B2B Contracts: How liability clauses support business continuity

What does your liability clause actually protect you from? Under Belgian law, a service provider is, in principle, liable for all foreseeable damage caused by a contractual breach, with no predefined cap — unless the contract says otherwise. A well-drafted liability clause can significantly reduce that exposure.

How contractual liability works

Under Belgian law, contractual liability arises where a party’s contractual breach causes any damage to the other party. It is sufficient that the loss was foreseeable at the time the contract was concluded, irrespective of the magnitude of the damage ultimately suffered.

Damages awarded must correspond to the actual loss suffered, which must be proven by the claimant. If the exact amount of damage cannot be determined (e.g. in the case of non-pecuniary or reputational damage), the court may determine the amount ex aequo et bono (i.e. on the basis of fairness and equity, rather than a strict legal calculation).

Limiting your liability is possible

In Belgium, contractual freedom allows parties to limit or exclude their contractual liability (article 5.89 Civil Code).

As a service provider, limiting your liability to your clients is a matter of business logic and continuity.

Indeed, it is rarely commercially sensible for a company to assume unlimited liability under a contract worth only 1.000 EUR. Likewise, companies should make sure that their liability is aligned with the amount that their insurance covers.

…But within certain limits only

In certain activities, your willingness to assume responsibility may form part of the value for which the customer is paying. Overly broad liability exclusions may deter customers and diminish your value proposition.

In addition, there are legal exceptions that should be accounted for:

• liability cannot be excluded for willful misconduct (dol/opzet) (Art. 5.89 Civil Code);
• liability for gross negligence can be excluded, provided that such exclusion is expressly stipulated in the clause (Art. 5.89 Civil Code);
• liability cannot be excluded for damage affecting life or physical integrity (Art. 5.89 Civil Code);
• a liability clause will be unenforceable if it deprives the contract of its essential substance (article 5.89 Civil Code) or creates a manifest imbalance between the rights and obligations of the parties in B2B contracts (article VI.91/1 to VI.91/10 Code of Economic Law);
• finally, certain specific statutory warranties (e.g. the ten-year liability regime applicable to real estate construction) are matters of public order and cannot be excluded or limited by a liability clause.

Consequences of an invalid liability clause

In principle, the court will consider the clause null and void. The contractual limitation falls away, exposing you to uncapped liability. This could lead to a worse situation than if you had provided for an initial more lenient cap.

To preserve the stability and certainty of contractual relationships, the invalidity of the clause does not, as a general rule, result in the invalidity of the contract itself. Having a well-drafted severability clause in the contract is advised to reinforce this position.

Depending on the circumstances, the court may decide to adapt the invalid portion of the clause. This is, however, left entirely to its discretion. The outcome remains highly fact-specific and cannot be predicted with certainty.

What you should consider

As a starting point when assessing your liability exposure, consider four things.

First, the nature of your services: are they standardized or tailor-made? The more bespoke, expert-driven, or business-critical your services are, the harder it is to justify aggressive exclusions.

Second, your negotiation position: do you have enough commercial leverage to impose your preferred terms on your clients, or are you the one accepting theirs?

The scale of potential damage matters too: are losses infrequent but potentially significant, or frequent but relatively limited? Is there a high risk of consequential damages (such as in IT), or are damages more direct?

Finally, look at your ability to reassure clients through other means — the warranties and indemnities you already provide, your insurance coverage, and so on.

Actions you should take

Three concrete steps put this into practice: capping the amount, clarifying which damage categories are covered, and carving out what can’t be excluded.

1. Limit the amount

Start by setting a maximum liability amount, and make sure it is calibrated to your real risk rather than picked arbitrarily:

• The cap is often a fixed amount, the fees paid under the agreement, or a multiple of those fees.
• Specify whether the cap applies per event (limits the payout for each separate event giving rise to liability), per year (resets the maximum amount every year) or in aggregate (one single maximum total for all claims combined during the whole contract).
• Make sure your liability cap is aligned with what your insurance covers and with commercial standards for your activity.
• If you rely on subcontractors or suppliers to provide your services, beware of being “squeezed” between your client and those third parties (i.e. the situation where your liability to the client for your supplier’s fault exceeds your supplier’s liability to you).

2. Clarify certain damage categories

Beyond the overall cap, it is worth spelling out which categories of damage are excluded, capped separately, or left uncapped.

• Specific caps for specific types of liability may be agreed (e.g. data protection, regulatory, etc.).
• Clarify whether indemnities (e.g. for intellectual property infringement) fall within the general liability cap, are subject to a specific cap, or are unlimited.
• List explicitly which types of damage count as ‘indirect and/or consequential damage’ (e.g. loss of profits, loss of revenue, etc.). Belgian law has no direct equivalent to the Anglo-Saxon concept of ‘indirect and/or consequential damages’ (frequently used in international B2B contracts) but parties may contractually exclude this category of losses, provided it is clearly defined (since exceptions are interpreted restrictively).

3. Provide exceptions for non-excludable damages

Finally, make sure the liability exclusion expressly carves out willful misconduct and damage affecting life or physical integrity. This may look like a purely formal requirement, but stating it explicitly reduces the risk of the whole clause being challenged on that basis.

Conclusion

Liability clauses are not merely legal boilerplate. When properly drafted, they help ensure that the risks associated with a contract remain proportionate to its value, the nature of the services provided and the insurance available. Taking the time to carefully review and tailor your liability regime can therefore play an important role in protecting both your business and its long-term continuity.

FAQ

Can a Belgian company fully exclude its contractual liability in a B2B contract?

No. Belgian law prohibits excluding liability for wilful misconduct and for damage affecting life or physical integrity. In addition, certain statutory warranties are matters of public order and cannot be excluded or limited. Liability for gross negligence can only be excluded if expressly stipulated in the clause. Outside these limits, contractual freedom allows parties to allocate contractual risks as they see fit. However, a liability clause will be unenforceable if it deprives the contract of its essential substance or creates a manifest imbalance between the rights and obligations of the parties.

What happens if a liability clause is declared invalid?

The clause is generally considered null and void, and the limitation it provided falls away, exposing the party to uncapped liability. This does not, as a general rule, invalidate the contract itself, especially where a severability clause is in place. Whether the court adapts the invalid portion instead is left to its discretion.

Should a liability cap apply per event, per year, or in aggregate?

It depends on your risk profile and insurance coverage. A per-event cap limits the payout for each separate incident, a per-year cap resets the maximum annually, and an aggregate cap sets one single ceiling for the whole contract. The right choice should match what your insurance actually covers and what is considered standard practice in your sector.

Are indirect or consequential damages automatically excluded under Belgian law?

No. Belgian law has no direct equivalent to the Anglo-Saxon concept of indirect and/or consequential damages. To exclude this category, parties must define it clearly and expressly in the contract, for example by listing loss of profits or loss of revenue among the excluded categories of damage.

Does a liability clause need special attention when subcontractors are involved?

Yes. If you rely on subcontractors or suppliers to deliver your services, check that your liability towards your client for their fault does not exceed what you can recover from them under your own contract with them. Otherwise, you risk being “squeezed” between your client and your supplier.