Rescinding a contract under Dutch law

Rescinding a contract under Dutch law, also known as setting aside a contract, is governed by articles 6:265 DCC to 6:277 of the Dutch Civil Code. This remedy allows a party to terminate a contract due to the other party’s failure to perform their obligations.

Key aspects of rescinding a contract under Dutch law

1. Grounds for rescission: Under Dutch law, any failure by a party to perform their contractual obligations can justify rescission, unless the failure is of minor importance.
2. Default: The debtor must be in default, unless fulfilment is permanently or temporarily impossible. Default occurs when the debtor, after a written notice of default, does not fulfil the obligation within a reasonable period of time. In some cases, default can occur without notice of default, as stipulated in Article 6:83 of the Dutch Civil Code.
3. Burden of proof: The debtor must prove that the failure does not under Dutch law justify rescission.
4. Partial rescission: Contracts can be rescinded in whole or in part, allowing for a proportional reduction of mutual performances.
5. No retroactive effect: Rescission does not have retroactive effect, but releases parties from future obligations.
6. Reversal of performances: Parties must reverse or compensate for performances already made under the contract.
7. Impossibility of fulfilment: If fulfilment is permanently or temporarily impossible, the contract can also be dissolved without default.
8. Compensation for damages: The party whose failure led to rescission may be required to compensate the other party for damages resulting from non-compliance.
9. Written declaration or court decision: The dissolution can take place by a written declaration from the party authorised to dissolve the contract, or by a court decision.

It’s important to note that rescission differs from termination for convenience, which may be provided for in the contract itself. When considering rescission, parties should carefully evaluate the materiality of the breach and any potential consequences.

What are the main differences between terminating a contract for breach and setting it aside under Dutch law?

Under Dutch law, there are significant differences between terminating a contract for breach and setting it aside. The main distinctions are:

1. Legal basis: Termination for breach (ontbinding) is based on Article 6:265(1) of the Dutch Civil Code, while setting aside (opzegging) is typically provided for in the contract itself or specific statutory provisions.
2. Grounds: Termination for breach under Dutch law requires a failure to perform contractual obligations, whereas setting aside can be done for convenience or other reasons specified in the contract.
3. Default requirement: Termination for breach in the Netherlands generally requires the breaching party to be in default (verzuim), often necessitating a letter of demand. Setting aside usually does not require default.
4. Effect on obligations: Termination for breach releases parties from future obligations and requires undoing past performances. Setting aside typically only affects future obligations.
5. Compensation: In case of termination for breach, the party at fault may be required to compensate the other party for damages resulting from non-compliance. Setting aside may not involve compensation unless specified in the contract.
6. Retroactivity: Termination for breach does not have retroactive effect, but it creates an obligation to reverse or compensate for performances already made. Setting aside generally does not have retroactive effect and does not require undoing past performances.
7. Partial application: Termination for breach can be applied to the whole contract or only part of it, allowing for a proportional reduction of mutual performances. Setting aside is typically applied to the entire contract.
8. Burden of proof: In termination for breach, the debtor must prove that the failure does not justify termination. For setting aside, the burden of proof depends on the specific circumstances and contract terms.

These differences highlight the importance of carefully considering the appropriate method for ending a contract under Dutch law, as the legal consequences and requirements vary significantly between termination for breach and setting aside.

Law firm specialized in rescinding a contract under Dutch law

For any legal inquiries or support in the Netherlands regarding the rescinding of a contract under Dutch law, please feel free to contact our adept team at MAAK Advocaten. Committed to excellence, our Dutch lawyers provide superior legal services tailored to your distinct needs. You can reach our law firm in the Netherlands through our website, by email, or phone.

Our approachable and skilled staff at MAAK Attorneys will be delighted to assist you, arranging a meeting with one of our specialized attorneys in the Netherlands. Whether you need a Dutch litigation attorney or a Dutch contract lawyer in Amsterdam, we are eager to guide you through the legal intricacies and secure the most favorable results for your situation.

Contact details

Remko Roosjen | attorney-at-law (‘advocaat’)
+31 (0)20 – 210 31 38
remko.roosjen@maakadvocaten.nl

The information on this legal blog serves purely for educational purposes and should not be taken as specific legal guidance. While we endeavor to maintain accurate and current information, we do not assert its absolute completeness or relevance to your particular situation. For advice tailored to your legal concerns, we urge you to engage with a licensed attorney. Please note that the blog’s content may change without notice, and we are not liable for any inaccuracies or missing information.