New Book 5. “The Obligations" of the Civil Code
August 2022 – The Civil Code is being modernised. Book 5 "Obligations" of the new Civil Code was published on 1 July 2022. What are the main points to remember about this new book?
Settlement of disputes relating to the general conditions
According to the new book, all general terms and conditions of a contract are applicable, with the exception of conflicting clauses. This means that a contract will now also be formed if it contains conflicting terms, except that the conflicting terms will not be effective.
If you consider certain clauses in your general terms and conditions so important that you would rather not conclude a contract than waive these clauses, you must state this explicitly. Preferably before the contract is concluded. A clause in your general terms and conditions which states that in the event of conflicting clauses the contract is not validly concluded will indeed be ineffective.
Pre-contractual liability
The New Book 5 of the Civil Code provides that in the event of a breakdown in negotiations one party may be liable to pay damages to the other party. Such damages are only possible in the case of a culpable breach of negotiations. The injured party can claim damages for the costs incurred, for example, for a due diligence study or for the drafting of the contract.
And it can go even further: if a party had a legitimate expectation that the contract would be concluded, that party can claim damages equivalent to the net benefits that would have accrued to it from the non-concluded contract.
Abusive clauses
Another novelty concerns non-negotiable clauses that create a clear imbalance. Such clauses are deemed to be unwritten.
Please note: the Code of Economic Law (CDE) also contains provisions on unfair terms, but these only apply in B2C (Business to Consumer) and certain B2B (Business to Business) situations. This refers to unfair terms that do not fall within the scope of the CDE.
The theory of unforeseeability
One of the main novelties, however, is the introduction of the theory of unforeseeability. This theory allows a party to be released from the obligations of the contract if new (unforeseeable) circumstances make it almost impossible to perform. A typical example is the payment of rent by a trader who is forced to close his business due to a pandemic. This theory of unforeseeability did not exist in Belgian law. Case law and more specifically the Court of Cassation have already explicitly confirmed it.
But things are going to change: the new provision offers the debtor faced with an unforeseeable situation the possibility to ask for a renegotiation.
If renegotiations fail, the debtor can ask the judge to adapt or even terminate the contract.
Let us be clear: this exception is only applicable in very exceptional situations.
The parties can also stipulate that the theory of unforeseeability will not apply to their contract.
Indemnity clauses
The new Book 5 no longer refers to penalty clauses, but to indemnity clauses. General terms and conditions may provide for an indemnity clause in the event of fault on the part of one of the parties. The judge can moderate an indemnity which is provided for in a clause but which is manifestly unreasonable.
Exoneration of liability clauses
The new Civil Code also confirms that liability exemption clauses are valid.
It adds that the debtor cannot exempt himself from liability for his own intentional faults or the intentional faults of persons for whom he is responsible. Nor can he exempt himself from liability for his own faults or the faults of the persons for whom he is responsible when these faults cause injury to the life or physical integrity of others.
Conversely, the debtor's employees can now invoke the liability exemption clauses contained in the contract between the debtor and his creditor.
1st January 2023
Although the new Book 5 was already published on 1 July 2022, it will only be applicable from 1 January 2023. Contracts concluded before 1 January 2023 will therefore remain subject to the old provisions. Only contracts concluded as from 1 January 2023 are subject to the new provisions of Book 5. Discussions concerning the performance of the contract, its payment or the application of the theory of unforeseeability must therefore be settled according to the date of the contract, and not according to the moment when the questionable situation arises.
