As observes I. Markovits, Justice, p. 221, socialist civil law expressed, hence, “little sympathy for the idea that every citizen should be entitled to arrange his own affairs with as much individual autonomy as possible.” 23 Apart from limitations based on central planning, communist thought triggered also much subtle type of restrictions to freedom of contract. Intense Marxist infusions in social and economic views resulted in shifting the general understanding borderlines of the concept of unfairness in contract law. It started to involve much stronger considerations related to community values or “socialist” morality (cf., A.W. Rudziński, New Communist, p. 71 f; I. Markovits, Justice, p. 222 f.; D.T. Ostas, Institutional Reform, p. 519 f. 24 The act of 23 April 1964 (in force as of 1 January 1965). 38 Mateusz Grochowski red down through legislative25 and judicial26 interventions.27 In this way, the state era‐ dicated freedom of contract from a robust part of the market, being able to determine virtually all elements of transfer of assets on a vast part of the market.28 In a conse‐ quence, agreements in the planned economy had only an outer form of contracts and were in fact instruments of state steering.29 Only on the margins of the state-ruled market contract was put to its classic use: a vehicle of self-organization of the market and revealing preferences of its actors.30 This pertained mostly to the spheres, where central planning was too costly in terms of lack of data or fluidity of a particular mat‐ ter.31 Though with the fall of Stalinist regime and the thaw that ensued in the mid-1950 s, the idea of centralized economy was partly eased, the concept of freedom of contract remained invariably a strong suspect in the doctrinal and policy discus‐ sions. This particular dynamic was concluded with the final expulsion of explicit de‐ claration of freedom of contract in the 1964 Code. This shift of paradigms becomes particularly vivid when it is realized that the bulk of the new contract law replicated provisions of the 1933 Code. In this way the old structures were set in the context of 25 The most intense and far-reaching of them were introduced in the early post-war period, along with establishment in Poland (and other countries of the region) the centrally-planned economy – introduced in 1950 by the act on planned contracts in the national economy, enacted on of 19 April 1950 (subsequently replaced with other acts on economic planning). 26 Redrafting of statutory law was, for obvious reasons, too compound and time-consuming (especially in the post-war reality, where legal institutions were gradually recreated and the pre-war legal elite have been effectively disintegrated) to achieve a prompt transition to new ideological agenda of contract law. Therefore, one of the most immediate ways of transition has been judicial re-interpretation of the existing body of provisions and principles. On the post-war argumentative shift in the Supreme Court opinions regarding freedom of contracts see W.J. Wagner, The Interplay, p. 356. More generally on the interpretive approach of Polish case-law in the period of establishing socialist legal order till 1956 see A.W. Rudziński, Marxist Ethics and Polish Law, Natural Law Forum, Paper 1960, p. 48, 55–65. 27 On the discussion over the place for freedom of contract in the new Civil Code see especial‐ ly W.J. Wagner, General Features and id, The Interplay of Planned Economy and Traditio‐ nal Contract Rules in Poland, American Journal of Comparative Law 1962, p. 350–364. 28 See also I. Markovits, Socialist vs. Bourgeois Rights: An East-West German Comparison, 45 University of Chicago Law Review 1978, p. 631 who noticed that under the socialist concept „contracts are often enforced not because the interest constellation between the parties makes enforcement desirable, but because the state so orders”. 29 On the peculiar understanding of freedom of contract in this sphere cf. J. Gwiazdomorski, „Najem" lokali jako problem kodyfikacyjny, 11 Państwo i Prawo 1956, p. 661 f; A. Stelma‐ chowski, Czy kryzys prawa cywilnego?, 36 Ruch Prawniczy, Ekonomiczny i Socjologiczny 1974, p. 275; on similar observations also J. Zemánek, Problems and Perspectives of the Legal Adaptation to the Market Economy in the Czech and Slovak Republics, in: P.-Ch. Müller-Graff (ed.), East Central European States and the European Communities: Legal Adaptation to the Market Economy, Baden-Baden 1993, p. 52. 30 Z.H. Mihaly, The Role of Civil Law, p. 315 f, 327 f; S. Buczkowski, S. Szer, A. Wolter, Prawo cywilne, in: Dziesięciolecie prawa polski ludowej 1944–1954. Zbiór studiów, Warsaw 1955, p. 173. 31 Due to profound dysfunctionalities of state-owned firms under the socialist regime, these goals were hardly achievable in practice – see H. Mihaly, The Role of Civil Law, p. 327 f). Freedom of Contract on Crossroads 39 new policy and ideology.32 At the same time, the expulsion of freedom of contract in the 1964 Code was most symbolic and did not impact the actual degree of contractual autonomy that has developed through the first two post-war decades.33 It only ack‐ nowledged the shift of paradigms that has already taken place in the Polish contract law and only finalized evolution that begun in mid-1940 s.34 The autonomy in disguise The symbolic removal of freedom of contract in the 1964 Code did not totally eradi‐ cate it from the conceptual framework of private law. Throughout the socialist period it still existed in the shadow of the more exposed principles of the “new” socialist contract law. Its elements were present on the margins of the mainstream ideas and concept endorsed in the socialist law and prevailed relatively intact in the spheres that were beyond the scope of interest of the centrally-planned economy. In all of these instances freedom of contract was considered mostly in descriptive terms (as an ac‐ count of the degree of autonomy enjoyed by parties in concluding agreements).35 Scarcely, however, it was perceived as a principle, both in terms of policy considerati‐ ons and the conceptual matrix of contract law. Preservation of individual autonomy in these circumstances was usually not the matter of ideological, but of a purely pragma‐ tic choice. It rested on the assumption that the socialist economy is based to a great extent on the same properties as any other economy and, hence, cannot be deprived of the core guiding values, amongst them “the general principle of autonomy of will of the parties and their parity and in consequence, the principle of freedom of con‐ tract.”36 The relevance of contractual freedom in the realm of socialist economy can be broken down to two domains.37 First of all, freedom of contract still persisted in parts of transactions between the state-owned enterprises.38 Multiple relations between these entities were still based on agreements, which – however strongly regulated through mandatory rules – maintai‐ 3. 32 As M. Safjan observed for the Polish private law of that era, “[i]n private law, the infiltration of ideological elements, although much smaller than in other fields, seemed particularly dangerous because it disfigured the essence of the structures designed for a different reality, for the real market and for free citizens.” – M. Safjan, Is it worth being a Rejtan?, https://ve 33 At the same time, Polish post-war private law maintained, cf. R. Sacco, The Romanist Substratum in the Civil Law of the Socialist Countries, 14 Review of Socialist Law, 1988, p. 75 f. 34 Cf. A.W. Rudziński, New Communist, p. 42, 54. 35 On acknowledging freedom of contract in the socialist economy H.J. Berman, Commercial Contracts, p. 210 f; in a similar way this attitude has been endorsed also by A. Wolter in one of the most prominent post-war handbooks for the general part of civil law (A. Wolter, Prawo cywilne. Zarys części ogólnej, Warszawa 1967, p. 219). On the opposing perceptions of freedom of contract in the socialist law see also, A. Stelmachowski, Czy kryzys, p. 274–277. 36 S. Buczkowski, Obrót gospodarczy a metody jego regulacji prawnej, 15 Państwo i Prawo 1960, p. 443. 37 Cf. also V. Petev, Sozialistisches Zivilrecht, Berlin/New York 1975, p. 133–141. 38 Also in the international trade relations with the non-socialist countries, for obvious reasons socialist states did not question freedom of contract as a principle – see e.g. J. Rajski, The Law 40 Mateusz Grochowski ned insular spheres of autonomy and deliberate decision-making. The actual ambit of this freedom was changing over time, along with political, economic and legal fluxes of the communist regime. In Poland this process had two main culminations: the first of them was formed as the outcome of post-Stalinist thaw in 1956, the second by eco‐ nomic liberalization of 1970 s.39 At each of these stages Polish contract law was drif‐ ting towards higher level of actual liberty and autonomy. At the same time, the idea of contract in the scholarly and policy discourse was perceived to a greater extent as an instrument of individual interests, not of pursuing goals set through a central plan.40 The same liberalization was the shared experience of all the CE countries41, which were gradually empowering contracts as the vehicle of the market exchange.42 Secondly, the classic concept of a contract prevailed in everyday-life transactions concluded between individuals.43 Although freedom of contract was only occasional‐ ly recognized in these spheres in an explicit way44, its main tenets (autonomy and the individual’s freedom to pursue own’s interest by making legally enforceable con‐ tracts) were however preserved relatively intact.45 It led to a peculiar situation, whe‐ re “the written provisions of the laws were much closer to market circumstances than business reality.”46 One of fundamental components of this phenomenon was also an of International Trade of Some European Socialist Countries and East-West Trade Relati‐ ons, 1967 Washington University Law Quarterly 1967, p. 133 f. 39 See, also, P. Szymaniec, The Influence of Soviet Law on the Legal Regulations of Property in Poland (1944–1990), 5 Russian Law Journal 2017, p. 100–104. 40 S. Buczkowski, S. Szer, A. Wolter, Prawo cywilne, p. 165. 41 See G. Ajani, By Chance, p. 101; K. Sajko, Enterprise Organization of East European Socialist Countries – A Creative Approach, 61 Tulane Law Review, 1986–1987, p. 1373; T. Sarközy, Problems and Perspectives of the Legal Adaptation in the Market Economy in Hungary, in: P.-Ch. Müller-Graff (ed.), East Central European States and the European Communities: Legal Adaptation to the Market Economy, Baden-Baden 1993, p. 69, 71. 42 See also A. von Mehren, A General View of Contract, in: A. von Mehren (ed.), International Encyclopedia of Comparative Law, vol. VII, Contracts in General, part 1, Tübingen–Leiden– Boston 1976, p. 10. Amongst the spheres, where this increase is observable, the author mentioned not only “the economic importance or role of contract as an institution”, but also emphasis on “free choice as a source of legal rights and liabilities”. 43 See also A. Bakardijeva Engelbrekt, The impact, p. 102. One of the most vivid illustrations of this phenomenon may be the duality of legal regime of sales contract, regulated separa‐ tely for dealings between state enterprises and for the “other” sales (mostly between nonprofessional individuals) – cf. W. J. Wagner, The Interplay, p. 370 f; see also id, General Features, p. 406. 44 See e.g. judgments of the Supreme Court of 1965, discussed and quoted by W.J. Wagner, in: ed. D. Lasok (ed.), Polish Civil Law, Vol. II, Obligations in Polish Law, Leiden 1974, p. 45 f. 45 On the attempt to preserve the pre-war structural and conceptual agenda of law in the time of rise of communism in Poland see also generally K. Grzybowski, Reform and Codification of Polish Law, 7 American Journal of Comparative Law 1958, p. 401 f; M. Raff, One Summer in Gdańsk: Poland’s leadership in transition from the socialist legal model, 16 Humanities Research 2010, No. 3, p. 75 f. At the same time, however, the actual content of these terms had to be filtered through the premises of communist ideology. This pertained, especially, to the underlying autonomy-related notions of contract law – cf. W.J. Wagner, Polish Civil Law, p. 45–49. 46 L. Vékás, Contract, p. 50. Freedom of Contract on Crossroads 41 unofficial (black-market) economy,47 which was a commonplace in all the countries of the region till early 1990 s.48 In the parallel word of unofficial economy, the idea of freedom had a peculiarly subversive color. It was understood in absolute and pure terms, as freedom from any state-made legal framework. Fossilization of contract freedom The “double life” of contract freedom, officially denied, but unofficially tolerated in the communist regime, triggered meaningful consequences for the conceptual agenda of contract law. It led to development of its very peculiar shape of “freedom of con‐ tract »under socialist conditions«”49, which combined elements of liberty and com‐ pulsion. At the same time, this concept was developed without any more thorough theoretic and policy agenda. The academic study over the concept of liberty in con‐ tracting was in that period at least unfashionable and if carried out – usually limited to rather peripheral remarks.50 Moreover, a part of the discussion over contractual free‐ dom was focused on the peculiar issues of the socialist economy, in particular on the agreements between the state-owned enterprises in the planned economy. For similar reasons, contract freedom was also not in the center of attention of courts and was ne‐ ver developed as a case law doctrine. Consequently, in the communist era freedom of contract was usually seen through the prism of its inter-war notion. It was the most proximate – and the only fullyshaped – concept of contractual liberty available to legal scholarship of the Central European countries of that era. The confinement to this idea made it, however, hardly possible to absorb modern attitudes towards freedom of contract that developed in the Western European scholarship after World War II. It pertained, in particular, to the new ways of perceiving market inequalities and the social role of contract law in the areas of systemic inequalities, such as consumer protection. These ideas started to proliferate to the Central European scholarship relatively late and till 1990 s they did not find broader recognition in the case law and legislation. Consequently, freedom of contract in Poland, along with other states of the region, got fossilized in the pre-war understanding, rather obsolete in terms of actual market and social needs – which (such as mass consumption51) developed on both sides of the Iron Curtain. While the 4. 47 Cf. J. Kochanowski, Jenseits der Planwirtschaft: der Schwarzmarkt in Polen 1944–1989, Göttingen 2013. 48 I. Markovits, Justice, p. 224. 49 On this approach in the East German legal scholarship see I. Markovits, Civil Law in East Germany. Its Development and Relation to Soviet Legal History and Ideology, 78 Yale Law Journal 1968, p. 40. 50 See also, W. J. Wagner, The Law of Contracts in Communist Countries (Russia, Bulgaria, Czechoslovakia and Hungary), 7 St. Louis University Law Journal 1963, p. 297 and V. Petev, Sozialistisches, p. 134. 51 On the consumer market in the socialist economy cf. e.g. F. Trentmann, Empire of Things. How We Became a World of Consumers, from the Fifteenth Century to the Twenty–First, New York 2016, p. 326–337 and A.K. Koźmiński, Consumers in Transition From the Cen‐ trally Planned Economy to the Market Economy, 14 Journal of Consumer Policy 1992, p. 351–363. 42 Mateusz Grochowski Western European scholarship started to realize that freedom of contract is a field of balancing values52, the Central European legal thought still portrayed freedom of con‐ tract mostly in terms of a binary distinction between liberty and non-liberty. It rested, in particular, on equalizing formal and real freedom of contracting parties, denying in general more differentiated approach towards various types of market actors and the need of introducing protective measures. After “big bang” Transition of economy and transition of contract law The political and economic transition in Poland in late 1980 s and early 1990 s ent‐ ailed meaningful consequences for the conceptual architecture and economic role of contract law. In the newly-established economic model, the notions of party autono‐ my and freedom of contract step out of the shadows and reclaimed the central role in the institutional agenda of the free market.53 The parallel processes ensued, in various pace, in all the Central European countries.54 Against this backdrop, the Polish trans‐ formation was particularly rapid and in-depth-reaching. Although the first steps to li‐ beralize the economy were taken in late 1980 s by the communist Party,55 the proper free-market turn took place within merely 100 days of 1990, when the first non-com‐ munist government introduced a series of radical economic reforms, which removed central planning and strongly endorsed individual market autonomy and freedom of entrepreneurship. This “big bang”56 economic shift was intended to create a shock III. 1. 52 See also Thomas M.J. Möllers, Working, p. 121–123. 53 See also L. Vékás, Contract, p. 51. 54 H. Izdebski, General Survey of Developments in Eastern Europe in the Field of Civil Law, in: G. Ginsburgs, D.D. Barry, W.B. Simons (eds.), The Revival of Private Law in Central and Eastern Europe. Essays in Honor of F.J.M. Feldbrugge, The Hague–London–Boston 1996, p. 5; J. Zemánek, Problems and Perspectives, p. 51; I.T. Berend, Toward a New World System? The Promises of Transition to Market-Economy, in: Debates and Controversies in Economic History. A-Sessions. Proceedings. Eleventh International Economic History Congress, Milan, September 1994, Milan 1994, p. 194–204. 55 Cf., e.g., M.G. Woźniak, Lessons from the Polish way of transformation, 52 Nierówności Społeczne a Wzrost Gospodarczy 2017, p. 45; M. Ratajczak, Polish Economics and the Polish Economy: A Study for the Twentieth Anniversary of Transition in Poland, 51 Hist. Econ. Thought 2009, p. 9 f. Further on the ideas of social justice advocated by Solidarność see e.g. M. Glasman, Unnecessary Suffering. Managing Market Utopia, London-New York 1996, p. 90–95. In fact, early attempts to loosen the system of central planning and introducing selected elements of free market economy were taken in early 1980 s, after the temporary prevalence of the ant-communist opposition forces gathered in the “Solidarność” (“Solidari‐ ty”) movement. These reforms were, however, soon abandoned after imposition of martial law in Poland in December 1981. 56 See also, A. Harmathy, Codification in a Period of Transition, 31 U.C. Davis Law Review 1998, p. 784. Freedom of Contract on Crossroads 43 wave57 to push the market towards self-reform. This idea rested on a clear conviction – strongly inspired by the Chicago School neoliberal concept58 – that market forces are by definition more efficient in creating well-functioning economy than the state.59 As a result, “Poland became a textbook example of Friedman's crisis theory: the dis‐ orientation of rapid political change combined with the collective fear generated by an economic meltdown to make the promise of a quick and magical cure-however illuso‐ ry-too seductive to turn down.”60 Contract law, confronted with this change, had to provide instruments that could address the newly-established economic reality.61 At the same time, it had to rebuild its conceptual and political agenda and to adjust it to the newly-established policy goals.62 The transformation changed, first and foremost, the overall perception of a contract, transforming it from a tool of economic coordination, focused on collective welfare, to a way of expressing idiosyncratic needs of individuals in an autonomous and (in principle) unconstrained way.63 Due to the form and pace of transformation, contract law turned, however, substantially unprepared to absorb the new reality.64 Although the formal toolbox of contract law could persist without more substantial 57 As has been summed-up by one of the main architects of Polish economic transformati‐ on, “shock therapy” should be understood as “a rapid, comprehensive, and far-reaching program of reforms to implement »normal« capitalism, makes particular sense in view of the global trends.” – J. Sachs, Shock Therapy in Poland: Perspectives of Five Years. The Tanner Lectures on Human Values. 6–7 April 1994, University of Utah (https://tannerlectures.utah. edu/_documents/a-to-z/s/sachs95.pdf), p. 268. 58 Cf. e.g. N. Klein, The shock doctrine: the rise of disaster capitalism, New York 2008, p.; J. Sowa, An unexpected twist of ideology/ Neoliberalism and the Collapse of the Soviet Bloc, Praktyka Teoretyczna 2012, p. 166. 59 On the premises of the market reform see also L. Balcerowicz, Understanding Postcommu‐ nist Transitions, 5 Journal of Democracy 1994, p. 81 f. 60 Cf. N. Klein, The shock, p. 191, 227 f. 61 See generally J. Rajski, European Initiatives and Reform of Civil Law in Poland, 14 Juridica International 2008, p. 152; see also, more generally, P.H. Rubin, Growing a Legal System in the Post-Communist Economies, 27 Cornell International Law Journal 1994, p. 27; P.H. Brietzke, Designing the Legal Frameworks for Markets in Eastern Europe, 7 Pacific McGe‐ orge Global Business & Development Law Journal 1994, p. 44; Daniel T. Ostas, Institutio‐ nal Reform, p. 514. 62 Cf. e.g D. Lipton, J. Sachs, Creating a Market Economy in Eastern Europe: The Case of Poland, 1 Brookings Paper on Economic Activity 1990, p. 77; E. Łętowska, A. Wiewiórow‐ ska-Domagalska, The Common Frame of Reference – The Perspective of a new Member State, 3 Eur. Rev. Contr. L. 2007, p. 279; A. Harmathy, Codification, p. 784 f; K. Hoff, J.E. Stiglitz, After the Big-Bang? Obstacles to the Emergence of the Rule of Law in Post- Communist Societies, 94 Am. Econ. Rev., 2004, p. 753 f. 63 In a similar way also A. Bakardijeva Engelbrekt (The impact, p. 103): “[a]t stake has therefore been changing the role if the state from dictating to framing economic relations and reforming a rigid, secretive and politicised bureaucracy into a modern public administration along principles of legality, transparency, accountability and public service.” See also, with respect to East German experience, I. Markovits, Children of a Lesser God: GDR Lawyers in Post-Socialist Germany, 94 Michigan Law Review 1996, p. 2272, who observes that “the move from socialism to capitalism can be described as a change in legal paradigms”, amongst which she enlists a switch “from Plan to contract”. 64 See also A. Harmathy, Codification, p. 797. 44 Mateusz Grochowski variations, its profound intellectual structures – including freedom of contract – faced growing bewilderment.65 After being marginalized during the communist era, after transformation the liberal concept of contract law was still functioning in its inter-war and rather obsolete shape.66 As a result, at the moment of transition contract law was not equipped to fully embrace new forms of organizing market exchange and to ad‐ dress the specific protective needs in B2C and B2B relations.67 In this way, at the in‐ itial stage of post-communist transformation freedom of contract – already a bit disso‐ ciated after the communist era – was even further entrenched in the obsolete version of economic liberalism.68 The new-old concept of contract freedom The concept of freedom of contract was in the very center of the post-communist mar‐ ket changes69. It provided both the conceptual agenda for adjusting the contract law to new economic realities and a basis for framing new instruments of contract law.70 Therefore, it came as no surprise that one of the most immediate legislative changes in the transformation process was restoration of an explicit reference to freedom of contract. The process originated in 1988, when Poland established freedom of busi‐ ness activity as a legal principle71 (which was subsequently elevated it to the constitu‐ 2. 65 In a similar way, the peril of inflexible theoretic accounts in contract law acknowledges A. Harmathy: “[t]he other danger is the conservatism of legal theory. This danger is particular‐ ly great in a period of fundamental, political, and economic change when, according to the German experience, many people do not understand what the new needs are, and theoretici‐ ans are likely to stick to theories worked out by them or those to which they are accusto‐ med." (A. Harmathy, Codification, p. 797). 66 This argument was used, e.g., in the context of the review of clauses in consumer contracts, introduced by European Union law in order to protect consumers against abuse of dominant market position by professionals. On the similar issue in Hungarian law N. Reich, Transfor‐ mation of Contract Law and Civil Justice in the New EU Member Countries – The Example of the Baltic States, Hungary and Poland, 23 Penn State International Law Review 2005, p. 606. 67 The same tendencies to refer back to the pre-communist notions of contract liberty were observable also in other CE countries at the outset of 1990 s transformation – cf. L. Vékás, Contract, p. 51; B.W. Roelvink, Security Interests in the Czech Republic, in: G. Ginsburgs, D.D. Barry, W.B. Simons (eds.), The Revival of Private Law in Central and Eastern Europe. Essays in Honor of F.J.M. Feldbrugge, The Hague–London–Boston 1996, p. 559. 68 See also L. Vékás, Contract, p. 51. 69 Cf. U. Drobnig, The Conversion of a Socialist Economic System to a Market Economy: Legal Implications, in R. Cranston, R. Goode (eds.), Commercial and Consumer Law. National and International Dimensions, Oxford 1993. 70 See also H. Unberath, Freedom of Contract, in: J. Basedow et al. (eds.), The Max Planck Encyclopedia of European Private Law, vol. I, Oxford 2012, p. 752, who observes that “[n]otwithstanding the restrictive trend [towards limiting freedom of contract in Europe – M.G.] [...] freedom of contract has recently witnessed a renaissance in Eastern Europe following the collapse of the socialist systems.” 71 Cf. C.R. Sunstein, Something Old, Something New, 1 East European Constitutional Review 1992, p. 19. Freedom of Contract on Crossroads 45 tional level, as one of the fundamental rights featured in the 1997 Constitution).72 In the second step, the amendment of 199073 reintroduced to the Polish civil law an exp‐ licit declaration of contractual freedom in Article 3531 of the 1964 Code. The new provision declared admissibility of any agreement, as long as it does not infringe the statute, principles of social coexistence (mostly understood as fairness) or the nature of the particular transaction.74 Admittedly, this change did not add much to the exis‐ ting content of freedom of contract as such75 and was mostly a symbolic affirmation that tides in contract law shifted to a liberal attitude.76 Notably, Article 3531 was shaped as a clear incarnation of the Article 55 of the 1933 Code. This vividly illustrates that the post-transformation reform in its deeper layer was intended to reverse the post-war developments and to bring the concept of freedom of contract to its “original” mid-war shape.77 Along the same lines contractu‐ al freedom was also understood in the scholarship and case law, which referred direct‐ ly to the inter-war sources, especially to the doctrinal output that accompanied the 1933 Code.78 In this way the initial fossilization of contractual liberty was further ex‐ tended and petrified. The rapidity and depth of market transformation significantly impeded the possibility to work out more coherent and modern agenda. The new mar‐ ket and social issues required prompt legal reaction, which did not leave much space for deliberation and carving new tools. The already existing framework of concepts, 72 J. Frąckowiak, Problems and Prospects of Adaptation of the Law to the Market Economy in Poland, in: P.-Ch. Müller-Graff (ed.), East Central European States and the European Communities: Legal Adaptation to the Market Economy, Baden-Baden 1993, p. 127. 73 By the amendment of 28 July 1990; see also e.g. N. Reich, Transformation, p. 606. 74 Literally: “Parties making a contract may arrange their legal relationship at their discretion so long as the content or purpose of the contract is not contrary to the nature of the relation‐ ship, the law or the principles of social coexistence.” – on the broader context of reintroduc‐ tion of this provision see M. Safjan, Zasada swobody umów (uwagi wstępne na tle wykładni art. 3531 k.c.), 48 Państwo i Prawo 1993; C. Żuławska, Wokół zasady wolności umów (art. 3531 i wykładnia zwyczaju), 238 Acta Universitatis Vratislaviensis. Prawo 1994, p. 174. 75 Cf., e.g. B. Gessel-Kalinowska vel Kalisz, Mixing Legal Systems in Europe; the Role of Common Law Transplants (Polish Law Example), 25 European Review of Private Law 2017, p. 808. Poland (along with Slovakia) did not decide to draft a new civil code after the freemarket transformation, but opted for incremental amendments of the exiting code of 1960 s. 76 On the “somewhat symbolic value” of this act also M. Safjan, Ł. Gorywoda, A. Jańczuk, Taking Collective Interest of Consumers Seriously: A View from Poland, EUI Working Papers, LAW 2008/26, at 20. On the symbolic role of law in the Polish social and economic transformations in the second half of the 20th century also A. Leder, Prześniona rewolucja. Ćwiczenie z logiki historycznej, Warsaw 2013, p. 32. 77 In a similar way – as a revival of the mid-war concept of contractual liberty – this principle has been also interpreted in the doctrine; see e.g., J. Rajski, European Initiatives, p. 152; M. Safjan, Ł. Gorywoda, A. Jańczuk, Taking Collective Interest, p. 20. 78 What is also noteworthy, the inter-war literature is still one of the most important and appreciated points of references in the Polish civil law scholarship. As A. Mączyński puts it, “[i]t was possible to notice a peculiar fashion for quoting older scholarship and older case law.” (A. Mączyński, Uwagi o stanie nauki polskiego prawa cywilnego, Państwo i Prawo 2011, p. 10). Although in many instances such references may be fully justified (especially due to the lacunae in the more recent literature or the special qualities of the particular texts and authors) the general proclivity for the literature originated in a different context may amplify the “fossilization” of the contract law conceptual agenda. 46 Mateusz Grochowski notwithstanding its obsolescence, was hence in handy, ready for almost instant use. It lacked not only particular instruments (e.g. a developed system of consumer protec‐ tion), but also a deeper conceptual agenda, which would allow legitimizing interventi‐ on in contractual dealings.79 Moreover, the “fossilized” contract liberalism advocated an opposite solution: restrain of intervention or regulation of the issues in question through antitrust and unfair competition instruments, not contract law as such.80 The fossilization at the level of concepts and ideology was accompanied by me‐ thodological conservatism. In Central Europe the post-communist period was domi‐ nated by textocentric interpretation,81 which minimized or neglected more functional or dynamic approaches.82 The roots of this attitude may be traced back to the socialist era,83 but notwithstanding the change of political realities it persists as one of the most prominent shades of the legal culture of this region.84 Needless to say that for‐ malist reasoning creates a strong hurdle to any modernization of contract law – espe‐ cially, if it were to take place in a bottom-up way, without a direct legislative inter‐ vention in the existing rules. This was also the case for Poland, where the overshado‐ wing heritage of the inter-war period is reflected not only at the legislative level (ma‐ ny rules of the current Civil Code of 1964 copy almost verbatim provisions of the 1933 Code), but above all in the intellectual fabric of contract law. 79 In more overall terms on the intellectual weakness of the CE’s countries in the transformati‐ on era also D. Bohle, Neoliberal hegemony, transnational capital and the terms of the EU’s eastward expansion, 30 Capital & Class (2006), p. 78 f. 80 See also A. Bakardijeva Engelbrekt, The impact, p. 105) and ea, Grey Zones, Legitimacy Deficits and Boomerang Effects: On the Implications of Extending the Acquis to Central and Eastern Europe, in: N. Wahl, P. Cramér (eds.), Swedish Studies in European Law, Oxford 2006, p. 11. More generally on the post-transformation development of antitrust and unfair competition rules in the region see T. Varady, The Emergence of Competition Law in (Former) Socialist Countries, 47 The American Journal of Comparative Law 1999. 81 A. Bakardijeva Engelbrekt, The impact, p. 102; P. Cserne, Formalism in judicial reasoning: Is Central and Eastern Europe a special case?, in: M. Bobek (ed.), Central European Judges under the European Influence: The Transformative Power of the EU Revisited, Oxford 2015. 82 On an attempt to construe a common denominator for the legal experience of the countries in the region see also A. Fogelklou, East European legal thinking, RGSL Working Papers No. 4, Riga 2002, pp. 16–27. 83 Cf. e.g. M. Bobek, A New Legal Order, Or a Non-Existent One? Some (Early) Experiences in the Application of EU Law in Central Europe, 2 Croatian Yearbook of European Law & Policy 2006, p. 298; Z. Kühn, Worlds Apart: Western and Central European Judicial Culture at the Onset of the European Enlargement, 52 The American Journal of Comparative Law 2004, p. 538–545; R. Mańko, Weeds in the Gardens of Justice? The Survival of Hyperposi‐ tivism in Polish Legal Culture as a Symptom/Sinthome, 7 Pólemos. Journal of Law, Litera‐ ture and Culture 2013, p. 210–214. 84 Cf. P. Cserne, Thinking about Judicial Formalism in Central and Eastern Europe – Symptom of an Inferiority Complex?, paper available at: urses_on_Judicial_Formalism_in_Central_and_Eastern_Europe_Symptom_of_an_Inferiori ty_Complex, p. 6–9. Freedom of Contract on Crossroads 47 The struggle over protection of “the weaker” in contract law Clash of narratives: freedom of contract and consumer protection One of the most conspicuous fields, where the liberal concept of freedom of contract entailed meaningful consequences was transposition of EU contract law. Although the clash between regulatory attitude towards the nature and market role of contract law is a commonplace in all EU Member States,85 the particular version of contract liberty that entrenched itself in Polish law after transformation seems to amplify this tension. The presence and intensity of this tension became particularly clear after Poland star‐ ted transposition of European consumer law,86 in preparation for accession to the EU. The concept of consumer protection was, as such, not new nor unprecedented in the Polish legal order: since 1970 s Poland incrementally has developed a system of con‐ sumer protection, focused however mostly on public law instruments and direct state steering of the economy.87 In the post-transition period the idea of consumer protec‐ tion was moved progressively towards contract law and started to encompass the EU values and policy goals. On these grounds freedom of contract encountered the lais‐ sez-faire attitude towards freedom of contract. This led to a mêlée than a harmonious adjustment: “[f]itting the more interventionist consumer protection acquis into the fa‐ bric of private law slowed down the process of private law consolidation and was in conflict with the legal policy goal of strengthening the position of private autonomy. In this way harmonization proved indeed to be »at war with codification and libera‐ lization«.”88 The idea of consumer protection was perceived from this vantage point as a for‐ eign object within the body of contract law, based on the strong notions of autonomy and lack of state intervention. This approach rested on a formal idea of equality and autonomy, assuming that consumers should bear both risks and profits arising from voluntary engagement in the market activity. At the same time, it did not ignore mar‐ ket failures entirely. It disregarded, however, their impact on market mechanisms, building on strong trust that economy will be able to automatically diminish them and guarantee fair dealings for all the parties involved. This equation between “free mar‐ ket” and “flawless market” served as one more argument against interventionism in contract law and undermining its classic principles, especially against a persistent dogma of freedom of contract in the laissez-faire form. The socio-economic changes of late 1980 s and 1990 s framed the playground for the subsequent turn in Polish consumer law, brought about by implementation of EU IV. 1. 85 Cf. e.g. H.-W. Micklitz, The Expulsion of the Concept of Protection from the Consumer Law and the Return of Social Elements in the Civil Law: A Bittersweet Polemic, 35 Journal of Consumer Policy 2012, p. 290 and passim. 86 The first piece of new consumer legislation, implementing EU law, was the act of 2 March 2000, which transposed to Polish system EU rules on doorstep and distance contracts, unfair contract terms and on product liability. 87 Cf. e.g. E. Łętowska, Consumer Protection as Public Interest Law, 36 Droit polonais con‐ temporain 1999. 88 A. Bakardijeva Engelbrekt, The impact, p. 127. 48 Mateusz Grochowski consumer contract law.89 This reform, confronted with certain obsolescence of the ideas of autonomy and freedom of contract in Polish law, created strong frictions in absorption of the EU consumer law by the Polish legal system90 Although at the legis‐ lative level Poland – as the other Member States – follows the regulatory patterns es‐ tablished at the EU level, the practical understanding and application of these rules is much less obvious and predictable. In the result, although after adoption of the EU consumer contract law, Poland obtained quite well-developed system of consumer protection, supported with clear axiological foundations, the general vector of the case-law took another direction. One of the most illustrative examples of this tenden‐ cy might be a judgment of the Polish Supreme Court of 2014, which ascertained that in the lack of an explicit duty of disclosure, the professional concluding contract with consumer is not obliged to inform her about the full set of relevant entitlements: „when there is no provision that imposes […] [on the business contractor] a duty of disclosure regarding the content of [consumer’s] entitlements in the case of non-con‐ formity of a good with a [sales] contract, it is not possible to claim that the lack of full, exhaustive information on all the consumer’s entitlements set forth in the […] [consumer sales regime] constitutes a misleading practice. […] There is no relevant duty to inform in this regard”.91 This reasoning is clearly rooted in an assumption that only direct expression of particular obligation in contract law can constrain parties’ autonomy. Everything beyond these exceptions (which should be understood in a pos‐ sibly narrow way) belongs to the sphere of freedom, which cannot be further limited without clear legal ground.92 The libertarian version of contractual freedom, elaborated and venerated as an ab‐ stract ideal, was thereby translated on the practice – directing particular choices about regulatory design of contract law. Even several years after post-communist transfor‐ mation it was still observable that “there still is a strong belief among Polish lawyers that the invisible hand of the market will resolve any problem and that any market intervention equals a paternalistic approach towards the consumer, which destroys the sacralized freedom of contract. Moreover, the formal notion of freedom of contract 89 On the impact of EU law as a vehicle of transition of Polish contract law see also D. Kempter, Der Einfluss des europäischen Rechts auf das polnische Zivilgesetzbuch, Baden- Baden 2007, p. 53–72. 90 On the externally imposed elements of legal system and the integration issues cf. generally D. Berkowitz, K. Pistor and J.-F. Richard, The Transplant Effect, 51 American Journal of Comparative Law 2003, p. 189 and passim. 91 Judgment of the Supreme Court of Poland of May 18, 2014, III SK 45/13. On the other examples of misconceptions of consumer law, based on the excessively liberal attitude towards market and law, see also A. Wiewiórowska-Domagalska, CJEU’s jurisprudence in domestic legal orders: potential and hurdles – a case study, in: S. Grundmann, M. Grochow‐ ski (eds.), European Contract Law and the Creation of Norms, Antwerp – Portland 2020 [forthcoming]. 92 In a result, as was observed in mid-1990 s, “[w]e can see a complete lack of sensitivity of the courts to the problems of consumers. The breaches of their rights are believed to be one of the unavoidable costs of the economic transformation, as it was the case a few years earlier when their interests were not protected in order not to harm state enterprises.” – E. Łętowska, The Barriers of Polish Legal Thinking in the Perspective of European Integration, 1 Yearbook of Polish European Studies 1997, p. 58, fn. 2. Freedom of Contract on Crossroads 49 happens to be subjected to involuntary or purposeful manipulation in the legal and pu‐ blic discourse in order to favorize particular market actors over the others.93 If there are any inconveniences experienced on the market, consumers should bear them as they present an unavoidable cost of the free market. Moreover, a free market economy should not tolerate privileges for any particular group of participants on the market – even consumers.”94 A deep conviction that one can and should rely only on oneself entailed a deeply embedded approach that individual ought to be allowed to seek fre‐ ely self-fulfillment and self-satisfaction of its own needs and that existing market shortcomings will be cured by the market itself. It resulted in a part from the intellec‐ tual heritage of the transformation period and its persistent impact on the concepts of autonomy and freedom of contract.95 Business-to-consumer agreements: the case of commercial agency The same patterns of fossilization and its further entrenching in the scholarship and case law occurred also beyond the classic scope of consumer law. One of the most conspicuous instances of this dynamic has been the struggle over regulatory concept of a commercial agency. The concept of commercial intermediaries has been introdu‐ ced for the first time to Polish law in the 1933 Code, which provided framework rules for the mandate agreement and in the Code of Commerce of 1934, which regulated in detail contracts between the principal and the intermediary. As the whole mid-war contract law, also the concept of commercial agency was subordinated to the general‐ ly liberal attitude, in its early-20th century version. It was based on the assumption that parties to a commercial agency agreement are typically equal in terms of their market power and hence, there is no clear need to protect any of them against the other. This observation rested on a much more profound conviction that apart from limited and extraordinary instances (especially beyond labor law), contracting parties should be considered as equal and able to fully realize their autonomy towards each other. This assumption was reflected, in particular, in a widespread conviction that all rules on commercial agency agreements are default (since there is no clear risk that any of the parties will be able to abuse its bargaining power to the detriment of the other).96 In the socialist era commercial agency was functioning mostly on the margins of the state economy, considered mostly as the relict of bourgeois free market.97 The centrally-steered market in most of its parts did not require independent intermedia‐ ries, which almost completely stopped development of legal and policy premises of 2. 93 Cf. e.g. E. Łętowska, Co ujawnia dyskurs o kredytach frankowych, czyli o świadomym i nieświadomym uwikłaniu prawników, 16 Europejski Przegląd Sądowy 2020, p. 9. 94 E. Łętowska, A. Wiewiórowska-Domagalska, The Common Frame of Reference – The Perspective of a new Member State, 3 European Review of Contract Law 2007, p. 283. 95 Cf. M. Safjan, Ł. Gorywoda, A. Jańczuk, Taking Collective Interest, p. 20. 96 Cf. M. Allerhand, Kodeks handlowy. Komentarz, Lwów 1935, p. 846; Z. Fenichel, Ajent, pośrednik i pełnomocnik handlowy wedle kodeksu handlowego i zobowiązań, PPH nr 1/1934, p. 15. 97 M. Piekarski, in: Z. Resich, J. Ignatowicz, J. Pietrzykowski, J.I. Bielski (eds.), Kodeks cywilny. Komentarz, t. 2, Warszawa 1972, p. 1564. 50 Mateusz Grochowski the commercial agency. Although the 1964 Code regulated this contract, it repeated almost entirely the inter-war provisions. They also did not change after transformation and remained in the unchanged shape until 2000. In this way the commercial agency agreement was conserved in its inter-war version, not only at the level of the rules’ wording, but also in the underlying policy framework. This resulted in a pervasive un‐ derstanding of the agency agreement through the prism of the mid-war convictions. In the new economic reality this premise turned out, however, quite obsolete. In the free-market economy the class of intermediaries became much broader – not only in terms of the sectors of industry that started to use this way of market expansion, but also regarding the array of individuals who act as agents. Currently, the vast majority of intermediaries in this sphere are quite vividly non-professionals, who usually cooperate with only one principal – being clearly dependent on her and hence, experi‐ encing inferior bargaining power. The classic concept of agents as equal and autono‐ mous professionals has to be replaced, hence, by a more protective model. Along this line, the EU law98 provides protective measures for agents, treating them as systema‐ tically weaker. Although the relevant parts of the EU legislation were implemented to Polish law, their actual protective impact has been rather questionable99. Courts were visibly building on the classically liberal attitude towards contract law, very much akin to the inter-war understanding of contract liberty in commercial agreements. They tended to treat agents as professionals in the strict sense and to refrain from ma‐ king effective use of the instruments provided by EU law.100 This attitude was rooted in an implicit assumption that any protective measures would limit contractual free‐ dom and, as such, should be interpreted and applied to the possibly narrow extent. In doing so, courts also seemed to build on an intuitive assumption that the field of pro‐ tective measures in contract law is already “occupied” by consumers law. Under this binary view, every agreement outside the scope of business-to-consumer contracts should be considered as, by definition, subjected to the laissez faire concept. Conclusions The development of freedom of contract in Poland in the 20th century, outlined in this paper, provides a clear instance of the legal concept that developed on historical crossroads, being subjected to contradictory political and socio-economic tensions. As was argued above, the concept of contractual freedom that proliferated in the Polish legal imaginarium, resulted from intersection of two major factors. First of all, it emerged as a spillover of the inter-war concept of contract freedom, that remained fossilized throughout the communist era and was unable to integrate more modern V. 98 Directive of 18 December 1986 on the coordination of the laws of the Member States relating to self-employed commercial agents (OJ L 382, 31.12.1986, p. 17–21). 99 See also E. Rott-Pietrzyk, Commercial agency contracts and freedom of contracts, in: T. Drygala et al., Private autonomy in Germany and Poland in the Common European Sales Law, Munich 2012. 100 Cf. the empirical study on commercial agency agreements in the Polish judicial practice: M. Grochowski, Umowa agencyjna w orzecznictwie sądów powszechnych, 24 Prawo w Działaniu 2014. Freedom of Contract on Crossroads 51 (and not laissez faire-based) considerations. Secondly, this way of understanding con‐ tract freedom was subsequently confronted with a rapid and profound change of eco‐ nomic and political agenda in early 1990 s, based on neoliberal rationale, which fur‐ ther reinforced the early-20th-century accounts of contract liberty. In the result, at the outset of the post-socialist transition in Poland, the classically liberal concept of contract law was transplanted quite directly into the intellectual background of contract law. At that stage, however, contract law was not fully prepa‐ red to grasp intellectually the essence of this change and absorb it. Instead, being con‐ fronted with the new phenomena, it turned back to the inter-war understanding of contractual liberty, which was the only well-developed conceptual framework, which survived in a mostly fossilized form during the communist era. Consequently, the concept of freedom of contract, which occurred in early 1990 s in a rather trivialized version, was much closer to the inter-war market liberalism (dating back to the 19th century laissez-faire attitude), rather than to the modern concept of liberalism in con‐ tract law. The intellectual history of contract law in the period of transition from the socia‐ list economy to free market was far from being simple and fully coherent. Both in the socialist era and in the free-market economy contract law lived its own life, engaging itself in various interactions with the actual ideological agenda, but never absorbing entirely any of these premises. At the same time, in its deeper intellectual background contract law stayed partly immune to the modern developments of the legal and eco‐ nomic scholarship. In particular, it missed the growing awareness of inefficiencies of market, especially the systematic imbalances created by mass consumption. It also did not embrace the stronger awareness of the social meaning of contract law (its “soziale Aufgabe”, to put in von Gierke’s words101). These dynamics led to a skewed version of market liberalism, turned out hence deeply meaningful for the entire social order built upon contractual freedom and its legal constraints. It missed, in particular, a de‐ eper understanding of market deficits and differentiation between formal and material (functional) contract freedom, understood as the actual possibility to make mea‐ ningful market choices. The picture outlined above is certainly not permanent and is a subject to constant evolution. Under the pressure of economic and social forces the radical color of the laissez faire attitude in Polish contract law was subsequently alleviated.102 One of the most vivid factors for this dynamic was the 2008 financial crisis. It led to massive de‐ pression on the consumer and B2B financial markets and, in turn, generated a broad judicial and doctrinal discourse about the relevant legal tools that may feasibly ad‐ dress these circumstances. This resulted in reconsideration of the particular parts of contract law – with a general tendency to increase the degree of their regulatory inten‐ sity. This, indirectly, led to partial reframing of the existing account of freedom of contract, by limiting it – or to put it differently, by shifting from its formal to material understanding (i.e. towards stronger appreciation of the actual freedom to make infor‐ 101 O. v. Gierke, Die soziale Aufgabe des Privatrechts, Berlin–Heidelberg 1889. 102 See also more generally A. Bakardijeva Engelbrekt, Grey Zones, p. 31–33 and H. Appel, M.A. Orenstein, Why did Neoliberalism Triumph and Endure in the Post-Communist World?, 43 Comparative Politics 2016, p. 327 f. 52 Mateusz Grochowski med market choices).103 Notwithstanding this, Polish contract law still seems to await a more profound debate over the more precise meaning of freedom of contract. It still lacks, in particular, a more in-depth understanding of the real role of this principle in confrontation with the growing degree of regulatory features of contract law. This re‐ quires, especially, more precise allocation of the contract freedom against the back‐ drop of the view of contract law as an instrument of market regulation, currently strongly endorsed in the EU. Lastly, the “fossilized” view of freedom of contract re‐ quires also mindful reconciliation with the EU concept of contract autonomy, based much stronger on pursuing consumer welfare and fairness through mandatory rules. 103 A part of this change took place through preliminary questions asked by the Polish courts to CJEU. Some of them referred especially within the past three years, attempted to question particular tenets of the laissez-faire‘s approach that developed in contract law; see for instance judgment of 3 October 2019, C-260/18, Kamil Dziubak, Justyna Dziubak v Raiffeisen Bank International AG (ECLI:EU:C:2019:819), where the CJEU clearly limited applicability of classic (autonomy-based) contract law tools in favor of stronger regulatory approach grounded on the EU unfair commercial terms concept. Freedom of Contract on Crossroads 53


The text delves into the origins and theoretic premises of the concept of freedom of contract that developed in Poland throughout the 20th century. It attempts to provide a more precise understanding of the economic and political dynamics that led to creation of the quite strong laissez faire perception of contract liberty, which still seems to underpin most of the Polish discourses about contract law. In so doing, the article seeks to analyze two crucial dynamics that seem to be determinative for the current shape of freedom of contract in Poland: the direct translation of the inter-war model of contract liberty into the current civil law, as well as the rapidity and profoundness of the transformation from the centrally-steered to free market economy in the 1990s. This view on intellectual history of contract liberty is, in turn, applied to analyze frictions in transposition of EU contract law, which occur conspicuously in the Polish realities.



Osteuropa Recht behandelt Gegenwartsfragen der Rechtssysteme und Rechtswissenschaft im östlichen Europa sowie deren völkerrechtliche Einbindung. Im Fokus stehen die ost-, ostmittel- und südosteuropäischen Staaten sowie der Kaukasus und Zentralasien. Die Zeitschrift dokumentiert und analysiert Gesetzgebung, Rechtsprechung und rechtswissenschaftliche Debatten in den einzelnen Staaten der Region und leistet einen Beitrag zum internationalen Rechtsvergleich. Die Zeitschrift erscheint vierteljährlich und ist peer-reviewed. Publikationssprachen sind Deutsch und Englisch. Osteuropa Recht wurde 1954 von der Deutschen Gesellschaft für Osteuropakunde e.V. gegründet.