Last week, the Belgian Parliament approved a draft law on unfair contractual terms in B2B contracts. The law will apply to all types of B2B contracts, except for financial services and government procurement contracts.
Why
In order to protect “weaker” businesses against the exploitation of disparities in negotiating power, unfair terms are prohibited and will be declared null and void in court.
What
Under the new law,"any term of a contract between businesses is unfair if, on its own or in combination with one or several other terms, it creates a significant [legal] imbalance in the parties’ rights and obligations”.
Even though this definition is based on existing customer protection law, the legislator stressed that (i) the interpretation of what can be considered as unfair will be different, taking into account a B2B context, and that (ii) existing case law on B2C clauses can therefore not be applied mutatis mutandis.
In particular, when verifying the “fairness” of a clause, it will be evaluated whether the parties willingly entered into such an arrangement (contractual freedom), taking into account the following elements: the circumstances surrounding the conclusion of the agreement, the general economy of the agreement, applicable commercial practices, the other clauses of the agreement and the nature of the products/services.
The assessment of the unlawful nature of clauses will not relate to the determination of the actual subject matter of the agreement, nor to the equivalence of the price/reimbursement and the products/services to be supplied in return.
In order to give some first guidance to businesses, the law also includes (i) a “black list” of terms that are indisputably unfair and (ii) a “grey list” of terms that are presumed to be unfair unless the contrary is proven.
Action
Revisiting your B2B general terms & conditions and template agreements from this new angle will therefore definitely be required in order to avoid clauses being challenged and declared null and void in court.
The new law will enter into force on the first day of the nineteenth month following the month in which it will be published in the Belgian State Gazette. It will apply only to contracts that are entered into, renewed or modified after that date. We will in any case keep you posted.
