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If you conduct business in Belgium, it is crucial to have general terms and conditions (GTC) that comply with Belgian law and clearly define the rights and obligations between you and your customers or business partners. Well-drafted GTC can significantly reduce the risks associated with cross-border transactions. They may include provisions on liability, payment terms, guarantees, or a retention of title clause. Many of these aspects are regulated differently in Belgium than in Germany.
In both B2B and B2C transactions, Belgian law restricts the freedom to shape general terms and conditions. In particular, GTC clauses must be clear, transparent, and balanced. Certain clauses are even explicitly prohibited. We assist you in drafting or updating your GTC to ensure compliance with Belgian law.
For cross-border transactions, it is also essential to note that Belgian business partners must have the opportunity to review the GTC before concluding a contract. In practice, this means that the GTC must be sent to the contracting partner in advance or otherwise made available before the contract is concluded. Ideally, receipt and acceptance of the GTC should be confirmed in writing. The burden of proof for providing the GTC prior to contract formation lies with the seller.
Retention of Title
Retention of title is a widely used security instrument for German companies when selling goods. Under such a clause, ownership of the goods—despite delivery—does not pass to the buyer until the purchase price has been paid in full. If the buyer defaults on payment, the seller is entitled to demand the return of goods still under its ownership. This mechanism is particularly valuable in cases of the buyer’s insolvency, as the goods do not form part of the insolvency estate but can be reclaimed from the insolvency administrator.
German law recognizes an extensive set of retention-of-title provisions (simple, extended, and prolonged). In Belgian business practice, however, the legal framework for retention of title is determined by the location of the goods, irrespective of the parties’ choice of law—in most cases, this will be the law of the buyer’s country. Recently, the Belgian regime for retention of title has been fundamentally reformed with the introduction of the Belgian Pledge Act, which has considerably expanded its scope. For more details on Belgian retention of title rules, please refer to our publication Retention of Title in Belgium.
It should also be noted that under Belgian law, ownership is transferred as soon as the sales contract is concluded, provided that the parties agree on the goods and the price. The distinction under German law between an obligation contract and a transfer of title does not exist in Belgium. Thus, ownership generally passes upon conclusion of the sales contract. However, ownership transfer can still be made conditional, for example through a retention-of-title clause.
Incoterms
When conducting cross-border transactions, careful allocation and mitigation of commercial risks is essential. One of the key risks is transportation, which can be considerable when goods are delivered abroad. To regulate the transfer of risk and costs in international deliveries, exporters can rely on the Incoterms rules.
Incoterms are standardized contractual delivery terms that provide an internationally recognized framework for the sale of goods. They clarify, in particular, which party is responsible for the transport of goods, who bears the costs, and who assumes the risk of loss or damage. In addition, they allocate responsibilities for insurance, packaging, labeling of goods, and the procurement of documentation.
These clauses only become part of the contract if expressly agreed between the parties. Only one Incoterm can be chosen per contract, as the individual clauses contain mutually exclusive rules. The choice of an Incoterm clause may also have customs and tax implications. It is therefore vital to check whether contracts or GTC contain a reference to Incoterms and what has been accepted as binding contract content. We advise you on selecting the Incoterm best suited to your business transactions with Belgium.
Do you have any questions?
If you have any questions regarding the preparation of international contracts, please do not hesitate to contact Marco Wirtz, who specializes in Belgian labour and commercial law. He can be reached by e-mail at m.wirtz@euregio.law or by telephone at +32 11 29 47 00.
