BELGIUM Trends and Developments Contributed by: Pieter Puelinckx, Yves Moreau, Melissa Verplancke and Lothar Van Driessche, Linklaters
Ongoing Recodification of the Belgian Civil Code Belgium is currently undergoing a significant legal transformation with the recodification of its Civil Code. This reform aims to modernise and consolidate the legislative framework, ensuring it is adapted to contemporary societal needs and legal practices. During the past few years, the real estate sector was deeply impacted by these changes – for example, with the update of Belgian property law, which entered into force on 1 September 2021 and is known as Book 3, and the more recently introduced Book 5 (on obligations), which entered into force on 1 Janu - ary 2023. Coming next on the legislative agenda is Book 6 (concerning extracontractual liability), which the legislator aims to bring into force by 1 January 2025. Contract law reform Reform of the obligations regime of the Belgian Civil Code A few novelties of Book 5 (on obligations) of the Civil Code are as follows. • The introduction of hardship – the concept of hardship was previously rejected by the Belgian courts and, following the entry into force of Book 5, is now specifically recog - nised under Belgian law. Hardship cases occur where the performance of an obligation becomes excessively burdensome owing to unforeseen events. The legal provisions with regard to hardship allow for the renegotiation of contractual terms when events substantial - ly alter the balance of the agreement, render - ing obligations disproportionately onerous for one party. If the parties fail to reach a new agreement, the issue may be brought before the courts with jurisdiction, which can modify the contractual obligations to re-establish bal - ance or terminate the agreement.
Previously, hardship was not accepted by the Belgian courts – although applied in public pro - curements, contracts governed by the (Vienna) Convention on Contracts for the International Sale of Goods and sometimes in arbitration proceedings. The hardship provision is of suppletive law. As expected by various legal practitioners, it is not unusual to see clauses modulating, derogat - ing or excluding the application of the hardship provisions in real estate agreements (including leases, construction agreements and transfer of ownership and real rights). • The introduction of anticipatory termination and extrajudicial termination by notification – under Book 5, the Civil Code formally intro - duced the possibility for contracting parties to unilaterally terminate a reciprocal agreement by a mere notification (ie, without the need to go to a court) if the other party’s non-perfor - mance is sufficiently serious. Furthermore, the Civil Code also grants the option to terminate a contract before the actual due date of an obligation if the creditor reason - ably expects that the other party will not fulfil this obligation within the agreed timeframe. This termination for anticipatory breach is subject to conditions and can occur only under exceptional circumstances. In addition to the foregoing, the reformed con - tract law regime offers various new (or codified jurisprudential creations of) sanctions and rem - edies against a non-performing debtor (including unilateral extra-judiciary price reduction, substi - tution of the non-performing debtor, termination for (anticipated) non-performance, and the right to withhold performance).
85
CHAMBERS.COM
Powered by FlippingBook