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An exemption clause (exoneratiebeding) is a contract term that excludes or limits a party’s liability. Under Dutch law, it is in principle valid. It does not apply, however, to the extent that relying on it would be unacceptable by standards of reasonableness and fairness (Article 6:248(2) Dutch Civil Code), and it is void if contrary to good morals or public order (Article 3:40(1)).
Exemption clauses are also called exclusion clauses, disclaimers or limitation clauses; see also our page on limitation of liability under Dutch law. They are often found in general terms and conditions. Dutch law does not require particular wording: a clause is interpreted by the meaning the parties could reasonably give to it in the circumstances and by what they could reasonably expect from each other (Hoge Raad 13 March 1981, ECLI:NL:HR:1981:AG4158, Haviltex). Clear drafting still helps to avoid disputes about its scope.
How Are Exemption Clauses Regulated in the Netherlands?
In the Dutch legal system, exemption clauses are governed by the Dutch Civil Code (Burgerlijk Wetboek) and case law. Every exemption clause is subject to Article 6:248(2) and Article 3:40. If the clause is part of general terms and conditions, it can also be annulled if it is unreasonably onerous for the other party, in view of the nature and other content of the contract, the way the terms came about, the mutually apparent interests of the parties and the other circumstances of the case (Article 6:233(a) Dutch Civil Code). That ground cannot be invoked by a legal entity referred to in Article 2:360 DCC that, when the contract was concluded, had most recently published its annual accounts (or to which Article 2:403(1) was then last applied), by another party for which fifty or more persons work at that time (or for which a filing under the Trade Register Act 2007 then shows this) (Article 6:235(1)), or by a party that repeatedly uses the same or nearly the same general terms itself (Article 6:235(3)).
Consumers are protected more strongly. In general terms used towards a consumer, a clause that wholly or partly releases the user or a third party from a statutory obligation to pay damages is presumed to be unreasonably onerous (Article 6:237(f) Dutch Civil Code). A clause obliging the consumer to compensate damage caused to a third party by the user, or to bear a larger share of it than the law requires, is always unreasonably onerous (Article 6:236(h)). In a consumer sale, the rights and claims that the law gives the buyer if the seller fails to perform cannot be limited or excluded at all (Article 7:6(1) Dutch Civil Code).
What Are Real-Life Examples of Exemption Clauses under Dutch law?
Practical applications of exemption clauses are abundant in everyday transactions. For instance, a software license agreement might include an exemption clause that limits the licensor’s liability in cases of software malfunctioning.
Similarly, in service contracts, such as with gyms or telecom providers, these clauses are frequently employed to cap compensation or exclude liability for certain failures like service interruptions or data loss. Each instance highlights the need for drafting precise clauses that comply with Dutch legal standards to ensure they hold up in court if challenged.
An example from case law is this clause in a commercial lease: “Landlord is not liable for the consequences of visible or invisible defects in the leased property” (Hoge Raad 29 January 2021, ECLI:NL:HR:2021:153, para. 2.1(vi); our translation). Other common clauses cap liability at the invoice amount or the amount paid out by the insurer, or exclude indirect and consequential loss.
What are exemption clauses under Dutch law?
Exemption clauses are contractual provisions that exclude or limit liability for specific events. Without such a clause, a party that fails to perform must compensate the resulting damage, unless the failure cannot be attributed to it (Article 6:74(1) Dutch Civil Code); unless performance is already permanently impossible, the debtor must first be in default (Article 6:74(2)). Parties are free to agree otherwise, within the limits of Articles 6:248(2) and 3:40 and, for general terms and conditions, Articles 6:233 to 6:237.
Which types of exemption clause exist?
- Exclusion Clause under Dutch law: This type of clause entirely excludes liability for certain events.
- Limitation Clause under Dutch law: It partially limits liability, often capping the maximum amount payable in damages.
- Indemnity clause (vrijwaringsbeding): one party undertakes to hold the other harmless, often against claims by third parties. Strictly speaking it shifts liability rather than excluding it. Towards a consumer, a clause in general terms that obliges the consumer to compensate damage caused to a third party in the performance of the contract by the user (or by a person or thing for which the user is liable), or to bear a larger share of it than the law requires, is unreasonably onerous (Article 6:236(h) Dutch Civil Code).
When is an exemption clause enforceable?
A valid exemption clause applies unless relying on it would be unacceptable by standards of reasonableness and fairness in the circumstances (Article 6:248(2) Dutch Civil Code). The Supreme Court has named relevant factors, such as the seriousness of the fault, also in connection with the nature and seriousness of the interests involved, the nature and further content of the contract, the social position and relationship of the parties, the way the clause came about and the extent to which the other party was aware of its purport (Hoge Raad 19 May 1967, ECLI:NL:HR:1967:AC4745). Courts must apply this test with restraint (Hoge Raad 29 January 2021, ECLI:NL:HR:2021:153, para. 3.1.2).
Can liability for intent or gross negligence be excluded? The Civil Code has no specific rule on this. The seriousness of the fault is one of the factors under Article 6:248(2) (Hoge Raad 19 May 1967, above), so intent or gross negligence can be a reason why reliance on the clause is unacceptable; this depends on all circumstances of the case. Many clauses carve out intent and gross negligence themselves. In the 2021 case, for example, the general lease terms provided that certain limitations, including the exclusion of business loss, did not apply to damage caused by gross fault or serious negligence of the landlord regarding the condition of the premises (Hoge Raad 29 January 2021, paras 2.1(vi) and 3.1.2).
For international contracts, note that the Dutch rules on general terms and conditions (Articles 6:231 to 6:247) do not apply at all between businesses that are not both established in the Netherlands, whatever law governs the contract (Article 6:247(2) Dutch Civil Code). What counts is the main establishment or, if the contract is to be performed by another establishment, that establishment (Article 6:247(3)). If Dutch law governs such a contract, an exemption clause is then mainly tested under Article 6:248(2) and Article 3:40.
What do exemption clauses look like in practice?
- Exclusion Clause Example: “Notwithstanding any other provision of this Agreement, neither party shall have any liability to the other for consequential, special, or exemplary damages.”
- Limitation Clause Example: “The Consultant’s liability to the Client for any breaches shall be limited to the amount in fees already paid, except for damages resulting from intent or gross negligence.”
Frequently asked questions about exemption clauses in Dutch contract law
What is an exemption clause?
A contract term that excludes or limits a party’s liability, for example for breach of contract or for certain types of loss. Under Dutch law it is in principle valid, but it does not apply where relying on it would be unacceptable (Article 6:248(2) Dutch Civil Code), and it is void if contrary to good morals or public order (Article 3:40(1)).
What is an example of an exemption clause?
“Neither party shall be liable for indirect or consequential loss”, or “Liability is limited to the invoice amount, except in case of intent or gross negligence”. A Dutch case example: “Landlord is not liable for the consequences of visible or invisible defects in the leased property” (Hoge Raad 29 January 2021, ECLI:NL:HR:2021:153; our translation).
Which exemption clauses are forbidden under Dutch law?
A clause contrary to good morals or public order is void (Article 3:40(1) Dutch Civil Code). Towards consumers, a clause in general terms excluding statutory damages is presumed unreasonably onerous (Article 6:237(f)), some clauses are always unreasonably onerous (Article 6:236), and in a consumer sale the buyer’s rights for non-performance cannot be limited or excluded (Article 7:6(1)).
Can you exclude liability for gross negligence in the Netherlands?
There is no specific statutory ban. Whether reliance on the clause is acceptable depends on all circumstances, including the seriousness of the fault (Article 6:248(2) Dutch Civil Code; Hoge Raad 19 May 1967, ECLI:NL:HR:1967:AC4745). Intent or gross negligence can therefore be a reason why reliance on the clause is unacceptable, but there is no fixed rule.
Do the Dutch rules on general terms apply to international contracts?
Not between businesses that are not both established in the Netherlands, whatever law governs the contract (Article 6:247(2) Dutch Civil Code). If Dutch law applies, an exemption clause is then mainly tested under Article 6:248(2) and Article 3:40.
Primary sources
- Dutch Civil Code Book 3: Article 3:40
- Dutch Civil Code Book 6: Articles 6:74, 6:233, 6:235, 6:236, 6:237, 6:247 and 6:248
- Dutch Civil Code Book 7: Article 7:6
- Hoge Raad 13 March 1981, ECLI:NL:HR:1981:AG4158 (Haviltex)
- Hoge Raad 19 May 1967, ECLI:NL:HR:1967:AC4745
- Hoge Raad 29 January 2021, ECLI:NL:HR:2021:153, paras 2.1 and 3.1.2
