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Termination for breach under Dutch law (in Dutch: ontbinding) allows you to end a contract when the other party fails to perform. Every failure in performance gives that right, unless the failure, given its special nature or minor importance, does not justify termination, and in most cases only once the other party is in default (Article 6:265 Dutch Civil Code).
This page is for foreign companies whose Dutch supplier, customer or service provider fails to deliver, pay or perform properly, and for companies that have received a termination letter from a Dutch party. It sets out the legal criteria, when a notice of default is needed and when it is not, how to terminate out of court, what happens afterwards and how to limit the risk of an unjustified termination. Ending a contract by notice without a breach is a different route, explained on our page on terminating a long-term business agreement under Dutch law.
What are the legal criteria for termination for breach under Dutch law?
Five conditions must be met: a failure in performance, serious enough to justify termination, in principle default of the other party, no default on your own side as creditor, and a written declaration or a court decision.
| Requirement | What it means | Article |
|---|---|---|
| Failure in performance (tekortkoming) | The other party does not perform, performs late or performs badly. Fault is not required for termination. | 6:265(1) |
| Sufficient seriousness | No termination if the failure, given its special nature or minor importance, does not justify termination with its consequences. | 6:265(1) |
| Default (verzuim) | Required unless performance is permanently or temporarily impossible. | 6:265(2), 6:81–6:83 |
| No creditor default | You cannot terminate for a failure in an obligation regarding which you are in default yourself. | 6:266(1) |
| Declaration or court | Written declaration (also electronically if the contract was concluded electronically), or a judgment at your request. | 6:267 |
Termination is a power, not an obligation. You can also claim performance, suspend your own performance or claim damages. The sections below discuss each requirement and the practical choices.
How serious must the breach be to justify termination?
The starting point is that every failure justifies termination. The exception is a failure that, given its special nature or minor importance, does not justify termination with its consequences (Article 6:265(1) Dutch Civil Code).
Whether the exception applies depends on the circumstances: what the contract was for, how important the failed obligation was, whether it can still be remedied and what termination would mean for both parties. A single late delivery in a long supply relationship will often not be enough; structural non-delivery or a defect that makes the goods unusable usually is. If only part of the contract is affected, partial termination is possible; it reduces the mutual performances proportionally (Article 6:270).
Parties can agree otherwise. Article 6:265(1) is default law, so a contract can give a right to terminate for specific breaches without the seriousness test. Whether a termination declaration then takes effect is assessed under what the parties agreed (HR 7 July 2023, ECLI:NL:HR:2023:1071, para. 3.2). Our page on dissolution clauses in Dutch B2B contracts discusses that judgment.
When is the other party in default, and when is a notice of default needed?
As a rule, the other party is in default only after a written notice of default that gives a reasonable period for performance, and performance does not follow within that period (Article 6:82(1) Dutch Civil Code).
Default (verzuim) means the performance is due and has not been made, and the requirements of Articles 6:82 and 6:83 are met, unless the delay cannot be attributed to the debtor or performance is already permanently impossible (Article 6:81). If the debtor cannot perform temporarily, or its attitude shows that a demand would be useless, a written statement holding it liable for the failure is enough (Article 6:82(2)).
No notice of default is needed at all in three situations (Article 6:83):
- a deadline agreed for performance expires without performance, unless it appears that the deadline has a different purpose (under a);
- the obligation arises from a tort, or is an obligation to pay damages under Article 6:74(1), and it is not performed immediately (under b);
- you must infer from a statement of the debtor that it will fail to perform (under c).
An agreed deadline therefore puts the other party in default when it passes, unless it appears that the date had a different purpose, for example as a target date. Whether that is the case is a matter of interpretation, so state expressly in the contract that a date is final. If in doubt, send a notice of default anyway. What is a reasonable period depends on the performance: a payment can usually be made faster than a complex repair.
How do you terminate a contract out of court?
By a written declaration to the other party. If the contract was concluded electronically, an electronic declaration is also possible. Alternatively, you can ask the court to pronounce the termination (Article 6:267(1)-(2) Dutch Civil Code).
The declaration takes effect when it reaches the other party (Article 3:37(3)). The law prescribes no further content, but a declaration that will hold up in a dispute states:
- the contract and the obligations that were not performed;
- the notice of default and the period given, or why no notice was needed;
- that you terminate the contract, wholly or partly, and from which date;
- what must be returned or paid back, and that you reserve your claim for damages.
Send it by a method that proves receipt, and keep the notice of default and earlier correspondence together. A court judgment is the safer route if the facts are disputed or a large amount is at stake, but it takes longer. In that case, an offer to perform made after you claimed termination has no effect if the court pronounces it (Article 6:269).
What are the consequences of termination for breach?
Termination releases both parties from the obligations it affects. It has no retroactive effect, but what has already been performed must be undone, and the party whose failure caused the termination must in principle compensate the resulting damage (Articles 6:269, 6:271 and 6:277 Dutch Civil Code).
The legal basis for performance already rendered remains, but each party must return what it received (Article 6:271). Goods are returned and payments repaid. Where the nature of the performance rules out undoing it, as with services already provided, its value at the time of receipt is paid instead; if the performance did not conform to the contract, that value is limited to what it was actually worth to the recipient (Article 6:272(1)-(2)).
The party whose failure gave the ground for termination must compensate the damage the other party suffers because the contract is terminated instead of performed (Article 6:277(1)). That can include the extra cost of buying elsewhere and lost profit. If the failure cannot be attributed to that party, it only has to pay within the limits of Article 6:78, which concerns an advantage it gained from the failure (Article 6:277(2)).
Does the breach have to be attributable to the other party?
Not for termination: every failure in performance can justify it. Attributability matters for damages. A debtor owes damages for a failure unless the failure cannot be attributed to it (Article 6:74(1) Dutch Civil Code).
A failure is not attributable if it is not the debtor’s fault and is not for its account by law, by the contract or by generally accepted views (Article 6:75). That is the Dutch concept of force majeure (overmacht). So if an export ban prevents your supplier from delivering, you can still terminate, but you will usually not get damages beyond Article 6:277(2).
Can you terminate if you are in default yourself?
No, not for a failure in an obligation regarding which you, as creditor, are in default yourself, for example because you did not provide the information or cooperation the other party needed (Article 6:266(1) Dutch Civil Code).
There is one exception: if proper performance becomes wholly or partly impossible during your default, you can still terminate if the debtor or its subordinate fell short of the care that could be expected (Article 6:266(2)). If both parties have failed to perform, check carefully which failure came first and which obligations depend on each other. Our page on creditor default under Dutch law explains when a creditor is in default.
What is the difference between termination for breach and termination by notice?
Termination for breach requires a failure in performance and ends the contract by a declaration. Termination by notice (opzegging) needs no breach, but must follow the contract, the law and the case law on notice periods and compensation.
In English-language contracts, both are often called “termination”. Under Dutch law they are different instruments. A notice of termination of a long-term contract can itself trigger a duty to offer compensation (HR 29 November 2024, ECLI:NL:HR:2024:1709, paras. 3.2-3.3); a justified termination for breach gives you a claim for damages instead. Annulment (vernietiging) for mistake, fraud, threat or abuse of circumstances is a third route, which undoes the contract retroactively (Article 3:53(1)).
When is annulment a better option than termination?
When the problem lies in how the contract was formed rather than in how it is performed. A contract can be annulled for mistake (Article 6:228 Dutch Civil Code) and for threat, fraud or abuse of circumstances (Article 3:44).
Annulment takes place by an out-of-court declaration or a court judgment (Article 3:49) and works back to the moment the contract was concluded (Article 3:53(1)). It can be the better choice if you were misled about essential facts before signing. The conditions are strict and each defect of consent has its own requirements; see our page on rescinding a contract under Dutch law.
Which special rules apply to specific contracts?
Some contracts and treaties have their own termination rules that go before Article 6:265. The most important one for international trade is the Vienna Sales Convention (CISG), which applies to many cross-border sales of goods.
- Under the CISG, a buyer or seller can only declare the contract avoided for a fundamental breach, or after an additional period for delivery or payment has passed without performance (Articles 49 and 64 CISG). A breach is fundamental if it substantially deprives the other party of what it was entitled to expect, unless that result was not foreseeable (Article 25 CISG). The time limits for declaring avoidance after delivery or payment must be watched closely.
- A client can terminate a contract of assignment (services) at any time, without a breach, unless business parties have agreed otherwise (Article 7:408(1) Dutch Civil Code); see terminating a contract of assignment.
- For supply contracts, see termination of a supply contract under Dutch law; for construction, see terminating a construction contract; for franchise agreements, see terminating a franchise agreement.
What are the risks of an unjustified termination?
If the requirements are not met, your declaration does not end the contract. If you then stop performing, you may be the one in breach, and liable for the other party’s damage (Article 6:74 Dutch Civil Code).
Before you terminate, consider the alternatives. You can suspend your own performance while the other party does not perform, as far as its failure justifies that (Article 6:262(1)-(2)); see our page on the right of suspension. You can terminate only part of the contract (Article 6:270). Or, once the other party is in default, you can convert its obligation into one for replacement damages by written notice (Article 6:87(1)).
An example. A German wholesaler buys 500 devices from a Dutch distributor for a campaign. The contract is governed by Dutch law, excludes the CISG and gives an expected delivery week rather than a fixed date. The distributor delivers late. The wholesaler sends a written notice of default with a reasonable new date; when that date also passes, it terminates in writing, buys elsewhere at a higher price and claims the difference as damages under Article 6:277(1). Had it terminated as soon as the expected week passed, without a notice of default, the distributor could have argued that the week was not a deadline for performance, that it was not yet in default and that the termination had no effect.
How can your contract make termination for breach easier?
By stating clearly which breaches give a right to terminate, which deadlines are final, and how notices must be given. Parties may deviate from Article 6:265(1), and the court will then assess a termination under the contract (ECLI:NL:HR:2023:1071, para. 3.2).
- Name the obligations whose breach gives an immediate right to terminate, such as non-payment after a stated period or breach of exclusivity.
- Make critical delivery dates expressly final, so that default arises when they pass (Article 6:83 under a).
- Agree how notices of default and termination are sent and to which address, including e-mail.
- Regulate what happens on termination: return of goods, stock, intellectual property, and any limitation of damages.
- Align the clause with the governing law and the forum; if the CISG applies, its own rules on avoidance apply unless excluded.
Frequently asked questions about contract termination for breach under Dutch law
What does Article 6:265 of the Dutch Civil Code say?
Every failure of a party to perform one of its obligations gives the other party the right to terminate the contract wholly or partly, unless the failure, given its special nature or minor importance, does not justify termination. Unless performance is impossible, the right only arises once the debtor is in default (Article 6:265(1)-(2) Dutch Civil Code).
When is the debtor in default without a notice of default under Article 6:83?
When an agreed deadline passes without performance, unless the deadline has a different purpose; when the obligation arises from a tort or is an obligation to pay damages and is not performed immediately; or when the debtor’s statement shows it will fail to perform (Article 6:83 under a-c Dutch Civil Code).
What must a notice of default under Article 6:82 contain?
It must be a written demand that gives the debtor a reasonable period to perform. Default arises if performance does not follow within that period. If the debtor temporarily cannot perform or a demand would be useless, a written statement holding it liable is enough (Article 6:82(1)-(2) Dutch Civil Code).
What does Article 6:74 of the Dutch Civil Code mean for a breach of contract?
Every failure in performance obliges the debtor to compensate the damage the creditor suffers, unless the failure cannot be attributed to the debtor. As long as performance is not permanently impossible, this applies only once the debtor is in default (Article 6:74(1)-(2) Dutch Civil Code).
Do I need a court to terminate a contract for breach in the Netherlands?
No. A written declaration to the other party is enough, and if the contract was concluded electronically, an electronic declaration is also possible. You can also ask the court to pronounce the termination (Article 6:267 Dutch Civil Code).
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 (Burgerlijk Wetboek) Book 3: Article 3:37, Article 3:44, Article 3:49 and Article 3:53
- Dutch Civil Code Book 6: Article 6:74, Article 6:75, Article 6:78, Article 6:81, Article 6:82, Article 6:83, Article 6:87, Article 6:228, Article 6:262, Article 6:265, Article 6:266, Article 6:267, Article 6:269, Article 6:270, Article 6:271, Article 6:272 and Article 6:277
- Dutch Civil Code Book 7: Article 7:408
- United Nations Convention on Contracts for the International Sale of Goods (CISG): Article 25, Article 49 and Article 64
- Hoge Raad 7 July 2023, ECLI:NL:HR:2023:1071 (Beachhotel De Wielingen)
- Hoge Raad 29 November 2024, ECLI:NL:HR:2024:1709
Need advice on terminating a contract for breach in the Netherlands?
A termination that misses one requirement can turn a strong position into a damages claim against you. A Dutch lawyer can check the contract and the facts, draft the notice of default and the termination declaration, and calculate the damages you can claim. Read more about our work as a contract lawyer in the Netherlands for international companies. Related pages: what constitutes a contract breach under Dutch law and contractual penalty clauses under Dutch law.
