The Mistake Defense
In Polish law, a mistake can undo what’s been done. When someone makes a declaration of intent under the influence of error—a false belief about reality—the legal consequences can be avoided through what lawyers call “relative invalidity.” But escaping the effects of one’s words requires a formal declaration renouncing the legal consequences of the earlier statement made in error.
In practice, both in formulating such a renunciation and in invoking mistake during legal disputes, professional legal assistance proves invaluable. The intricacies of proving mistake—and the narrow window for doing so—make this an area where amateur hour ends badly.
What Counts as a Mistake
The definition of mistake as a defect in a declaration of intent, contained in Article 84 of the Civil Code, aligns with everyday understanding of the concept. Mistake consists of a false notion about reality—a divergence between the world as it is and one’s awareness of it. By contrast, mistake is absent when the person making the declaration knew reality and understood the circumstances but drew improper conclusions, thereby making a decision disadvantageous to himself. Mistake concerns faulty knowledge rather than inability to predict or reason. Moreover, it must relate to the state of affairs existing at the moment of entering into the agreement, not to circumstances arising during its performance that might suggest the decision to enter it was wrong. (The Supreme Court explained this in March, 2022.)
The Other Party’s Role
When a declaration of intent has been made to another person, repudiation of its legal effects is permissible only when the mistake was caused by that person—even without fault—or when that person knew about the mistake or could easily have noticed it. This limitation doesn’t apply to gratuitous transactions.
In cases where a declaration of intent was made to another person, assessing whether one can invoke mistake requires determining whether the error was deliberately, consciously, intentionally caused. It must be an intentional act by the other party—whether through direct or indirect intent, but always with willful fault. This intention must be realized through concrete conduct by one of the parties to the agreement. It may consist of providing a false denial or assurance, regardless of whether there was any essential need to make such a statement. (The Warsaw Court of Appeals ruled thus in January, 2023.)
To establish whether the addressee of a declaration of intent caused a mistake under Article 84, Section 1, of the Civil Code, the addressee’s conduct need not be the sole cause (in the sine qua non sense); it suffices that it be a contributing cause. The degree of contribution isn’t precisely defined but must certainly be significant. Given the aim of balancing both parties’ interests under Article 84, it would be difficult to justify burdening the addressee with the adverse consequences of the declarant’s mistake if the mistaken party primarily contributed to creating the error. (The Supreme Court held this in September, 2022.)
Mistake Must Concern the Transaction Itself
A mistake invoked to repudiate the effects of a legal transaction may concern a mistaken notion about the transaction’s content or its legal consequences, but it cannot relate to how the agreement will actually be performed—to future, uncertain events from the parties’ perspective. The failure of a person making a transaction to realize expected developments doesn’t constitute grounds for finding that person’s declaration of intent was the result of essential legal mistake. (The Warsaw Court of Appeals ruled accordingly in December, 2022.)
For example, if a plaintiff was aware of the legal consequences flowing from entering into a franchise agreement, knew all circumstances surrounding its signing, and correctly understood the agreement’s elements, then the argument that he believed he would achieve revenues at an expected level in the future has no legal significance. In such a case, the mistake concerned the boundaries of business risk—a motivational element—and cannot be considered a mistake about the transaction’s content. (The Łódź Court of Appeals explained this in February, 2023.)
The Essential Character of Mistake
In assessing whether the condition of “essential mistake” exists, objective criteria must be considered. The correctness of this approach is confirmed primarily by Article 84, Section 2, of the Civil Code, which provides a more specific definition of essential mistake. According to this provision, one may invoke only a mistake that justifies the supposition that, had the person making the declaration not acted under the influence of mistake and assessed the matter reasonably, he would not have made a declaration with such content. The requirement of reasonable assessment as a condition for invoking mistake mandates objectification of the evaluation process. This approach aligns with principles of interpreting Article 60 of the Civil Code accepted in both doctrine and case law, and ensures protection of transactional certainty against potential threats arising from subjective criteria. (The Warsaw Court of Appeals confirmed this in January, 2023.)
In a case concerning inheritance, the Supreme Court held that legally essential mistake—which might serve as grounds for an heir’s repudiation of legal effects connected to failing to timely file a declaration accepting or rejecting an inheritance—doesn’t include ignorance of the actual estate assets caused by the heir’s negligence. Mistake about the actual state of estate assets can occur only when ignorance on this subject doesn’t result from the heir’s lack of diligence but is justified by circumstances. Merely basing a decision on groundless assumptions about estate assets is considered recklessness, not essential mistake. As the Supreme Court indicated, such recklessness doesn’t constitute grounds for repudiating the legal effects of a declaration (or failure to make a declaration) under provisions concerning defects in declarations of intent. (The Court ruled thus in November, 2021.)
The Deadline for Repudiation
Under Article 88, Section 2, of the Civil Code, the right to repudiate expires if the appropriate declaration isn’t made within one year of discovering the mistake. If a plaintiff bases a complaint on repudiating the legal effects of a declaration made under the influence of mistake, and it’s established that the repudiation declaration was made only after one year from discovering the mistake, the court may and should—for this reason alone—dismiss the complaint without examining the merits. (The Supreme Court held this in November, 2016.)
How to Invoke Mistake Before a Court
Whenever there’s a possibility that an agreement’s validity might collapse because one party exercised the right to repudiate the effects of a declaration made, the court must conduct detailed evidentiary proceedings to verify fulfillment of conditions specified in Article 84.
This process requires gathering information and making findings based on available evidentiary materials, often from various sources, including personal testimony. Verification of the legal effectiveness of a declaration made under Article 88 in conjunction with Article 87 may be conducted in separate proceedings before a civil court, including in a declaratory action where the declaration’s effectiveness will be examined as a prerequisite within the framework of assessing a civil-law agreement’s validity. (The Supreme Administrative Court confirmed this in September, 2023.)
One must remember, however, that invoking mistake before a court cannot substitute for making a declaration to the opposing party repudiating the effects of the mistake. For example, the Poznań Court of Appeals, examining such a case, stated: “If the defendant—as he claims—remained in error about the agreement’s actual content, and this error was allegedly caused by the plaintiff, then, at most, he could have used the mechanism for repudiating the effects of a declaration made due to mistake (Article 84 of the Civil Code). But since he didn’t do so, the agreement’s content remained binding on him.” (The Court ruled thus in February, 2023.)
Invoking Mistake Regarding Declarations of Knowledge
Under Article 65¹ of the Civil Code, provisions concerning defects in declarations of intent apply to declarations of knowledge as appropriate. “As appropriate” means that provisions concerning defects in declarations of intent may apply in full, after appropriate modification, or may not apply at all to declarations of knowledge. (The Supreme Court clarified this in March, 2022.)
March 22, 2024
Robert Nogacki is a Polish attorney at law (radca prawny), the founder and managing partner of Kancelaria Prawna Skarbiec (Skarbiec Law Firm), which has operated continuously since 2006.
The law is equal for everyone, but the parties rarely are: on one side stands an organization with time, money, and lawyers, on the other a person with one business, one nest egg, and one life.
Clients rarely come to him with a legal problem. They come with a problem that also has a legal side: an audit that began with a single invoice, money entrusted to someone who has disappeared, a company that has to be passed on before it is too late. Most such matters are decided long before the first letter is written, in decisions made without asking and in deadlines nobody remembered. So he begins by asking how the client got here, not what the client should have done.
He advises entrepreneurs and families from more than a dozen countries, including those whose accounts the tax office has just seized and who do not know what to do tomorrow morning. He defends them in tax audits, customs and fiscal inspections, disputes with the tax authorities, and criminal tax proceedings. He represents victims of investment fraud and Ponzi schemes. He helps families set up family foundations and plan succession, so that a life’s work outlasts a single generation.
Not every case can be won. Every case can be run so that the client knows where they stand. Since 2006 he has represented the victims in the WGI case (Warszawska Grupa Inwestycyjna, the Warsaw Investment Group), one of the longest criminal cases in the history of the Polish financial market, because some things must not be left half finished, even when they take two decades. In the case of the collapsed cryptocurrency exchange Zonda (Zondacrypto, operated by BB Trade Estonia OÜ), he represents several hundred victims in the criminal investigation conducted by Poland’s National Prosecutor’s Office and in the Estonian bankruptcy proceedings.
Kancelaria Prawna Skarbiec is listed in the rankings of Poland’s largest tax advisory firms published by Dziennik Gazeta Prawna and Rzeczpospolita, and it is a four-time recipient (2015 to 2018) of the European Medal awarded by the Business Centre Club and the European Economic and Social Committee. Robert Nogacki publishes regularly, in the press and on the firm’s website, for people who have a problem rather than a law degree, because a legal opinion the client cannot understand protects only the lawyer.
He believes that the best legal advice is the kind that means the client never has to appear in court.
