The Belgian B2B prohibition on unfair clauses: scope, risks and practical impact on M&A deals

The Act of 4 April 2019 introduced three important mechanisms into the Belgian Code of Economic Law (the “B2B Act”):

1. The prohibition of abuse of economic dependence (Book IV).
2. The prohibition of unfair market practices (Book VI).
3. Rules on unfair clauses between enterprises (Book VI).

In this article, we will focus on the rules on unfair clauses which apply to agreements governed by Belgian law and which have been entered into, renewed or amended after 1 December 2020. These rules represent a broad and far-reaching reform. While intended to promote fairness and balance in B2B relationships, the open-ended wording of these rules and their (partial) overlap with existing legal principles have created significant legal uncertainty, particularly in M&A contexts.

I. Scope

The rules on unfair clauses apply to all agreements between “enterprises”, which are defined broadly as any natural or legal person pursuing an economic purpose on a continuing basis. Unlike in several other countries, the application of the rules on unfair clauses is therefore not limited to certain types of contracts, such as adhesion contracts (“toetredingscontracten”/“contrats d’adhésion”), or to general conditions.

Certain categories of agreements are, however, excluded from the scope of the regime, in particular agreements relating to financial services and public procurement contracts, as well as contracts concluded in the performance of such procurement contracts (such as subcontracting agreements). The legislator has nevertheless reserved the possibility of bringing these categories of agreements within the scope of the regime by Royal Decree.

II. Main Principles

The regime on unfair clauses introduces a general transparency rule in accordance to which all written clauses included in agreements between enterprises must be stated in clear and comprehensible language. While jurisprudence on the similar B2C transparency rule interprets transparency broadly requiring clauses to enable an understanding of their scope and economic consequences, most legal doctrine is of the opinion that the transparency requirement in the framework of B2B contracts should be interpreted more narrowly. Unlike consumers, enterprises are expected to have greater contractual experience and access to professional advice. Accordingly, the transparency rule, in this view, should be solely aimed at ensuring linguistic clarity. The precise contours of the transparency requirement in B2B agreements will ultimately be clarified by future case law.

Secondly, there is a general prohibition on clauses that create a significant imbalance between the rights and obligations of the parties. This fairness test is assessed at the time the contract is made, taking into account not only the clarity of the terms but also the circumstances under which the agreement was concluded, customary practices within the sector, and the overall context of the contract. By way of exception, the Belgian legislator has clarified that this fairness test does not apply to clauses defining the actual or main object (“eigenlijke voorwerp” / “objet principal”) of the agreement, nor can it be used to assess the appropriateness of the price in relation to the product or service to be provided.

In addition to the above, the legislator has also opted to include both a blacklist and a grey list of unfair clauses in the B2B Act: 

1. The blacklist contains four types of clauses that are always considered void, e.g.:

• Irrevocable obligations which are subject to purely discretionary conditions.
• Rights to unilaterally interpret provisions.
• Provisions excluding all legal recourse.
• Irrefutable acceptance of terms not actually known.

2. The grey list, on the other hand, contains eight types of clauses presumed unfair, including:

• Unilateral modification rights without valid reason.
• Tacit renewals without reasonable notice.
• Shifting economic risks without compensation.
• Excessive limitations of liability.
• Binding parties without reasonable notice of termination.
• Exoneration of liability for intent, gross negligence or non-performance of essential contractual obligations.
• Limiting the means of evidence available to the other party.
• Setting compensation amounts in case of non or delayed performance that are manifestly disproportionate to the damage that may be suffered.

As set out above, the (four) blacklist clauses are always considered to be unfair, while the (eight) grey list clauses are presumed to be unfair, but this presumption is refutable. Both lists are in any case to be interpreted restrictively.

III. Relevance in M&A transactions

Almost all M&A documents fall in scope: share/asset purchase agreements, shareholders’ agreements, joint venture agreements, option agreements, NDAs, transitional service agreements, etc.

Examples of clauses which may be subject to scrutiny:

• Call/put option mechanisms might be interpreted as irrevocable obligations subject to purely discretionary conditions.
• Earn-out mechanisms – May be scrutinized if shifting post-closing performance risk to the seller without adequate compensation.
• Material adverse change clauses – Could be challenged if heavily one-sided.
• Sole remedy clauses – Could be challenged to the extent they inappropriately exclude or limit the rights of a party in case of non-performance of the other party.
• Limitation of liability to EUR 1 (e.g. in the framework of a W&I Insurance) – Could be challenged as being an “excessive” limitation of liability.
• Tacit renewals of shareholders’ agreements.
• Liquidated damages clauses in noncompete agreements to the extent deemed disproportionate to the damages suffered.  

IV. Sanctions and enforcement

Unfair clauses in business-to-business agreements are deemed null and void. The remainder of the agreement remains valid if it can function without the unfair clause.

It is generally assumed that unfair clauses are subject to relative nullity (relatieve nietigheid), meaning only the affected party can challenge them. However, some clauses – such as clauses blocking access to the courts – may be absolutely null because they violate fundamental rights, meaning any interested party (including the courts) can invoke the nullity.

The Belgian legislator has not clarified whether, following the annulment of a clause, courts can replace an unfair clause with a fair legal alternative or reduce it to a reasonable level. It is generally believed, contrary to a B2C context, that courts should have such flexibility in a B2B context. 

V. Conclusion

The Belgian B2B unfair clauses regime represents a shift in contract law between enterprises. While designed to protect weaker parties, its scope and vague drafting introduce a significant compliance burden and litigation risk for M&A practitioners. Until further legislative clarification or consistent case law emerges, parties should assume a proactive compliance approach, balancing their commercial objectives with the need to safeguard enforceability.