General terms and conditions under Belgian law : 3 Common mistakes

Do you know what a “battle of the forms” is?  This term is used by lawyers under contract law. A battle of the forms arises when two businesses are negotiating the standard terms and conditions of a contract and each party wants to contract on the basis of its own terms. 

When a contract is formed, it is extremely important to avoid a battle of the forms. Otherwise, key provisions can become void (e.g.: purchase order terms, applicable law, arbitration clause, protection of personal data). 

Under Belgian law, terms and conditions of a contract will only be binding for the parties if they reached an agreement about them. 

An agreement requires that the terms and conditions are known (or ought to be known) by the parties. In addition, conditions are binding only if all parties have given their consent. 

Consent can be express ( e.g. in a framework agreement or in writing), but also implied ( e.g. if a party made no reservations when receiving a copy of another party’s terms and conditions.

In the present article, you will find 3 common mistakes made by a lot of companies when contracting an agreement (and how to avoid these).

Mistake 1: Relying solely on the terms and conditions of your website 

A simple reference to your terms and conditions mentioned on a website or through a link is not sufficient to make your terms and conditions binding. 

Indeed, under Belgian law, you must demonstrate that : 

• the other part of the  contract had actual knowledge of your  terms and conditions ; 
• acceptance (implicit or explicit) was given to these terms and conditions. 

Mistake 2: Failing to reject the other party’s terms and conditions

Even if you have transmitted your own conditions, you still need to explicitly reject the other party’s purchase conditions. Otherwise, both terms and conditions will apply. 

In case of discrepancies, different theories apply under case law:

• The Knock-Out Rule: This leads to the nullity of the respective parties’ stipulations ;
• The First-Shot Rule: under this theory, the terms & conditions first communicated prevail ;
• The Last-Shot Rule: This leads to the application of the last terms & conditions communicated.

Mistake 3: Not having a clause governing conflicting provisions (clause of precedence or frame agreement)  

Given the unpredictability of case law theories in the case of conflicting provisions, parties are advised to agree on a clause governing conflicting provisions and thereby avoid further discussions about contradicting sales and purchases conditions.

Alternatively, a frame agreement can set the applicable rules governing the contract between the parties and overrule conflicting provisions.

Conclusion 

If you plan to enter into a contract under Belgian law, avoid making common mistakes leading to uncertainty about the applicable terms and conditions. The rules of Belgian contract law differ substantially from common law. 

In order to avoid issues on the terms of the contract, we recommend that you conclude a separate agreement or come to an understanding of the conflicting provisions. 

Legal advice is crucial to avoid any battle of the forms situations and prevent a lot of troubles. If you need assistance, do not hesitate to contact me.