General terms and conditions: legal concerns

Introduction

General terms and conditions play a fundamental role within contractual relationships. They shape the rights and obligations of contracting parties and create a standardized framework that promotes legal certainty. This predetermined framework eliminates the need for individual negotiations for each new contract.

With general terms and conditions, as lawyers we often see one party imposing them unilaterally, which constantly raises questions about when they become legally binding on the other party. Over the years, the Supreme Court has developed settled case law on this issue. Whereas the Court previously based its reasoning on Article 1108 of the old Civil Code, since Jan. 1, 2023, with the entry into force of Book 5 of the (new) Civil Code, a new legal basis.

Below, we look at how recent case law has refined the terms of notice and acceptance. We also examine how general terms and conditions relate to special conditions and when they are enforceable in specific contexts such as insurance law or consumer relations. We also discuss the phenomenon of conflicting general terms and conditions ("battle of forms"), which is now legal.

1. The enforceability of general terms and conditions

1.1. Conditions for opposability

For years, the Supreme Court has consistently addressed two essential requirements that must be met before general terms and conditions become binding (Cass. Dec. 19, 2011, C.10.0587.F.; Cass. Sept. 16, 2016, C.214.0424.N; Cass. April 20, 2017, C.16.0341.F.).

First, there must be actual knowledge. The party against whom general terms and conditions are invoked must have had a real opportunity to study them before giving consent. It is sufficient that there was a reasonable opportunity to acquaint oneself with them, regardless of whether this was availed of. This perusal must relate to both the existence and content of the terms and conditions, and is assessed according to the specific situation. The second requirement concerns the clear acceptance of these terms and conditions, which may be either express or implied.

In recent years, the Supreme Court has explored these principles further, especially in insurance law cases. In these cases, the dispute often revolves around exclusion or limitation clauses contained in the general policy conditions, to which the special conditions refer.

With the entry into force of Book 5 of the Civil Code on January 1, 2023, this case law is now enshrined in law. Article 5.23, paragraph 1 of the Civil Code states: "The inclusion of general terms and conditions of a party in the contract requires their effective knowledge by the other party or at least the possibility for it to effectively take note of them, as well as their acceptance“.

1.2. Reference to general terms and conditions: when are they opposable?

1.2.1. Special conditions referring to general conditions

The case law has shown restraint in the common practice of simply referring to general terms and conditions without explicitly providing them.

There have been several relevant rulings on this issue in insurance law. In one particular case, an insured challenged the binding effect of the loss mitigation clauses in his insurer's general terms and conditions. The insured claimed that he had never received nor accepted them. The Court of Appeal of Liege ruled that, despite the absence of a signed copy of the general terms and conditions, the insured must necessarily have accepted them since otherwise the contract whose performance he was seeking would not have been formed. The court added that it was immaterial that the special terms and conditions had not been signed by the insured, since the insured had shown consent to the contract by paying the premium. The Supreme Court overturned this ruling, emphasizing that valid consent as an essential condition of the contract requires that the contracting party had actual knowledge of the terms to which such consent relates. The Court stated that a simple reference to general terms and conditions, without more, is in principle not sufficient. The Court also specified that failure to make reservations against general terms and conditions does not automatically mean their tacit acceptance. (Cass. Dec. 22, 2021).

Exactly one year later, the Supreme Court overturned a similar ruling by the same appeals court, in which an insurer invoked a damage limitation clause contained in its general terms and conditions. The Supreme Court reiterated that a mere reference to such terms is insufficient for their enforceability. The opportunity to take notice must be real and reasonable given the circumstances. The Advocate General added that requiring a policyholder to request the terms and conditions from his broker himself cannot be construed as providing a real and reasonable opportunity to take notice. (Cass. Dec. 22, 2022, C.22.0082.F).

The Supreme Court also overturned a ruling by the Ghent Court of Appeals in a similar case. The special conditions of the insurance contract mentioned that together with the general conditions they formed "one whole." The Ghent Court of Appeal had held that by paying the premium, the insured had accepted the general conditions and was presumed to have taken cognizance of them. The Court of Cassation stated that the appeals court should have examined whether the insured had actually had the opportunity to take note of these terms and conditions. (Cass May 14, 2021, C.20.0506.N).

Following an accident during a soapbox race, the police court in Namur ruled that the indemnity clauses on the entry form filled out by participants on race day were legally binding. The court pointed out that the adult participant was accompanied by someone with experience in such events, and could have objected, which was not done. On appeal, the Namur Court of First Instance upheld this decision. Indeed, the participants had had a real opportunity to familiarize themselves with the terms and conditions (most of which were on the front of the form) and had accepted them by signing stating "read and approved," while the clauses were clearly worded. (Pol. Namur, Dinant Division March 25, 2019; Rb. Namur, Dinant Division June 1, 2021).

The Bergen Court of Appeals clarified that when general terms and conditions are not physically attached to the contract but are in a separate document, the contract or special conditions must refer to them, stating that they apply. However, the contract cannot simply refer to general terms and conditions that have not been handed over. The co-contractor does not have to take the initiative to learn about the terms and conditions himself. A referral clause gives binding force to general terms and conditions only if it is accompanied by a reasonable opportunity to acquaint oneself with them.(Bergen April 6, 2021)M.

1.2.2. General terms and conditions available on request

In another case, an order form mentioned that general terms and conditions were available upon request. The Supreme Court upheld the ruling of the appellate judges that these terms and conditions were not objectionable because the file did not show that the general terms and conditions had been communicated to the other party, nor that the latter had in any way taken note of them or accepted them. The Court confirmed that general terms and conditions must be brought to the knowledge of the co-contractor, or, at a minimum, the co-contractor must have had the effective opportunity to take note of them. (Cass. Sept. 12, 2019, C.18.0480.N).

1.2.3. General terms and conditions on the back of an invoice

The Brussels Commercial Court dealt with a case where a company had printed general terms and conditions exclusively on the reverse side of invoices. A business partner claimed that this violated Article III.74 of the Economic Law Code, which requires companies to inform their contract partners of the existence of general terms and conditions. After noting that non-compliance with contract formalities can lead to nullity even when the law does not expressly state this sanction (virtual nullity), the court ruled that the general terms and conditions had indeed been brought to the attention of the other party from the sending of the first invoice. Since the terms and conditions had not been disputed and the invoices had been paid, the party could not prove prejudice through lack of information, thus the purpose of the legislation had been achieved and there was no reason to disapply the disputed clause. (Orb. Brussels Feb. 4, 2020)

1.2.4. Hyperlink accessible terms and conditions.

A dispute between Tilman and Unilever led to a preliminary question from the Belgian Court of Cassation to the European Court of Justice. The parties had entered into an agreement which provided that, in the absence of other arrangements, the contract was subject to Unilever's general terms and conditions, which could be accessed and downloaded from its website via a hyperlink in the contract. These terms stipulated that each party to the contract "irrevocably submitted to the exclusive jurisdiction of the English courts for the resolution of disputes arising directly or indirectly out of the contract."

Following a dispute, Tilman sued Unilever in Belgian courts. The court of first instance declared jurisdiction, but ruled that English law applied to the contract. However, the Liège Court of Appeal upheld Unilever's jurisdiction exception, based on the choice of forum clause in the general terms and conditions. Tilman appealed in cassation, arguing that article 23, §§ 1 and 2 of the Lugano II Convention had been violated because the appeals court had likened the situation to online contracting that requires the buyer to check a box accepting the sellers' terms and conditions. The Supreme Court then submitted preliminary questions to the Court of Justice (Cass May 20, 2021, C.20.0440.F).

The Court of Justice recalled in its judgment of November 24, 2022 recalled that a forum selection clause requires mutual consent, and that in the context of technological developments, such consent can be secured by including the clause in hyperlinked general terms and conditions. The Court added that the requirements for a legally valid clause are met when there is an explicit reference to terms and conditions containing the clause. The Court clarified that the absence of a checkbox on the website does not detract from proof of communication of the terms and conditions. The ability to save and print the terms and conditions prior to contract conclusion was sufficient to comply with Article 23, § 2 of the Lugano II Convention. Following this ruling, the Supreme Court dismissed the cassation appeal (Cass. March 30, 2023, C.20.0440.F).

1.3. Factors affecting the opposability of general terms and conditions

1.3.1. Language of the general terms and conditions

In a dispute between a French and a Belgian company, one party challenged the application of the other party's general terms and conditions because, although stated on the back of an offer drawn up in French, they were drafted in Dutch. The Antwerp Court of Appeal ruled that the party against whom the terms and conditions were invoked had had the opportunity to read the terms and conditions prior to accepting the offer and could have seen that they were drafted in Dutch. If this posed a problem, it should have informed the other party and requested a translation. By signing the order form without reservations, she had accepted the terms and conditions (Antwerp Dec. 19, 2022, 2022/AR/199).

1.3.2. Ongoing commercial relationship

General terms and conditions should not have to be re-disclosed with every transaction when parties have a long-standing business relationship where it is reasonable to assume that successive transactions will proceed according to the known and previously accepted general terms and conditions.

For example, the Bergen Court of Appeals held that a party's general conditions, referred to on the front of invoices, were part of the contractual framework given that the parties had maintained business relations for several years. (Bergen May 15, 2023).

In another case, a party argued that its counterparty could have been aware of its general terms and conditions because it received an annual price offer for the following year that referred to them. The court recalled that case law generally refuses to consider general terms and conditions as binding when they are only accessible, for example, at the Chamber of Commerce, the Registry, the Belgian Official Gazette or on a website. The party also invoked the business relationship between the parties. For the court, this relationship did not alter the fact that the general terms and conditions had not been accepted by the other party since, although mentioned in the offer, they had not been communicated. Moreover, the invoices did not contain the full version of the general terms and conditions, but an abbreviated version. The court therefore ruled that they were not applicable to the dispute, which concerned a contractual warranty term (Orb. Antwerp, Tongeren Division Jan. 15, 2020).

1.3.3. Clauses that presuppose knowledge of general terms and conditions

Article VI.91/4, 4° of the Code of Economic Law provides that, in contracts between companies, clauses are unlawful which aim to establish, in an irrefutable manner, the knowledge or acceptance of the other party with clauses of which the latter was unable to have actual knowledge prior to the conclusion of the contract. In a dispute submitted to the Antwerp Court of Appeal, a party argued that the clause in the contract, which provided that signing it meant accepting the general terms and conditions attached to the contract, was void for illegality. The court recalled that nullity does not prevent the party relying on general terms and conditions from proving that its counterparty had actual knowledge of them or at least had the opportunity to take note of them and had accepted them. Since the party invoking the terms and conditions in this case could not prove that they were actually attached to the contract, the court declared the clause null and void. The court also ruled that the general terms and conditions were not objectionable because the party invoking them could not prove that the other party had knowledge of them (or the possibility of knowledge) and had accepted them. The general terms and conditions were not on the back of invoices, were not listed on the front cover, were not available on the Internet, and had never been referred to in correspondence between the parties (Antwerp Feb. 15, 2023).

The Liege corporate court, Namur division, also had to consider such a clause in a dispute between an insured who had purchased an electric bicycle and his insurer who refused to reimburse him after the bicycle was stolen. The insurance contract contained a clause indicating that the policyholder stated that he had read and agreed to the terms and conditions, stating that they were available upon request from the broker or on the company's website. The policyholder had not received a copy of the general terms and conditions and disputed the legality of the clause. The court, after recalling the conditions for unenforceability and the Supreme Court's jurisprudence, confirmed that such a clause is valid in principle, but in order to be effective "must be given binding force, which implies compliance with the two conditions for unenforceability." The court added that in consumer law, pursuant to Article VI.83, 26° of the Code of Economic Law, the clause that establishes the consumer's consent to terms of which the consumer did not have an effective opportunity to take cognizance prior to the conclusion of the contract is unlawful and null and void when such consent is irrefutably presumed and the consumer did not have an effective opportunity to take cognizance of the general terms and conditions. Finally, the court stated that, given the obligations of insurance intermediaries, a reference to the means of access to general terms and conditions in special conditions is insufficient and the intermediary is obliged to ensure the effective transmission of the general terms and conditions. This is an obligation of result and in the absence of proof of communication of the general conditions, they are not opposable to the policyholder (Orb. Liege, Dept. of Namur June 5, 2023).

1.3.4. Consumer and information law

The Economic Law Code requires companies that conclude non-distance contracts with consumers to provide in a clear and comprehensible manner "the terms and conditions of sale, taking into account the consumer's expressed need for information and the consumer's communicated or reasonably foreseeable use" (Article VI.2, 7° WER). Several courts have ruled on the legal binding of general terms and conditions when the party against whom they were invoked alleged a failure to provide information.

In a case submitted to the Supreme Court, the Court recalled that in principle, consumers are presumed to have had a reasonable opportunity to acquaint themselves with general terms and conditions printed on the back of a contract document referenced on the front. However, this does not apply where certain clauses are unusual or excessive, as in this case where the terms printed on the back of the purchase order contained a substantial severance charge to the consumer. The appeals court had correctly held that, given this clause, the company should have expressly drawn the consumer's attention to it and, in the absence of evidence to that effect, could not invoke its terms and conditions (Cass. June 18, 2023, C.20.0577.N).

A consumer who brought a claim against Bpost (for non-delivery of a registered item containing two gold bars) also invoked article III.74 WER, claiming that Bpost had not informed him of its general terms and conditions limiting its liability in case of loss of registered mail. The Liège Court of Appeal ruled that Bpost had fulfilled its information obligation by publishing its general terms and conditions in the Belgian Official Gazette, on its website and in post offices. Moreover, the court ruled that they were enforceable against the customer because article 144, § 1 of the law of March 21, 1991 on the reform of some public economic enterprises was complied with (terms available to users on the Internet, in post offices and in the Official Gazette). In addition, the receipt on the back stated that the service "is subject to Bpost's general terms and conditions of service. See post office or www.bpost.be". (Liege Dec. 18, 2020). In light of established cassation case law, this decision is open to criticism: Although Bpost had informed the customer of the existence of the general terms and conditions, it did not show that the customer had had a real and reasonable opportunity to effectively take note of them.

The Supreme Court ruled that an appellate court could not lawfully find that an insured could have taken cognizance of an exclusion clause contained in general terms and conditions, when the special terms and conditions contained only a reference to these general terms and conditions. The Court based its reasoning on Article 4 of the then Law of April 6, 2010 on Market Practices and Consumer Protection (now repealed), which, like the current Code of Economic Law, required companies to provide accurate information to consumers before or at the time of contract conclusion (Cass. Feb. 15, 2019, 18.0401.N./1). This decision highlights that if special terms and conditions merely refer to general terms and conditions without communicating them, this is not sufficient to satisfy the legal duty to inform consumers.

1.4. Jurisdiction and arbitration clauses in general terms and conditions.

1.4.1. Forum selection clauses

In principle, the parties can agree on a forum selection clause within the limits of Articles 627-633 Judicial Code and any special provisions applicable to their contract.

When contracting parties have their registered offices in different EU member states, Article 25.1 of the Brussels Ibis Regulation the possibility of designating the competent court through a choice of forum clause, provided the conditions of validity are met. Such clauses are often included in general terms and conditions. The European Court of Justice confirmed in a judgment dated July 7, 2016 that a forum selection clause contained in general terms and conditions is valid when the signed contract expressly refers to those terms, provided that the reference is verifiable by a party exercising ordinary care and it is established that the terms were actually communicated.

In a case before the company court in Kortrijk, the court ruled that the general terms and conditions containing the forum selection clause had not been communicated to the other party. The court also found that it had not been shown that the parties maintained a long-term business relationship. Consequently, the forum selection clause in the general terms and conditions could not be applied, and the court declined jurisdiction (Orb. Ghent, Kortrijk Division Aug. 31, 2021).

In another dispute, the business court in Tournai ruled that the forum selection clause invoked was invalid because there was no contract signed by both parties that referred to general terms and conditions containing this clause (each party invoked its own clause in its own terms and conditions, leading to a "battle of forms" situation). The court also found that there was no evidence of a commercial relationship based on the general terms and conditions of either of them, nor of a choice of forum "in a form consistent with generally recognized and regularly observed usage in contracts of the same type." The court concluded that the clause did not meet the requirements of Article 25.1(a) of the Brussels Ibis Regulation (Orb. Hainaut, Dept. of Tournai Dec. 20, 2021).

In a case brought before the Enterprise Court of Antwerp, Hasselt Division, a Belgian buyer and a French seller were in dispute over the sale of pump groups. The buyer sued the seller in Belgium based on a choice of forum clause in its general terms and conditions, while the seller believed that its own general terms and conditions, which also contained a choice of forum clause, applied. Faced with this battle of forms, the court disregarded both choice of forum clauses and determined jurisdiction based on the rules of private international law (place of delivery of the pump groups). This decision is open to criticism because the court had not first tested the validity of the choice of forum clauses in the light of Article 25 of the Brussels Ibis Regulation, which seems to have disregarded the primacy of European law (Orb. Antwerp, Dept. of Hasselt Nov. 29, 2021).

The Antwerp Court of Appeal held that, in the absence of a written agreement between the parties, the mere mention of a choice of forum clause on the back of an invoice did not meet the requirements of Article 25.1.a) of the Brussels Ibis Regulation. The court stated that this article could not be interpreted in the light of Belgian law and, consequently, payment of invoices and failure to protest could not be construed as express acceptance of the clause. The court also ruled that there was no regular commercial relationship between the parties, so the clause could not be applied.

1.4.2. Arbitration clauses in general terms and conditions

In some recent decisions, courts have had to rule on requests to set aside arbitration awards based on an arbitration clause contained in general terms and conditions.

The Dutch-speaking Court of First Instance in Brussels found that the parties had clearly mentioned in e-mail correspondence that dispute resolution by arbitration was part of the general terms and conditions. One of the parties had specifically drawn the other's attention to the amendment of the general terms and conditions introducing an arbitration clause. The court therefore refused to set aside the arbitration award (Rb. fr. Brussels, Jan. 28, 2022, 21/423/A).

Two decisions concerned contracts with consumers. The court of first instance East Flanders, Ghent division, recognized the binding force of an arbitration clause included in general terms and conditions but set aside the ruling for another reason (Rb. East Flanders, Ghent division March 18, 2019, 18/2922/A). The Dutch-speaking court of first instance in Brussels ruled that an arbitration clause included in general terms and conditions had binding force even if the designation of the arbitration institute or its composition was not included in the clause (Rb. nl. Brussels April 8, 2022, 20/3670/A).

2. The scope of general terms and conditions

2.1. General terms and conditions as a framework agreement

In addition to the many rulings on the unenforceability of general terms and conditions, the Brussels Commercial Court has ruled that general terms and conditions can constitute a framework agreement if this is the intention of the parties. An article in the general terms and conditions stipulated that the parties wanted to maintain business relations that could continue over time and that the assignments to a recruitment agency were intended to be of unlimited duration. These general conditions thus defined the general principles of the contractual relationship, as a framework agreement, making the provisions applicable to each assignment (specific application of the framework agreement) (Orb. Brussels Jan. 19, 2023).

2.2. Conflicts between general and special terms and conditions

The Court of Cassation rejected a cassation appeal against a judgment of the Brussels Court of Appeal. The Court of Appeal had ruled that in case of contradictions between special and general conditions, the special conditions prevail (Cass., Oct. 18, 2019, C.18.0543.F).

This solution is now legally enshrined in Article 5.23, paragraph 2 of the Civil Code, which provides that "In case of conflict between the general conditions of one of the parties and the negotiated conditions, the latter shall prevail.“

3. Conflicting general terms and conditions

The issue of conflicting general terms and conditions ("battle of forms") has received much legal attention. Some recent rulings highlight this issue.

In a case where the parties disputed the application of each other's general terms and conditions from the exchange of offers, the Brussels Court of Appeal ruled that the contradiction between the general terms and conditions related to an ancillary element of the contract, allowing the contract to be validly formed. The court then applied the "knock-out rule" and ruled that neither of the two general terms and conditions formed part of the contract, especially since the parties did not request the application of any common clauses (Brussels May 20, 2021).

In a previously discussed case in which the buyer sued the seller in Belgium based on a choice of forum clause in its general terms and conditions, while the seller believed that its own general terms and conditions with a different choice of forum clause applied, the court found that the general terms and conditions were indeed contradictory and consequently there was no will as to the competent court (Orb. Antwerp, Dept. Hasselt Nov. 29, 2021).

In another case where the parties also disagreed on jurisdiction, the court deleted both choice of forum clauses in the absence of a contract signed by both parties that referred to the terms of one of them, and determined jurisdiction based on where the contractual services were provided (Orb. Antwerp, Dept. Hasselt Nov. 29, 2021) .

It is important to note that Article 5.23(3) of the Civil Code now regulates the issue of conflicting general terms and conditions by providing that if offer and reference refer to different general terms and conditions, the contract is nevertheless formed, with both general terms and conditions forming part of the contract, except for the incompatible clauses. Some legal experts believe that application of this rule presupposes that the general terms and conditions have actually entered the contractual framework, while others argue that for application of Article 5.23 it is sufficient that offer and acceptance refer to different general terms and conditions.