For commercial transactions in The Netherlands, general terms and conditions (in Dutch: ‘Algemene Voorwaarden‘) are often applied. Most Dutch companies adhere to general terms and conditions in the Netherlands. The Dutch Civil Code contains provisions regarding the content of general terms and conditions and the way in which they should be used. This blog by or Dutch contract lawyer will give you an overview on the major points of attention regarding general terms and conditions in the Netherlands. It is possible that the rules in other countries’ laws will be different.General Terms and Conditions in the Netherlands
APPLICABILLITY OF GENERAL TERMS AND CONDITIONS in Holland
Under Dutch law it is sufficient for the party wishing to use general terms and conditions to refer to its conditions. An express agreement of the other party is not necessary. The general terms and conditions must be agreed upon prior to or at latest at the time of concluding an arrangement. It is always important to check when the agreement is concluded in order to determine whether the terms are agreed in time. For example, a statement on the invoice may just be too late for successful applicability of general terms and conditions.
TERMS AND CONDITIONS MUST BE PROVIDED
When doing business with small companies in the Netherlands, terms and conditions must be provided to the other party at the time of concluding the agreement in the same way as the agreement is concluded. If not, the other party’s lawyer can annul the terms and conditions. If these terms are annulled, then the user relying on the general conditions will no longer be able to use them.
There are some exceptions to this main rule. For example, if it is not reasonably possible to hand over the terms and conditions, a reference to a deposit with a register of the court or chamber of commerce will suffice. Especially now that many contracts are concluded digitally and the conditions can easily be sent along by email, this exception can rarely be invoked.
Once the general conditions have been made readily available, any future orders and deliveries will require only a reference to them. In such cases, it remains important to refer to the conditions in time.
TERMS AND CONDITIONS IN INTERNATIONAL TRANSACTIONS
Under Dutch law a different position applies to international transactions (such as those between a Dutch company and a non-Dutch supplier or customer). In this situation, it is not required to hand over the terms and conditions. In those cases, however, the terms must be accepted by the non-Dutch contracting party. Explicit consent is not necessarily required, but you must be able to prove that the other party was aware that conditions would apply. For this reason, we recommend that you also provide the terms and conditions in international transactions.
If the general terms and conditions have been referred to, but have not been provided to the other party, the other party may attempt to annul these conditions. If the terms are annulled for this reason, the user of the general terms and conditions will be unable to rely on the conditions.
BATTLE OF FORMS under Dutch law
Dutch law has rules for the situation that both parties refer to their own conditions. The so called “Battle of Forms”.
The main rule is that the terms and conditions referred to first will apply. The so called first shot theory. Please note that this reference can also be included in a general e-mail. Therefore, it is sometimes difficult to judge which party was first with a reference.
This rule is excepted if in a subsequent reference the applicability of the earlier general terms and conditions is expressly rejected. If the second terms and conditions are then declared applicable, then those are the terms and conditions that shall exclusively apply.
For an express rejection of the first terms and conditions it is not sufficient that only a second general conditions are referred to by the other party. Express rejection of the first terms and conditions is required whereby it is clear that the other party will only accept the offer if its own terms and conditions apply.
The second terms and conditions will apply if they are accepted explicitly or implicitly, for example by starting with the execution of the agreement. An impasse may occur if the other terms and conditions are expressly rejected too. If there is a battle of the forms, it is essential that both parties are clear about the applicability and scope of all general terms.
Please be aware that the outcome could be different if one of the parties is not based in the Netherlands.
UNREASONABLE STIPULATIONS IN GENERAL TERMS AND CONDITIONS
A key rule regarding the content of general terms and conditions is that they cannot place unreasonable burdens on the customer. This means that you cannot simply place all the risks of exercising the contract on the customer. Dutch legislation contains a gray and a blacklist of unreasonable stipulations in general terms and conditions that may not (always) be included. With regard to terms in the grey list, the user of the conditions may argue that the conditions are reasonable in this particular situation. Blacklist provisions are always considered unreasonable in all situations and cannot be discussed. In practice, generally terms and conditions will often include black or grey stipulations. Unreasonably burdensome stipulations can be cancelled, and annulment can be done by an extrajudicial statement, or by a court order.
DRAWING UP GENERAL TERMS AND CONDITIONS
In the Netherlands, many businesses use general terms and condition in their dealings with customers. Often this is the only legal document in a transaction. But the legal requirements and the importance for those conditions are often underestimated. When drawing up general terms and conditions, it is important to consider how your company conducts business and who its customers are. It is a customized job to create proper general terms and conditions. Good general terms and conditions should include stipulations that are convenient to avoid being in a disadvantage when you must resolve disputes with customers.
LITIGATION REGARDING GENERAL TERMS AND CONDITIONS
In legal proceedings general terms and conditions are often an important point of dispute. The decision on the applicability of the general terms and conditions can have crucial consequences. Especially when there is no other legal document, a claim sometimes stands or falls with the applicability of the terms and conditions.
DUTCH LAWYER SPECIALIZED IN GENERAL TERMS AND CONDITIONS
Do you have any question regarding general terms and conditions in the Netherlands or do you need specific legal advice regarding contract law in Holland? Our experienced English-speaking specialist lawyers in Holland for contract law will be happy to help you.