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A legal remedy is the means the law gives you to enforce a right or obtain redress when it is infringed. Under Dutch contract law, a creditor faced with non-performance can claim performance, claim damages (including damages in lieu of performance), terminate the contract (ontbinding) or suspend its own performance (Articles 3:296, 6:74, 6:87, 6:265 and 6:262 Dutch Civil Code).
This page explains, for businesses dealing with Dutch counterparties, which remedies Dutch civil law offers, when you can use them and how a judgment is enforced. It is written by a Dutch contract lawyer and focuses on commercial contracts.
Which remedies does Dutch law provide?
Most civil remedies in Dutch law arise either from a failure to perform an obligation, usually under a contract (Article 6:74), or from a wrongful act, the Dutch equivalent of tort (onrechtmatige daad, Article 6:162 Dutch Civil Code).
Dutch contract law is based on freedom of contract. If the other party breaches the contract, it is in principle the creditor who chooses the remedy, not the court. The court does check whether the legal requirements are met; for example, termination is not allowed if the breach, given its special nature or minor importance, does not justify it (Article 6:265(1)), and a contractual rule does not apply insofar as that would be unacceptable by standards of reasonableness and fairness (Article 6:248(2)). Tort law leads to civil liability for damages; criminal sanctions belong to criminal law. Disputes go to the civil courts or, if agreed, to arbitration.
As a creditor, you have a number of options. Often the first step is a written notice of default (ingebrekestelling) that gives the debtor a reasonable period to perform; if performance does not follow within that period, the debtor is in default (Article 6:82(1)). In the event of non-performance, you can for example:
- demand performance (in Dutch: “nakoming”; Article 3:296);
- demand performance plus additional damages, for example for delay (in Dutch: “nakoming + aanvullende schadevergoeding”; Article 6:74);
- claim damages in lieu of performance (in Dutch: “vervangende schadevergoeding”; Article 6:87);
- terminate the agreement for breach (in Dutch: “ontbinding van de overeenkomst”; Article 6:265) and claim the resulting damage (Article 6:277);
- give notice to end a continuing contract (in Dutch: “opzegging”), where the contract or the law allows it, and claim damages if there was a breach;
- suspend your own performance (in Dutch: “opschorting”; Articles 6:52 and 6:262).
Several of these remedies can be combined: for instance, termination with damages, or performance with damages for delay. Which remedy fits depends on the basis of the claim (contract or tort), on whether performance is still possible and on what the contract says. In principle, damages compensate loss; they do not punish (Article 6:95).
What are the consequences of a breach of contract?
Any failure to perform an obligation obliges the debtor to compensate the creditor’s resulting loss, unless the failure cannot be attributed to the debtor (Article 6:74(1) Dutch Civil Code).
Insofar as performance is not already permanently impossible, damages for non-performance can only be claimed once the debtor is in default (Article 6:74(2) and Article 6:81). Default usually requires a written notice of default (Article 6:82). It occurs without notice if a fixed deadline for performance passes (unless the deadline has a different purpose), if the obligation arises from a wrongful act or is an obligation to pay damages and is not performed immediately, or if the creditor must infer from a statement of the debtor that it will not perform (Article 6:83). The same default requirement applies to termination, unless performance is permanently or temporarily impossible (Article 6:265(2)).
Which types of relief are available?
The Netherlands has a wide range of civil remedies available for breach of contract and other disputes. The Dutch remedy laws provide various ways to settle disputes between parties, as well as providing further legal recourse if needed.
This section will discuss the types of relief available in the Netherlands under its civil law remedies.
In practice, most disputes are first discussed between the parties or their lawyers, sometimes with a mediator; a settlement is then a contract, not a court remedy. If that fails, the remedies above are claimed before a court or, if the parties have agreed to it, before an arbitral tribunal, which decides the dispute in a binding award. In urgent cases, the preliminary relief judge (voorzieningenrechter) can grant an immediate provisional measure in summary proceedings (kort geding, Article 254(1) Dutch Code of Civil Procedure). A party directly involved in a legal relationship can also ask the court for a declaratory judgment about that relationship (Article 3:302 Dutch Civil Code).
Whichever route is chosen, a settlement or judgment only has effect if it is complied with or enforced, which is discussed below.
When is a judgment enforceable?
In the Netherlands, the civil court system provides several types of remedies for damages. One example is a dispute between two parties where one has caused damage to another and the other party seeks compensation through a Dutch court judgment.
In such cases, it is important to understand how the Dutch legal system operates when determining who will receive relief from this damage and what type of remedy can be enforced.
A Dutch judgment can be enforced throughout the Netherlands once there is an enforceable title (executoriale titel), such as a judgment or an authentic (notarial) deed (Article 430(1) Dutch Code of Civil Procedure). An appeal suspends enforcement, unless the court has declared the judgment provisionally enforceable (uitvoerbaar bij voorraad) despite any appeal (Article 350(1) Dutch Code of Civil Procedure); the court can do so on request and may require security (Article 233). Dutch civil courts award compensation for loss; they do not impose punitive measures.
Enforcement may only start after the judgment has been served by a bailiff on the party against whom it will be enforced (Article 430(3) Dutch Code of Civil Procedure). If that party still does not comply, a bailiff may attach bank balances, wages, movable property or real estate. Where the judgment orders something other than the payment of money, the court can, on request, attach a penalty payment (dwangsom) to it; a penalty payment cannot be forfeited before the judgment has been served (Article 611a(1) and (3) Dutch Code of Civil Procedure).
When can you claim damages instead of performance?
Damages in lieu of performance (vervangende schadevergoeding) replace the performance itself. Insofar as performance is not already permanently impossible, the obligation is converted into one to pay such damages when the debtor is in default and the creditor notifies it in writing that it claims damages instead of performance (Article 6:87(1) Dutch Civil Code). No conversion takes place if the breach, given its minor importance, does not justify it (Article 6:87(2)). If performance has become permanently impossible, the creditor can claim damages directly (Article 6:74).
Damages cover both the loss suffered and the profit lost (Article 6:96(1)). If the liable party has made a profit through its breach or wrongful act, the court may, on the claimant’s request, assess the damage at the amount of that profit or part of it (Article 6:104). Late payment of a sum of money is compensated by statutory interest for the period of default (Article 6:119(1)). In a commercial contract between businesses (handelsovereenkomst), statutory commercial interest is due instead, from the day after the agreed final payment date or, if no date was agreed, by operation of law from 30 days after receipt of the invoice (or of the performance), without a notice of default (Article 6:119a(1) and (2)). The aim of contractual damages is to put the creditor in the position it would have been in if the contract had been performed properly.
Instead of claiming damages in lieu of performance, the creditor can terminate the contract in whole or in part (Article 6:265(1)). Partial termination proportionally reduces the performances on both sides (Article 6:270). Termination releases the parties from the obligations affected; performances already received must be undone (Article 6:271). The party whose breach gave rise to termination must compensate the loss caused by the fact that the contract is terminated rather than performed (Article 6:277(1)).
It should be noted that while providing recourse through legal action is important in upholding contractual obligations, there are costs involved which must be taken into consideration when deciding whether initiating proceedings against another party is worthwhile. As such, understanding the available options – including those set out above – and their implications before entering into agreements is essential for protecting rights under Dutch laws governing contracts.
When can a contract be set aside?
When two parties enter into a contract, they do so with the assumption that each will hold up their end of the bargain.
Dutch law distinguishes two ways to get rid of a contract. Annulment (vernietiging) applies when something went wrong when the contract was made. Termination (ontbinding) applies when a party fails to perform afterwards.
A contract can be annulled, among other grounds, if:
- it was concluded under threat, fraud or abuse of circumstances (Article 3:44 Dutch Civil Code);
- it was concluded under the influence of error (dwaling) and would not have been concluded with a correct view of the facts, in the situations listed in Article 6:228(1), unless the error concerns only a future circumstance or should remain for the account of the mistaken party (Article 6:228(2));
- it conflicts with a mandatory statutory provision that exists solely to protect one of the parties (Article 3:40(2)); a contract that conflicts with public order or morality is void (Article 3:40(1)).
If an essential term has been breached, the remedy is termination (Article 6:265), not annulment. Inducing someone to breach a contract may be a wrongful act (Article 6:162), but it does not set the contract aside. Annulment takes place either by an out-of-court statement or by a court judgment (Article 3:49). Termination takes place by a written statement of the entitled party, or electronically if the contract was concluded electronically, and can also be pronounced by the court on that party’s claim (Article 6:267). For some contracts the court is required: a lease of a building can be terminated for the tenant’s breach only by the court, subject to exceptions (Article 7:231(1)), and an employment contract can be terminated for breach only by the court (Article 7:686). Commercial contracts often contain their own termination clauses, which then also apply.
How are disputes resolved?
In civil proceedings, the court decides on the claims the parties put forward. The most common outcomes are the following.
The primary remedy in civil proceedings is an order to pay a sum of money, such as damages or the price. If the debtor does not pay voluntarily, the judgment can be enforced by a bailiff (Article 430 Dutch Code of Civil Procedure). Alternatively, the parties may settle; a settlement agreement is binding as a contract.
In addition to monetary awards, courts may also grant declaratory relief (verklaring voor recht), declaring the rights and obligations between the parties (Article 3:302 Dutch Civil Code). A declaratory judgment concerns a legal relationship, not the existence of facts as such; it is typically used when there is uncertainty about the parties’ rights and obligations, for example whether a particular contract term applies or whether a contract was validly terminated. A declaratory judgment does not order anyone to do anything, so it cannot be enforced as such; it is often combined with a claim for performance or damages.
With these remedies explored it is now possible to move onto discussing enforcement of judgments obtained in the Netherlands.
How is a Dutch judgment enforced?
Dutch law provides a range of attachment and enforcement measures, both before and after a judgment. Whether enforcement succeeds depends largely on whether the debtor has assets that can be found.
Before or during proceedings, a creditor can secure its claim with a prejudgment attachment (conservatoir beslag) on movable or immovable property, bank balances or other claims. This requires leave from the preliminary relief judge (Article 700(1) Dutch Code of Civil Procedure). Unless proceedings on the merits are already pending, they must be started within the period set by the judge, which is at least eight days after the attachment. The judge can extend that period on a request made before it expires; if the claim on the merits is not brought in time, the attachment lapses (Article 700(3)). Once the creditor obtains an enforceable title that has been served, the prejudgment attachment becomes an executory attachment (Article 704(1)), after which assets can be sold. Attachment of wages and bank balances are routes used often in executory attachments.
In urgent cases, a creditor can also start summary proceedings (kort geding) before the preliminary relief judge of the district court for an immediate provisional measure (Article 254(1) Dutch Code of Civil Procedure); in cases that the subdistrict court (kantonrechter) handles on the merits, it is also competent (Article 254(5)). A kort geding judgment is a provisional measure.
Together, these tools give a creditor several ways to press for compliance with a Dutch judgment.
Which judicial remedies apply to breach of contract?
In Dutch contract law, the judicial remedies for breach are an order to perform (including an order to refrain from certain conduct), damages, termination and a declaratory judgment. Damages are compensatory: they cover financial loss and, only where the law provides for it, other harm (Article 6:95). Dutch law does not award punitive damages.
Specific performance is not an exceptional remedy in Dutch law. A person who is obliged to give, do or refrain from doing something is ordered to do so by the court at the request of the entitled party, unless the law, the nature of the obligation or a legal act provides otherwise (Article 3:296(1)). The same rule covers injunctions: an order to refrain from certain conduct. The court can attach a penalty payment to such an order (Article 611a Dutch Code of Civil Procedure). Damages aim to put the injured party in the position it would have been in without the breach.
The effects litigation has on Dutch contract law must also be considered when addressing breaches of contract. It is important to understand how courts have interpreted existing laws and applied them in various cases so that those entering into agreements have some idea of what legal consequences could arise should matters go awry. This knowledge can provide insight into potential risks associated with contracting activities and help guide decision-making accordingly. A thorough review of applicable precedent will ensure that both parties’ interests are being properly protected throughout negotiations and beyond.
How does litigation shape Dutch contract law?
Litigation is an important tool for enforcing contract law in the Netherlands. It can have far-reaching effects, both legal and practical, on Dutch contract law. To illustrate its impact:
- Litigation helps to clarify the intent of parties when a dispute arises over contractual terms.
- Through judicial interpretation, it may expand or limit existing rights and obligations under a given agreement.
- Furthermore, litigation serves as a deterrent against bad faith behavior by making potential violators of contracts aware that they may be liable if their actions go beyond what was agreed upon in the contract.
Outside contract, the main remedy is a claim for damages based on a wrongful act. A wrongful act is an infringement of a right, or an act or omission in breach of a statutory duty or of what is generally accepted as proper conduct under unwritten law, unless there is a justification; the act must be attributable to the wrongdoer (Article 6:162(2) and (3) Dutch Civil Code). The person who commits a wrongful act must compensate the resulting damage (Article 6:162(1)).
Frequently asked questions about remedies under Dutch law
What is a remedy in law?
A remedy is the means the law gives a person to enforce a right or obtain redress for its infringement, such as an order to perform, damages, termination of a contract or a declaratory judgment. Under Dutch law, a creditor can ask the court to order performance unless the law, the nature of the obligation or a legal act provides otherwise (Article 3:296(1) Dutch Civil Code).
What types of remedies are available in Dutch civil law?
For breach of contract: performance (Article 3:296), damages (Article 6:74), damages in lieu of performance (Article 6:87), termination (Article 6:265) with damages (Article 6:277), and suspension of your own performance (Articles 6:52 and 6:262). For a wrongful act: damages (Article 6:162). A court can also give a declaratory judgment (Article 3:302) and, in urgent cases, a provisional measure in summary proceedings (Article 254 Dutch Code of Civil Procedure).
What are damages in lieu of performance under Dutch law?
They replace the performance itself. Insofar as performance is not already permanently impossible, the obligation is converted into an obligation to pay damages when the debtor is in default and the creditor notifies it in writing that it claims damages instead of performance (Article 6:87(1) Dutch Civil Code). No conversion takes place if the breach is of minor importance (Article 6:87(2)).
Are punitive damages available in the Netherlands?
No. Damages under Dutch civil law compensate financial loss and, where the law provides for it, other harm (Article 6:95 Dutch Civil Code). A court may assess damages at the profit the liable party made through its breach or wrongful act (Article 6:104), but that is a way of estimating damage, not a punishment.
Can you terminate a contract in the Netherlands without going to court?
Usually, yes. Termination for breach takes place by a written statement to the other party; the court can also pronounce it (Article 6:267). Unless performance is permanently or temporarily impossible, the debtor must first be in default (Article 6:265(2)). The court is required for leases of buildings terminated for the tenant’s breach, subject to exceptions, and for the termination (ontbinding) of employment contracts for breach (Articles 7:231(1) and 7:686).
Primary sources
- Dutch Civil Code Book 3: Articles 3:40, 3:44, 3:49, 3:296 and 3:302
- Dutch Civil Code Book 6: Articles 6:52, 6:74, 6:81, 6:82, 6:83, 6:87, 6:95, 6:96, 6:104, 6:119, 6:162, 6:228, 6:248, 6:262, 6:265, 6:267, 6:270, 6:271 and 6:277
- Dutch Civil Code Book 7: Articles 7:231 and 7:686
- Dutch Code of Civil Procedure (Wetboek van Burgerlijke Rechtsvordering): Articles 233, 254, 350, 430, 611a, 700 and 704
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In summary, Dutch law gives a creditor several remedies for breach of contract: performance, damages, damages in lieu of performance, termination and suspension. A wrongful act gives a right to damages. A contract can be annulled on grounds such as fraud, threat, abuse of circumstances or error. Judgments are enforced by a bailiff after service.
Which remedy is best depends on the contract, the facts and the assets of the other party. Choosing the wrong one, or skipping a notice of default, can cost time and money.
If you are dealing with a breach of contract or another civil dispute with a Dutch party, contact our Dutch law firm. See also our pages on contract law in the Netherlands and litigation in the Netherlands.
