Commercial Contracts: a Map

The legal framework

Most commercial agreements fall into four families. Buying contracts are those where you are the customer: supply, services, software and procurement. Selling contracts are the mirror image: your terms of sale, service agreements and SaaS terms. Partnering contracts include distribution, reseller, agency, joint venture and manufacturing. Licensing contracts grant intellectual property or data rather than a product or service. Knowing the family tells you whose paper you are on and which way the risk usually leans.

Contract law is largely national in the EU. Each member state has its own, and all of them give the parties wide freedom to shape their contract, within limits that differ from country to country. The parties can usually choose the governing law, and the Rome I Regulation sets which law applies when they do not (for a services contract, generally the provider's country; for sale of goods, the seller's). The Brussels I bis Regulation decides which courts have jurisdiction, and respects a valid choice of court. Member states fill in the details differently. Some require contracts to be performed in good faith, some allow a court to reduce a manifestly excessive penalty clause, and some let a party ask for renegotiation when changed circumstances make performance excessively onerous. Parties can often limit these rules in their contract, which is why the clause on change of circumstances deserves a deliberate choice. Countries differ on each of these points, so check the law that governs your contract.

Unfair-terms rules between businesses are also national. The EU unfair-terms directive protects consumers only, and member states differ on whether and how they police business-to-business terms. Some countries have a general rule that voids a clause creating a manifest imbalance between the rights and obligations of the parties, sometimes backed by lists of prohibited or presumed unfair clauses. Others leave it to general contract law. Where such a rule exists, the main price and the description of the main performance are usually protected only if they are written in a clear and understandable way.

EU law is strongest where it harmonises. Competition law applies across the EU: agreements between businesses must respect Article 101 TFEU and the national equivalent. For supply and distribution, the Vertical Block Exemption Regulation (EU) 2022/720 gives a safe harbour to agreements below market-share thresholds, as long as they contain none of its hardcore restrictions. The Commercial Agents Directive protects self-employed sales agents, and the Late Payment Directive (2011/7/EU) gives statutory interest and recovery costs for late payment between businesses, which cannot be fully contracted out of. Some countries add their own mandatory regimes, such as protection of distributors on termination, as explained in distribution and reseller agreements.

In practice

Where value and risk sit

The commercial terms get the attention, but the clauses that decide outcomes when something goes wrong are usually elsewhere. They are who owns what is created, how liability is capped and what the indemnities cover, how personal data is handled, and what happens on exit. A contract that is silent or weak on any of these four is where disputes start.

Framework or one-off

For a single transaction a one-off contract is enough. For an ongoing relationship a framework is usually better: a master agreement with the standing terms, and orders or statements of work underneath. We explain this in Master Services Agreements and SOWs.

Red flags

Some terms justify a closer look before signature: uncapped liability, broad indemnities you give, assignment of intellectual property you expected to keep, automatic renewal with a long notice period, and data clauses that do not match how the data will be used. None is necessarily wrong. Each shifts real risk and deserves a deliberate decision.

An example

A software company in Ghent agrees to buy analytics tooling from a vendor on the vendor's standard terms. The price is acceptable, so the contract is signed without legal review. A year later the vendor changes the product, the service degrades, and the company wants to leave. It then finds that the contract renews automatically for twelve months unless notice is given ninety days before the end, caps liability at one month of fees, and says nothing about exporting its data. None of this was visible in the commercial discussion. A review before signature would have raised each point, and a rights and obligations register would at least have flagged the notice date.

Frequently asked questions

Do I need a lawyer for every contract?

No. Low-value, standard contracts can often be handled in-house once you know what to look for. Legal input becomes more valuable as the commitment, the importance of the IP or data involved, and the difficulty of exit increase.

Whose standard terms should we use, ours or theirs?

Preferably your own, as standard terms are written to protect their author. If you must work from the other side's paper, focus the review on the four risk areas above rather than on every clause equally.

Does a contract have to be in writing?

Generally not, as most commercial contracts are formed by agreement alone. Some contracts require writing or specific wording, for example transfers of copyright and of patents, and a written contract is in any case the practical way to prove what was agreed.

Can a clause that was signed still be set aside?

Yes, in some cases. Depending on the governing law, a clause can be void under national B2B unfair-terms rules, a penalty can be reduced by a court, and a clause generally cannot exclude liability for your own intentional fault.

How this connects

This map is the background to our commercial contracts and transactions service. Drafting runs through our Document Studio, incoming drafts are checked with our contract review, and the rights and obligations register follows what the signed contract requires. The detail on specific contracts is in the articles on SaaS agreements and licensing agreements.