I. Introduction
Since 2019, the Belgian legislator has begun adopting regulations aimed at limiting contractual freedom in B2B relationships, largely inspired by the principles applied to protect consumers in B2C contracts. Certain commercial practices in the food sector have also been prohibited.
The openly stated goal is to protect businesses considered weaker or dependent in economic markets.
The current parliamentary legislature is drawing to a close, with the next elections set for June 9.
Before this date, two draft royal decrees have just been adopted, aiming to further extend, particularly in the food sector, the principles that have been applied for several years.
While the adoption of these regulations may have gone unnoticed amid the multitude of draft regulations communicated during the election period, their consequences for economic actors are significant and will need to be factored in by them.
II. Overview of Recent Regulations
A. A. Prohibition of Abusive B2B Clauses
The legislator has decided to apply principles similar to those already in place for consumer contracts to contracts between businesses, namely sanctioning certain clauses deemed abusive.
The law has established a general principle for B2B relationships, stating that clauses creating a manifest imbalance between the parties to a contract are abusive and thus null.
Two lists have been created in this regulation: clauses prohibited in all circumstances and clauses presumed to be abusive.
The prohibited clauses, known as "black" clauses, include those in which:
- One party is bound by commitments while the other party is completely free to release themselves from their commitments;
- One party reserves the exclusive right to interpret the contract;
- One party waives the right to any recourse against the other party in advance;
- It is found that a party adhered to principles and conditions they had not had the opportunity to review.
The presumed abusive clauses, known as "grey" clauses, which can be proven not to be abusive, include those that:
- Allow a company to modify the price and conditions of the contract, and without valid reason;
- Allow a company to free itself from all responsibility, including intentional misconduct (fraud) or even gross negligence;
- Bind the parties without providing a reasonable period for contract termination;
- Allow the renewal of a contract without the possibility of opposition to the renewal or a reasonable termination period;
- Limit the types of evidence that can be presented by one party;
- Set excessive penalty clauses;
- Place commercial risks on one company when, according to the concerned sector, they should rest on the other party.
These prohibitions are not limited, and the abusive nature of any clause can be found in practice if it creates a manifest imbalance between the rights and obligations of the parties, either alone or in combination with other clauses.
B. Unfair Commercial Practices in B2B Relations within the Agricultural and Food Supply Chain
This newer regulation aims to provide better protection for small and medium-sized suppliers against larger buyers, notably in the food retail sector.
Certain commercial practices listed in the law are still prohibited (blacklist).
Other market practices are prohibited unless the supplier and buyer have previously agreed in clear and unambiguous terms (grey list).
The following practices are considered illegal in all cases:
- Payment terms exceeding 30 days;
- Cancellation periods too short to find an alternative (less than 30 days before delivery is considered too short);
- Unilateral modification of essential contract terms;
- Payments not related to the sale of products;
- Payments for damage or loss without fault on the supplier’s part;
- Illegal obtaining, use, or disclosure of trade secrets;
- Threats or commercial retaliation;
- Requesting compensation from the supplier for handling complaints.
The practices on the grey list are presumed to be illegal. These practices include:
- The return of unsold products without payment;
- Storage, display, or inclusion fees in the product range;
- Supplier financing for discounts and promotions;
- Payments for advertising and marketing costs;
- Payments for personnel responsible for setting up sales areas.
The presumption of the illegality of these grey clauses can be overturned by:
- A clear and unambiguous agreement concerning these clauses in the delivery contract;
- The addition of a written estimate of the amount to be paid, along with an estimate of the costs and the elements on which the calculation is based.
In other words, a clause considered to be a grey clause could be declared valid if the supplier knows exactly what they are committing to, both in principle and in terms of figures. Additionally, an estimate of costs and economic impact must be provided for these clauses.
III. New Regulations
A. Extension of Abusive B2B Clauses
The first draft royal decree adds to the black and grey lists of abusive clauses. These additions specifically apply to commercial partnership agreements concerning retail trade in non-specialized stores, predominantly in the food sector, including franchise agreements.
In the black list (clauses that are illegal in all cases), the following clauses are added (and thus prohibited) for the sector in question:
- Clauses that excessively reduce the responsibility of the party granting an exploitation right regarding their delivery obligation to the party benefiting from that right;
- Clauses that prohibit preparing for or starting negotiations during the notice period or the period covered by a non-compete clause;
- Clauses requiring the party receiving the exploitation right to bear more than half of the cost of promotional activities organized;
- Clauses requiring exclusive recourse to a specified arbitration body;
- Clauses requiring exclusive recourse to the territorially competent judge of the recipient of the exploitation right or to a judge located in another linguistic region than that of the seat of the party receiving this right.
Regarding the grey list (presumed illegal clauses until proven otherwise), the following clauses are added (and thus generally prohibited):
- Clauses providing for a lump-sum evaluation that sets a price manifestly unreasonable in relation to a normal valuation of a business or shares of a company;
- Clauses that contractually obligate the continuation of activities for a business with a structural deficit;
- Clauses allowing the party granting the exploitation right to terminate the commercial partnership agreement by applying an express termination clause (i.e., an extrajudicial termination for fault of the other party).
B. Extension of Unfair Commercial Practices
The second draft royal decree complements the lists of unfair commercial practices in B2B relations within the agricultural and food supply chain. It was adopted in the context of the agricultural crisis at the beginning of 2024.
The blacklist is supplemented by the following prohibitions:
- Unfair delisting of products and delisting without prior written justification;
- Automatic imposition of damages by the buyer;
- Unilateral compensation by the buyer for non-indemnity penalties; and
- Unilateral compensation by the buyer for damages, without prior written justification.
The grey list is supplemented by:
- The prohibition of the buyer purchasing products from the supplier at a price below the supplier's production costs. This complements the ban on resale at a loss as stated in Article VI.116 of the Economic Code, which does not apply to food producers;
- The prohibition of refusing to renegotiate in cases of unforeseeable circumstances.
IV. Conclusion
These royal decrees have not yet been published, and their effective date is still unknown.
In any case, these new principles will require economic actors to extensively reconsider their contractual frameworks and commercial practices with various partners.
We will not fail to communicate practical information on these regulations as soon as they are known. Feel free to contact us for more details.
Partner THALES – Commercial, IP & Food Law
Partner THALES – Distribution and Commercial Law
