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New Belgian Civil Code – (1) New rules on extrajudicial termination of contract due to breach.

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Silke van Erum & Liezl Steyfkens – 18/8/2022 – Book 5 of the new Belgian Civil Code (CC) will embed (not very?) new rules on contract termination. In this article, we discuss the novelties that Book 5 entails regarding the extrajudicial termination due to breach.

Even without a termination clause, it was already possible to end a contract extrajudicially due to serious breach. This option had already found its way to the Belgian law system, through jurisprudence and doctrine.

This concept is now introduced in a statutory provision as the “termination by creditor notice” (“ontbinding door kennisgeving van de schuldeiser”) under article 5.93 of the CC. 

In case of serious breach of the debtor, the creditor can end the agreement by simple written notice. An explicit termination clause is not required. Intervention of the court is not necessary either.

So far so good, nothing new under the sun. However, the CC eased the requirements for a party to terminate lawfully. Before, the serious breach had to be accompanied by exceptional circumstances and urgency. It had to be clear that court intervention was already useful and quick action was required, due to the seriousness of the debtor’s breach.

This is no longer the case. A simple written notice, indicating the shortcomings that justify the termination, will do. Previously, the creditor should send a notice of default to the debtor, with an ultimate opportunity to remedy the flaws.  In case discussion rises between parties, on the lawfulness of the termination, they may address the court for an a posteriori judicial review. The court verifies whether the nature of the breach was indeed of this kind to justify a termination. It will also be checked whether the terminating party did not abusively – against the principle of parties’ good faith behaviour – use her right to end the contract.

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