The legislature has used the new Book 5 of the Civil Code, which has been in effect since Jan. 1, 2023, to regulate struggles over general terms and conditions. This new book defines the conditions that general terms and conditions must meet in order for them to be opposable to a contracting party.
Here, the legislator has not limited itself to turn established case law into law but has also worked creatively to provide a solution to the common problem of conflicting general terms and conditions, also known as the battle of the forms. This is the conflict that arises when parties each believe that their general terms and conditions and not those of the other party apply to the contract entered into.
Over the years and in the absence of a legal regulation, a variety of theories have emerged to provide a solution to this issue, ultimately leading to three strands:
– first shot rule: the general terms and conditions of the party who first communicated them are applicable;
– last shot rule: the general terms and conditions of the party that communicated them last apply;
– knock-out rule: both sets of general terms and conditions apply except for the provision(s) which are incompatible
The new rules end legal uncertainty and resolutely favor the so-called knock-out rule. As mentioned above, this rule means that the general terms and conditions of the parties apply to the concluded contract except for those that contradict each other. In the latter case, the parties fall back on the common law of obligations.
It should be emphasized, however, that negotiated terms always take precedence over the standard terms of one of the parties. Only in the event that the conflict cannot be resolved on the basis of the negotiated terms, and different general terms and conditions are referred to in the offer and acceptance, the knock-out rule should be applied.
However, one can exclude the knockout rule by clearly and explicitly stating prior to the conclusion of the contract or at the time of acceptance that one does not want to be bound by the general terms and conditions of the contracting party. If this is not simply stated in a style clause of one’s own general terms and conditions but is included in a separate declaration, the consequence is that no contract is concluded. This is because there is then a lack of consent, even in the event that one party were to begin performance. In that case, the other party can have the contract annulled under the new legal provisions. This has the effect of forcing a return of the services provided, with all the difficulties associated with it.
It is therefore important to take into account these new regulations and check to what extent an adaptation of his agreements and general conditions is necessary.
For more information on this subject, please feel free to contact Mr. Antoine DECLEVE.
With our best regards
The Cairn Legal team