On February 22, 2022, our contract law attorney in the Netherlands wrote a blog post about the fact that in the event of a defective performance of the purchase contract, buyers are obligated to give notice of that defectiveness to the seller in a timely manner. If this is not done, the seller’s obligations under the purchase contract may no longer be enforceable in court. This is referred to as the “obligation to give notice of defects.” Shortly after the publication of the above blog post, on April 22, 2022, the Supreme Court issued a recent ruling on the obligation to give notice of defects in the performance of purchase contracts. In this post, our attorneys discuss this recent Supreme Court ruling about the time limit for complaints in the Netherlands.
CIVIL PROCEEDINGS in the Netherlands ON THE DUTY TO GIVE NOTICE OF DEFECTS
Civil proceedings in the Netherlands on the Duty to give notice of defects happen often. In this case, the plaintiff, a consumer, entered into a contract with Dutch Campers BV, a company, according to which Dutch Campers BV was to convert a van of the plaintiff into a motorhome. After the motorhome was delivered, the plaintiff complained to Dutch Campers BV about defects in, among other things, the kitchen cabinets and the roof hatch of the motorhome.
The plaintiff then claimed damages. The court granted this claim only in part. Following, the plaintiff appealed against this judgement. The Court of Appeal set aside the judgment of the District Court, ordered Dutch Campers BV to pay and dismissed the rest of the claim.
DEFINITION OF THE OBLIGATION TO GIVE NOTICE OF DEFECTS?
The obligation to give notice of defects can be defined as the assertion of the defectiveness of a performance. Thus, the creditor can no longer invoke a possible defect if he does not give notice of it to the debtor within a reasonable period of time after he has discovered the defect or should reasonably have discovered it. The legal consequences are regulated by the Dutch Civil Code in Article 6:89 DCC and Article 7:23 DCC (the latter refers specifically to sales contracts).
The obligation to give notice of defects in the event of defective performance of a purchase contract is a constantly recurring topic in the context of legal practice, which often gives rise to discussions. It is important to note that if a seller invokes the legal consequences of the provisions on the timely notification of a defect, it is up to the buyer to prove that and when he notified the defect. Subsequently, it is up to the seller to prove that the buyer did not complain in time and that his interests were harmed as a result (see judgment: FAR Trading v. Edco Eindhoven).
HAS THE PLAINTIFF COMPLIED WITH THE TIME LIMIT FOR GIVING NOTICE OF DEFECTS?
The Court of Appeal had to deal with the obligation to give notice of defects in the context of the defective performance of a purchase contract. This case is therefore worthy of attention for all parties who are confronted with a defective performance under a purchase contract and provides information on what measures should be taken by the parties in this regard. This is because a delayed complaint can lead to the loss of all rights, and the damage caused by the defect may no longer be enforceable against the party responsible.
The court had to consider the following: In an email dated June 20, 2017, the plaintiff first informed Dutch Campers BV that his claims regarding the kitchen cabinets as well as regarding the location of the roof hatch had not been met. Dutch Campers BV then (apparently) asked for a list of all defects, as can be seen from the plaintiff’s email to Dutch Campers BV of July 19, 2017: “following the list you have asked for.” However, neither the kitchen cabinets nor the location of the roof hatch reappeared in this list of defects. In view of this chronological sequence of events and the purpose of the obligation to give notice of defects to provide the seller with clarity about any delivery defects, and taking into account the fact that the plaintiff had still been on vacation with the motorhome between June 20, 2017 and July 19, 2017 and had therefore had the opportunity to comprehensively inspect the motorhome, Dutch Campers BV was entitled to rely on the fact that the list of defects of July 19, 2017 was complete and replaced the list of June 20, 2017. Thereafter, Dutch Campers BV heard again for the first time in the context of the DEKRA report 2018 that the plaintiff considered the cabinets as well as the position of the roof hatch as a material defect – thus more than six months after completion and furthermore more than six months after June 20, 2017, and thus (according to the Court of Appeal) too late.
FAILURE TO GIVE NOTICE OF DEFECTS IN DUE TIME under Dutch law
It is therefore (under Dutch law) important to observe the obligation to give notice of defects if the purchased item is defective. Otherwise, this can have considerable consequences. The Court of Appeal ruled here that the plaintiff had failed to give timely notice of a number of defects. This is remarkable in that Dutch Campers BV had at no point in the court proceedings raised the objection that the plaintiff had not given notice in time. In other words, Dutch Campers BV had at no time invoked the obligation incumbent on the plaintiff to give notice of defects.
The plaintiff did not agree with this view of the Court of Appeal and referred the dispute to the Supreme Court, which had to deal with the question of a potential failure to comply with the obligation to give notice of defects, among other things. This was because, in the plaintiff’s view, the Court of Appeal should not have measured the facts of the case against the duty to give notice of defects.
The Supreme Court upheld the plaintiff and found that the Court of Appeal had misapplied the provisions of the Act on (Consumer) Sales Contracts concerning the obligation to give notice of defects.
TIMELY NOTIFICATION OF A DEFECT
The fact that the court of appeal may not examine compliance with the duty to give notice of defects on its own initiative, i.e. “ex officio”, is of particular importance for the parties to the proceedings. For entrepreneurs who buy or sell goods, the ruling is particularly interesting with regard to the statements of defects, which played an important role in these proceedings. As an entrepreneur, you should be aware that obtaining a list of defects can be of great importance in the later course of proceedings.
For buyers, on the other hand, it is advisable to have all defects examined by an expert. As a seller, it is not least advantageous to request a corresponding list, because this provides clarity about the potentially existing defects. And you avoid, for example, your company being held liable later for defects that you did not rectify (or have rectified) because you were not aware of the defect at the time.
Dutch LAWYER SPECIALIZING IN COMPLAINTS IN THE CONTEXT OF SALES CONTRACTS
MAAK Advocaten specializes, among other things, in contract and liability law. If you would like to find out about your legal options against a seller who has not fulfilled his contractual obligations, our contract law attorney will be happy to assist you. Would you like to know what your company should look for in a complaint against a seller who has delivered defective goods and how to proceed in this respect? Would you like to know more about the time limit for complaints in the Netherlands? Or do you have a dispute with a seller in the Netherlands? In this case, too, we will be happy to support you. We will explain your legal situation in order to provide you with practical advice and/or support your company in legal proceedings. Please contact our contract attorney in the Netherlands Remko Roosjen or one of our other lawyers in Amsterdam.