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Under Dutch law, an invalid contract is either void (nietig) or voidable (vernietigbaar). A void contract has no legal effect, for example if it lacks a prescribed form or is contrary to good morals or public order (Articles 3:39 and 3:40 Dutch Civil Code, DCC). A voidable contract is valid until annulled, for instance for mistake, threat or fraud (Article 3:44 and 6:228 DCC).
This page explains when a contract is void or voidable under Dutch law, how you annul a voidable contract and what the consequences are. It is written for foreign businesses that contract with Dutch parties or under Dutch law. For the wider picture, see our page on Dutch contract law. Our attorneys in the Netherlands can check whether your contract is valid.
When is a contract under Dutch law void?
A void contract (nietige overeenkomst) is invalid by operation of law. It does not need to be annulled. The main grounds are:
- Form: a legal act that is not performed in the prescribed form is void, unless the law provides otherwise (Article 3:39 DCC). Most contracts do not need a specific form: unless the law provides otherwise, declarations can be made in any form, including by conduct (Article 3:37(1) DCC). There are exceptions. For example, the purchase of a home by a consumer buyer must be concluded in writing (Article 7:2(1) DCC). What a missing form means for validity depends on the provision concerned.
- Content or purpose: a legal act that by its content or purpose is contrary to good morals or public order is void (Article 3:40(1) DCC).
- Breach of mandatory law: a legal act that violates a mandatory statutory provision is void. If the provision only protects one of the parties to a multilateral legal act, the act is only voidable, unless the purpose of the provision implies otherwise (Article 3:40(2) DCC). Provisions that are not intended to affect the validity of conflicting legal acts do not lead to nullity at all (Article 3:40(3) DCC).
Nullity does not always affect the whole contract. If a ground for nullity concerns only part of a legal act, the rest remains valid, unless that part is inseparably connected with the void part, given the content and purpose of the act (Article 3:41 DCC). A void act can also take effect as another, valid legal act if its purpose corresponds so closely to that other act that the parties would have performed it had they known of the invalidity, unless this would be unreasonable towards an interested party who did not take part in the act (Article 3:42 DCC).
When is a contract voidable under Dutch law?
A voidable contract (vernietigbare overeenkomst) is valid until it is annulled by the party the ground for annulment protects. The main grounds are:
- Legal incapacity: a legal act of a person without legal capacity is voidable (Article 3:32(2) DCC). A minor, for example, only has capacity if he acts with the consent of his legal representative, unless the law provides otherwise (Article 1:234(1) DCC).
- Mental disorder: if a person whose mental faculties are disturbed makes a declaration, a corresponding will is deemed to be lacking if the disturbance prevented a reasonable assessment of the interests involved, or if the declaration was made under the influence of that disturbance. This makes the legal act voidable (Article 3:34 DCC).
- Threat, fraud and abuse of circumstances (Article 3:44(1) DCC). Fraud includes intentionally giving incorrect information and intentionally keeping silent about a fact you were obliged to disclose. General sales talk, even if untrue, is not fraud in itself (Article 3:44(3) DCC).
- Mistake (dwaling): a contract concluded under the influence of a mistake, which would not have been concluded with a correct view of the facts, is voidable if (a) the mistake is due to information from the other party, unless that party could assume the contract would also have been concluded without that information; (b) the other party should have informed the mistaken party, given what it knew or should have known about the mistake; or (c) both parties made the same incorrect assumption, unless the other party, even with a correct view of the facts, need not have understood that this would deter the mistaken party from concluding the contract (Article 6:228(1) DCC). There is no annulment for a mistake that concerns only a future circumstance, or that should remain for the account of the mistaken party given the nature of the contract, common opinion or the circumstances of the case (Article 6:228(2) DCC).
- A missing legal relationship: a contract intended to build on an existing legal relationship between the parties is voidable if that relationship does not exist, unless this should remain for the account of the party invoking it (Article 6:229 DCC).
- General terms and conditions: a clause in general terms and conditions is voidable if it is unreasonably onerous for the other party, or if the user did not give the other party a reasonable opportunity to take note of the terms (Article 6:233 DCC). These grounds cannot be invoked by a legal entity as referred to in Article 2:360 DCC that had most recently published its annual accounts when the contract was concluded (or to which Article 2:403(1) DCC was most recently applied), by another party with fifty or more people working for it at that time (or according to its entry in the trade register), or by a party that itself repeatedly uses the same or almost the same general terms (Article 6:235(1) and (3) DCC). Between businesses that are not both established in the Netherlands, these rules do not apply at all, whatever law governs the contract (Article 6:247(2) DCC). What counts is the main establishment or, if another establishment must perform the contract, that establishment (Article 6:247(3) DCC).
How do you annul a voidable contract under Dutch law?
You annul a voidable contract either by an out-of-court declaration or by a court decision (Article 3:49 DCC). The out-of-court declaration is made by the party in whose interest the ground for annulment exists and is addressed to the other parties to the contract (Article 3:50(1) DCC). If the contract concerns registered property and has led to an entry in the public registers or to a deed of transfer, an out-of-court declaration only works if all parties accept the annulment (Article 3:50(2) DCC).
The legal claim for annulment becomes time-barred three years after the incapacity has ended (or, if the person without capacity has a legal representative, three years after the legal act came to the knowledge of that representative), after the threat or abuse of circumstances has stopped having effect, after the fraud or mistake has been discovered or, for other grounds, after the power to invoke the ground became available to the person entitled to it (Article 3:52(1) DCC). After that, you can no longer annul the contract on the same ground by an out-of-court declaration (Article 3:52(2) DCC). You can, however, invoke a ground for annulment at any time as a defence against a claim or other legal measure based on the contract (Article 3:51(3) DCC).
The right to annul lapses if you confirmed the contract after the limitation period started to run, or if, after the limitation period started to run, a directly interested party gave you a reasonable period to choose between confirmation and annulment and you made no choice within that period (Article 3:55 DCC). In the case of mistake or abuse of circumstances, the other party can prevent annulment by proposing, in time, an amendment of the contract that adequately removes your disadvantage. At the request of a party, the court can also amend the contract instead of annulling it (Article 3:54 and 6:230 DCC).
What are the consequences of an invalid contract under Dutch law?
A void contract has no legal effect from the start. An annulment works retroactively to the moment the contract was concluded (Article 3:53(1) DCC). In both cases, what the parties have already performed was performed without a legal basis. A party that paid money or delivered something can claim it back as an undue payment, and other performances must be undone (Article 6:203 DCC). If consequences that have already occurred are difficult to undo, the court can, at a party’s request, deny the annulment its effect in whole or in part. It can then order the party that is unfairly favoured to pay compensation to the party that is disadvantaged (Article 3:53(2) DCC).
Damages do not follow automatically from invalidity. If the other party acted wrongfully, for example by committing fraud, you may claim damages under the general rules, such as Article 6:162 DCC. Such a claim is usually aimed at the negative contractual interest: the position you would have been in if you had never concluded the contract, not the position as if the contract had been performed.
An invalid contract can sometimes be saved. A voidable contract can be confirmed (Article 3:55 DCC). If a statutory requirement for validity is only met after the legal act was performed, the act is ratified if all directly interested parties who could have invoked the defect treated it as valid in the meantime (Article 3:58(1) DCC). This does not apply if the act was void because the person who performed it lacked legal capacity and later obtained it (Article 3:58(2) DCC).
Are you unsure whether your contract is valid under Dutch law, or do you want to annul a contract? Have it checked before you perform or rely on it. The three-year limitation period for annulment (Article 3:52 DCC) means you should not wait too long.
Frequently asked questions about the invalidity of a contract under Dutch law
What is the difference between a void and a voidable contract under Dutch law?
A void contract has no legal effect from the start and does not need to be annulled, for example a contract contrary to good morals or public order (Article 3:40(1) DCC). A voidable contract is valid until the protected party annuls it by an out-of-court declaration or a court decision, for example for mistake or fraud (Articles 3:44, 3:49 and 6:228 DCC). Once annulled, it is treated as invalid from the start (Article 3:53(1) DCC).
What does “null and void” or “under pain of nullity” mean?
Null and void (nietig) means that the legal act has no legal effect. A rule that applies “on pain of nullity” (op straffe van nietigheid) makes an act void if the rule is not followed; Dutch procedural law uses this wording, for example in Article 721 Dutch Code of Civil Procedure. For contracts, the general rule is that a legal act not performed in the prescribed form is void, unless the law provides otherwise (Article 3:39 DCC).
Can you annul a contract for mistake under Dutch law?
Yes, if you would not have concluded the contract with a correct view of the facts and one of the three situations of Article 6:228(1) DCC applies: the mistake was caused by information from the other party, the other party should have informed you, or both parties made the same incorrect assumption. A mistake about a purely future circumstance, or one that should remain for your account, is not enough (Article 6:228(2) DCC). The other party can prevent annulment by proposing, in time, an amendment that adequately removes your disadvantage (Article 6:230 DCC).
Is the whole contract void if one clause is invalid?
Not necessarily. If a ground for nullity concerns only part of a contract, the rest remains valid, unless the rest is inseparably connected with the void part, given the content and purpose of the contract (Article 3:41 DCC). Many contracts also contain a severability clause.
How long do you have to annul a contract under Dutch law?
The legal claim for annulment becomes time-barred after three years. Depending on the ground, the period starts when the incapacity ends (or, if there is a legal representative, when the legal act came to that representative’s knowledge), when the threat or abuse of circumstances stops having effect, or when the fraud or mistake is discovered (Article 3:52(1) DCC). As a defence against a claim based on the contract, you can invoke a ground for annulment at any time (Article 3:51(3) DCC).
Primary sources
- Dutch Civil Code (Burgerlijk Wetboek), Book 1: Article 1:234
- Dutch Civil Code, Book 2: Article 2:360
- Dutch Civil Code, Book 3: Articles 3:32, 3:34, 3:37, 3:39, 3:40, 3:41, 3:42, 3:44, 3:49, 3:50, 3:51, 3:52, 3:53, 3:54, 3:55 and 3:58
- Dutch Civil Code, Book 6: Articles 6:162, 6:203, 6:228, 6:229, 6:230, 6:233, 6:235 and 6:247
- Dutch Civil Code, Book 7: Article 7:2
- Dutch Code of Civil Procedure (Wetboek van Burgerlijke Rechtsvordering): Article 721
Dutch lawyers for questions about void and voidable contracts
Do you have questions about Dutch contract law or do you need specific legal advice in Holland on nullity under Dutch law? Our experienced contract lawyer in the Netherlands, Remko Roosjen, will be happy to help you.
