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General Terms & Conditions in 2014: What Changes Will The New Civil Code Bring?

General Terms & Conditions in 2014: What Changes Will The New Civil Code Bring?

29.8.2013 10:45
Autor: Ondřej Mikula, KSB

As under the current Commercial Code, the New Civil Code requires GTCs to be attached to the draft agreement (offer) or at least made available to the parties in some other way. Professional organizations, however, are exempt from this requirement; a simple reference to their GTCs will suffice. In the case of any conflicting covenants, the agreement itself will naturally prevail.

The law attempts to deal with a problem common in international law – the so- called “battle of the forms”. This typically occurs when the offeror’s and offeree’s GTCs conflict. Under the current rules the offeree’s acceptance of an offer, but with a reference to its own GTCs, would constitute a refusal of the offer. However, the New Civil Code will consider the agreement concluded to the extent that the two GTCs do not conflict. The conflicting provisions will simply not apply. The provisions will instead be replaced by statutory provisions, such as when the contradicting standard terms impose different deadlines for fulfilling an obligation (e.g. to remove defects, pay a contractual penalty, etc.). The obligation itself should not be excluded since the GTCs should remain applicable as much as possible. As regards, the general deadline “without undue delay”, this will apply upon the entitled party’s request.

New rules will also be introduced that apply to unilateral changes to the GTCs applicable to agreements that have already been concluded. However, the only agreements eligible are those which the party in question enters into on a regular basis in standard business transactions with a large number of persons.

Performance under the contract must be of a particular kind, be rendered repeatedly over a long period and require alteration on a reasonable basis. This will apply to some loan agreements, for instance. The parties must agree on how the altering party will inform the other party of the changes and the other party must have a right to reject them and cancel the relevant obligation within a relevant notice period.

Surprising Clauses

One important new feature can be found in the rules applicable to so-called “surprising clauses”. The New Civil Code renders a clause invalid if a party, when acting reasonably, could not have expected the clause to form a part of the standard terms, unless that party has explicitly accepted it. For example, in a written declaration. Disputes over what can and cannot reasonably be expected will be resolved by the courts, which will, among other things, take into account the wording of the particular clause. If the clause is too difficult or too complicated for an average person to understand, the court will likely rule the clause “surprising” and thus ineffective. 

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