Distribution, Contracts and T&C in Belgium

General Terms and Conditions: the basis for your business in Belgium

First of all, it is important that you have general terms and conditions adapted to Belgian law that set out the rights and obligations of you and your customer or business partner. Well-drafted T&Cs can reduce the risks you face as an entrepreneur. For example, your T&Cs may contain provisions on liability, payment terms and guarantees, or provide for a retention of title. Many of these aspects are regulated differently in Belgium than in other countries.

In both B2B and B2C relationships, freedom of contract is restricted by Belgian legislation. In particular, contractual provisions must be clear, understandable and balanced. In addition, a number of clauses are expressly prohibited. We can help you draft or update your general terms and conditions in accordance with Belgian law.

In the case of cross-border transactions, it must also be taken into account that your Belgian business partners must have the opportunity to take note of the contractual provisions before the contract is concluded. Thus, in Belgium it is generally necessary to send the T&Cs to the contractual partner in advance of the conclusion of the transaction or to make them accessible in some other way. Ideally, the receipt of the T&Cs including the consent should be confirmed in writing. The burden of proof of the transmission of the T&Cs prior to the conclusion of the contract lies with the seller.

Pre-contractual information obligations

If you wish to enter into a commercial cooperation agreement with a Belgian partner – think of a distribution or agency agreement – you must also take into account the pre-contractual information obligations. These obligations include that you must inform your partner clearly and in detail about your service or product, target group, intended market, etc. We can provide you with a checklist of all the information you need to provide to your business partner.

Retention of title

Retention of title is a popular instrument of foreign companies to secure receivables when selling goods. This is because by agreeing to retention of title, ownership of the goods – despite delivery – does not pass to the buyer until the purchase price has been paid in full. If the buyer does not meet his payment obligation as agreed, the seller is entitled to reclaim the goods, which are still his property.

In the Belgian business it should be noted that regardless of the choice of law, the law governing the retention of title is determined by the place where the goods are currently and physically located, i.e. usually the law of the country of the buyer.

Recently, the rules for retention of title in Belgium have changed fundamentally with the entry into force of the Law on the Right of Pledge. With the Law on Pledge, the scope of the Belgian retention of title has been largely extended.

It is important to bear in mind that in Belgian law the transfer of ownership already takes place when the sales contract is concluded. There only has to be a consensus regarding the goods and the price of the goods. As of the conclusion of the purchase contract, the purchased object is in principle no longer part of the seller’s property. However, the transfer of ownership can be made dependent on a condition such as retention of title.

Incoterms

The avoidance and hedging of specific business risks is particularly necessary in cross-border transactions. One of these risks is the transport risk, which can be considerable, especially in the case of deliveries abroad. Various Incoterms clauses are available to exporters to regulate the transfer of risks and costs of international deliveries of goods.

The Incoterms are uniform contractual and delivery conditions that enable the parties to the purchase contract to carry out standardised transactions, especially in international trade in goods. Essentially, the Incoterms regulate which contracting party is responsible for the transportation of goods, who bears the costs and who bears the risk. In addition, regulations are also made as to who is responsible for insurance, packaging, goods labelling or procurement of documents.

The clauses only become part of the contract if they are agreed between the parties. Only one clause can be agreed at a time, as the individual clauses contain contradictory provisions. The agreement of an Incoterm clause may also have consequences under customs and tax law. It is therefore important to check whether contracts or general terms and conditions contain a reference to an Incoterm clause and to be aware of what one accepts as the content of the contract.

General Terms and Conditions: the basis for your business in Belgium | Euregio Law & Tax