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Dutch contract law is set out in Books 3, 6 and 7 of the Dutch Civil Code (DCC). An agreement (overeenkomst) is formed by offer and acceptance (Article 6:217 DCC), in principle needs no particular form (Article 3:37(1) DCC) and binds the parties to what they agreed and to what follows from the law, custom and reasonableness and fairness (Article 6:248(1) DCC).
This page gives an overview for foreign businesses: how a Dutch contract is formed, when it is valid, how it is interpreted and what you can do if the other party does not perform. For more detail, see our pages on contract law in the Netherlands and on specific topics linked below. Our team also advises on Dutch Distribution Law.
Book 3 contains general rules on juristic acts (rechtshandelingen), Book 6 the general law of obligations and contracts (Article 6:213 DCC onwards), and Book 7 rules for specific contracts such as sale (Article 7:1 DCC).
How does Dutch contract law work?
A contract is a multilateral juristic act by which one or more parties undertake obligations towards one or more others (Article 6:213(1) DCC). It is formed by an offer and its acceptance (Article 6:217(1) DCC). An offer can in principle be revoked, unless it contains a period for acceptance or its irrevocability otherwise follows from the offer. Revocation is only possible as long as the offer has not been accepted and no acceptance has been sent; an offer made without obligation (vrijblijvend) can still be revoked immediately after acceptance (Article 6:219 DCC).
Dutch law looks at both will and declaration. A juristic act requires an intention to produce legal effects that has been expressed in a declaration (Article 3:33 DCC). If a declaration does not reflect what the person making it actually intended, that person cannot rely on the lack of a corresponding intention against a recipient who, in the circumstances, reasonably understood the declaration in that way (Article 3:35 DCC). This is the so-called will and reliance theory (wilsvertrouwensleer).
Read more about contract formation under Dutch law and about obligations during contract negotiations.
Dutch law also follows the principle of freedom of contract: parties are free to decide whether, with whom and on what terms they contract. A contract that by its content or purpose is contrary to good morals or public order is void; a contract that violates a mandatory statutory provision is void, or only voidable if that provision exists solely to protect one of the parties, unless the purpose of the provision implies otherwise (Article 3:40(1) and (2) DCC). This does not apply to statutory provisions that are not intended to affect the validity of conflicting juristic acts (Article 3:40(3) DCC).
Which principles govern contract formation?
The following principles determine whether a contract is valid and binding:
- Consensus: there must be an offer and an acceptance (Article 6:217 DCC), assessed by the will and reliance theory (Articles 3:33 and 3:35 DCC).
- Freedom of contract: parties determine the content, within the limits of mandatory law, good morals and public order (Article 3:40 DCC) and reasonableness and fairness (Articles 6:2 and 6:248 DCC).
- Legal capacity: every natural person has legal capacity unless the law provides otherwise; a juristic act by a person without capacity is voidable (Article 3:32 DCC). A minor can act with the consent of his or her legal representative (Article 1:234 DCC).
- Determinability: the obligations the parties undertake must be determinable (Article 6:227 DCC). An agreement that leaves some points open can therefore still be binding if its content can be determined, for example with the help of the law or reasonableness and fairness (Article 6:248(1) DCC).
- Free and informed consent: a contract concluded under threat, fraud or undue influence is voidable (Article 3:44 DCC), as is a contract concluded under a relevant mistake in the cases of Article 6:228 DCC.
Annulment (vernietiging) of a voidable contract can take place by an extrajudicial declaration or by a court judgment (Article 3:49 DCC).
Which elements must a Dutch contract have?
Dutch law has no requirement of consideration as known in common law systems: a promise without anything in return can also be binding. The essential elements are the following.
The table below summarises the essential elements of a Dutch contract:
| Element | What Dutch law requires | Statutory basis |
|---|---|---|
| Offer and acceptance | An offer and its acceptance | Article 6:217 DCC |
| Will and declaration | An intention to create legal effects, expressed in a declaration; reasonable reliance is protected | Articles 3:33 and 3:35 DCC |
| Capacity | Parties must have legal capacity; otherwise the contract is voidable | Article 3:32 DCC |
| Determinable obligations | The obligations must be determinable | Article 6:227 DCC |
| Permitted content | Not contrary to good morals, public order or mandatory law | Article 3:40 DCC |
| Form | In principle no form required, unless the law prescribes one | Articles 3:37(1) and 3:39 DCC |
In principle, a contract can be concluded orally, in writing, electronically or by conduct (Article 3:37(1) DCC). Where the law prescribes a form, a juristic act that does not comply is void, unless the law provides otherwise (Article 3:39 DCC). Examples are the purchase of a residential property by a consumer, which must be in writing (Article 7:2(1) DCC), a non-compete clause in an employment contract, which must be agreed in writing (Article 7:653(1) DCC), and the transfer of real property, which requires a notarial deed and registration (Article 3:89(1) DCC). Even where no form is required, a written contract makes it much easier to prove what was agreed. See also when an agreement is legally binding in the Netherlands.
How is a Dutch contract interpreted?
Dutch courts do not interpret a contract on the basis of its wording alone. The question is what meaning the parties could reasonably attribute to the provisions in the circumstances, and what they could reasonably expect from each other. It may also matter to which social circles the parties belong and what legal knowledge can be expected of them (HR 13 March 1981, ECLI:NL:HR:1981:AG4158 (Haviltex)). The wording is an important starting point, especially in contracts between professional parties.
Reasonableness and fairness (redelijkheid en billijkheid) also play a role. Parties must behave towards each other in accordance with reasonableness and fairness (Article 6:2(1) DCC). A contract has the legal effects that the parties agreed and also those that follow from the law, custom and reasonableness and fairness (Article 6:248(1) DCC). A contractual rule does not apply to the extent that this would be unacceptable by standards of reasonableness and fairness in the circumstances (Article 6:248(2) DCC); courts apply this restrictively.
Read more about the interpretation of Dutch contracts and the Haviltex criterion.
What happens when a contract is breached?
If a party fails to perform (tekortkoming), the other party has several remedies under Dutch law:
- Performance: the creditor can claim performance in court, unless the law, the nature of the obligation or a juristic act provides otherwise (Article 3:296 DCC).
- Damages: every failure to perform obliges the debtor to compensate the loss, unless the failure cannot be attributed to the debtor (Article 6:74(1) DCC). Where performance is not already permanently impossible, the debtor must in principle first be in default (verzuim), usually after a notice of default (Article 6:74(2) DCC). Damages cover both losses suffered and lost profits (Article 6:96(1) DCC).
- Termination: every failure in performance entitles the other party to terminate the contract in whole or in part, unless the failure, given its special nature or minor significance, does not justify termination with its consequences (Article 6:265(1) DCC). Where performance is not permanently or temporarily impossible, termination is only possible once the debtor is in default (Article 6:265(2)). Termination takes place by written declaration or by court judgment (Article 6:267 DCC).
- Suspension: if one party does not perform, the other party may suspend performance of its own counter-obligations; in case of partial or improper performance only to the extent the failure justifies it (Article 6:262 DCC).
Contracts often contain a penalty clause (boetebeding, Article 6:91 DCC). The creditor cannot claim both the penalty and performance of the obligation to which it is linked, and the penalty replaces statutory damages (Article 6:92(1) and (2) DCC). At the debtor’s request, the court can reduce the penalty if fairness clearly so requires, but not below the statutory damages (Article 6:94(1) DCC).
Read more about breach of contract under Dutch law, terminating an agreement and contractual penalties.
How are contract disputes resolved?
While it is essential to understand the potential repercussions of breach in Dutch contracts, it is equally important to be aware of the mechanisms for dispute resolution under Dutch contract law.
The Dutch legal system provides a structured approach to resolve contractual disputes. This approach includes both judicial and extrajudicial methods.
- Judicial methods:
- Court Litigation: This traditional method involves the presentation of a case before a judge, who will then issue a binding decision based on Dutch contract law.
- Summary Proceedings: These are expedited court procedures, often used in urgent cases. The verdict, however, may be subject to further proceedings in a full trial.
- Extrajudicial methods:
- Arbitration: Here, a neutral third party or parties (the arbitrators) decide on the dispute. The decision, generally binding, is made based on an agreement between the disputing parties.
- Mediation: This is a voluntary process whereby a neutral third-party mediator facilitates dialogue in an attempt to reach a mutually satisfactory agreement.
Many contracts contain a choice of court or an arbitration clause. Read more about litigation in the Netherlands.
Why are Dutch contract rules important for foreign businesses?
Foreign businesses are sometimes surprised by a few features of Dutch contract law:
- A contract can be binding without a signature or written document (Article 3:37(1) DCC), for example by e-mail or by conduct.
- A contract is not interpreted by its wording alone (Haviltex), and reasonableness and fairness can supplement it (Article 6:248(1) DCC).
- Termination for breach generally requires default and does not need a court, but it is not available where the failure, given its special nature or minor significance, does not justify termination (Articles 6:265 and 6:267 DCC). Some contracts can in principle only be terminated for breach by the court, such as a lease of a building where the tenant is in breach (Article 7:231(1) DCC) and an employment contract (Article 7:686 DCC).
- A contractual penalty can be reduced by the court (Article 6:94 DCC).
- General terms and conditions must be validly incorporated and made available; see how to make valid general terms and conditions under Dutch law.
Clear drafting, written confirmation of what was agreed and a deliberate choice of law and forum reduce the risk of disputes.
Frequently asked questions about Dutch contract law
What is a Dutch agreement (overeenkomst)?
Under Dutch law, an agreement or contract (overeenkomst) is a multilateral juristic act by which one or more parties undertake obligations towards one or more others (Article 6:213(1) DCC). It is formed by an offer and its acceptance (Article 6:217(1) DCC).
Does Dutch contract law require consideration?
No. Consideration is a common-law concept. Under Dutch law, a contract requires an offer and acceptance, capacity, determinable obligations and permitted content (Articles 6:217, 3:32, 6:227 and 3:40 DCC). A contract without anything in return can also be binding.
Does a contract have to be in writing in the Netherlands?
In principle no: declarations can be made in any form (Article 3:37(1) DCC). If the law prescribes a form and it is not observed, the act is void unless the law provides otherwise (Article 3:39 DCC); examples are the purchase of a home by a consumer (Article 7:2(1) DCC) and a non-compete clause in an employment contract (Article 7:653(1) DCC).
Is an uncertain or incomplete agreement binding under Dutch law?
It can be. The obligations must be determinable (Article 6:227 DCC), not fully specified. Gaps can be filled by the law, custom and reasonableness and fairness (Article 6:248(1) DCC). If parties have not yet agreed on points they considered essential, there may be no contract yet.
What can you do if the other party breaches a Dutch contract?
You can claim performance (Article 3:296 DCC), damages (Article 6:74 DCC), usually after a notice of default, and terminate the contract unless the breach, given its special nature or minor significance, does not justify termination (Article 6:265 DCC). Termination takes place by written declaration or by the court (Article 6:267 DCC).
Primary sources
- Dutch Civil Code (Burgerlijk Wetboek): Article 1:234; Articles 3:32, 3:33, 3:35, 3:37, 3:39, 3:40, 3:44, 3:49, 3:89 and 3:296
- Dutch Civil Code, Book 6: Articles 6:2, 6:74, 6:91, 6:92, 6:94, 6:96, 6:213, 6:217, 6:219, 6:227, 6:228, 6:248, 6:262, 6:265 and 6:267
- Dutch Civil Code, Book 7: Articles 7:1, 7:2 and 7:653
- HR 13 March 1981, ECLI:NL:HR:1981:AG4158 (Haviltex)
Conclusion
To sum up: under Dutch law, a contract is formed by offer and acceptance, usually without formalities, and is interpreted in light of what the parties could reasonably expect from each other. If the other party does not perform, you can claim performance, damages or termination, subject to the statutory conditions.
Before signing a contract governed by Dutch law, check how it is formed, which terms apply and which remedies are available if things go wrong.
