As already succinctly explained in a previous article, the new contract law came into force on Jan. 1, 2023. The new rules apply to contracts entered into from Jan. 1, 2023, but can also be applied to existing contracts if both contracting parties agree.
In the article below, we take a closer look at how this will affect the contracts you have entered into and will enter into in the future as a business owner and offer answers to the question: what is best to consider during your contract negotiation?
Conflicting general terms and conditions
The discussion often arises as to what exactly should happen if there are contradictions between your terms and conditions and those of the party you wish to enter into a contract with? Does this then mean that there is no contract at all?
No, not at all, the contract does come into being, except for the provisions in your terms and conditions that conflict with each other, which creates uncertainty.
Renegotiation when circumstances have changed
Here, too, the modernization of the old law is clearly felt. From now on, under certain conditions, a contracting party can request a renegotiation when fulfilling the contract becomes "excessively burdensome" due to circumstances that have changed and were unforeseeable. Consider the current issues surrounding commodity price increases. It even goes so far as to allow a judge to modify or even terminate the contract in the event the renegotiations fail. If you want to avoid the possibility of renegotiation, you can exclude it in your contract or general terms and conditions.
Price reduction or prior rescission
If you, as an entrepreneur, are confronted with a party that only partially fulfills its contract (e.g. a supplier delivers, but too little or of poor quality), you can, even without the intervention of a judge, unilaterally apply a price reduction. This with the aim of readjusting the contract so that the mutual commitments are brought back into balance. In this way the law enshrines what was already common practice. However, it can be contractually stipulated to exclude this sanction completely or subject it to certain conditions.
But it goes even a step further. If you are absolutely convinced that a contract will not be fulfilled even before it is due, you can cancel the contract on your own initiative. This, for example, as a result of sufficiently serious circumstances indicating that the purchased good will never be delivered or that payment will never be made.
Also important to keep in mind is that any non-negotiable provision must be lawful, meaning that there must always be a contractual balance between the parties' performance and rights and obligations. If this is not the case, this can be a valid reason to escape performance of your contract.
The new contract law is very broad and applies both between entrepreneurs and with consumers.
Want to know more about the impact and possibilities on your contracts and general terms and conditions? Then make an appointment here with our pro experts!
