The law of obligations appears to be an abstract subject matter, but it’s impact is significant. According to the explanation given by the former Minister of Justice Koen Geens at the plenary meeting, the law of obligations concerns the principles that govern how we deal with each other and what are allowed to expect from each other.
The Civil Code section that featured obligations was two centuries old. For several years now, legal theorists and legal practitioners have been calling for modernization of the law of obligations.
The new law meets modernization head-on by giving settled case-law a legal basis, by filling in gaps, and by classifying law provisions more consistently.
What the new law is not is a mere codification of case-law or a technical adaptation.
New legal concepts
The new general contract law contains several novelties. The central thread of the reform is creating a balance between the parties’ autonomy and the task of the judge, who is the guardian of the interests of the weaker party and the public interest.
Therefore, the parties’ free will and intention on certain points is strengthened, but the judge will also be able to made adjustments when there is a contractual imbalance as a result of one party’s abuse of the other party’s weaker position (abuse of circumstances) or when the contractual equilibrium has been seriously disrupted after new, unforeseeable circumstances, such as Covid-19, rise in raw material prices, or the war in Ukraine (hardship).
The general discharge clause, price reduction, and dissolution upon notice are also striking examples of legal concepts that the new law of obligations governs.
Entry into force in 2023 but parties can opt in to have it apply to the contract
The new law will enter into force on the first day of the sixth month after its publication in the Belgian State Gazette. That will presumably be in the beginning of 2023.
In principle, the new law of obligations will apply to contracts that were concluded after the date the law becomes effective. But there is a possibility for the parties to deviate from this contractually and to stipulate that the new law applies also to contracts concluded before the law entered into force.
If the latter strengthens one’s legal position, it could be interesting for a company to stipulate in new contracts that the new law of obligations is applies immediately regardless of the fact that the contract was concluded before the law entered into force.
This is precisely why we will be highlighting several important new features in the coming newsletters. We want to make sure that you are completely up to date.