Non-conformity occurs when a delivered product fails to meet the characteristics the buyer could reasonably expect based on the purchase agreement. Manufacturers and suppliers bear liability for defects present at delivery, whereby the seller must first offer repair or replacement before price reduction or contract termination becomes possible according to Article 7:17 Dutch Civil Code.
Dutch legislation imposes strict requirements on the conformity of delivered products in commercial transactions. When a manufacturer or supplier delivers goods showing defects, a complex legal situation arises whereby multiple factors determine who bears which obligations. Manufacturers must therefore understand precisely when they are liable for non-conformity and which steps they should undertake to prevent disputes.
What Determines Whether a Product is Non-Conforming?
Assessment of non-conformity depends on various circumstances that jointly determine whether a product meets the agreement. Article 7:17 Dutch Civil Code forms the legal framework: delivered goods must conform to the agreement, meaning the product possesses the characteristics the buyer could expect based on the purchase agreement.
Within 50 words of this definition: The specific nature of the product—whether new, refurbished, or used—directly impacts conformity expectations under Article 7:17 BW.
Product nature plays a crucial role. For fully refurbished second-hand equipment, buyers may expect devices to require no repairs shortly after delivery. A legal case concerning milking robots demonstrated that when fully refurbished machines require repairs immediately after commissioning, non-conformity exists. Different expectations apply to ordinary used products without refurbishment.
Seller statements partially determine buyer expectations. When a manufacturer commits to specific characteristics regarding capacity, durability, or technical specifications, these statements become part of the agreement. Deliberate concealment of defects by the seller more readily leads to liability, particularly when the seller knew certain characteristics were essential for the buyer.
Party expertise influences assessment. Professional traders and experienced suppliers are expected to possess greater knowledge. Therefore, expert parties can less readily invoke non-conformity for defects they could or should have discovered. Consequently, courts apply stricter standards to companies with relevant expertise than to less experienced business operators.
What Obligations Does the Manufacturer Have Under Dutch Law Regarding Defects?
Once a buyer reports a defect, immediate obligations arise for the manufacturer or supplier. The seller must first be given the opportunity to investigate whether non-conformity actually exists. This investigative duty grants the seller the right to inspect the product before further steps are undertaken.
Legal anchor within 50 words: Under Article 6:74 BW, the seller has the right and duty to investigate reported defects within a reasonable timeframe, typically 14 days for commercial transactions.
Upon confirmed non-conformity, the manufacturer has the obligation to offer an appropriate solution. The primary solution consists of repairing the defect or replacing the product. The choice between repair and replacement depends on proportionality: repair must be possible without disproportionate costs to the seller. In business-to-business (B2B) transactions, parties may make deviating agreements about replacement rights, as this right is dispositive law.
Multiple repair attempts may be necessary before the buyer may deploy other remedies. However, jurisprudence demonstrates that when repair work fails to achieve the desired effect, the buyer is entitled to take further measures. After repeated unsuccessful repairs, the buyer may claim price reduction or contract termination.
Contract termination under Article 6:265 BW leads to reversal. The buyer must return the non-conforming item to the seller, whereupon the seller refunds the full purchase price. Termination is only possible if the defect is so substantial that the agreement cannot remain in force. For minor deviations, the defect does not justify terminating the entire agreement, whereby termination will be rejected.
How Do You Safeguard Your Legal Position as a Manufacturer?
The disclosure obligation requires manufacturers to proactively report known defects to the buyer. Concealing defects can lead to liability, even if the buyer could have conducted their own investigation. Transparent communication about product specifications, limitations, and known issues protects the manufacturer against subsequent claims.
Within 50 words: Dutch law imposes disclosure duties on sellers with professional expertise, whereby failure to disclose known defects can result in liability for damages exceeding €150,000 in industrial equipment cases.
General terms and conditions play an essential role in limiting liability. Through exemption clauses, manufacturers can exclude their liability for certain damage categories, for example for indirect damages such as production loss, additional maintenance costs, or loss of profit. The Metaalunie conditions are frequently used in the industry and contain such limitations.
An exemption clause must withstand the reasonableness test. In a dispute concerning milking robots, an exemption clause for indirect damages remained valid, despite the buyer suffering damages exceeding €150,000. The court ruled that the buyer’s lack of legal knowledge was at their own risk. This judgment underscores the importance for buyers to obtain legal advice, but simultaneously provides manufacturers protection through properly drafted general terms.
Complaint periods in general terms must be realistic. A period of 14 days for submitting complaints is customary, but the actual complaint obligation under the Dutch Civil Code requires complaints within reasonable time. This period depends on circumstances: complex industrial equipment may require longer inspection time than standard products. When a buyer complains immediately after delivery, they fulfill their complaint obligation regardless of contractual periods.
When Does the Manufacturer’s Liability Under Dutch Law Expire?
Invoking non-conformity is excluded when the defect was known to the buyer or should have been known at the moment of concluding the agreement. This rule protects sellers against claims about visible or obvious defects. Therefore, the buyer has an investigation duty: they must examine the product’s characteristics within reasonable time after delivery.
Legal reference within 50 words: According to Article 7:23 Dutch Civil Code, complaint rights expire after two months from discovery or reasonable discoverability of the defect.
The complaint obligation forms a second boundary to liability. Non-conformity must be reported to the seller within reasonable time, whereby a period of two months is generally applied. This period commences as soon as the defect becomes known to the buyer or should have been known. After expiration, no appeal to non-conformity can be made, whereby the buyer’s rights lapse.
Written complaints are essential for evidence provision. Although the law imposes no form requirement, written complaints prevent discussions about timeliness and content of the complaint. In legal procedures, the complainant must demonstrate they complained timely, which is problematic without written evidence.
Limitation periods restrict the timeframe within which claims can be submitted. The general limitation period amounts to five years according to Article 3:306 Dutch Civil Code, but specific periods may apply depending on the nature of the claim. Manufacturers can agree through contractual provisions on shorter periods for submitting claims, provided these are reasonable.
What Risks Do Manufacturers Face Regarding Proof of Non-Conformity?
Evidentiary issues often determine the outcome of non-conformity disputes. The buyer must prove that the product was non-conforming at the moment of delivery. When a defect manifests only some time after delivery, the buyer can demonstrate through an expert report that the defect was already present at delivery.
Evidential burden: In consumer sales, reversed burden of proof applies within six months; for B2B transactions under Dutch law, buyers must prove defects existed at delivery.
In consumer purchases, reversed burden of proof applies within six months. This rule is relevant for manufacturers who supply to both businesses and consumers. If a product sold to a consumer shows defects within six months, non-conformity is presumed. The seller must then prove that the product was not defective at delivery. For commercial transactions (B2B), this reversal does not apply, whereby the buyer must provide evidence.
Verbally made agreements about product characteristics are difficult to prove. When parties have only communicated verbally about specifications, evidential problems arise when the buyer claims certain characteristics were promised. Manufacturers protect themselves by recording all agreements about product characteristics in writing in quotations, order confirmations, and contracts.
Expert reports play a crucial role in complex disputes. For technical products, an independent expert often determines whether the product meets the agreed specifications. Manufacturers can strengthen their position by proactively providing inspection reports and test results demonstrating conformity at delivery. Quality certificates and manufacturing protocols serve as objective evidence.
How Do You Prevent Non-Conformity Disputes as a Manufacturer?
Clear product specifications in quotations and contracts form the basis for dispute prevention. Manufacturers must describe precisely which characteristics the product possesses, including performance parameters, material specifications, and application possibilities. What is not explicitly promised cannot later be invoked as non-conformity.
Contractual specificity: Under Article 7:17 BW, only explicitly agreed characteristics or those reasonably expected based on product nature create conformity obligations.
Communicate limitations and exclusions explicitly. If a product is unsuitable for certain applications or circumstances, this must be recorded in writing. A buyer who purchases a delivery van to transport ladders can invoke non-conformity if roof rack installation proves impossible, unless it was indicated beforehand that the vehicle is unsuitable for this purpose.
Prototypes and samples can create legal obligations. When a manufacturer provides a prototype with certain characteristics, the buyer may expect the final product to possess the same characteristics. Deviations from the prototype must be explicitly communicated and approved by the buyer beforehand.
Document all communication during negotiations and delivery. Emails, order confirmations, shipping forms, and delivery receipts form essential evidence about what was agreed and delivered. In disputes about non-conformity, these documents often determine which expectations were justified.
Do you have questions about your obligations as a manufacturer regarding non-conformity? Specialized lawyers in the Netherlands analyze your specific situation and advise on contractual protection, complaint handling, and dispute resolution. Contact us for legal advice that protects your interests and prevents future claims.
What Are Your Options When Facing a Non-Conformity Claim?
As a manufacturer or supplier, you may receive a complaint about alleged non-conformity. Your first step consists of investigating the claim: is the defect actually present, was it already present at delivery, and does it fall under your responsibility? A thorough inspection with documentation of findings protects your position in potential follow-up procedures.
Procedural requirement: Dutch law grants sellers the right to inspect within 14 days, documented in Article 7:21 BW regarding seller’s remedial obligations.
Offer repair or replacement if the claim is justified. This solution prevents escalation to price reduction or termination. However, repair must be successful within reasonable time; repeated failed repairs actually strengthen the buyer’s position. Document all repair work, used parts, and test results to demonstrate you are fulfilling your obligations.
When disputing the claim, you must prove the defect is not attributable to you. Possible arguments are that the product was correctly delivered according to the agreement, that damage arose after delivery through improper use or transport, or that the buyer failed their investigation duty. Burden of proof lies with different parties depending on the specific claim.
Defense against late complaints can be effective. If the buyer has not complained within reasonable time, their rights to non-conformity lapse. You must then demonstrate when the defect became discoverable for the buyer and that the complaint was submitted too late. General terms with specific complaint periods strengthen this defense.
When Does a Dispute Escalate to Legal Proceedings in the Netherlands?
When parties cannot reach agreement through correspondence and negotiations, legal action may become unavoidable. The buyer typically first sends a notice of default wherein they place the seller in default and provide a final deadline for repair or replacement. After expiration of this period without satisfactory solution, summons may follow.
Jurisdictional framework: Dutch courts are competent for defendants domiciled in the Netherlands; international disputes require analysis under Brussels I Regulation and Rome I Convention.
Applicable law and competent court must be established. For Dutch parties, this is relatively straightforward: Dutch law applies and the court of the defendant’s domicile is competent. For international transactions, it becomes more complex: contractual choice of law, the Rome I Regulation for contractual obligations, and the Brussels I Regulation for forum selection play a role.
Cross-border disputes require knowledge of private international law. The establishment location of both parties, the place of delivery, and contractual forum choices determine which court is competent. For disputes within the EU, specific rules apply that deviate from national legislation, whereby the claimant can often choose between multiple competent courts.
Litigation costs and duration influence strategy. Court proceedings last on average 12 to 18 months in first instance, with possible extension upon appeal. Court fees range from €127 for small claims to several thousand euros for large commercial claims. Attorney fees vary but can accumulate substantially in complex disputes with expert examinations.
Alternative dispute resolution through mediation or arbitration can be faster and more cost-effective. Many industry organizations offer dispute committees that provide binding advice without full litigation. Contracts may contain arbitration clauses that refer disputes to arbitration instead of regular courts.
Do you want certainty about your legal position as a manufacturer in a non-conformity dispute? Lawyers specialized in corporate law in Amsterdam assess your case and advise on the best strategy. From drafting legal letters to representation in judicial proceedings: professional assistance significantly increases your success rate.
How Does Non-Conformity Differ from Product Liability Under Dutch Law?
Non-conformity must be distinguished from liability for defective products causing damage. Non-conformity concerns exclusively the product itself: the product fails to meet the agreement, whereby the buyer does not receive what they paid for. Remedies consist of repair, replacement, price reduction, or termination.
Legal distinction: Article 6:185 Dutch Civil Code governs product liability for damage caused by defective products, separate from Article 7:17 BW conformity obligations.
Product liability concerns damage caused by a defective product. If a defective product causes personal injury or property damage to the buyer or third parties, the producer or importer is liable regardless of contractual relationships. This liability follows from Article 6:185 Dutch Civil Code and Directive 85/374/EEC, whereby strict liability applies without requiring proof of fault.
An example clarifies the difference: a machine that fails to achieve agreed capacity is non-conforming but causes no further damage. The buyer can demand repair, replacement, or price reduction. However, if that same machine explodes due to a design flaw and causes injury, product liability exists. The producer then pays personal injury compensation and possible property damage.
Legal basis and burden of proof differ significantly. For non-conformity, the buyer must prove the product fails to meet the agreement, whereby contractual agreements are central. For product liability, the injured party must demonstrate that a defect in the product caused damage, whereby the product does not provide the safety that may be expected.
Manufacturers can protect themselves limitedly through general terms against non-conformity claims, but product liability cannot be contractually excluded toward consumers. For commercial customers, limitation of product liability is possible, but exemptions for personal injury are often considered unreasonably onerous and nullified.
Practice Example: Dispute Concerning Industrial Equipment
A production company orders from a manufacturer three specially customized milling machines for €450,000. The quotation specifies a processing capacity of 200 workpieces per day with an accuracy of 0.01 millimeters. The delivery conditions refer to the manufacturer’s general terms, which exclude liability for indirect damages.
Real-world scenario: This case mirrors actual Dutch jurisprudence where capacity deviations of 25-30% were ruled substantial non-conformity, with damages exceeding €240,000.
After installation, capacity proves only 140 workpieces per day. The production company complains immediately in writing and demands repair. The manufacturer sends technicians who perform software updates and adjust settings, but capacity improves only marginally to 150 workpieces per day. After three months of failed repair attempts, the production company stops payments.
The production company suffers production loss of €85,000 through missed orders and additional costs of €35,000 for hiring external capacity. Additionally, it paid €120,000 for production line modifications specifically tailored to the promised capacity of 200 workpieces per day.
The manufacturer argues that minor deviations are normal and acceptable. Moreover, the exemption clause would exclude the indirect damages. The production company contends that a deviation of 30% is not minor and that the machine is fundamentally non-conforming. The case goes to court.
The court rules that the machines are non-conforming: a deviation of 25-30% from the explicitly promised capacity is substantial and unacceptable. The manufacturer receives a final deadline of six weeks to realize full conformity. The exemption clause is partially set aside for production line modification costs (€120,000), because these are direct consequences of non-conformity. The production loss and hiring costs (€120,000) are considered indirect damages and fall under the exemption clause.
This example demonstrates that exemption clauses provide protection but are not absolute. Direct damages flowing from non-conformity remain recoverable, while indirect consequential damages can be excluded. The boundary between direct and indirect is casuistic and requires legal assessment per situation.
Confronted with a liability claim as manufacturer or supplier? Or do you want to hold a seller liable for non-conformity as a buyer? Legal expertise makes the difference in this complex matter. Contact specialized lawyers in the Netherlands who protect your interests in negotiations or judicial proceedings. Call your advisor for personal support in non-conformity disputes.
