The B2B Act introduces three sets of rules :
- Rules on unfair market practices (art. VI.104 – et seq. CEL), entered into force as from 1 September 2019;
- Rules on the prohibition of the abuse of economic dependency (art. IV.2/1 CEL), entry into force as from 22 August 2020 (the original entry into force was set to 1 June 2020 but postponed to ensure consistency with the other new competition law rules introduced by the Royal Decree of 31 July 2020 regarding the modification of books I and IV of the CEL regarding the abuse of economic dependency; and
- Rules on unlawful contractual terms (art. VI.91/2 – et seq. CEL) will apply to agreements entered into, renewed or adapted after 1st of December 2020. They do not apply to existing agreements (to the extent they are not renewed or modified after 1st of December 2020).
The new B2B rules are applicable on all agreements entered into between enterprises, regardless the size of the affected enterprise, i.e. any undertaking in a B2B agreement can invoke these prohibitions, not only the “weaker” contracting party or a SME.
The B2B Act states that these provisions on unlawful contract terms do not apply to financial services, nor to public procurements. For financial services this exemption may however not be permanent. The government has been given the power to render certain or all of these provisions on unlawful contract terms applicable to financial services (following advice of the National Bank of Belgium and the Financial Services and Markets Authority). By foreseeing this initial exclusion but with the option to render certain provisions applicable afterwards, the legislator recognized that the specificity of financial services and the international context in which they take place requires a more tailor made assessment of the rules on unfair provisions before these are made generally applicable to financial services.
What are the rules?
There are 3 rules to assess whether your contractual term is unlawful.
- As a general principle, all contractual terms of an agreement should be drafted in a clear and understandable manner.
- In addition to this transparency principle, each contractual term, individually or together with other terms, which creates a significant imbalance between the rights and obligations of the contracting parties, is prohibited. So called “core clauses” of the agreement (such as price and object of the agreement) are exempted from this fairness assessment provided that these clauses are formulated in a clear and understandable manner.
- The CEL introduces a “black list” and “grey list” of unfair clauses. The B2B protection regime provides for a so-called “black list” of clauses that are in any case unlawful and thus prohibited. The “black list” is limited to the following 4 types of clauses (art. VI.91/4 CEL) :
- potestative clauses;
- clauses containing a unilateral interpretation right;
- clauses containing a waiver of remedy; and
- irrefutably knowledge or acceptance clauses.
The “grey list” contains clauses that are presumed to be unlawful unless the contrary is proven. In other words, the assumption of the unlawful character of the clause is reversed, whereby the contracting party must prove that the clause is not unlawful.
The following clauses are on the “grey list” (art. VI.91/5 CEL) :
- clauses containing a unilateral modification right;
- clauses containing a tacit renewal without reasonable notice period;
- clauses reversing the economic risk;
- clauses that inappropriately limit the rights in case of a breach of contract;
- clauses containing an unreasonable notice period;
- clauses containing a waiver of liability for gross negligence, wilful misconduct or non-performance of essential obligations that are the subject matter of the contract;
- clauses limiting the means of evidence; and
- excessive penalty clauses.
Unlawful terms are prohibited and considered null and void (article VI.91/6 CEL). The agreement itself will remain binding for the contracting parties, provided it can continue to exist without the unfair clause.
Initiating cease-and-desist proceedings or damage claims are also possible.
When are the unfair B2B rules applicable?
The new rules on unfair clauses in B2B agreements are applicable on agreements entered into, renewed or modified after the 1st of December 2020.
- Revise your B2B (template) agreements based on these new rules to avoid clauses being challenged and declared void in court. Pay particular attention to clauses qualified as black- or greylisted clauses in articles VI.91/4 and VI.91/5 CEL.
- Be attentive when you conclude new agreements / renew or amend existing agreements after 1st of December 2020.
- As always be as clear and precise as possible when drafting agreements!
If you want to know more on the unfair B2B rules, you can check our Webinar or contact us.