Blenheim`s international team of foreign partners is trained in both common law and Dutch law, which allows us to identify aspects of agreements that are subject to Dutch law and of which foreign parties (including those in common law systems) may not be aware. People make deals every day, sometimes without realizing it. Whether it`s buying a house, renting a bike, or ordering a cup of coffee, all of these actions are considered the conclusion of a legal agreement. When can we talk about a legally binding agreement in the Netherlands? Is an oral agreement binding? Marco Guit, a Dutch contract lawyer, briefly explains the key concepts of Dutch contract law. A contract or agreement (including the general terms and conditions) is concluded by offer and acceptance The offer and acceptance is the main prerequisite for the conclusion of a contract under Dutch contract law. » Sea on offer and acceptance Offer and acceptance. These actions can be very explicit, such as buying a house, but in everyday life they tend to coincide: paying for gasoline with a credit card is essentially accepting the offer of gasoline for a certain price of one liter. If the parties agree, a contract is concluded. In principle, all natural and legal persons have legal capacity. There are some exceptions, such as minors (who need parental consent) and people who have been declared incapacitated (p.B due to mental illness).
Another legal principle of great importance in the interpretation of contracts in Dutch law is the general guiding principle of adequacy and fairness, which can be used to supplement the provisions of a contract or to prevent the invocation of a provision where such a remedy would be unreasonably inappropriate or unfair in the circumstances. Under Dutch contract law, entire contract clauses are often included in contracts to anchor or supplement the probation rule: if your company is based in an English-speaking country such as the UK, USA, Australia, Canada, New Zealand or Singapore, this will likely shock you. In common law countries where the parties have entered into a written contract, they generally cannot deviate from the text of the contract, e.B. if it turns out that the written contract does not accurately reflect an agreement or insurance concluded by the parties during the contractual negotiations. Lawyers call this the ”rule of probative evidence.” Unlike the common law, Dutch law attaches great importance to the subjective meaning of agreements. According to the Haviltex principle, a written agreement must be interpreted as meaning that, in the circumstances, both parties could reasonably have expected them to have interpreted the provision. This involves a process in which the subjective intentions of the parties are examined beyond the literal wording of the clause. When interpreting a contract, the courts therefore rely on a number of extrinsic documents (e.B pre-contractual negotiations). A full contractual clause will not prevent the Dutch courts from adopting this approach.
Foreign parties should be aware of this aspect of Dutch law and (as practical advice) ensure that pre-contractual negotiations are well documented. An important and regularly applied principle of Dutch contract law is the rule of adequacy and fairness: an agreement has not only the legal effects agreed by the parties, but also those resulting from the law, current practice or standards of relevance and fairness due to the nature of the agreement (Article 6:248 of the Dutch Civil Code). Under this rule, a civil court may strike down a contractual provision if the application of that provision would be unacceptable in light of the standards of adequacy and fairness in the circumstances. When exactly this is the case, we often discuss in litigation, hence the plethora of jurisprudence on the subject. Unlike many common law jurisdictions (such as the United States, Australia, Canada, and New Zealand), punitive clauses in the Netherlands are easily enforceable (and extremely common). It is customary to find significant sanctions in agreements, in particular in the provisions relating to breach of confidentiality, the obligation of non-competition and non-solicitation. As might be expected, criminal provisions are often the subject of litigation, which means that the parties would be well advised to have these provisions drafted and/or revised by lawyers specialising in Dutch commercial law. This Dutch law website also highlights some of the basic principles of Dutch civil law, for example the obligation of adequacy and good faith, which also permeates contract law in the Netherlands.
Dutch contract law is mainly found in the Dutch Civil Code. It is an integral part of the general law of obligations. Under Dutch law, an agreement between two or more parties (whether oral or written) creates an obligation for each party to do or not to do something and the right to fulfil the duty or remedy of the other party in the event of a breach. If a matter is governed by Dutch law, the parties are bound by the Dutch legal principles of good faith and appropriate and fair, which allow the courts to include clauses in contracts under Dutch law. These principles apply widely to contractual transactions. For example, the principle of good faith limits the extent to which the parties may terminate pre-contractual negotiations without liability to the extent that this would be contrary to the reasonable expectations of the other party. As regards the principle of adequacy and fairness, it plays an important role in Dutch commercial contracts, including in circumstances in which the parties may terminate an agreement. Termination of a contract is subject to the terms of the agreement itself, as well as to the principles of reasonableness and fairness set out in Article 6:248 of the Dutch Civil Code. Pursuant to Article 6:258 of the Dutch Civil Code, a court may also modify the legal effect of an agreement or annul an agreement in whole or in part if there are unforeseen circumstances that prevent the other party from expecting the original agreement to continue in accordance with standards of reasonableness and fairness.
These principles were particularly interesting with regard to Covid-19, as Dutch courts ruled that Covid-19 could be an unforeseen circumstance that would allow courts to amend existing trade agreements. There are certain types of contracts that inherently require more specific rules, especially when parties with unequal social positions often enter into these contracts. .