Your contracts under the new contract law

On 1 January 2023, the new law of obligations (Book 5 of the (New) Civil Code) came into force, at least for all contracts concluded from that date. What does this mean concretely for your contracts and general terms and conditions? A brief overview.
Little news under the sun?
In general, no fundamental changes were introduced. The (N)BW is mostly a modernisation of the provisions of the old BW and a codification of the principles already applied by the courts when interpreting contracts or settling disputes. For example, the (N)BW now considers all clauses that are manifestly unbalanced to be unlawful. This complements the earlier B2B Act of 4 April 2019, which – by analogy with consumer law – already curbed some unlawful and unbalanced clauses in contracts between companies. Also in the area of exoneration clauses, the B2B Act is supplemented by a general provision that one can limit and exclude liability for all faults, including grave faults, except for his intentional fault or when doing so would erode the contract. Remarkably, the B2B Act inserted a presumption of illegality for clauses that exclude (i.e. not merely limit) liability for serious fault and is thus still stricter for companies. In turn, for your general terms and conditions, it is relevant that it is now provided by law that conflicting provisions between the applicable terms and conditions of the seller/service provider and those of the customer will cancel each other out, thus creating a potential loophole.
More flexibility and self-direction
The biggest innovation in the (N)BW is undoubtedly the legal enshrinement of the imprevision doctrine, which allows a party to insist on amending the contract as a result of exceptional and unforeseen changed circumstances (e.g. substantially increased raw material prices). This was previously possible only to the extent provided for by contract. In this case, the law imposes a renegotiation obligation on the parties and offers the possibility of obtaining an adjustment or even the termination of the contract through the courts. In terms of contract termination, the law enshrines the principles already applied by the courts. For instance, a party can terminate a contract at his own risk for serious breach of contract by means of a reasoned written notice. The law now also offers the (previously more contested) possibility, in exceptional cases, to terminate a contract anticipatively, or to suspend its performance, when it is already clear that the other party will not be able to fulfil its commitments and it cannot provide sufficient guarantees to this end after notice. Also new is the legally provided possibility to have a party replaced by a third party at its own risk in case of urgency or in exceptional circumstances after written notice.
More law, less contract?
At first glance, therefore, most contracts and general terms and conditions should be able to decrease in size, given the increased legal provisions to fall back on. Still, the law usually only contains the outlines and it remains important to sufficiently contractually define the modalities of the cooperation, termination, limitations of liability, and so on. Also bear in mind that many of these legal principles are only of supplementary law and can therefore be excluded contractually. You will also always have to keep an eye on the conditions that the law and the contract link to the exercise of the various rights (e.g. dissolution order or suspension). Finally, it remains to watch out for any applicable stricter legislation on unfair terms, such as consumer law and the B2B Act.

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