Essential Commercial Contracts for Your Business in Belgium

The Importance of Commercial Contracts

Under Belgian law, the new Book 5 of the Civil Code (effective January 1, 2023) modernized the law of obligations and contracts. A well-drafted contract is your best protection against disputes and commercial misunderstandings.

Fundamental Principles of Belgian Contract Law

• Freedom of contract: parties are free to determine the content of their contract
• Binding force: the contract is law between the parties
• Good faith: parties must perform their obligations in good faith
• Contractual balance: clauses creating a significant imbalance may be revised

Essential Contracts

1. General Terms and Conditions (T&C)

T&Cs govern all your commercial relationships with clients. They must include:

• Payment conditions: deadlines, methods, late payment penalties
• Delivery: timelines, conditions, risk transfer
• Warranties: legal and commercial
• Liability: limitations and exclusions
• Intellectual property: rights transferred or retained
• Jurisdiction clause and applicable law

Note: in B2C, T&Cs must comply with the Code of Economic Law (Book VI) and rules on unfair terms.

2. Service Agreement

This contract defines the reciprocal obligations between service provider and client:

• Precise description of services to be provided
• Execution deadlines and milestones
• Remuneration and invoicing methods
• Obligation of means vs obligation of result
• Confidentiality clause
• Termination conditions

3. Non-Disclosure Agreement (NDA)

The NDA protects your sensitive information during negotiations or collaborations:

• Definition of confidential information
• Duration of confidentiality obligation
• Exceptions to confidentiality
• Penalties for breach
• Obligation to return documents

4. Shareholders' Agreement

Complementary to the articles of association, the shareholders' agreement governs relations between shareholders:

• Pre-emption and approval clauses
• Exit clauses (tag-along, drag-along)
• Non-competition and non-solicitation
• Profit distribution
• Dispute resolution between shareholders

5. Employment Contract

Belgian employment law is governed by the Act of July 3, 1978. Essential elements include:

• Contract type: permanent, fixed-term, part-time
• Remuneration and benefits
• Non-competition clause (strict conditions in Belgium)
• Intellectual property: assignment of rights clause
• Personal data protection

Essential Clauses Not to Forget

• Force majeure clause: definition and consequences
• Hardship clause: renegotiation in case of changed circumstances
• Penalty clause: reasonable and proportionate amount
• Mediation/arbitration clause: alternative dispute resolution
• GDPR clause: compliance with the General Data Protection Regulation

Conclusion

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