Working with an Italian entity can mark the start of a long-term business relationship, but negotiating a contract with a foreign partner requires more than just knowledge of the laws. Differences in business culture, contract negotiation styles and the expectations of both parties are also important. These are the challenges that Wojciech Bazan, attorney-at-law, navigates in his day-to-day practice; for years, he has been supporting Polish businesses working with Italian partners, including on major construction and infrastructure projects. Such relationships require not only an understanding of the terms of the contract, but also the ability to explain what they mean in practice and to assess what consequences they may have for a Polish entity.

Negotiating a contract with an Italian company – things to bear in mind

A contract concluded with an Italian business partner may be governed by Polish law, Italian law or the law chosen by the parties. However, the choice of the applicable law alone does not determine all matters relating to the performance of the contract and potential disputes.

In practice, the following factors, amongst others, are important:

In the case of larger projects, it is particularly important that these issues are properly addressed as early as the contract negotiation stage. A well-drafted contract can minimise the risk of a potential dispute and facilitate the pursuit of claims should they nevertheless arise.

The language of the contract is also important. In the case of cooperation between Polish and Italian entities, the parties should agree on the language in which the contract will be drawn up and which version will prevail in the event of discrepancies. This is particularly important for contracts relating to complex projects, where a correct understanding of legal and technical terminology can affect the scope of the parties’ rights and obligations.

Experience in advising Italian businesses and resolving construction disputes

Working with an Italian partner does not necessarily mean focusing solely on an analysis of Italian law. It is equally important to understand how the provisions of the contract and the resulting obligations translate into day-to-day business decisions. For a Polish entity, it is crucial not only to be aware of the legal interpretation of an Italian contract, but above all to understand its practical implications: what risks are associated with specific clauses, what consequences these may have for the implementation of the project, and what decisions should be taken to avoid these risks. Our role is to explain these issues in a way that is understandable to the Polish management team, taking into account both legal differences and the realities of conducting business activities.

This approach is particularly important in the case of large and complex projects, where legal issues are closely linked to technical, organisational and business aspects. The experience we have gained on projects carried out by Italian contractors and businesses in Poland enables us to view contractual issues from the perspective of the project as a whole. We support clients from Italy in, amongst other things, road and infrastructure projects, as well as projects relating to the expansion of airports. We also maintain an established network of Italian legal professionals, enabling us to draw on their expertise in matters requiring an understanding of Italian law or local business practices.

This experience is particularly valuable in disputes arising from complex construction and infrastructure projects. Wojciech Bazan has advised contractors on projects involving Italian entities in Poland for many years. In such cases, a legal assessment must consider how the project was carried out, the causes of delays and additional costs, and how the relevant contractual provisions operated in practice. Reviewing the contract alone is insufficient; it is also necessary to understand how its provisions affected the project and each party’s position.

We apply the same expertise at each stage of drafting and negotiating contracts. We help clients assess not only the legal significance of individual clauses, but also their practical implications, identifying potential sources of dispute and areas requiring clarification. This enables us to support businesses both in resolving problems that have already arisen and in minimising the risk of such problems occurring.

Clear and direct communication is essential to effective cooperation. Our team includes Italian-speaking lawyers, which facilitates discussions with Italian entities and the negotiation of contractual terms. Combined with our relationships with Italian lawyers, this enables us to effectively bridge the perspective of a Polish business with an understanding of Italian regulations and practice, without losing sight of the client’s business objectives.

Not just Italian companies in Poland

Our experience also covers the other side of business relationships. We have advised Polish entities undertaking projects in Italy, helping them, amongst other things, to engage suitable local lawyers and law firms and to understand Italian regulations. We have also advised on projects carried out in Poland but governed by Italian laws.

Depending on the nature of the project, we collaborate with trusted Italian law firms, selecting lawyers suited to the specific case, sector and type of legal risks.

Our role is not merely to provide the client with the contact details of an Italian lawyer. Throughout the entire duration of the contract, we help to translate Italian regulations and legal practice into terms familiar to an entity operating in Poland.

This enables the client to more easily understand how Italian legislation and legal solutions affect the client’s business and the negotiated contract.

Case study: Construction disputes in the implementation of expressway contracts

How did we support an Italian contractor in disputes concerning two major infrastructure projects in Poland?

JDP represented an Italian contractor in disputes relating to the implementation of an infrastructure project carried out for a Polish public contracting authority. The project was terminated prematurely, and the settlement of accounts involved complex disputes concerning the reasons for the works being stopped, the liability of the parties and the financial consequences of the project’s termination.

Business challenge

Each contract involved different circumstances that affected the course of the project and the ability to continue the works.

In the first project, the key issue was the impact of the COVID-19 pandemic, which led to the discontinuation of works. The dispute concerned, amongst other things, the settlement of the consequences of the contract’s termination and the possibility of adapting its terms to the extraordinary circumstances caused by the pandemic.

In the other project, the execution of the works was hampered by unpredictable geological conditions and ground settlement. This situation made it impossible to continue the works in accordance with the contract and led to a dispute over the financial consequences of the project’s termination.

Scope of JDP’s support

JDP represented the contractor in disputes concerning the settlement of both contracts, including claims for damages, additional costs and the value of the works performed. The cases also involved compensation for the loss of the value of money over time, as well as the client’s claims regarding contractual penalties and the costs of completing the project.

These cases involved reviewing the contractual and technical documentation against the project schedules, analysis of geological conditions and an assessment of the financial impact of disruptions to the works.

Significance for infrastructure projects

These disputes have highlighted how important a comprehensive approach to construction claims is in major road projects. Assessing liability for stopping works required consideration not only of the contract provisions, but also of the actual conditions of the project implementation and their impact on the contractor’s costs.

JDP’s experience includes supporting contractors in infrastructure disputes where contractual, technical and financial issues directly affect the settlement of multi-million projects.

Case study: Construction disputes relating to the expansion of a passenger terminal

EUR 52.3 million – the total value of disputes relating to the terminal expansion at one of Poland’s largest airports

JDP represented an Italian contractor in disputes relating to the expansion of a passenger terminal at one of Poland’s largest airports. The project was intended to increase the airport’s annual capacity from approximately 2 million to 5 million passengers.

The disputes, with a total value of approximately EUR 52.3 million, concerned contract settlement, additional costs and liability for delays in the project.

Business challenge

In the case of airport projects, delays and changes to the organisation of works can generate significant additional costs. In this case, the dispute involved both the contractor’s claims and the investor’s counterclaims.

It was crucial to establish the rules of liability for delays, settle the costs of the extension of the construction period and assess the impact of additional works and lost productivity on the contract’s economics.

Scope of JDP’s support

JDP represented the contractor in disputes concerning:

Another key aspect of the case was the interpretation of the FIDIC contract conditions, in particular subcl. 10.2 concerning the investor’s use of the facility prior to the formal completion of the relevant stage of the project. This issue was relevant for assessing the rules governing the calculation and limitation of contractual penalties.

Importance for contractors carrying out FIDIC contracts

The case illustrates how complex the settlement of large-scale infrastructure projects can be, particularly where delays, additional works and the ongoing use of the facility give rise to mutual claims between the parties.

In the case of such projects, effective handling of construction disputes requires a combination of knowledge of FIDIC conditions and Polish law with an understanding of the construction process and the financial consequences of changes in the contract performance.

JDP supports contractors in disputes relating to major infrastructure projects, assisting with the analysis of contractual claims, liability for delays and the rules governing the settlement of construction costs.

CCIIP and Polish-Italian business relationships

JDP is a member of the Italian Chamber of Commerce and Industry in Poland (CCIIP – Camera di Commercio e dell’Industria Italiana in Polonia), an organisation supporting the development of commercial relationships and business cooperation between Poland and Italy.

As part of our activities within the CCIIP, we are also involved in initiatives aimed at the exchange of knowledge and experience between Polish and Italian business entities, including the International Construction Business Meeting (ICBM), which focuses, amongst other things, on construction and infrastructure projects and Polish-Italian cooperation. Being a member of the CCIIP complements our experience in assisting Italian entities in Poland and enables us to better understand the specific nature of business relationships between Polish and Italian partners.

Concluding a contract with an Italian partner – what you should check before signing

The most significant legal problems often do not arise at the moment a dispute emerges. They may stem from provisions of the contract which, at the stage of the contact conclusion, do not define the rights, obligations and liabilities of the parties with sufficient precision.

You should therefore review a contract with an Italian partner not only from the perspective of current cooperation, but also in terms of the risks that may arise at a stage of the contract performance or in the event of a dispute.

The combination of our experience in working with Italian contractors in Poland, supporting Polish businesses undertaking projects in Italy, and our activities within the CCIIP enable us to approach the negotiation and implementation of contracts from the perspective of both sides of Polish-Italian business cooperation.

How we can help you in concluding a contract with an Italian partner

Depending on the project’s requirements, our assistance includes, amongst other things:

1reviewing a draft contract, preparing the Polish or English version, and assessing legal risks;

2supporting in negotiating key provisions, contractual penalties and limits of liability;

3establishing the rules of liability for delays and breach of the contract, and securing payments and the fulfilment of obligations;

4establishing the applicable law and the competent court, drafting the terms for contract termination and providing support in disputes with an Italian counterparty;

5reviewing contracts relating to construction and infrastructure projects and coordinating cooperation with an Italian law firm.

If the contract must be governed by Italian law, we can take charge of coordinating the entire process of cooperating with Italian lawyers.

If you are planning to enter into a contract with an Italian counterparty, commence cooperation with an Italian partner or carry out a project in Italy, we will be happy to assist you with reviewing the contract, assessing legal risks and preparing for and conducting negotiations. If you need legal support in negotiating a contract with an Italian partner, do not hesitate to contact us via the contact form.

FAQ

How do you find a lawyer to negotiate a contract with an Italian company?

It is advisable to choose a lawyer who has experience in negotiating commercial contracts and is familiar with the specific nature of business dealings between Polish and Italian companies. Important factors to consider when making your choice also include the lawyer’s command of Italian, experience in dealing with international contracts and practical knowledge of disputes that may arise from such contracts.

What should you pay attention to in a contract with an Italian counterparty?

Before signing a contract, you should first review the applicable law, competent court, language of the contract, terms of payment, parties’ liability, contractual penalties, limits of liability, performance deadlines and terms for terminating the contract. It is also particularly important to specify how potential disputes will be resolved – preferably at the contract negotiation stage.

Which law governs a contract with an Italian company?

This depends on the type of the contract, the nature of the cooperation and the arrangements between the parties. In many cases, the parties may choose the applicable law for the contract, e.g. Polish or Italian law. However, this choice should be made consciously, taking into account the place of the contract performance, the nature of the project and where and how any dispute will be resolved.

Should you consult a lawyer before concluding a contract with an Italian counterparty?

Consulting a lawyer before signing a contract allows you to assess the key legal risks and verify the rules governing the parties’ liability, payments, termination of the contract and dispute resolution. This is particularly important in the case of high-value contracts or those relating to projects carried out in more than one country.