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Under Dutch law, an agreement whose content or purpose is contrary to good morals or public order is void, and so is an agreement that breaches a mandatory statutory provision. If that provision only protects one of the parties, the agreement is merely voidable (Article 3:40 Dutch Civil Code). Often only part of the contract falls away. Have a doubtful clause or contract assessed before you perform it or rely on it.
This page is for foreign companies with a contract governed by Dutch law, or with a Dutch counterparty, that suspect a clause or the whole agreement is unlawful, or whose counterparty claims so to avoid paying. You will read when Dutch law treats an agreement as void or voidable for illegality, what happens to the rest of the contract, how performance is unwound and how to respond. Other grounds of invalidity, such as mistake or threat, are covered in the invalidity of a contract under Dutch law.
When is an agreement contrary to Dutch law void?
In two situations: when its content or purpose is contrary to good morals or public order, and when it breaches a mandatory statutory provision that is meant to affect the validity of such agreements (Article 3:40(1) and (2) Dutch Civil Code). A void agreement has no legal effect from the start; no one needs to annul it.
“Content” refers to what the parties must do, for example paying a bribe or delivering prohibited goods. “Purpose” refers to what the parties want to achieve with the agreement, even if each obligation looks lawful in itself, such as a contract designed to defraud creditors or to hide a cartel. The court tests the agreement against both.
| Ground | Consequence | Source |
|---|---|---|
| Contrary to good morals or public order | Void | Article 3:40(1) |
| Breach of a mandatory statutory provision | Void | Article 3:40(2) |
| Breach of a provision that only protects one party | Voidable by that party | Article 3:40(2) |
| Breach of a provision that does not aim to affect validity | Valid (other sanctions may apply) | Article 3:40(3) |
| Prescribed form not observed | Void, unless the law provides otherwise | Article 3:39 |
What does a breach of a mandatory statutory provision mean?
It depends on the purpose of the provision. Many statutory rules are mandatory, but not all of them make a contract invalid: Article 3:40(3) excludes rules that are not meant to affect the validity of conflicting agreements (Article 3:40(3) Dutch Civil Code). A breach of a licensing or reporting duty may lead to a fine without making the underlying contract void.
Some statutes state the consequence themselves. Agreements between companies that prevent, restrict or distort competition on the Dutch market are void by operation of law, unless an exemption applies (Article 6(2) Dutch Competition Act). Where a rule protects only one party, such as many consumer rules, the agreement is voidable by that party rather than void. Read more on prohibited price-fixing and forbidden terms in Dutch contracts.
What is the difference between void and voidable?
A void agreement never had legal effect, and anyone with an interest can rely on that. A voidable agreement is valid until the protected party annuls it, by a written declaration or through the court (Articles 3:49 and 3:50 Dutch Civil Code).
Annulment has retroactive effect (Article 3:53(1)). A court claim for annulment is time-barred after three years, counted from the moment the law specifies for each ground (Article 3:52(1)). For a void agreement no such period runs for the nullity itself, but claims to undo performance have their own limitation periods. For annulment because of pressure in negotiations, see abuse of circumstances.
Does the whole contract fall away if one clause is unlawful?
Not necessarily. If the ground of nullity concerns only part of the agreement, the rest remains in force, unless it is inextricably connected with the void part given the content and purpose of the agreement (Article 3:41 Dutch Civil Code).
A void agreement can also be converted: if its purpose corresponds so closely to another, valid legal act that the parties would have chosen that act had they known of the invalidity, the agreement has the effect of that valid act (Article 3:42). Many contracts contain a severability clause stating that a void clause is replaced by a valid one that comes as close as possible. Such a clause supports the same result, but it cannot save an agreement whose core is unlawful. See also contract law clauses in the Netherlands.
Is your Dutch counterparty refusing to pay because it says the contract is void? Have a Dutch contract lawyer assess whether the nullity argument holds, and which parts of the agreement survive.
What happens to performance under a void agreement?
What was performed without a valid legal basis must be undone. A party that paid or delivered can claim it back as an undue payment (Article 6:203 Dutch Civil Code).
Where performance cannot by its nature be undone and also should not be valued in money, for example because valuing it would reward the unlawful conduct, a claim to undo the counter-performance is excluded to the extent that it would be contrary to reasonableness and fairness (Article 6:211(1)). In practice this means that a party to a clearly unlawful agreement cannot always recover what it paid. If a legal requirement for validity is fulfilled later and all parties treated the agreement as valid in the meantime, the agreement is confirmed (Article 3:58(1)).
How do you invoke or contest nullity in a dispute?
A party can rely on nullity as a defence, for example when the other party claims payment, or ask the court for a declaratory judgment. Because the consequences can be far-reaching, courts examine closely whether the provision really aims to affect validity.
- Identify the exact statutory provision or principle that the agreement is said to breach.
- Assess its purpose: does it protect the public interest, one of the parties, or neither (Article 3:40(2) and (3))?
- Determine which clauses are affected and whether the rest of the contract can stand (Article 3:41).
- Calculate what has been performed and what can be reclaimed (Articles 6:203 and 6:211).
- Check whether the contract is governed by Dutch law; a mandatory Dutch rule can matter even if foreign law was chosen, depending on the rule.
Practical example: a market-sharing clause in a supply agreement
Suppose a Swedish manufacturer and a Dutch competitor agree that the Dutch company will supply certain parts, and in the same contract agree not to sell in each other’s home markets. Two years later, the Dutch company stops paying for a delivery and argues that the whole agreement is void because of the market-sharing clause.
The clause restricts competition and is void (Article 6(2) Dutch Competition Act and Article 101(2) TFEU). Whether the supply obligations fall with it depends on Article 3:41: if the parties would also have concluded the supply agreement without the clause, the rest remains valid and the Dutch company must pay. The manufacturer should in any event stop applying the clause, because the competition risk does not disappear when the dispute is settled.
When should you involve a Dutch lawyer?
When you doubt whether a clause or contract complies with mandatory Dutch law, before you perform an agreement that may be unlawful, and as soon as a counterparty relies on nullity to avoid its obligations.
MAAK Advocaten in Amsterdam advises foreign and Dutch businesses on the validity of commercial contracts and litigates disputes about nullity and annulment before the Dutch courts in first instance and on appeal. See also the interpretation of Dutch contracts.
Frequently asked questions about agreements contrary to Dutch law
When is a contract void under Dutch law?
When its content or purpose is contrary to good morals or public order, or when it breaches a mandatory statutory provision meant to affect validity (Article 3:40 Dutch Civil Code). A contract that ignores a prescribed form is also void unless the law provides otherwise (Article 3:39).
Is every breach of a statute fatal to the contract?
No. Provisions that do not aim to affect the validity of conflicting agreements do not make the contract void (Article 3:40(3)), and a breach of a rule that only protects one party makes the agreement voidable, not void.
Does one unlawful clause make the whole contract void?
Not necessarily. The rest of the agreement remains in force unless it is inextricably connected with the void part (Article 3:41 Dutch Civil Code).
Can I get back what I paid under a void contract?
In principle yes, as an undue payment (Article 6:203). The claim can be excluded where the performance received cannot be undone or valued and recovery would be contrary to reasonableness and fairness (Article 6:211).
Are agreements restricting competition void in the Netherlands?
Yes. Agreements prohibited by Article 6(1) of the Dutch Competition Act are void by operation of law (Article 6(2)), unless an exemption applies.
Primary sources
Dutch statutes are only officially available in Dutch, on wetten.overheid.nl. Judgments can be found on rechtspraak.nl by their ECLI number.
- Dutch Civil Code Book 3: Article 3:39, Article 3:40, Article 3:41, Article 3:42, Article 3:49, Article 3:50, Article 3:52, Article 3:53, Article 3:58
- Dutch Civil Code Book 6: Article 6:203, Article 6:211
- Dutch Competition Act: Article 6
