You have paid 80% of the price for more than a dozen pieces of equipment that are sitting in the supplier’s warehouse and will remain there for another year. The supplier sends a statement: “our third-party liability insurance fully covers property stored at our premises, so there is no need to take out any other policies”. Sounds reasonable. It isn’t.
Third-party liability insurance responds to third-party claims — it does not insure property belonging to someone else. If the warehouse burns down, you are neither the policyholder nor the insured. This is the first of seven issues that must be resolved before the draft safekeeping agreement is sent to the supplier.
Warehouse sale is a model in which ownership of the equipment passes up the chain in stages (supplier → subcontractor → general contractor → client), while the items physically remain with the supplier — sometimes for a year or longer. Payment is made long before physical delivery to the construction site. Without a separate safekeeping agreement, you have no insurance, no access, and no proof of ownership.
In this article, you will find seven specific decisions you need to make before sending the draft agreement to the other party. Each answers one question: “what will happen if I do not put this in writing?”. At the end, there is a 15-point checklist you can copy and a procedural note that could save you from a serious negotiation problem.
Key terms used in this article
Before we move on to the seven points, it is worth explaining several terms that will recur throughout the article.
| Term | What it means in the context of a warehouse sale |
|---|---|
| Warehouse sale | You purchase and pay for equipment that physically remains in the supplier’s warehouse until it is installed at the construction site |
| Safekeeping agreement (Article 835 et seq. of the Civil Code) | An agreement under which the custodian (supplier) undertakes to keep an item in an undeteriorated condition and return it on demand |
| Insurance for the account of another (Article 808 of the Civil Code) | A policy taken out by one person (e.g. the supplier) but protecting the property interest of another person (the owner of the equipment) |
| Transfer of possession without delivery (Article 349 of the Civil Code) | A mechanism whereby ownership is transferred without physically handing over the item — the current possessor becomes a dependent possessor |
| Right of retention (Article 461 of the Civil Code) | The custodian’s right to withhold the item until outstanding amounts have been paid — unless this right is waived, construction work may grind to a halt |
| Exclusion from the bankruptcy estate (Article 70 of the Bankruptcy Law) | The possibility of recovering an item from the assets of an insolvent custodian if you prove that you own it |
| Contract engineer | The entity supervising performance of the contract on behalf of the client — in infrastructure contracts, its approval is often a condition of payment |
Point 1: the safekeeping end date — without it, the supplier may terminate the agreement
A safekeeping agreement for an indefinite term gives the custodian the right to terminate it. Equipment awaiting installation may suddenly have to be transported elsewhere and stored at your own expense.
What to include:
- Specify a fixed safekeeping end date — later than the latest deadline under your subcontract. This date should be taken from the contract schedule, not from the safekeeping agreement itself.
- Enter into the agreement for a fixed term — this eliminates the custodian’s right to terminate it.
- Add a mechanism allowing the depositor to extend the term unilaterally, without changing the remaining terms. Contract schedules slip — you need flexibility on your side, not on the supplier’s.
- Expressly exclude Article 844 § 2 of the Civil Code — i.e. the custodian’s right to demand collection of the item before the agreed date. This is one of the main imbalances in this type of agreement and a common point of contention.
What will happen if you do not include this: the supplier may demand that you collect the equipment when your construction site is not yet ready. Emergency transport, additional storage costs, and the risk of damage caused by unnecessary handling.
Point 2: the acceptance report and payment — this is a cash-flow question
The safekeeping acceptance report serves two functions at once: it individually identifies the items (type, quantity, factory numbers, storage location, unit value) and marks the commencement of the agreement. It is often also the event that triggers payment.
The problem is that the payment mechanisms under the respective agreements do not align:
| Agreement | Payment schedule |
|---|---|
| Supply agreement | 70% after delivery of the main unit, 20% after delivery of external equipment, 10% after commissioning |
| Main agreement (warehouse sale) | 80% of purchase and transport costs, 20% after commissioning |
Signing the safekeeping acceptance report is not the same as “delivery” within the meaning of the supply agreement — unless you expressly state that it is.
What to do:
- Arrange a 30-minute meeting with the person responsible for contract settlements.
- Use a single sentence in the agreement to determine whether signing the safekeeping acceptance report constitutes delivery of the components within the meaning of the supply agreement.
- Map the instalments under the supply agreement and the main agreement side by side to identify any mismatch.
- Before signing the report, compile the identifying details for each location: type and quantity of components, factory or serial numbers, storage location, and unit value.
- Agree in writing on the involvement of the general contractor and the contract engineer in the acceptance and inventory procedures.
What will happen if you do not include this: the supplier will sign the report and demand 70% of the price. You will have no grounds either to refuse or to confirm the payment — and the dispute will land on a lawyer’s desk instead of the contract settlement manager’s desk, where it should have started.
Contact us — we will help you align the acceptance report with the payment schedule under your contract.
Point 3: property insurance for the account of another — why the supplier’s third-party liability insurance is not enough
This is the most common mistake in this arrangement. The supplier claims that its third-party liability insurance covers property stored at its premises. The standard response is: “we have third-party liability insurance that fully covers property stored at our premises, so there is no need to take out any other policies”.
Why this does not work:
- Third-party liability insurance protects against third-party claims against the supplier. It is not property insurance.
- The owner of the equipment (you, the general contractor, or the client) is neither the policyholder nor the insured under the supplier’s third-party liability policy.
- If the warehouse burns down, the liability insurer will not pay compensation to the owner of the equipment.
What to include:
- Require the custodian to take out and maintain, at its own expense, property insurance structured as insurance for the account of another (Article 808 of the Civil Code). Article 808 § 1 of the Civil Code (consolidated text, Journal of Laws 2024, item 1061) permits insurance for the account of another where the insured group is not identified by name. Article 808 § 3 gives the insured the right to claim benefits directly from the insurer.
- Specify the insured group: the subcontractor, general contractor, and client — according to their respective property interests.
- Include a clause ensuring continuity of the insurable interest despite a change of ownership — the provision itself does not establish automatic continuity of cover following successive changes of ownership.
- Define the rule for allocating compensation to the owner at the time of the insured event, prohibit double recovery, and require compensation to be used to repair or replace the items.
- Reject in writing the argument that third-party liability insurance is sufficient.
Who pays for the policy? The custodian may pass the cost of property insurance for the account of another on through the price of the equipment. Resolve this during negotiations, not after the fact.
Point 4: warehouse location — delete it, do not negotiate it
The contract engineer has approved one warehouse address. A second address, added by the supplier, appears in the draft agreement.
The rule is simple:
- Delete from the draft every warehouse location for which you do not have the written approval of the contract engineer and the general contractor.
- Do not negotiate addresses added by the supplier — remove them and request approval through a separate procedure.
- Require storage in a designated area separated from the custodian’s own items and those of third parties, within a fenced site and in accordance with the manufacturer’s operation and maintenance documentation.
- Agree the wording of the identification signs with the engineer when the warehouse is approved and obtain express confirmation by email that the signage is sufficient.
Why individual identification matters if the custodian becomes insolvent:
Article 70 of the Bankruptcy Law (consolidated text, Journal of Laws 2026, item 913) excludes from the bankruptcy estate assets that do not belong to the insolvent party. The Court of Appeal in Poznań (I AGa 278/22, 21 April 2023) confirms that Article 70 covers assets included in the estate even though they are not owned by the insolvent party.
However, exclusion is not automatic. You need the combined effect of prior acquisition of ownership, precise identification of the items (factory numbers, a designated area, signs), no commingling with the insolvent party’s assets, and consistency between the contractual documents, warehouse records, and the actual state of affairs.
What will happen if you do not include this: after a bailiff visits the supplier, you will be unable to prove which units belong to you. The supplier stores the equipment together with its own products and other customers’ goods, without signs or segregation — and you lose your evidence.
Point 5: the transfer of risk — one sentence that eliminates a dispute
Transporting the equipment from the warehouse to the construction site is at the custodian’s cost and risk. Unloading is the depositor’s responsibility. But the agreement does not say when the risk passes.
What to include:
- Add one sentence defining the point at which risk passes at the interface between transport and unloading — when the vehicle arrives, when the load is lifted off the truck bed, or when it is placed on the ground.
- Determine who is responsible for securing the load during unloading.
- Clarify whether the custodian remains liable for loss, destruction, damage, and theft until delivery (i.e. until the point specified in that one sentence) or until another point in time.
What will happen if you do not include this: every instance of damage during unloading will be disputed. The matter may end up in court because neither party will be able to prove whose risk materialised.
Point 6: waiver of lien and retention rights — without it, construction work stops
The right of retention (Article 461 of the Civil Code) allows the custodian to make release of the items conditional on payment. Without an express waiver of this right, the supplier may retain the equipment by citing an unpaid invoice — even one relating to another order.
What to include:
- The custodian’s waiver of its lien and right of retention (Article 461 of the Civil Code).
- A prohibition on making the release of the items conditional on payment.
- Plan notices to the holder (Article 350 of the Civil Code) for each successive transfer of ownership in the chain — Article 349 of the Civil Code allows ownership to be transferred without physical delivery of the items, but the custodian must be informed of each new owner.
- Exclude any retention-of-title clause from the supply agreement and the custodian’s commercial documents — otherwise, the supplier may claim that ownership never passed.
What will happen if you do not include this: the supplier refuses to release the equipment, construction work stops, and the contract schedule falls apart. Delay penalties under the main agreement may be many times higher than the value of the disputed invoice.
Point 7: contractual penalty — three decisions you need to make
A typical contractual penalty in a draft agreement is a daily rate of around one thousand zlotys for each day of delay and each item held in safekeeping. With more than a dozen sets of equipment, the amount increases very quickly.
Article 484 § 2 of the Civil Code (consolidated text, Journal of Laws 2024, item 1061) provides two independent grounds for reducing a penalty: substantial performance of the obligation and a grossly excessive penalty. The Supreme Court (II CSKP 2107/22) confirms that there is no statutory percentage or monetary threshold. For a daily penalty, courts assess the total amount accrued, not merely the rate for one day.
Three decisions to make:
| Decision | Question | Consequence of not deciding |
|---|---|---|
| Proportionality | Does the daily rate multiplied by the number of items result in an amount proportionate to the value of the equipment and the actual loss? | The Court of Appeal in Gdańsk (I AGa 20/22, 16 August 2022) indicates that a penalty equal or close to the value of the delayed performance may be considered grossly excessive |
| Aggregate cap | Will you introduce an overall cap on the penalty? | The absence of an aggregate cap is not in itself grounds for invalidity, but it strengthens the argument that the penalty is grossly excessive in the event of prolonged delay. In its judgment II CSKP 326/22, the Supreme Court confirms that a daily penalty without a cap is generally permissible, but it must not lead to a “perpetual obligation” |
| Supplementary damages | Will you reserve the right to claim damages exceeding the contractual penalty? | Without an express reservation, the contractual penalty exhausts the claim — any actual loss exceeding the penalty remains your responsibility |
An additional enforcement gap: a typical draft provides for a penalty only for delay in releasing the items. A custodian that fails to maintain insurance, denies access for inspections, or breaches the storage conditions incurs no direct cost as a result. Add sanctions for breaches of insurance, access, and storage obligations — otherwise, breaching them costs nothing.
Checklist: 15 points before sending the draft agreement
Before the draft safekeeping agreement is sent to the supplier, go through this list and assign a responsible person to each point — lawyer, contract settlement manager, project coordinator, or risk/insurance specialist.
| No. | Point to check | Responsible person |
|---|---|---|
| 1 | Safekeeping end date — later than the latest deadline under the subcontract | project coordinator |
| 2 | Fixed-term agreement + unilateral extension mechanism | lawyer |
| 3 | Exclusion of Article 844 § 2 of the Civil Code (the custodian’s right to demand early collection) | lawyer |
| 4 | Relationship between the acceptance report ↔ payment under the supply agreement resolved in one sentence | contract settlement manager + lawyer |
| 5 | Identifying details compiled for each location (factory numbers, value, location) | project coordinator |
| 6 | Property insurance for the account of another with a clause ensuring continuity of the insurable interest | risk/insurance |
| 7 | Written refusal to accept third-party liability insurance as sufficient | lawyer |
| 8 | Every warehouse location approved in writing by the engineer and the general contractor | project coordinator |
| 9 | Requirement for segregation, fencing, and signage — wording of the signs agreed | project coordinator + engineer |
| 10 | Point of risk transfer at the transport–unloading interface defined in one sentence | lawyer |
| 11 | Waiver of lien and retention rights + prohibition on making release conditional on payment | lawyer |
| 12 | Notices to the holder (Article 350 of the Civil Code) planned for every transfer of ownership | lawyer |
| 13 | Exclusion of retention of title from the supply agreement and the supplier’s commercial documents | lawyer |
| 14 | Contractual penalty: proportionality, aggregate cap, supplementary damages — all three decisions made | lawyer + contract settlement manager |
| 15 | Sanctions for breaches of insurance, access, and storage obligations | lawyer |
Procedural note: internal comments in the draft agreement
One additional point that does not concern the substance of the agreement but may cost more than all seven combined.
Internal comments in the draft agreement — those identifying weaknesses in your own position and areas where you expect resistance — must not be sent to the counterparty. Sending a file containing internal comments reveals your negotiation strategy and weakens your position on each of the seven points described above.
A procedure that eliminates this risk:
- The version containing internal comments and the clean version must be two separate files.
- First, discuss the comments with the internal client.
- Then remove them.
- Only then send the file.
- Add a review step before every draft is sent to the counterparty.
Does this approach work outside the construction industry?
A safekeeping arrangement involving individual identification and insurance for the account of another is not limited to infrastructure contracts. Article 853 § 1 of the Civil Code (warehousing agreement) does not restrict its subject matter to a specific industry — it covers specified movable property (consolidated text, Journal of Laws 2024, item 1061).
| Industry | Situation | What to look out for |
|---|---|---|
| IT | Equipment purchased before implementation and stored with the manufacturer | Serial numbers provide stronger evidence of individual identification than identification by type |
| E-commerce / fulfilment | Customer goods stored in the operator’s warehouse | For bulk goods (SKU, batch, quantity), effective exclusion from the operator’s bankruptcy estate depends on the goods not being commingled |
| Manufacturing | Components purchased in advance and awaiting the assembly line | Classifying a hybrid model (safekeeping + configuration + order picking) requires an analysis of the parties’ actual obligations |
In each of these cases, the operator’s insurance does not replace its contractual liability — these are separate mechanisms. The seven points described above apply with appropriate modifications.
Safekeeping agreement for a warehouse sale — how we can help
A safekeeping agreement accompanying a warehouse sale is a document that appears simple but is entirely governed by the contractual chain. The actual beneficiaries of the rights are three entities that are not parties to it: the general contractor, the client, and the contract engineer. Each of the seven points described above requires a decision that brings together legal, financial, and project logistics considerations.
We can help in three areas:
- Review of the supplier’s template and a list of decisions for your contract — you receive an assessment of the draft agreement, including a map of the seven points and an indication of what you need to change before sending the draft to the other party.
- A prepared draft agreement with an acceptance report annex and a statement for the client — a complete set of documents tailored to your contract, taking into account the order of precedence of the documents (main agreement, supply agreement, safekeeping agreement, reports, supplier’s commercial documents).
- Drafting plus negotiation support — coordination with the contract engineer, ensuring consistency with the supply agreement and the main contract, and conducting negotiations with the supplier through to signature.
If you are paying for equipment stored with the supplier and do not yet have a safekeeping agreement — contact us. We will help you resolve the seven points, prepare the documents, and conduct the negotiations.
Frequently asked questions
Do I really need a separate safekeeping agreement, or is a supplier’s statement enough?
A supplier’s statement that it is responsible for the equipment until it is transported to the construction site does not regulate property insurance, access rights, individual identification of the items, the point at which risk passes, or waiver of the right of retention. Without these elements, you have no protection if the supplier becomes insolvent, the warehouse burns down, or a dispute arises over the release of the equipment. A statement is not enough — you need an agreement that resolves the seven points discussed in this article.
The supplier claims that its third-party liability insurance covers property at its premises — how should I respond?
Third-party liability insurance protects the supplier against third-party claims — it does not insure property belonging to you. Respond in writing: “Third-party liability insurance is not property insurance for the account of another within the meaning of Article 808 of the Civil Code. Please take out a property insurance policy covering the subcontractor, general contractor, and client as insured parties”. Do not treat this as an ideological dispute — it is a question of a protection mechanism that either works or does not.
What will happen to my equipment if the supplier becomes insolvent?
Article 70 of the Bankruptcy Law allows assets that do not belong to the insolvent party to be excluded from the bankruptcy estate. However, exclusion is not automatic. You need the combined effect of proof of ownership, precise identification of the items (factory numbers, a designated area, signs), no commingling with the insolvent party’s assets, and consistency between the documents and the actual state of affairs in the warehouse. Without an acceptance report containing identifying details and physical segregation, your chances of securing exclusion are significantly lower.
Is a penalty of one thousand zlotys per day and per item high — and won’t a court reduce it?
There is no market benchmark for this rate. Courts assess the total amount accrued in relation to the value of the equipment and the actual loss. A penalty equal or close to the value of the delayed performance may be considered grossly excessive. The absence of an aggregate cap strengthens this argument. A safer model is: a daily rate + calculation unit + aggregate cap + reservation of the right to claim supplementary damages.
Does the same approach work for IT equipment before implementation or goods stored in a fulfilment operator’s warehouse?
Yes, with modifications. The provisions governing safekeeping and warehousing are not limited to construction. Individual identification is easier for IT equipment with serial numbers. It is more difficult for bulk goods in fulfilment because it depends on preventing commingling with other customers’ goods. In every case, the operator’s insurance does not replace its contractual liability.
How long does it take to agree this type of agreement, and can it be done without suspending deliveries?
The time required depends on the number of unresolved points and the supplier’s willingness to negotiate. Resolving the seven points described in this article usually takes several meetings and two or three rounds of exchanging drafts. This can be done in parallel with deliveries — provided that you do not sign the acceptance report before resolving the relationship between the report and payment (point 2).
