Article 1184 of the Belgian Civil Code stipulates that a judge, at the request of one of the parties to a contract, may declare termination of the contract (ontbinding/résolution) if the other party has breached it. But if the contracting parties want to terminate the contract without having such prior recourse to a court, their contract must stipulate this specifically.
Also, there are several conditions that should be fulfilled: (i) a party must have notified formally the other party about the latter’s breach, and (ii) the breach committed must be “serious”. To determine whether the breach committed is a serious one, it is necessary to consider whether the parties would still have concluded the contract if they had known—at the time they entered into the contract—this particular breach could have been committed by the other party.
However, these rules are not mandatory. The parties may thus freely specify what the termination regime should comprise, i.e., the contract could stipulate that no prior formal notice of breach is required and that the contract will be terminated if the other party has committed a breach.
If the contract’s termination is disputed, the Belgian courts have a discretionary power to determine post factum whether the breach was sufficiently justified. If they decide that it was not the case, the termination may be considered wrongful. If the courts find the termination wrongful, they may grant damages to the other party or may order the forced performance of the agreement.
On 11 May 2012, the Court of Cassation, just as how the Court of Appeal ruled in this case, also found that all the contractual conditions to declare termination of the contract were not fulfilled. Therefore, the contract could not be terminated and had to stay in force.
Considering the highest court’s ruling, contracting parties should be reminded to be careful when terminating an agreement unilaterally.
The decision can be found on http://www.juridat.be