Liability in B2B contracts

B2B contracts, which form the foundation of cooperation between businesses, are now an integral part of the Polish economy. This model is gaining in importance in sectors such as IT, professional services and outsourcing – wherever flexibility and a partnership-based approach are of key importance. At the same time, the liabilities arising from B2B contracts require the parties not only to have legal awareness but also the ability to anticipate the consequences of imprecise provisions. In this paper, I present a practical analysis of the topic ‘B2B contracts – liability’, highlighting the pitfalls and opportunities for risk mitigation that may determine your company’s financial security.

What is a B2B contract and how is the liability of the parties structured?

A B2B (business-to-business) contract is a civil law contract concluded between entities carrying out business activities: companies with share capital, partnerships or natural persons registered as sole traders. Unlike an employment contract, this relationship is not governed by the Labour Code, but is based on the provisions of the Civil Code, in particular the principle of freedom of contract (Article 3531 of the Civil Code) and – depending on the structure of the contract – the provisions on contracts for services or specific work.

In practice, this means that the parties have broad autonomy in shaping their rights and obligations, and the only limits to this freedom are mandatory provisions, the principles of social coexistence and the nature of the legal relationship. Responsibility for the performance of the contract’s provisions lies with the parties themselves – and to the full extent, both with the company’s assets and their private assets (in the case of a sole trader). The absence of clear protective regulations, such as those applicable to permanent employees, means that every clause requires precision and an awareness of its consequences.

Contractual liability – scope, limits and exclusions

In B2B contracts, liability for non-performance or improper performance of an obligation is generally based on fault (Article 471 of the Civil Code), although the parties may agree to a broader or narrower regime of liability. By default, unless the contract provides for limitations, the contractor bears full liability for the damage caused, covering both actual losses (damnum emergens) and loss of profits (lucrum cessans).

Limits on liability

Market practice, particularly in high-risk sectors, favours limiting liability to a specific amount or a multiple of the remuneration for the project in question. For example, the limit may be set at 100 per cent or 200 per cent of the contract value. However, such a limitation does not cover damage caused intentionally or as a result of gross negligence – this exception is standard in both Polish and international contracts.

• Liability for actual damages: it is recommended that an explicit monetary limit be introduced.
• Exclusion of liability for loss of profits: in practice, the contracting authority very often waives the right to pursue such claims, which significantly reduces unforeseeable financial burdens on the contractor.
• Exclusion of warranties and guarantees: in the case of contracts for specific work or the provision of services, it is possible to exclude or limit warranties, particularly in the IT sector.

A contractual penalty is a common tool for ensuring the performance of non-monetary obligations. In practice, penalties are imposed for delays, breaches of confidentiality or breaches of non-competition clauses. The amount of the penalty should be proportionate to the potential losses, and a grossly excessive amount may be moderated by the court (Article 484(2) of the Civil Code). It is good practice to apply a progressive system – the longer the delay, the higher the percentage of the penalty.

Limitation of liability clauses

• Force majeure clause – a detailed specification of the circumstances in which the parties are exempt from liability (e.g. natural disasters, war, actions by public authorities).
• Exclusion of liability for the actions of third parties – in the IT services or outsourcing sector, this provision protects against claims arising from errors by subcontractors or external infrastructure.
• Procedure for reporting defects and making complaints – clearly defining deadlines and the method for reporting and rectifying defects helps prevent protracted disputes.
• Non-competition clause – time and territorial restrictions, as well as a financial compensation upon termination of the cooperation.

An entrepreneur entering into a B2B contract is responsible for their obligations towards the tax authorities and the Social Insurance Institution (ZUS). This means they must independently settle their income tax (progressive tax scale, flat-rate tax, lump-sum tax), VAT and pay social security contributions on time. The absence of these obligations on the part of the client is often mistakenly perceived as an advantage; however, for the contractor, this means full financial liability for any errors or arrears.

New regulations coming into force in 2025 provide for additional tax reliefs and changes to the contribution system for the self-employed, which may affect the attractiveness of this form of cooperation. However, maintaining transparency and compliance in accounting remains crucial – in the event of errors, the contractor alone bears the consequences.

The line between a B2B contract and an employment relationship – legal risks

The phenomenon of sham B2B contracts – that is, the conclusion of civil law contracts to circumvent labour law regulations – poses a significant risk to both parties. Case law and planned legislative changes provide for the possibility of converting such a contract into an employment contract if the conditions of subordination are met, including a specified place and time of work and management by the principal (Section 22 of the Labour Code).

• Consequences for the principal: an obligation to pay outstanding social security contributions (up to 5 years back), payment of employee benefits, and the risk of fines.
• Consequences for the contractor: the obligation to settle income tax in accordance with the rules applicable to employees, and the repayment of incorrectly claimed tax reliefs and tax-deductible expenses.

In 2026, labour inspectors are to be granted the power to administratively convert B2B contracts into employment contracts, which further increases the risk for companies that exploit this model for their own ends.

Confidentiality and personal data protection – liability for breaches

Confidentiality clauses (NDAs) and provisions concerning the protection of personal data (GDPR) are an integral part of modern B2B contracts. A breach of these obligations may result not only in contractual penalties, but also in liability for damages to the contracting party and third parties, and even administrative liability before the Personal Data Protection Office (PUODO).

• It is advisable to precisely define the scope of information covered by the clause and the duration of the confidentiality obligation.
• The contract should specify who is responsible for data security incidents and who is required to report breaches to the relevant authorities.

Best practices for businesses entering into B2B contracts

1. Negotiate liability limits and exclusions – do not accept clauses providing for unlimited liability, particularly for consequential damages and loss of profits.
2. Introduce precise definitions of key terms – the scope of services, performance standards, deadlines, acceptance criteria and complaint procedures must be unambiguous.
3. Ensure contractual balance – clauses relating to contractual penalties, non-competition, confidentiality and intellectual property should protect the interests of both parties, not just the larger partner.
4. Ensure flexibility and the possibility of renegotiation – draw up a procedure for amending the contract and changing the terms of cooperation in the event of a change in market circumstances.
5. Consult a solicitor specialising in commercial law on the contract – this will help identify any oversights and tailor the provisions to the specific nature of the project.

The most common mistakes and their consequences

• Overly general wording regarding the scope of services leads to disputes over the scope of liability.
• The absence of a liability limit exposes the company to disproportionate claims.
• Omitting clauses on the protection of intellectual property may result in the loss of rights to the results of the work.
• Failure to follow complaints and acceptance procedures prolongs disputes and blocks payments.
• The absence of clear procedures for terminating a contract increases the risk of sudden termination of the working relationship without safeguarding financial interests.

Summary

A professional B2B contract, which precisely regulates the parties’ liability, forms the cornerstone of secure and effective business cooperation. Rather than relying on standard forms and templates, it is worth approaching each contract on a case-by-case basis, analysing every provision in terms of its practical implications and risks. Financial, tax and legal liability in B2B relations rests on the shoulders of business owners – a properly drafted contract allows you to focus on business development rather than on disputes and the consequences of ill-considered clauses.

I recommend that every business owner regularly reviews the contracts they enter into, keeps track of legislative changes and invests in professional legal advice. This is not a cost, but an investment in stability and a competitive edge in the market.

Frequently asked questions

What risks are associated with liability in a B2B contract?

A B2B contract may impose broad financial liability on an entrepreneur for non-performance or improper performance of services. In practice, this means that you may be liable for actual damages, loss of profits, and may also be subject to contractual penalties. Without precise limitations in the contract, liability can be unlimited, which exposes the contractor to substantial claims from the other party.

Is it possible to limit one’s liability in a B2B contract?

Yes, it is possible to negotiate a limitation of liability in a B2B contract. The most common approaches involve setting monetary limits (e.g. up to the amount of the remuneration or a multiple thereof) or excluding liability for loss of profits. It is also worth including clauses excluding liability for specific situations, except for damage caused intentionally or through gross negligence.

What is the contractor most commonly liable for in a B2B contract?

The contractor is most often liable for the performance of services in accordance with the contract, the correctness and quality of the product supplied, data protection and the maintenance of confidentiality. In the IT sector, clauses regarding liability for errors in the code or copyright infringement are also common. The contract may also provide for an obligation to compensate for damages and pay contractual penalties.

What are the consequences of the absence of liability clauses in a B2B contract?

The absence of precise liability clauses results in the application of the general provisions of the Civil Code, which means that the contractor bears full liability for any damage caused to the other party. This may lead to the need to cover substantial losses, including those which, in a well-drafted contract, would have been excluded or limited.

Can a B2B contract provide for contractual penalties?

Yes, liquidated damages are frequently used in B2B contracts, particularly for delays, breaches of confidentiality, improper performance of services or breaches of non-competition clauses. The amount of the penalties should be reasonable and justified to avoid the risk of them being deemed grossly excessive. Their amount and the terms of calculation can be negotiated.

How can you protect yourself against excessive liability in a B2B contract?

It is best to ensure, right from the negotiation stage, that the scope and limits of liability are precisely defined, and that there are clear payment terms and complaints procedures. It is also worth considering taking out appropriate third-party liability insurance and seeking the assistance of a solicitor specialising in commercial law when analysing and negotiating contracts.

Does liability in a B2B contract also cover copyright?

Yes, if works are created under the contract (e.g. software, graphic designs), liability may also extend to copyright. It is worth ensuring that the transfer of copyright to the client takes place only after payment has been made, which safeguards the contractor’s interests and reduces the risk of the work being used without payment.