The new statutory regime aims to strike a new balance between the autonomy of the parties, on the one hand, and the role of the judge to protect a weaker party and the public interest, on the other hand. The reform further aims to modernize the Belgian law of obligations by giving established case law a statutory legal basis, and by introducing a number of new legal concepts and organizing provisions more consistently.

The following changes are among the many innovations introduced by the new regime:

1. A new statutory regime regarding pre-contractual information obligations and liability During pre-contractual negotiations, parties must provide each other information to the extent required by law, good faith or customs, taking into account the respective quality of the parties, their reasonable expectations and the object of the contract.
   
   The party that wrongfully terminates negotiations may be liable for costs incurred by the other party in the context of the negotiations. If the negotiations are terminated in an advanced stage when there was already a legitimate expectation that the contract would be concluded without any doubt, the awarded damages may furthermore include the expected net gain that the contract would have generated for the other party. These new rules apply in addition to the specific pre-contractual information obligations and sanctions applicable to certain commercial collaboration agreements as set forth in Book X, Title 2 of the Belgian Code of Economic Law.
    
2. Abuse of circumstances as a new consent defect (‘wilsgebrek/vice de consentement’)  If an abuse of circumstances linked to the weaker position of a party (which can result from the economic or functional superiority of the other party, or from personal characteristics of the weaker party) causes a gross disparity between the obligations of the parties, the weaker party may request the courts to adjust such obligations or to declare the contract null and void.
    
3. Application of the “knock-out” rule in case of “battle of forms” In case of conflicting general terms and conditions of the parties (a so called “battle of forms”), the “knock-out” rule shall apply. This rule implies that the contract will be governed by both sets of general terms and conditions, except for the conflicting provisions. The conflicting provisions shall be considered to be null and void and be excluded from the contract. In such a case, the subject matter of the excluded provisions shall be governed by the new statutory regime and other general principles of Belgian civil law.
   
   If a party does not want the knock-out rule to apply, it must reject the contract promptly after the other party’s acceptance of its offer. Alternatively, a party may specify expressly in its offer that the contract shall not be concluded if its general terms and conditions do not fully apply.
    
4. Hardship as a legal basis to renegotiate or terminate contracts (‘imprevisie/imprévision’) A party may request the other party to renegotiate or terminate the contract if an unforeseeable change of circumstances renders the performance of the contract excessively onerous (but not necessarily impossible), in such a way that the continued performance at the contractually agreed conditions cannot be reasonably expected from said party. If the other party refuses to renegotiate the contract or if no agreement is found between the parties, the courts may, in interim proceedings, adjust the terms or even terminate the contract.
    
5. Termination for “anticipatory breach” A party may terminate the contract in anticipation of a breach of contract by the other party. This is possible if, after giving prior notice, it is clear that the other party will not perform its obligations on time and the consequences of the non-performance are sufficiently serious. The other party may avoid the termination by providing adequate guarantees which show that it will be able to perform its obligations in accordance with the contract.

The new law includes a number of other important changes, such as new rules regarding the extrajudicial annulment of contracts in the event of breach, the interpretation of contracts, a general prohibition to include unfair terms in a contract, new remedies in case of non-performance such as a price reduction and partial nullity of the contract, a new statute of limitations for certain contractual claims, formal requirements for notices between parties, the calculation of time periods, etc.

The new provisions are included in new Book 1 (“General Principles”) and Book 5 (“Obligations”) of the Civil Code and are generally of supplementary nature. As such, the new rules will apply to all new contracts entered into as from 1 January 2023, unless such contract explicitly provides otherwise.

Any questions? Do not hesitate to contact us.