New B2B act – unlawful clauses in agreements between (B2B) companies

The new legal regime of unlawful clauses in agreements between companies (the new B2B rules) entered into force on 1 December 2020. This means that all contracts which are concluded, renewed or amended as from 1 December, will need to comply with these new rules in order to avoid the possibility of certain clauses being unenforceable.

*Act of 4 April 2019 on abuse of economic dependence, unlawful clauses and unfair market practices between companies.

What the new B2B act covers

The new Title 3/1 ‘Agreements concluded between companies’ of the Code of Economic Law (articles Article VI.91/1 – VI.91/10) applies to all B2B contracts which are concluded, renewed or amended as from 1 December 2020, irrespective of the companies’ legal form or size.

Financial services and public procurement are excluded from its scope – the new regime does therefore not apply to agreements on financial services, or to agreements which are concluded with public entities or with subcontractors following a public procurement procedure.

The new regime automatically applies to all contracts (including general terms and conditions) which are subject to Belgian law – and it cannot be excluded contractually.

General norm

The new article VI.91/3 introduces a “catch all” prohibition of clauses which create (alone or in combination with other clauses) a “manifest imbalance” between the rights and obligations of the parties.

To assess the unlawful character of a clause, courts will need to take into account the particularities of the agreement such as the circumstances in which it was concluded, the general economic set-up, relevant market practice, the subject matter of the agreement as well as the clear and unambiguous character of the clause.

Blacklisted clauses

Article VI.91/4 also introduces a list of blacklisted clauses which are in any case considered unlawful: (i) clauses which leave the performance of an obligation to the company’s sole discretion while binding the other party; (ii) unilateral interpretation clauses; (iii) full waiver of remedies; and (iv) irrefutable notification or acceptance clauses.

Greylisted clauses

Article VI.91/5 introduces a list of greylisted clauses which are considered unlawful unless proof to the contrary is provided: (i) right to unilateral changes of the agreement; (ii) tacit renewal without a reasonable notice period; (iii) shifting the economic risk contrary to standard market practice; (iv) inappropriately limiting remedies for breach; (v) lack of reasonable notice period; (vi) certain limitations of liability; (vii) limiting means of proof; and (viii) excessive penalty clauses.

Consequences

Any unlawful clause will be considered null and void: it will be deemed non-written and replaced with the corresponding principles of general contract law, while leaving the rest of the agreement untouched. This can naturally implicate a considerable risk, especially as some of the targeted clauses were until now fairly standard in Belgian-law contracts.

Any violations of the prohibitions may also qualify as an abuse of economic dependence and/or may give rise to liability.