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The Erosion of Contractual Freedom in Commercial Contracts. A Belgian Case-Study

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Quo vadis Commercial Contract?

Part of the book series: LCF Studies in Commercial and Financial Law ((LCFSCFL,volume 1))

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Abstract

This paper examines how fundamental principles of law in commercial law such as party autonomy, freedom of contract and pacta sunt servanda come under distress. After substantiating between a formal and substantive freedom of contract, as well as between a formal and a substantive contractual fairness or balance and explaining the concept of socialization of contract law; the author compares in this text a couple of legislative developments aimed at installing a substantive contractual balance in Business-to-Business (B2B) commercial contracts with the open norm of good faith. It will be shown that both share some similarities, but also have important differences. Next, the paper provides the reader with some examples where the legal practitioner can witness a trend in Belgian commercial (contract) law towards a far-reaching socialization of commercial contract law. Although commercial contract law governs the relationship between businesses entering contracts with other businesses, the mind of our legislator is more and more set to impose rules to protect the weaker business party, such as, for instance, small and medium-sized businesses.

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Notes

  1. 1.

    Ferguson (2015), p. 89.

  2. 2.

    De Page (1962), pp. 35ff.; Stijns (2005), pp. 37–38; Van Gerven and Covemaeker (2001), pp. 47–49.

  3. 3.

    Cornelis (2000), p. 17.

  4. 4.

    Steennot (2010), p. 1; see also for English private law: Andrews (2016), pp. 49–50.

  5. 5.

    Hondius and Grigoleit (2011), p. 4.

  6. 6.

    Cherednychenko (2007), pp. 10–11; Van Gerven and Covemaeker (2001), pp. 47–49; see also in English private law: Photo Production Ltd v. Securicor Transport Ltd [1980] AC 827, 848, HL; Andrews (2016), p. 3.

  7. 7.

    Sieburgh (2009), p. 172.

  8. 8.

    Drexl (1998), p. 308; Vandenberghe (2009), pp. 389–390.For England: see UK Department for Business (2009), p. 4; Crowther (1971), p. 151.

  9. 9.

    Berthiau (1999), pp. 173–174; Decock (2012), pp. 248–249; Feenstra and Ahsmann (1988), p. 47; Fin-Langer (2002), pp. 9–10; Swaenepoel (2011), pp. 26, 100–101; Terryn (2008), p. 50.

  10. 10.

    Fin-Langer(2002), p. 10; Swaenepoel (2011), pp. 101 and 644–645.

  11. 11.

    Cooter (2005), p. 229.

  12. 12.

    Haugesund Kommune v. Depfa ACS Bank (No 1) [2010] EWCA Civ 579.

  13. 13.

    Van Gerven and Covemaeker (2001), pp. 53–54.

  14. 14.

    Suisse Atlantique Société d'Armement Maritime SA v. NV Rotterdamsche Kolen Centrale [1967] 1 AC 406.

  15. 15.

    Sieburgh (2009), pp. 173–174.

  16. 16.

    Canaris (2000), p. 286.

  17. 17.

    Canaris (2000), p. 277; Jacquemin (2010), p. 14.

  18. 18.

    E.g. in Belgium an SME which seeks credit is protected by the Law of 21 December 2013 containing multiple provisions regarding financial agreements for SME’s (hereafter abbreviated as “SME-Financing Act”).

  19. 19.

    De Bondt (1984), pp. 104–105; Wilhelmsson and Willet (2010), pp. 158–159.

  20. 20.

    Byttebier and Flamee (2013), pp. 21–29 and De Page and Dekkers (1975), p. 162.

  21. 21.

    Van Ommeslaghe (2011), pp. 19–20.

  22. 22.

    Cass. 9 December 1948, Pas. 1948, I, 701 and RCJB 1954, 255, annotation by P. De Harven. See also Cass. 10 March 1994, Arr. Cass. 1994, 236 and Bank Fin 1994, 258, annotation by A. Bruyneel, Cass. 15 March 1968, Arr. Cass. 1968, 936 and RW 1967-68, 2000 and De Page (1962), pp. 110–112.

  23. 23.

    Drexl (1998), p. 283; Rinkes (2009), p. 380; Straetmans (1998), pp. 42–54.

  24. 24.

    Howells (2011), pp. 178–179.

  25. 25.

    Van Gerven and Lierman (2010), pp. 23–24.

  26. 26.

    Posner (2003), p. 16.

  27. 27.

    Ogus (1994), pp. 128–129.

  28. 28.

    Fouillée (1910), p. 410.

  29. 29.

    Smith (1776), p. 107.

  30. 30.

    Rabin (1993), pp. 1281–1284.

  31. 31.

    Lloyds Bank v. Bundy [1975] QB 336.

  32. 32.

    Raymaekers (2003), pp. 13–16.

  33. 33.

    Raymaekers (2003), pp. 13–14.

  34. 34.

    Hobbes (1651), p. 15.

  35. 35.

    Hesselink (2004), pp. 60–64.

  36. 36.

    Raymaekers (2003), pp. 14–20.

  37. 37.

    Hesselink (2004), pp. 60–64; Swaenepoel (2011), p. 101. In law and economics, reference is made to the concepts of redistributive justice and paternalism.

  38. 38.

    Articles 1135 and 1160 Belgian Civil Code, Cass. 6 June 1974, RW 1974-75, 869, Gent 13 February 2006, RW 2007-08, 1456, Cornelis (2000), pp. 321-325 and Van Gerven and Covemaeker (2001), pp. 54–55.

  39. 39.

    Vred. Verviers 7 June 2011, JLMB 2012, 229, De Bondt (1984), pp. 113–117, Lando (2007), pp. 602–603, Stijns (2005), pp. 61–62, Van Gerven and Covemaeker, pp. 58–59 and Van Gerven (1982), pp. 382–384.

  40. 40.

    Hartkamp (1992), p. 555.

  41. 41.

    Some of these information duties were afterwards also incorporated in hard law: see e.g. articles 3 and 4 of the Commercial Agency Directive (Council Directive 86/653/EEC).

  42. 42.

    De Bondt (1984), pp. 114–117, Cornelis (2000), pp. 325–326, Stijns (2005), pp. 61–62 and Van Gerven (1982), pp. 381–382.

  43. 43.

    Cornelis (2000), p. 325; Stijns (2005), p. 62.

  44. 44.

    Stijns (2005), p. 62.

  45. 45.

    Cass. 9 March 1989, Arr. Cass. 1988-89, 790.

  46. 46.

    Hartkamp (1992), p. 555.

  47. 47.

    In Belgian contract law: art. 1134, 1st paragraph Belgian Civil Code.

  48. 48.

    Van Gerven (1982), p. 381.

  49. 49.

    Stijns (2005), p. 63; Van Gerven and Covemaeker (2001), p. 60.

  50. 50.

    Dirix (1988), pp. 662–663.

  51. 51.

    Cass. 1 October 2010, RW 2011-12, 142, annotation by Jansen and Stijns, Cass. 17 May 1990, Arr. Cass. 1989-90, 1188, Cass. 30 November 1989, Arr. Cass. 1989-1990, 442, Cass. 15 October 1987, Arr. Cass. 1987-88, 190, Cass. 6 April 1984, Arr. Cass. 1983-84, 1049, Cass. 19 September 1983, Arr. Cass. 1983-84, 52, Stijns (2005), pp. 62–65 and Van Gerven and Covemaekers (2001), pp. 59–60.

  52. 52.

    Cass. 13 January 2012, RW 2012-13, 851 (summary), Cass. 1 October 2010, RW 2011-12, 142, annotation by Jansen and Stijns, Cass. 10 September 1971, Arr. Cass. 1972, 31; see also Cass. 10 June 2004, AR C020039N, www.juridat.be, Cass. 11 September 2003, AR C010470N, www.juridat.be, Cass. 8 February 2001, RW 2001-02, 778, annotation by Van Oevelen, Cass. 1 February 1996, Arr. Cass. 1996, 139, Cass. 19 November 1987, Arr. Cass. 1987-88, 354, Cornelis (2000), p. 303, Stijns (2005), pp. 66–67, Van Gerven (1982), p. 382 and Van Gerven and Covemaekers (2001), pp. 59–60.

  53. 53.

    Cass. 10 June 2004, AR C020039N, www.juridat.be, Cass. 11 September 2003, AR C010470N, www.juridat.be, Cass. 8 February 2001, RW 2001-02, 778, annotation by Van Oevelen, Cass. 1 February 1996, Arr. Cass. 1996, 139, Cass. 19 November 1987, Arr. Cass. 1987-88, 354, Cass. 10 September 1971, Arr. Cass. 1972, 31, De Muynck and de Potter de ten Broeck (2011), p. 72, De Page (1962), pp. 162–168, Stijns (2005), pp. 66–67 and Van Gerven and Covemaeker (2001), pp. 59–60.

  54. 54.

    De Page (1962), p. 168.

  55. 55.

    Cass. 10 September 1971, Arr. Cass. 1972, 31 and Stijns (2005), pp. 62–70.

  56. 56.

    Cass. 14 November 1997, Arr. Cass. 1997, 1138.

  57. 57.

    Cass. 30 January 2003, TBBR 2004, 405, Cass. 17 May 2002, RNB 2003, 86, Cass. 15 March 2002, RW 2003-04, 1261 and Stijns (2005), pp. 67–68.

  58. 58.

    De Muynck and de Potter de ten Broeck (2011), p. 72 and Stijns (2005), pp. 66–67.

  59. 59.

    Cass. 4 September 2000, RW 2001-02, 1061, Cass. 30 November 1989, Arr. Cass. 1989-90, 442, Cass. 15 October 1987, Arr. Cass. 1987-88, 190 and Cass. 3 February 1950, Arr. Cass. 1950, 355.

  60. 60.

    Lloyds Bank v. Bundy [1975] QB 339.

  61. 61.

    See a.o. National Westminster Bank Plc v. Morgan [1985] A.C. 686 and McNall (2003), p. 326.

  62. 62.

    Petromec Inc, Petro-Deep Inc, Societa Armamento Navi Appoggio SpA v. Petroleo Brasileiro SA Petrobas, Braspetro Oil Services Company, Den Norske Bank ASA (No. 3) [2005] EWCA Civ 891, para 116; see also Walford v. Miles [1992] 2 A.C. 138.

  63. 63.

    Petromec Inc, Petro-Deep Inc, Societa Armamento Navi Appoggio SpA v. Petroleo Brasileiro SA Petrobas, Braspetro Oil Services Company, Den Norske Bank ASA (No. 3) [2005] EWCA Civ 891, Walford v. Miles [1992] 2 A.C. 138; Bright (2000), p. 332 and McKendrick (2007), pp. 688–689.

  64. 64.

    Royal Bank of Scotland Plc v. Etridge (No.2) [2002] 2 A.C. 773, Interfoto Picture Library Ltd v. Stiletto Visual Programmes Ltd [1989] QB 439, Campbell Discount Co Ltd v. Bridge [1962] A.C. 626, Gibson v. Jeyes (1801) 31 E.R. 1044 and Philpott and Smith (2009), p. 539.

  65. 65.

    E.g. the unfair relationship test for consumer credit agreements (sections 140A-C of the CCA 1974), UCTA 1977 and the UTCCR 1999.

  66. 66.

    Articles 5–7 of the SME-Financing Act.

  67. 67.

    Art. 8 of the SME-Financing Act.

  68. 68.

    Art. 6 of the SME-Financing Act.

  69. 69.

    Hence, the Belgian legislator expanded the obligations derived from (B2C) Directive 2014/92/EU on the comparability of fees related to payment accounts, payment account switching and access to payment accounts with basic features to business clients.

  70. 70.

    Bell v Lever Bros Ltd (1932) AC 161.

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  1. Erasmus University Rotterdam, Rotterdam, The Netherlands

    Johan Vannerom

  2. Vannerom & Partners, Brussels, Belgium

    Johan Vannerom

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  1. University of Oslo, Oslo, Norway

    Mads Andenas

  2. The London Centre for Commercial and Financial Law (LCF), London, UK

    Maren Heidemann

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Vannerom, J. (2023). The Erosion of Contractual Freedom in Commercial Contracts. A Belgian Case-Study. In: Andenas, M., Heidemann, M. (eds) Quo vadis Commercial Contract?. LCF Studies in Commercial and Financial Law, vol 1. Springer, Cham. https://doi.org/10.1007/978-3-031-14105-8_11

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