As of December 1, 2020 there is a new list of prohibited clauses in B2B contracts. Are your contracts in order?
Since the 1930s, the consumer, as a legally weaker co-contractor, has benefited from more and more protection (See Consumer Law – Book VI of the Code of Economic Law (RCE)).
Compared to the protection that consumers have long enjoyed under economic law, Belgian law offered much less protection in a B2B context. Therefore, small entrepreneurs/enterprises were often in a weak position similar to that of their larger customers/suppliers as consumers.
In recent years, this concern has led to the idea that an extension of the protection of an economically weaker party, by analogy with consumer law, would also be desirable in a B2B context.
The law of April 4th 2019 and the prohibited clauses
An important step in this evolution was taken with the law of April 4th 2019 “amending the Code of Economic Law with regard to abuse of economic dependence, unfair terms and unfair commercial practices between companies”.
With this, the Belgian legislator has regulated certain practices in order to offer better protection to small businesses against economically more powerful players, in an attempt to balance the imbalance that can also exist in a B2B relationship.
Two parts of this law are already in force. For example, on September 1st 2019, a first part on “unfair business-to-business commercial practices” entered into force and on June 1, 2020 a second part on the prohibition of “abuse of the position of economic dependence”.
The third part, namely a regulation on “unlawful clauses” in a B2B context, i.e. a list of prohibited clauses in B2B contracts, being the last but perhaps the most extensive, has entered into effective on December 1st 2020.
We present below the main guidelines of this last part, thanks to which you can test whether your contracts and general conditions contain illegal clauses.
Where until now such provisions only applied to contracts concluded with consumers (B2C), with this new regulation, the Belgian legislator is hampering contractual freedom between companies. With this arrangement, the Belgian legislator wants to somewhat alleviate the sometimes manifest economic inequality between companies and create fairer conditions of competition.
Application fields of prohibited clauses in B2B contracts
- provide for an irrevocable commitment by the other party while the performance of the company’s service is subject to a condition whose fulfillment depends on its sole will;
- give the company the unilateral right to interpret any term of the contract;
- in the event of a dispute, have the other party waive any recourse against the Company;
- or to establish in an irrefutable manner the knowledge or acceptance of the other party to clauses which it could not have actually become aware of before the conclusion of the contract.