From passive clause to active notification
Consumers are often insufficiently aware of the impending end of their contracts and the consequences of failing to provide timely notification of cancellation, which can lead to disputes.
Against this backdrop, the Act introduces a new provision in Article VI.91 of the Belgian Code of Economic Law, requiring businesses to proactively notify consumers of an impending automatic renewal.
More specifically, the business must clearly, intelligibly and unambiguously inform consumers of:
- the fact that the contract will be automatically renewed; and
- their right to oppose or terminate that renewal.
The business must provide this information by letter, email or another durable medium no later than fifteen days before the notice of cancellation deadline. A mere link to a website will not suffice.
The Act provides an exception for contracts with a duration of one month or less. The notification obligation does not apply to such cases.
Implications for estate agency contracts
Estate agency contracts between private sellers or landlords and estate agents generally qualify as service contracts between a business and a consumer. Such contracts that are concluded for a fixed term exceeding one month and that provide for automatic renewal or extension, fall within the scope of the new notification obligation.
Until now, it was generally sufficient for the automatic renewal clause to be properly included in the contract itself, namely on the front page, in bold type and within a separate text box. Under the new legislation, this will no longer suffice. In addition to the relevant text in the contract, estate agents will be required to actively alert consumers in a timely manner of the impending end of the initial term of the contract.
Authors:
Jasmina Sadek, Monard Law
Stefaan Van Dyck, Monard Law
