FEBRUARY 2020 - Dominique BOGAERT

Rethinking the general terms and conditions in the light of the new provisions of the Economic Law Code relating to unfair contract terms between businesses

The Act dated 4 April 2019 (amending the Economic Law Code with regard to abuse of the economic dependence, unfair contract terms and unfair market practices between businesses) introduces new provisions in the Economic Law Code aimed at ensuring a better balance between economic partners. Some of these provisions will have an impact on the general terms and conditions applied to date between businesses. The latter shall ensure their validity beyond December 1st, 2020. All contracts renewed, amended or concluded after that date shall comply with the provisions pertaining to unfair contract terms.

A contract term shall be deemed unfair when, either taken alone or in combination with one or more other terms, it creates a significant imbalance between the rights and obligations of the parties. The Act distinguishes between two specific categories of terms: (i.) those terms which are deemed unfair without further assessment (notably those terms conferring a unilateral right conferred on one of the parties to interpret the contract; contract terms obliging one of the parties to waive any remedy in the event of a dispute; contract terms which irrefutably establish the other party’s knowledge or acceptance of the contract terms when such party could not actually have had the opportunity to become acquainted with such terms prior to the conclusion of the contract) and (ii.) those terms which are presumed to be unfair unless there is evidence to the contrary (for example, a contract term granting the business a right to alter the price, characteristics or terms of the contract, unilaterally and without a valid reason; contract terms tacitly extending or renewing a fixed-term contract without providing a reasonable period of notice; contract terms limiting the means of evidence the other party may rely on).

Unfair contract terms are prohibited and shall be deemed null and void.

These new provisions provide the courts with a broad margin of discretion in assessing the reasonable nature of a contract term in light of the specific nature of the good, the circumstances surrounding the conclusion of the contract and the overall economy of the contract, as well as according to generally accepted commercial uses and other contract terms. These new provisions will undoubtedly give rise to an abundant and dissonant body of case law.

But in any case, these provisions represent an opportunity to thoroughly reconsider the existing conditions of sale, purchase terms or conditions of provision of services in light of the business’ experience and the potential pitfalls in the implementation of these provisions.

Reduce