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New Civil Code Book 5 on contracts approved on 21 April 2022.

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21/04/2022
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Today the Chamber of Representatives approved Book 1 and Book 5 of the new Civil Code. Book 1 contains general principles, Book 5 concerns obligations in general and contractual obligations. Non-contractual obligations will be covered by a separate Book. Among the numerous innovations or useful clarifications, the following are worth noting:

  • The introduction of hardship (“imprévision”/imprevisie) in Belgian contract law. In case of unforeseeable changed circumstances that render the performance of the agreement so excessively onerous that it cannot be reasonably expected from a party, said party is entitled to ask the other party for a renegotiation or termination of the contract. If no agreement is found between the parties, the court may, in an expedite procedure, adapt or terminate the agreement (or not).
  • In the ”battle of the forms” between conflicting general terms, the “knock-out” rule will be applied and opts for the so-called “knock-out” rule: both sets of general conditions shall apply, except the incompatible clauses, that will apply from neither side. To prevent this mechanism, a party may, in its offer or acceptance (expressly though, not in its general conditions), specify that it does not accept a contract if (some of) its general terms do not fully apply.
  • A general rule on unfair terms (“any term that creates significant imbalance between the parties’ rights and obligations”), only applicable to clauses "which are not negotiable" though, aiming at making the law on unfair b2b terms redundant.
  • Abuse of circumstances during negotiations (misbruik van omstandigheden/abus de circonstances) is a ground to claim amendment of the obligations or nullity of the contract.
  • In case of precontractual liability, the damages awarded should put the victim in the situation prior to the negotiations (compensation for costs incurred), but if there was a legitimate expectation that in any case the contract would be entered, the damages awarded can be based on the revenues that the contract, if entered, had generated.
  • A court will be able to reduce penalty clauses taking into account all circumstances, not only the potential damage.
  • Termination for breach can be done without court intervention.
  • More flexible, tailor-made remedies, such as price reduction or partial termination.
  • Anticipatory breach: a contract party will be able to suspend the performance of its own obligations and even to terminate the agreement if it is obvious that the other party will not perform and if the consequences of such non-performance are sufficiently serious to justify the chosen remedy. The other party may avoid the remedy by providing adequate guarantees that it will be able to perform, and should in any case be put on notice to provide such guarantees prior to any termination.
  • The rules on assignment of rights, debts and contracts are now clarified.

Books 1 and 5 will enter into force on the first day of the sixth month following publication.