From 1 December 2020, the new rules on unlawful terms in B2B relations will apply to contracts concluded, amended or renewed after that date.
These new rules will allow the courts to assess the (unlawful) nature of contractual clauses much more broadly than today. If the court establishes the existence of an unlawful contractual clause, it will be able to sanction it, for example, by annulling the relevant provision.
It is therefore not surprising that this Act will significantly affect the freedom of contract between companies. In practice, the new B2B Act will have an impact on the general terms and conditions of companies and agreements between companies.
In this newsletter, we summarise the most relevant consequences of the new legislation for you.
The new rules regarding contractual terms apply to all agreements between companies (except for agreements concerning financial services and public contracts). Examples of such agreements are purchase/sale, hire, contracting, commercial agency, franchise, commercial collaboration agreements, etc.
The scope is not limited to general terms and conditions or accession contracts, however. All contractual terms are covered by the new rules.
The new rules regarding contractual terms apply to contracts that are assessed under Belgian law. In the event that companies think about applying a foreign legal system to their contract, these rules can still have an impact on the interpretation of the contract.
Finally, the new provisions will apply to agreements concluded, renewed or amended as from 1 December 2020. Consequently, the new provisions will not apply to contracts that are still running on this date of entry into force. The new provisions will, however, become relevant for ongoing agreements that are amended or renewed after the entry into force of the new rules.
As with consumer contracts and commercial co-operation agreements, the legislator has expressly provided that the written terms in contracts between companies must be clear and comprehensible.
In addition, terms that create an apparent imbalance between the rights and obligations of the parties - whether or not in conjunction with other terms - will be unlawful and will be prohibited.
In addition to this general standard, the Act also contains a black and a grey list of unlawful terms.
The so-called black list contains four provisions. If a contractual term falls within this list, it is unlawful without any further assessment of the term being required.
The black list contains clauses that aim:
to provide for an irrevocable undertaking by one party, whereby the performance of the other party is subject to a condition whose fulfilment depends solely on its will;
to give a party the unilateral right to interpret a contractual term;
to waive all remedies against the other party in the event of a dispute; or
to irrefutably establish the knowledge or acceptance of the other party of stipulations of which it could not actually have taken note prior to the conclusion of the contract.
In addition to a black list, the new B2B law for business-to-business contracts also contains a grey list of eight terms that are presumed to be unlawful and prohibited. This presumption is rebuttable based on the concrete circumstances and the characteristics of the contract. A company can thereby try to prove that, in the given circumstances and in view of the characteristics of the contract, the term does not create an obvious imbalance between the rights and obligations of the parties. The following clauses are on the grey list:
giving one party the right to unilaterally change the price, characteristics or conditions of the contract without a valid reason;
tacitly extending or renewing a fixed-term contract without giving reasonable notice;
binding the parties without specifying a reasonable period of notice;
placing the economic risk on one party without any quid pro quo if that risk is normally borne by the other party;
inappropriately excluding or limiting the legal rights of a party in the event of non-performance or defective performance of any of its contractual obligations by the other party;
releasing the company from liability for its wilful misconduct, its gross negligence or that of its employees or, except in cases of force majeure, for non-performance of the essential obligations that are the subject of the agreement;
limiting the evidence on which the other party can rely; or
in the event of non-performance or delay in performance of the other party's obligations, fixing amounts of compensation that are manifestly disproportionate to the prejudice suffered by the undertaking.
What can I do now?
The new B2B Act requires companies to review and - where necessary - update their agreements with other companies and their general terms and conditions.
Would you like more information on the new B2B Act or assistance with the analysis and updating of your agreements and general terms and conditions? Contact us immediately for a personal appointment. This can, of course, be done securely and completely online (our entire file management has been digital for years).
Defensis Law Firm
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