The measures taken by the Dutch government to combat the Corona pandemic have had an impact on the fulfilment of trade agreements in the Netherlands. Foreign entrepreneurs in the Netherlands were and still are affected. In times of Corona and even long after, for example, delivery problems caused by legal measures can raise many (legal) questions. In this article, the Dutch attorneys of MAAK Advocaten in Amsterdam inform about Corona and commercial contracts under Dutch law (and the effects on contracts).
Under Dutch contract law, both the corona pandemic and government action (not only by the Dutch government but also by foreign governments) can constitute a situation of force majeure. This seems to be the prevailing legal opinion in the Netherlands.
Performance of the agreement and force majeure under Dutch law
Article 6:75 of the Dutch Civil Code stipulates that in the event of force majeure, no specific performance of the contract can be expected under Dutch law (or: an “unattributable non-performance”, or “excusable breach”):
Non-performance cannot be attributed to the debtor if he is not responsible for it or cannot be held responsible for it by law, custom or practice.
Force majeure under Dutch law and the Corona crisis
Whether the effects of the Corona crisis under Dutch contract law constitute a situation where force majeure can be invoked, i.e. where non-performance is an excusable breach, depends on the interpretation of the contract in question and the specific circumstances of the individual case. Whether a party to a contract can be released from its contractual obligations depends on the terms of the contract in the context of the actual circumstances.
When assessing the legal position of a contracting party under Dutch law, not only the explicit contractual rights must be taken into account. In addition to the express wording of the contract, a contractual relationship under Dutch law is also subject to the overriding principles of reasonableness and equity. Depending on the circumstances, a party is obliged to take into account the other party’s legitimate and reasonable interests when exercising its contractual rights.
Contract performance not possible due to Corona?
In the absence of any contrary contractual clause, the parties may, in principle, reach an agreement on an adjustment of the agreement under Dutch law if performance is definitively or temporarily impossible.
Under Dutch law, however, performance of the agreement is considered impossible if state corona measures would reasonably preclude this.
The performance of a contract under Dutch law is generally not considered impossible if the debtor is still able to perform his obligations in any way or form. But please note; under Dutch contract law this interpretation has limits. The debtor must make reasonable efforts to fulfil his contractual obligations but is generally not obliged to make excessive and disproportionate efforts.
Impossibility due to state corona measures?
As mentioned above, the State measures to deal with the Corona crisis could lead to legal impossibility preventing parties from executing the commercial agreement concluded under Dutch law. However, this must be assessed on a case-by-case basis for each individual contract.
Dutch specialist attorney specialised in contract penalties
Do you have any questions about Dutch contract law or do you need specific legal advice in Holland on corona and commercial contracts under Dutch law? Our experienced English-speaking attorneys in Holland will be happy to help you.
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Contact: Remko Roosjen | Dutch Corporate Lawyer