Non-Conformity in Dutch Contract Law

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Under Dutch law, goods must conform to the contract (conformiteit): they must have the properties the buyer was entitled to expect, including those needed for normal use (Article 7:17 Dutch Civil Code). If not, the buyer can demand delivery of what is missing, repair or replacement, or claim damages or termination. The buyer must notify the seller in time (Article 7:23).

Consumers have additional, mandatory protection (Articles 7:18, 7:18a, 7:21 and 7:22 DCC; Article 7:6(1)). Cross-border sales of goods between businesses are often governed by the UN Convention on Contracts for the International Sale of Goods (CISG) instead of these Dutch rules. Our team also advises on Dutch Distribution Law.

The buyer cannot rely on a non-conformity it knew of, or could reasonably have known of, when the contract was concluded. Nor can it rely on defects caused by raw materials the buyer supplied, unless the seller should have warned about them (Article 7:17(5)). In a consumer sale, the consumer can in principle first demand repair or replacement. Termination (unless the deviation is minor) and a proportionate price reduction become available if repair and replacement are impossible or cannot be required of the seller, if the seller does not perform them within a reasonable time, or in the other cases listed in Article 7:22(5). Depending on the facts, a buyer can sometimes also annul the contract for mistake (dwaling, Article 6:228 DCC). We regularly assist clients with breach contract under Dutch law.

What are the key points on non-conformity?

  • In principle the buyer must prove the non-conformity (Article 150 Dutch Code of Civil Procedure). In a consumer sale, a defect that appears within one year of delivery is presumed to have existed at delivery, unless the seller proves otherwise or the nature of the goods or of the defect is incompatible with this presumption (Article 7:18a(2) DCC).
  • Buyers can demand delivery, request repair or replacement, terminate the contract, and seek damages as legal remedies.
  • The costs of delivering what is missing, repair or replacement cannot be charged to the buyer (Article 7:21(2) DCC).
  • The law sets no number of repair attempts. The seller must repair or replace within a reasonable time and without serious inconvenience to the buyer (Article 7:21(3) DCC). In a consumer sale, the consumer may terminate or reduce the price at once if the goods still do not conform despite the seller’s attempt (Article 7:22(5)(b)).
  • Buyers have the option to terminate the contract and seek a refund if non-conformity persists, reversing the transaction.

What does non-conformity mean under Article 7:17 DCC?

Article 7:17(1) DCC requires the delivered goods to conform to the contract. Under Article 7:17(2), goods do not conform if, taking into account their nature and the seller’s statements about them, they lack the properties the buyer was entitled to expect under the contract. The buyer may expect the properties needed for normal use whose presence it had no reason to doubt, and the properties needed for a special use provided for in the contract.

Delivering a different thing, or goods of a different kind, is also a non-conformity. The same applies if the quantity, measure or weight deviates from what was agreed (Article 7:17(3)). If the buyer was shown or given a sample or model, the goods must match it, unless it was only given as an indication (Article 7:17(4)).

For consumer sales, Article 7:18 DCC adds specific requirements, for example on functionality, compatibility, durability, accessories and, for goods with digital elements, updates. The seller can only rely on a deviation from the objective requirements of Article 7:18(2) or (4) if the consumer was expressly informed of it when concluding the contract and expressly and separately accepted it (Article 7:18(6)).

What are the time limits for claiming a lack of conformity in a sales contract under Dutch law?

The time limits depend on the applicable law. Under Dutch law, the buyer must notify the seller within a reasonable time after it discovered, or reasonably should have discovered, the non-conformity (Article 7:23(1) DCC). Claims and defences based on the non-conformity are time-barred two years after that notice, although a buyer who is sued for the price can still raise its right to a price reduction or damages as a defence (Article 7:23(2)). In an international sale governed by the CISG, the buyer must give notice within a reasonable time, and in any event within two years after the goods were actually handed over, unless this is inconsistent with a contractual guarantee period (Article 39 CISG).

Under the CISG, the buyer can only demand substitute goods if the lack of conformity is a fundamental breach of contract, and repair only if that is not unreasonable. In both cases the request must be made together with the notice or within a reasonable time afterwards (Article 46(2) and (3) CISG). Under Dutch law, the two-year period does not run while the buyer cannot exercise its rights because of the seller’s intent (Article 7:23(3) DCC). In consumer sales within the EU, the limitation period of a claim based on non-conformity may not expire within two years after delivery of the goods.

For distance and off-premises contracts, Dutch law gives consumers 14 days from receipt of the goods to withdraw without giving reasons (Article 6:230o DCC). That right is separate from the rules on non-conformity. If the goods do not conform, the consumer can in principle first demand repair or replacement. Price reduction or termination become available if that is impossible, cannot be required of the seller or does not happen within a reasonable time, or in the other cases of Article 7:22(5) (Articles 7:21 and 7:22 DCC). In a consumer sale, the seller cannot rely on the consumer’s knowledge of a deviation from the objective requirements unless the consumer was expressly informed of it and expressly and separately accepted it (Article 7:18(6)). The buyer may reasonably expect the goods to have the properties required for normal use.

What are the implications of the duty to complain in case of non-conformity?

The duty to complain (klachtplicht) requires the buyer to notify the seller within a reasonable time after it discovered, or reasonably should have discovered, the non-conformity (Article 7:23(1) DCC). If the goods lack a property the seller said they had, or if the deviation concerns facts the seller knew or should have known but did not disclose, the notice must be given within a reasonable time after actual discovery.

In all other cases, the period starts when the buyer discovered or reasonably should have discovered the non-conformity, which implies a duty to inspect the goods. If the buyer does not complain in time, it loses the right to invoke the non-conformity.

In a consumer sale, the notice must be given within a reasonable time after discovery, and a notice within two months of discovery is in time (Article 7:23(1), third sentence). Between businesses, the parties can in principle agree on a specific complaint period. In a consumer sale, these rules cannot be set aside to the consumer’s detriment (Article 7:6(1) DCC). In principle, the buyer must prove the non-conformity (Article 150 Dutch Code of Civil Procedure); in a consumer sale, the presumption of Article 7:18a(2) DCC applies to defects that appear within one year of delivery. After the notice, claims and defences based on the non-conformity become time-barred two years later (Article 7:23(2)). A buyer who is sued for the price can still raise its right to a price reduction or damages as a defence.

When does the CISG apply instead of Dutch sales law?

The CISG (Weens Koopverdrag) applies to sales of goods between parties whose places of business are in different Contracting States (Article 1(1)(a) CISG), or when the rules of private international law lead to the law of a Contracting State (Article 1(1)(b)). A choice of Dutch law alone does not, as a rule, exclude it; parties who do not want the CISG must exclude it (Article 6 CISG). It does not apply to goods bought for personal, family or household use, unless the seller neither knew nor ought to have known of that use (Article 2(a)).

Under Article 35 CISG, the goods must be of the quantity, quality and description required by the contract and packaged as required. Unless agreed otherwise, they must also be fit for their ordinary purposes and for any particular purpose made known to the seller, match a sample or model, and be packaged in the usual or an adequate way. The seller is not liable for such a lack of conformity if the buyer knew or could not have been unaware of it when the contract was concluded (Article 35(3)).

The buyer must examine the goods within as short a period as is practicable (Article 38 CISG). It must give notice specifying the nature of the lack of conformity within a reasonable time after it discovered it or ought to have discovered it, and in any event within two years after the goods were actually handed over, unless this time limit is inconsistent with a contractual period of guarantee (Article 39). The seller cannot rely on Articles 38 and 39 if the lack of conformity relates to facts it knew or could not have been unaware of and did not disclose (Article 40).

Who bears the burden of proof?

What is the burden of proof in non-conformity cases under Dutch contract law? In general, the buyer who invokes the non-conformity must prove it (Article 150 Dutch Code of Civil Procedure), unless a special rule provides otherwise.

In practice, the buyer often uses photos, correspondence and an expert report to show that the goods did not meet the contract at delivery.

There is an important exception in consumer sales. If the defect appears within one year of delivery, it is presumed that the goods did not conform at delivery, unless the seller proves otherwise or the nature of the goods or of the defect is incompatible with this presumption (Article 7:18a(2) DCC). After that year, the consumer must prove that the defect already existed at delivery.

It is important to understand the evidence requirements and legal implications of the burden of proof in non-conformity cases.

Seek legal advice if you’re unsure about how to handle the burden of proof effectively. This will help you handle such disputes and assert your consumer rights under Dutch contract law.

Which remedies does the buyer have?

Under Dutch contract law, if goods don’t conform to the agreed-upon terms, buyers have various remedies available to address these issues. When a buyer identifies a non-conformity, it’s important to take prompt action to make sure they can seek appropriate resolution.

The following remedies are available to buyers:

  1. Delivery of what is missing: the buyer can demand that the seller delivers the missing items (Article 7:21(1)(a) DCC).
  2. Repair or replacement: repair if the seller can reasonably do so, and replacement unless the deviation is too minor to justify it (Article 7:21(1)(b) and (c) DCC). In a consumer sale, the consumer is only denied repair or replacement if that is impossible or cannot be required of the seller (Article 7:21(4) and (5)).
  3. Termination: between businesses, every failure in performance entitles the buyer to terminate, unless the failure, given its special nature or minor importance, does not justify termination. Unless performance is permanently or temporarily impossible, the seller must first be in default (Article 6:265 DCC). In a consumer sale, Article 7:22 applies.
  4. Damages: the seller must compensate the loss caused by the failure, unless it cannot be attributed to the seller. Where performance is not already permanently impossible, the seller must first be in default (Article 6:74 DCC; for consumer sales also Article 7:24).

Seeking legal advice and employing effective negotiation strategies can greatly enhance a buyer’s chances of achieving their desired outcomes. It’s advisable to consult with legal professionals to draft clear and impactful communication to address non-conformity with sellers and achieve the best possible resolution.

Who pays the costs?

When addressing non-conformity under Dutch contract law, sellers are held financially accountable for the costs of rectifying the issue to make sure that buyers aren’t further burdened.

In terms of cost allocation, the costs of delivering what is missing, repairing or replacing the goods cannot be charged to you as the buyer (Article 7:21(2) DCC). In a consumer sale, the seller must also take back goods that are to be repaired or replaced at its own expense (Article 7:21(7)).

In a consumer sale, the seller cannot charge the consumer for normal use of the replaced goods in the period before replacement (Article 7:21(7) DCC).

If a consumer terminates the contract, the consumer returns the goods at the seller’s expense, and the seller refunds the price on receipt of the goods or of proof that they have been sent back (Article 7:22(7) DCC).

How quickly must a defect be repaired?

During the resolution process, timely action is needed to rectify the non-conformity and prevent further buyer inconvenience. Under Dutch contract law, prompt resolution is important for upholding buyer rights and securing a satisfactory outcome.

Here are the key aspects to keep in mind for timely resolution and repair:

  1. No fixed number of attempts: the law does not set a number of repair attempts. The seller must perform within a reasonable time and without serious inconvenience to the buyer, taking into account the nature of the goods and any special use provided for in the contract (Article 7:21(3) DCC).
  2. Other solutions: in a consumer sale, the consumer may terminate or reduce the price at once if the seller has not completed, or has refused, repair or replacement, or if the goods still do not conform despite the seller’s attempt (Article 7:22(5)(a) and (b)).
  3. Third-party repair: in a consumer sale, if the seller has not repaired the goods within a reasonable time after a written demand, the consumer may have them repaired by a third party and recover the costs from the seller (Article 7:21(6) DCC).
  4. Time-Critical Resolution: Sellers must act promptly to rectify non-conformities to avoid undue inconvenience to buyers.

A swift and effective resolution of non-conformities is vital in Dutch contract law. By following these guidelines, buyers can make sure that non-conformities are addressed efficiently and that fair remedies are available if needed.

When can you terminate and claim a refund?

If the non-conformity persists despite repair attempts, you can consider terminating the contract (ontbinding) and claiming a refund. Termination takes place by a written statement to the seller, or by a court judgment at the buyer’s request (Article 6:267 DCC). It releases both parties from their obligations, and performance already received must be undone (Article 6:271).

This option is particularly valuable when the non-conformity is significant and the seller fails to correct the issue. In such cases, contract termination allows you to exit the agreement and obtain a refund, effectively reversing the transaction.

  • Consumer sale: termination (unless the deviation is minor) or a proportionate price reduction, once the conditions of Article 7:22(2) or (5) DCC are met. The price is refunded when the seller receives the goods or proof that they were sent back (Article 7:22(7)).
  • Sale between businesses: termination under Article 6:265 DCC, in principle after the seller is in default, plus damages for the loss caused by the termination (Article 6:277) or the failure (Article 6:74).
  • International sale under the CISG: the buyer can declare the contract avoided in particular if the failure is a fundamental breach (Article 49(1)(a) CISG), meaning that it substantially deprives the buyer of what it was entitled to expect under the contract, unless the seller did not foresee and a reasonable person of the same kind in the same circumstances would not have foreseen such a result (Article 25). Once the goods have been delivered, the buyer must declare avoidance within a reasonable time after it discovered or ought to have discovered the breach (Article 49(2)(b) CISG).

Frequently asked questions about non-conformity under Dutch law

What is non-conformity under Dutch law?

Goods do not conform if, given their nature and the seller’s statements, they lack the properties the buyer was entitled to expect under the contract, including those needed for normal use (Article 7:17(2) Dutch Civil Code). Delivering a different thing, or a wrong quantity, measure or weight, is also a non-conformity (Article 7:17(3)).

Is there a fixed legal guarantee period for defective goods in the Netherlands?

No. Dutch law does not set a fixed period. The question is whether the goods have the properties the buyer could expect, including durability in a consumer sale (Articles 7:17 and 7:18(2)(d) DCC). In a consumer sale, a defect that appears within one year of delivery is presumed to have existed at delivery (Article 7:18a(2)). A commercial guarantee from the seller or producer applies in addition to these statutory rights (Article 7:6a(1)).

Who pays for repair, replacement or return of defective goods?

The seller. The costs of delivering what is missing, repair or replacement cannot be charged to the buyer (Article 7:21(2) DCC). In a consumer sale, the seller takes back the goods at its own expense and cannot charge for normal use before replacement (Article 7:21(7)). After termination, the consumer returns the goods at the seller’s expense (Article 7:22(7)).

How quickly must a buyer complain about a defect?

Within a reasonable time after the buyer discovered, or reasonably should have discovered, the defect (Article 7:23(1) DCC). For consumers, a notice within two months of discovery is in time. Claims based on the defect become time-barred two years after the notice, but a buyer who is sued for the price can still raise its right to a price reduction or damages as a defence (Article 7:23(2)).

Does the CISG apply to an international sale with a Dutch company?

Often it does. The CISG applies to sales of goods between parties whose places of business are in different Contracting States (Article 1(1)(a) CISG), unless the parties have excluded it (Article 6). Under the CISG, the buyer must give notice within a reasonable time and at the latest two years after the goods were actually handed over, unless this is inconsistent with a contractual period of guarantee (Article 39).

What should buyers and sellers remember?

Burden of Proof in Non-Conformity:

  1. Consumer purchases: a defect that appears within one year of delivery is presumed to have existed at delivery, unless the seller proves otherwise or the nature of the goods or of the defect is incompatible with this (Article 7:18a(2) Dutch Civil Code).
  2. Non-consumer Purchases: For purchases between companies, the buyer must prove the product was non-conformant at delivery.

Remedies Available for Buyers:

  1. Notice of default: between businesses, termination and damages for a failure that can still be remedied generally require the seller to be in default. Default usually arises when a written notice sets a reasonable period for performance and the seller does not perform within that period (Article 6:82 DCC), with exceptions in Article 6:83. In a consumer sale, Article 7:22 sets its own conditions.
  2. Liability for Defects: Buyers can claim damages or compensation if the seller fails to rectify the defects.

Costs and Compensation Structure:

  1. Reasonable costs: reasonable costs of establishing damage and liability, and of obtaining payment out of court, can be part of the damages (Article 6:96(2)(b) and (c) DCC). This does not apply insofar as the rules on procedural costs apply in court proceedings (Article 6:96(3)).
  2. Compensatory damages: the buyer can claim compensation for the loss caused by the non-conformity, unless the failure cannot be attributed to the seller; where performance is not already permanently impossible, the seller must first be in default (Article 6:74 DCC).

Timely Resolution and Repair:

  1. Compliance period: the seller must repair or replace within a reasonable time and without serious inconvenience to the buyer (Article 7:21(3) DCC).
  2. Long-term Defects: Defects that arise within a short period may imply non-conformity at delivery.

Contract Termination and Refund:

  1. Consumer protection: after termination, the consumer returns the goods at the seller’s expense and the seller refunds the price (Article 7:22(7) DCC).
  2. Remedies Pending: The matter can be taken to court if no resolution is reached, potentially leading to contract termination and other legal consequences.

To sum up, under Dutch contract law, buyers are protected in cases of non-conformity, with specific procedures for informing sellers, recovering costs, and seeking compensation.

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