The pre-contractual phase from 1 January 2023
The pre-contractual phase from 1 January 2023
January 2023 – The old Civil Code also called the "Code Napoleon" because of its originator, is being steadily renewed. In early 2023, the new Book 5 - Law of Obligations will come into force. Important for private individuals and traders alike.
Nieuw... what's in a name
We may always talk about the "new" law of obligations, but in practice, most of the provisions of the new Book 5 are copies of the old provisions of the Civil Code (BW). And where the provisions are truly new, they are often no more than a codification of the interpretation that case law and legal doctrine have given to the old provisions. So it is not that there is a true revolution, but there are some provisions that stand out.
Are those principles - new or otherwise - immediately applicable from 1 January 2023? No! The new Civil Code will only apply to legal acts performed from 1 January 2023. Existing contracts will therefore remain subject to the old rules. The old and new Book 5 will therefore continue to coexist for years to come.
Moreover, the new provisions are mostly of supplementary law. This means that you and your partner can stipulate other arrangements in your agreement. Obviously, you will then have to be very clear to avoid any misunderstandings.
All information
In the new law of obligations, a lot of attention is paid to the pre-contractual phase. Before a contract is formed, there are obviously negotiations between the parties. The information exchanged then has a particularly strong impact on mutual expectations. In the old Civil Code, this was hardly addressed. The courts could only sanction a party who had created false expectations in extreme cases. But it was not obvious. Now, the parties - and thus the courts - are given the tools to validate the expectations created.
From now on, the parties must share "all" information. So not only the legally required information, but also the information given from principles of good faith.
Moreover, the quality of that information is weighted, taking into account the capacity of the parties, their reasonable expectations and the object of the contract. Thus, in a contract between 2 private individuals, the obligation to provide information is less extensive than in a contract between two professionals.
Pre-contractual liability
If negotiations are erroneously broken off, the court now has a legal basis to act against it. After all, the aggrieved party has the right to be put back in the situation he would have been in had no negotiations taken place.
Supplementary duty
As mentioned earlier, many of the new rules are of suppletive or supplementary law: they only apply if the parties do not expressly deviate from them.
Between professional parties, it is common for a so-called letter of intent (LOI) to be drawn up. This lays down, as it were, the ground rules the parties will abide by during the negotiations. For example, it is agreed that negotiations should not exceed a certain deadline or that certain information should not be made public.
The LOI is also the document in which it could be agreed that the aforementioned pre-contractual information rules do not apply or that they apply only in certain situations.
Lex specialis
Do not lose sight of the fact that civil law "only" contains general rules (lex generalis). In some areas, special rules of law apply. Such a special set of rules, also called lex specialis, takes precedence over the lex generalis.
For example, in distribution law, specific obligations regarding pre-contractual information apply, with specific sanctions. Similarly, in company law, there is a special regime for pre-contractual liability in the context of an acquisition agreement.
A common thread in legislative changes is the tendency to protect the weaker party. The new Book 5 relating to contract law also follows that logic, whereby sufficient information must be exchanged in the pre-contractual phase and that information must be tailored to the other party.